Personal Property Security Act

Personal Property Security Act 359 1996 1922970521/96359/tlc96359_f E4tlc96359 1 Interpretation and Application Definitions and interpretation 1 1 In this Act: accessions means goods that are installed in or affixed to other goods; account means a monetary obligation not evidenced by chattel paper or an instrument, whether or not the obligation has been earned by performance, but does not include investment property; advance means the payment of money, the provision of credit or the giving of value and includes any liability of the debtor to pay any interest, credit costs or other charges or costs payable by the debtor in connection with an advance or the enforcement of a security interest securing an advance; broker has the same meaning as in the Securities Transfer Act ; building means a structure, erection, mine or works built, constructed or opened on or in land; building materials means materials that are incorporated into a building and includes goods attached to a building so that their removal a would necessarily involve the dislocation or destruction of some other part of the building and cause substantial damage to the building apart from the loss of value of the building resulting from the removal, or b would result in the weakening of the structure of the building or the exposure of the building to weather damage or deterioration, but does not include c heating, air conditioning or conveyancing devices, or d machinery installed in a building or on land for use in carrying on an activity inside the building or on the land; certificated security has the same meaning as in the Securities Transfer Act ; chattel paper means one or more writings that evidence both a monetary obligation and a security interest in, or a lease of, specific goods or specific goods and accessions; clearing house means an organization through which trades in options or standardized futures are cleared and settled; clearing house option means an option, other than an option on futures, issued by a clearing house to its participants; collateral means personal property that is subject to a security interest; commercial consignment means a consignment under which goods are delivered for sale, lease or other disposition to a consignee who, in the ordinary course of the consignee's business, deals in goods of that description, by a consignor who, a in the ordinary course of the consignor's business, deals in goods of that description, and b reserves an interest in the goods after they have been delivered, but does not include an agreement under which goods are delivered c to an auctioneer for sale, or d to a consignee other than an auctioneer for sale, lease or other disposition if it is generally known to the creditors of the consignee that the consignee is in the business of selling or leasing goods of others; consumer goods means goods that are used or acquired for use primarily for personal, family or household purposes; court means the Supreme Court; creditor includes an assignee for the benefit of a creditor, an executor, administrator or committee of a creditor; crops means crops, whether matured or otherwise, and whether naturally grown or planted, attached to land by roots or forming parts of trees or plants attached to land, and includes only trees that a are being grown as nursery stock, b are being grown for uses other than the production of lumber and wood products, or c are intended to be replanted in another location for the purpose of reforestation; debtor means a a person who owes payment or performance of an obligation secured, whether or not that person owns or has rights in the collateral, b a person who receives goods from another person under a commercial consignment, c a lessee under a lease for a term of more than one year, d a transferor of an account or chattel paper, e in sections 17, 24, 26, 58, 59 (14), 61 (8) and 69, a transferee of or successor to the interest of a person referred to in paragraph (a), or f if the person referred to in paragraph (a) and the owner of the collateral are not the same person, i if the term debtor is used in a provision dealing with the collateral, an owner of the collateral, ii if the term debtor is used in a provision dealing with the obligation, the obligor, and iii if the context permits, both the owner and the obligor; default means a the failure to pay or otherwise perform the obligation secured when due, or b the occurrence of an event or set of circumstances that, under the terms of the security agreement, causes the security interest to become enforceable; document of title means a writing issued by or addressed to a bailee a that covers goods in the bailee's possession that are identified or are fungible portions of an identified mass, and b in which it is stated that the goods identified in it will be delivered to a named person, or to a transferee of the person, to bearer or to the order of a named person; entitlement holder has the same meaning as in the Securities Transfer Act ; entitlement order has the same meaning as in the Securities Transfer Act ; equipment means goods that are held by a debtor other than as inventory or consumer goods; financial asset has the same meaning as in the Securities Transfer Act ; financing change statement has the meaning prescribed; financing statement means, if the context requires, a [Repealed 2003-96-56.] b data authorized under the regulations to be transmitted electronically, directly to the computer data base of the registry by a person defined in the regulations as a registering party, to effect a registration, and c a security agreement registered under the Book Accounts Assignment Act , R.S.B.C. 1979, c. 32, Chattel Mortgage Act , R.S.B.C. 1979, c. 48, Company Act , Manufactured Home Act , R.S.B.C. 1979, c. 281, or Sale of Goods on Condition Act , R.S.B.C. 1979, c. 373, before the coming into force of this section together with any statement of particulars that was registered with the security agreement unless there is a conflict between the statement of particulars and the security agreement in which case it means the statement of particulars and not the security agreement; financing statement (transition) has the meaning prescribed; fixture does not include building materials; foreign registered ship means a self-propelled, sea-going vessel used in international seaborne trade for the transport of goods, passengers or both, that is 20 or more gross registered tons and is registered, other than as a bareboat charter, in the name of the owner, but does not include a vessel registered under the Canada Shipping Act ; forest agreement means the type of licence referred to in paragraph (d) of the definition of licence; future advance means an advance whether or not the advance is made in accordance with an obligation and includes reasonable costs incurred and expenditures made for the protection, maintenance, preservation or repair of collateral; futures account means an account maintained by a futures intermediary in which a futures contract is carried for a futures customer; futures contract means a standardized future or an option on futures, other than a clearing house option, that is a traded on or subject to the rules of a futures exchange recognized or otherwise regulated by the British Columbia Securities Commission or by a securities regulatory authority of another province or territory of Canada, or b traded on a foreign futures exchange and is carried on the books of a futures intermediary for a futures customer; futures customer means a person for which a futures intermediary carries a futures contract on its books; futures exchange means an association or organization operated to provide the facilities necessary for the trading of standardized futures or options on futures; futures intermediary means a person who a is registered as a dealer permitted to trade in futures contracts, whether as principal or agent, under the securities laws or commodity futures laws of a province or territory of Canada, or b is a clearing house recognized or otherwise regulated by the British Columbia Securities Commission or by a securities regulatory authority of another province or territory of Canada; goods means tangible personal property, fixtures, crops and the unborn young of animals, but does not include chattel paper, a document of title, an instrument, investment property, money, trees other than crops until the trees are severed, or minerals or hydrocarbons until they are extracted; instrument means a a bill of exchange, note or cheque within the meaning of the Bills of Exchange Act (Canada), b any other writing that evidences a right to payment of money and is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment, or c a letter of credit or an advice of credit if the letter of credit or advice of credit states on it that it must be surrendered on claiming payment under it, but does not include d chattel paper, a document of title or investment property, or e a bond, debenture or similar document evidencing an obligation secured, in whole or in part, by a mortgage of an interest in land unless the interest being mortgaged is, itself, a mortgage of land; intangible means personal property, other than goods, chattel paper, a document of title, an instrument, money and investment property, and includes a licence; inventory means goods that are a held by a person for sale or lease, or that have been leased by that person as lessor, b to be furnished by a person or have been furnished by that person under a contract of service, c raw materials or work in progress, or d materials used or consumed in a business; investment property means a security, whether certificated or uncertificated, security entitlement, securities account, futures contract or futures account; lease for a term of more than one year includes a a lease for an indefinite term including a lease that is determinable by one or both of the parties within one year from its execution, b subject to subsection (3), a lease initially for a term of one year or less if the lessee, with the consent of the lessor, retains uninterrupted or substantially uninterrupted possession of the leased goods for a period in excess of one year after the day the lessee first acquired possession of the goods, and c a lease for a term of one year or less if i the lease provides that it is renewable for one or more terms automatically, at the option of one of the parties or by agreement of all the parties, and ii the total terms, including the original term, may exceed one year, but does not include d a lease involving a lessor who is not regularly engaged in the business of leasing goods, e a lease of household furnishings or appliances as part of a lease of land if the goods are incidental to the use and enjoyment of the land, or f a lease of a prescribed kind of goods regardless of the length of the term of the lease; licence means a right, whether or not exclusive, a to manufacture, produce, sell, transport, grow, harvest or otherwise deal with personal property, b to provide services, c to acquire personal property, d to harvest timber, or grow and harvest Christmas trees, under an agreement referred to in section 12 of the Forest Act , or e to harvest timber under a pulpwood agreement as defined in section 1 of the Forest Act , that is transferrable by the licensee with or without restriction or the consent of the licensor, and includes a licence that is subject to cancellation and reissuance by the licensor to another party at the request of either the