Section 91 – Effective registration of statutory pledge
374.Subsection (1) sets out three cases in which a purported registration of a statutory pledge in the statutory pledges record is ineffective, with the result that the statutory pledge is not created—
The first case is that the entry does not include a copy of the constitutive document.
The second case is that the entry contains an inaccuracy which, as at the time of registration is “
seriously misleading ” (for which see section 94(1)).The third case is that the constitutive document is invalid, for example because it is a forgery.
375.As such, it is crucial that the constitutive document is included in the entry (and is valid). If anything else is missing from the entry, the registration will still be effective unless the entry is considered seriously misleading by reason of the omission (i.e. the second case cited above applies, under which missing or incorrect text can lead to the entry being considered seriously misleading).
376.The effect of determining whether or not an entry is seriously misleading as at the time of registration is that a supervening inaccuracy will not render ineffective the creation of the pledge which took place by reason of the registration (although see section 93 of the Act as to other consequences).
377.Subsection (2) makes subsection (1) subject to section 94(1)(c) and (d), with the effect that a registration may be partially effective as regards the encumbered property or as regards co-providers or co-secured creditors.
378.Subsection (3) enables an ineffective registration to become effective by means of a correction. The effect of this provision, when read with section 101(3) of the Act, is that the registration becomes effective (and the pledge is created) on the date of the correction.