licensee or the secured party; money means a medium of exchange a authorized by the Parliament of Canada, or b authorized or adopted by a foreign government as part of its currency; new value means value other than an antecedent debt or liability; obligation secured means, when determining the amount payable under a lease that secures payment or performance of an obligation, a the amount originally contracted to be paid under the lease, b any other amount payable in accordance with the terms of the lease, and c any other amount required to be paid by the lessee to obtain ownership of the collateral, less any amount paid before the determination; option means an agreement that provides the holder with the right, but not the obligation, to do one or more of the following on terms or at a price established by or determinable by reference to the agreement at or by a time established by the agreement: a receive an amount of cash determinable by reference to a specified quantity of the underlying interest of the option; b purchase a specified quantity of the underlying interest of the option; c sell a specified quantity of the underlying interest of the option; option on futures means an option the underlying interest of which is a standardized future; pawnbroker means a person who engages in the business of granting credit to individuals for personal, family or household purposes and who a takes and perfects security interests in consumer goods by taking possession of them, or b purchases consumer goods under agreements or undertakings, express or implied, that the goods may be repurchased by the sellers; prior security interest means an interest created, reserved or provided for by a valid security agreement or other transaction made before this section comes into force that is a security interest within the meaning of this Act and to which this Act would have applied if it had been in force at the time the security agreement or other transaction was entered into; proceeds means a identifiable or traceable personal property, fixtures and crops i derived directly or indirectly from any dealing with collateral or the proceeds of collateral, and ii in which the debtor acquires an interest, b a right to an insurance payment or any other payment as indemnity or compensation for loss of, or damage to, the collateral or proceeds of the collateral, c a payment made in total or partial discharge or redemption of an intangible, an instrument, investment property or chattel paper, and d rights arising out of, or property collected on, or distributed on account of, collateral that is investment property; purchase means taking by sale, lease, discount, assignment, negotiation, mortgage, pledge, lien, issue, reissue, gift or any other consensual transaction creating an interest in property; purchase money security interest means a a security interest taken in collateral, other than investment property, to the extent that it secures payment of all or part of its purchase price, b a security interest taken in collateral, other than investment property, by a person who gives value for the purpose of enabling the debtor to acquire rights in the collateral, to the extent that the value is applied to acquire the rights, c the interest of a lessor of goods under a lease for a term of more than one year, and d the interest of a person who delivers goods to another person under a commercial consignment, but does not include a transaction of sale by and lease back to the seller and, for the purposes of this definition, "purchase price" and "value" include credit charges or interest payable for the purchase or loan credit; receiver includes receiver-manager; registrar means the registrar of the personal property registry designated under section 42; registry means the personal property registry established under section 42; secured party means a a person who has a security interest, b a person who holds a security interest for the benefit of another person, and c the trustee, if a security interest is embodied in a trust indenture; securities account has the same meaning as in the Securities Transfer Act ; securities intermediary has the same meaning as in the Securities Transfer Act ; security has the same meaning as in the Securities Transfer Act ; security agreement means an agreement that creates or provides for a security interest and, if the context permits, includes a an agreement that provides for a prior security interest, and b writing that evidences a security agreement; security certificate has the same meaning as in the Securities Transfer Act ; security entitlement has the same meaning as in the Securities Transfer Act ; security interest means a an interest in goods, chattel paper, investment property, a document of title, an instrument, money or an intangible that secures payment or performance of an obligation, but does not include the interest of a seller who has shipped goods to a buyer under a negotiable bill of lading or its equivalent to the order of the seller or to the order of an agent of the seller, unless the parties have otherwise evidenced an intention to create or provide for a security interest in the goods, and b the interest of i a transferee arising from the transfer of an account or a transfer of chattel paper, ii a person who delivers goods to another person under a commercial consignment, and iii a lessor under a lease for a term of more than one year, whether or not the interest secures payment or performance of an obligation; specific goods means goods identified and agreed on at the time the agreement in respect of those goods is made; standardized future means an agreement traded on a futures exchange in accordance with standardized conditions contained in the bylaws, rules or regulations of the futures exchange, and cleared and settled by a clearing house, to do one or more of the following at a price established by or determinable by reference to the agreement and at or by a time established by or determinable by reference to the agreement: a make or take delivery of the underlying interest of the agreement; b settle the obligation in cash instead of delivery of the underlying interest; trust indenture means a deed, indenture or document, however designated, by the terms of which a person issues or guarantees or provides for the issue or guarantee of debt obligations secured by a security interest, and in which another person is appointed as trustee for the holders of the debt obligations issued, guaranteed or provided for under the deed, indenture or document; uncertificated security has the same meaning as in the Securities Transfer Act ; value means any consideration sufficient to support a simple contract, and includes an antecedent debt or liability. 1.1 For the purposes of this Act, a a secured party has control of a certificated security if the secured party has control in the manner provided for under section 23 of the Securities Transfer Act , b a secured party has control of an uncertificated security if the secured party has control in the manner provided for under section 24 of the Securities Transfer Act , c a secured party has control of a security entitlement if the secured party has control in the manner provided for under section 25 or 26 of the Securities Transfer Act , d a secured party has control of a futures contract if i the secured party is the futures intermediary with which the futures contract is carried, or ii the futures customer, secured party and futures intermediary have agreed that the futures intermediary will apply any value distributed on account of the futures contract as directed by the secured party without the further consent of the futures customer, and e a secured party having control of all security entitlements or futures contracts carried in a securities account or futures account has control over the securities account or futures account. 2 For the purposes of this Act a a natural person knows or has knowledge when information is acquired by the person under circumstances in which a reasonable person would take cognizance of it, b a partnership knows or has knowledge when information has come to the attention of one of the general partners or a person having control or management of the partnership business under circumstances in which a reasonable person would take cognizance of it, c a corporation knows or has knowledge when information has come to the attention of i a managing director or officer of the corporation, or ii a senior employee of the corporation with responsibility for matters to which the information relates, under circumstances in which a reasonable person would take cognizance of it or when the information in writing has been delivered to the corporation's registered office or attorney for service, d the members of an association know or have knowledge when information has come to the attention of i a managing director or officer of the association, ii a senior employee of the association with responsibility for matters to which the information relates, or iii all members, under circumstances in which a reasonable person would take cognizance of it, and e the government knows or has knowledge when information has come to the attention of a senior employee of the government with responsibility for matters to which the information relates under circumstances in which a reasonable person would take cognizance of it. 3 A lease under paragraph (b) of the definition of "lease for a term of more than one year" does not become a lease for a term of more than one year until the lessee's possession extends for more than one year. 4 Unless otherwise provided in this Act, the determination whether goods are consumer goods, inventory or equipment must be made as of the time the security interest in the goods attaches. 5 Proceeds are traceable whether or not there is a fiduciary relationship between the person who has a security interest in the proceeds, as provided in section 28, and the person who has rights in or has dealt with the proceeds. Scope of Act: security interests 2 1 Subject to section 4, this Act applies a to every transaction that in substance creates a security interest, without regard to its form and without regard to the person who has title to the collateral, and b without limiting paragraph (a), to a chattel mortgage, a conditional sale, a floating charge, a pledge, a trust indenture, a trust receipt, an assignment, a consignment, a lease, a trust, and a transfer of chattel paper if they secure payment or performance of an obligation. 2 Despite section 4 (g), this Act applies to a security interest in a security or instrument, but does not apply to a a security or instrument that is a mortgage or charge on land if the land mortgaged or charged is described in the security or instrument or in documents held by the issuer of an uncertificated security, or b a security or an instrument that is a mortgage or charge registered under the Land Title Act or with respect to which an application for registration has been made under the Land Title Act . Scope of Act: security interests that do not secure payment or performance 3 Subject to sections 4 and 55, this Act applies to a a transfer of an account or chattel paper, b a commercial consignment, and c a lease for a term of more than one year, that do not secure payment or performance of an obligation. Exclusions from scope of Act 4 Except as otherwise provided in this Act, this Act does not apply to the following: a a lien, charge or other interest given by a rule of law or by an enactment unless the enactment contains an express provision that this Act applies; b a security agreement governed by an Act of the Parliament of Canada that deals with rights of parties to the agreement or the rights of third parties affected by a security interest created by the agreement, including but without limitation i a mortgage under the Canada Shipping Act , and ii any agreement governed by Part V, Division B of the Bank Act (Canada); c the creation or transfer of an interest or claim in or under a policy of insurance except the transfer of a right to money or other value payable under a policy of insurance as indemnity or compensation for loss of or damage to collateral; c.1 a transfer of an interest or claim in or under a contract of annuity, other than a contract of annuity held by a securities intermediary for another person in a securities account; d the creation or transfer of an interest in present or future wages, salary, pay, commission or any other compensation for labour or personal services other than fees for professional services; e the transfer of an interest in an unearned right to payment under a contract to a transferee who is to perform the transferor's obligations under the contract; f the creation or transfer of an interest in land, other than an interest arising under a forest agreement, including i a lease, ii a petroleum and natural gas lease under the Petroleum and Natural Gas Act , iii a lease, issued under the Coal Act , that confers the right to produce coal, or iv any similar interest that is prescribed for the purposes of this section; g the creation or transfer of an interest in a right to payment that arises in connection with an interest in land, including an interest in rental payments payable under a lease of land; h a sale of accounts or chattel paper as part of a sale of a business out of which they arose unless the vendor remains in apparent control of the business after the sale; i a transfer of accounts made solely to facilitate the collection of the accounts for the assignor; j the creation or transfer of an interest in a right to damages in tort; k an assignment for the general benefit of creditors made in accordance with an Act of the Parliament of Canada relating to insolvency; l a mineral claim or a placer claim as those terms are defined in the Mineral Tenure Act . Law applicable: general rules for goods and collateral in possession of secured party 5 1 Subject to sections 6 to 8, the validity, the perfection, the effect of perfection or non-perfection and the priority of a a security interest in goods, or b a possessory security interest in an instrument, a negotiable document of title, money or chattel paper, is governed by the law of the jurisdiction in which the collateral is located when the security interest attaches. 2 [Repealed 2007-10-117.] 3 A security interest in goods perfected under the law of the jurisdiction in which the goods are located at the time the security interest attaches, but before the goods are brought into British Columbia, remains perfected in British Columbia if it is perfected in British Columbia a not later than 60 days after the goods are brought into British Columbia, b not later than 15 days after the day the secured party has knowledge that the goods have been brought into British Columbia, or c before the date that perfection ceases under the law of the jurisdiction in which the goods were located when the security interest attached, whichever is the earliest, but the security interest is subordinate to the interest of a buyer or lessee of the goods who acquires the buyer's or lessee's interest without knowledge of the security interest and before it is perfected in British Columbia under section 24 or 25. 4 A security interest that is not perfected as provided in subsection (3) may be otherwise perfected in British Columbia under this Act. 5 If a security interest referred to in subsection (1) is not perfected under the law of the jurisdiction in which the collateral was located when the security interest attached and before the collateral was brought into British Columbia, it may be perfected under this Act. Law applicable: parties intend goods to be removed from jurisdiction 6 1 Subject to section 7, a if the parties to a security agreement that creates a security interest in goods in one jurisdiction understand at the time the security interest attaches that the goods will be kept in another jurisdiction, and b if the goods are removed to the other jurisdiction, for purposes other than transportation through the other jurisdiction, not later than 30 days after the security interest attaches, the validity, the perfection, the effect of perfection or non-perfection and the priority of the security interest is governed by the law of the other jurisdiction. 2 If the goods are removed out of British Columbia, but are later brought into British Columbia, the security interest in the goods is deemed to be a security interest to which section 5 (3) applies if it was perfected under the law of the jurisdiction to which the goods were removed. Law applicable: mobile goods, intangibles, etc. 7 1 In this section: registered organization means one that is organized by or under a law of the United States of America or of a state, which law requires the organization of the organization to be disclosed in a public record; state means a state of the United States of America, the District of Columbia, Puerto Rico, the United States Virgin Islands or a territory or insular possession subject to the jurisdiction of the United States of America. 1.1 For the purpose of this section, a debtor is located, a if the debtor is an individual, in the jurisdiction in which the debtor's principal residence is located, b if the debtor is a partnership, other than a limited partnership, and the partnership agreement governing the partnership states that the agreement is governed by the laws of a province, in that province, c if the debtor is a corporation, a limited partnership or an organization and is incorporated, continued, amalgamated or otherwise organized by or under a law of a province, which law requires the incorporation, continuance, amalgamation or organization to be disclosed in a public record, in that province, d if the debtor is a corporation incorporated, continued or amalgamated by or under a law of Canada, which law requires the incorporation, continuance or amalgamation to be disclosed in a public record, in the jurisdiction in which the registered office or head office of the debtor is located, i as set out in the special Act, letters patent, articles or other constating instrument by or under which the debtor was incorporated, continued or amalgamated, or ii as set out in the debtor's bylaws, if subparagraph (i) does not apply, e if the debtor is a registered organization that is organized by or under a law of a state, in that state, f if the debtor is a registered organization that is organized by or under a law of the United States of America, i in the state that the law of the United States of America designates, if the law designates a state of location, ii in the state that the registered organization designates, if the law of the United States of America authorizes the registered organization to designate a state of location, or iii in the District of Columbia in the United States of America, if subparagraphs (i) and (ii) do not apply, g if the debtor is one or more trustees acting for a trust, i if the trust instrument governing the trust states that the instrument is governed by the laws of a province, in that province, or ii in the jurisdiction in which the administration of the trust by the trustees is principally carried out, if subparagraph (i) does not apply, or h if none of paragraphs (a) to (g) applies, in the jurisdiction in which the chief executive office of the debtor is located. 1.2 For the purposes of this section, a debtor continues to be located in the jurisdiction specified in subsection (1.1), a in the case of a debtor who is an individual, despite the death or incapacity of the individual, or b in the case of a debtor who is not an individual, despite i the suspension, revocation, forfeiture or lapse of the debtor's status in its jurisdiction of incorporation, continuation, amalgamation or organization, or ii the dissolution, winding-up or cancellation of the debtor. 2 The validity, the perfection, the effect of perfection or non-perfection and the priority of a a security interest in i an intangible, or ii goods, other than a foreign registered ship, that are of a type that are normally used in more than one jurisdiction, if the goods are equipment or are inventory leased or held for lease by the debtor to others, and b a non-possessory security interest in an instrument, a negotiable document of title, money or chattel paper, is governed by the law of the jurisdiction in which the debtor is located when the security interest attaches. 3 If the debtor relocates to another jurisdiction or transfers an interest in the collateral to a person located in another jurisdiction, a security interest perfected in accordance with the law applicable as provided in subsection (2) remains perfected in British Columbia if it is perfected in the other jurisdiction a not later than 60 days after the day the debtor relocates or transfers an interest in the collateral to a person located in the other jurisdiction, b not later than 15 days after the day the secured party has knowledge that the debtor has relocated or has transferred an interest in the collateral to a person located in the other jurisdiction, or c before the date that perfection ceases under the law of the first jurisdiction, whichever is the earliest. 4 If the law governing the perfection of a security interest referred to in subsection (2) or (3) does not provide for public registration or recording of the security interest or a notice relating to it and the collateral is not in the possession of the secured party, the security interest is subordinate to a an interest in an account payable in British Columbia, or b an interest in goods, an instrument, a negotiable document of title, money or chattel paper acquired when the collateral was located in British Columbia, unless it is perfected under this Act before the interest referred to in paragraph (a) or (b) arises. 5 A security interest referred to in subsection (4) may be perfected under this Act. 6 The validity, the perfection, the effect of perfection or non-perfection and the priority of a security interest in a foreign registered ship is governed by the law of the jurisdiction where the ship is registered at the time that the security interest attaches. 7 Despite section 6 and subsection (2) of this section, the validity, the perfection, the effect of perfection or non-perfection and the priority of a security interest in minerals or hydrocarbons or in an account resulting from the sale of the minerals at the minehead or the hydrocarbons at the wellhead a that is provided for in a security agreement executed before the minerals or hydrocarbons are extracted, and b that attaches to the minerals or hydrocarbons upon extraction or attaches to an account upon sale of the minerals or hydrocarbons, is governed by the law of the jurisdiction in which the minehead or wellhead is located. 8 Despite subsection (2), the validity, the perfection, the effect of perfection or non-perfection and the priority of a security interest in a forest agreement is governed by this Act. Law applicable: investment property 7.1 1 The validity of a security interest in investment property is governed by the law, at the time the security interest attaches, a of the jurisdiction in which the certificate is located if the collateral is a certificated security, b of the issuer's jurisdiction if the collateral is an uncertificated security, c of the securities intermediary's jurisdiction if the collateral is a security entitlement or a securities account, or d of the futures intermediary's jurisdiction if the collateral is a futures contract or a futures account. 2 Except as otherwise provided in subsection (5), the perfection, the effect of perfection or non-perfection and the priority of a security interest in investment property are governed by the law a of the jurisdiction in which the certificate is located if the collateral is a certificated security, b of the issuer's jurisdiction if the collateral is an uncertificated security, c of the securities intermediary's jurisdiction if the collateral is a security entitlement or a securities account, or d of the futures intermediary's jurisdiction if the collateral is a futures contract or a futures account. 3 For the purposes of this section, a the location of a debtor is determined under section 7 (1.1), b the issuer's jurisdiction is determined under section 44 (5) of the Securities Transfer Act , and c the securities intermediary's jurisdiction is determined under section 45 (2) of the Securities Transfer Act . 4 For the purposes of this section, the following rules determine a futures intermediary's jurisdiction: a if an agreement between the futures intermediary and futures customer governing the futures account expressly provides that a particular jurisdiction is the futures intermediary's jurisdiction for purposes of the law of that jurisdiction, this Act or any provision of this Act, the jurisdiction expressly provided for is the futures intermediary's jurisdiction; b if paragraph (a) does not apply and an agreement between the futures intermediary and futures customer governing the futures account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the futures intermediary's jurisdiction; c if neither paragraph (a) nor (b) applies and an agreement between the futures intermediary and futures customer governing the futures account expressly provides that the futures account is maintained at an office in a particular jurisdiction, that jurisdiction is the futures intermediary's jurisdiction; d if none of the preceding paragraphs applies, the futures intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the futures customer's account is located; e if none of the preceding paragraphs applies, the futures intermediary's jurisdiction is the jurisdiction in which the chief executive office of the futures intermediary is located. 5 The law of the jurisdiction in which the debtor is located governs a perfection of a security interest in investment property by registration, b perfection of a security interest in investment property granted by a broker or securities intermediary if the secured party relies on the attachment of the security interest as perfection, and c perfection of a security interest in a futures contract or futures account granted by a futures intermediary if the secured party relies on the attachment of the security interest as perfection. 6 A security interest perfected under the law of the jurisdiction designated in subsection (5) remains perfected until the earliest of a 60 days after the day the debtor relocates to another jurisdiction, b 15 days after the day the secured party knows the debtor has relocated to another jurisdiction, and c the day that perfection ceases under the previously applicable law. 7 A security interest in investment property that is perfected under the law of the issuer's jurisdiction, the securities intermediary's jurisdiction or the futures intermediary's jurisdiction, as applicable, remains perfected until the earliest of a 60 days after a change of the applicable jurisdiction to another jurisdiction, b 15 days after the day the secured party knows of the change of the applicable jurisdiction to another jurisdiction, and c the day that perfection ceases under the previously applicable law. Transition — definitions and application for mobile goods, intangibles, etc. 7.2 1 In this section and in sections 7.3 to 7.5: effective date means the date on which this section comes into force; prior law means this Act as it read immediately before the effective date, including the applicable law as determined under this Act; prior security agreement means a security agreement entered into before the effective date; prior security interest means a security interest referred to in section 7 (2) (a) or (b) that arises under a prior security agreement. 2 Subject to subsection (3), if a prior security agreement is amended, renewed or extended by an agreement entered into on or after the effective date, the amended, renewed or extended security agreement is a prior security agreement. 3 If an amendment, renewal or extension to a prior security agreement referred to in subsection (2) includes collateral that was not subject to the security interest created or provided by the prior security agreement, the amended, renewed or extended security agreement is not a prior security agreement in relation to that collateral. Transition — validity of prior security interest 7.3 For the purpose of determining the location of the debtor in order to determine the law governing the validity of a prior security interest, section 7 (1) of the prior law governs. Transition — perfection of security interest and prior security interest 7.4 1 Subject to subsections (2) and (3), for the purpose of determining the location of the debtor in order to determine the law governing the perfection of a security interest referred to in section 7 (2) (a) or (b), section 7 (1), (1.1) and (1.2) governs, whether attachment occurs before, on or after the effective date. 2 A prior security interest that is a perfected security interest under prior law immediately before the effective date, but is not a perfected security interest under the applicable law as determined by this Act on or after the effective date, continues perfected until the beginning of the earlier of the following dates: a the date perfection ceases under prior law; b the date that is the 5th anniversary of the effective date. 3 A prior security interest referred to in subsection (2) that is perfected in accordance with the applicable law as determined under this Act on or after the effective date but before the earlier of the dates referred to in subsection (2) is continuously perfected from the date of its perfection under prior law. Transition — effect of perfection or non-perfection 7.5 1 Subject to subsections (2) to (4), for the purpose of determining the location of the debtor in order to determine the law governing the effect of perfection or non-perfection of a security interest referred to in section 7 (2) (a) or (b), section 7 (1), (1.1) and (1.2) governs, whether attachment occurs before, on or after the effective date. 2 For the purpose of determining the location of the debtor in order to determine the law governing the effect of perfection or non-perfection of a prior security interest in relation to an interest, other than a security interest, in the same collateral arising before the effective date, section 7 (1) of the prior law governs, whether or not the prior security interest is perfected on or after the effective date in accordance with the applicable law as determined under this Act. 3 Subject to subsection (4), for the purpose of determining the location of the debtor in order to determine the law governing the priority of a prior security interest in relation to another prior security interest in the same collateral, section 7 (1) of the prior law governs. 4 If a prior security interest is not a perfected security interest under prior law immediately before the effective date, but is perfected in accordance with the applicable law as determined under this Act on or after the effective date, for the purpose of determining the location of the debtor in order to determine the law governing the priority of the prior security interest in relation to another security interest in the same collateral, section 7 (1), (1.1) and (1.2) governs. Transition — investment property 7.6 1 In this section: effective date means the date on which this section comes into force; prior law means this Act as it read immediately before the effective date, including the applicable law as determined under this Act; prior security agreement means a security agreement entered into before the effective date; prior security interest means a security interest in investment property that arises under a prior security agreement. 2 If a prior security agreement is amended, renewed or extended by an agreement entered into on or after the effective date, the amended, renewed or extended security agreement is a prior security agreement. 3 Subject to subsections (4) to (6) and section 79, for the purpose of determining the law governing the validity, the perfection, the effect of perfection or non-perfection and the priority of a security interest in investment property, section 7.1 governs, whether attachment occurs before, on or after July 1, 2007, being the date that section 7.1 came into force. 4 For the purpose of determining the law governing the validity of a prior security interest, prior law governs. 5 A prior security interest that is perfected by registration and that is a perfected security interest under prior law immediately before the effective date, but is not a perfected security interest under the applicable law as determined by this Act on or after the effective date, continues perfected until the beginning of the earlier of the following dates: a the date perfection ceases under prior law; b the date that is the 5th anniversary of the effective date. 6 A prior security interest referred to in subsection (5) that is perfected in accordance with the applicable law as determined under this Act on or after the effective date but before the earlier of the dates referred to in subsection (5) is continuously perfected from the date of its perfection under prior law. Law applicable: substance and procedure 8 1 Despite sections 5 to 7.6, a procedural issues involved in the enforcement of the rights of a secured party against collateral are governed by the law of the jurisdiction in which the enforcement rights are exercised, and b substantive issues involved in the enforcement of the rights of a secured party against collateral are governed by the proper law of the contract between the secured party and the debtor. 2 For the purposes of sections 5 to 7.6, a security interest is perfected under the law of a jurisdiction when the secured party has complied with the law of the jurisdiction with respect to the creation and continuance of a security interest, and the security interest has a status in relation to the interests of other secured parties, buyers, judgment creditors or a trustee in bankruptcy of the debtor, similar to that of an equivalent security interest created and perfected under this Act. Internal law of the jurisdiction 8.1 For the purposes of sections 5 to 8, a reference to the law of a jurisdiction means the internal law of that jurisdiction excluding its conflict of law rules. 2 Validity of Security Agreements and Rights of Parties Effectiveness of a security agreement 9 Subject to this and any other enactment, a security agreement is effective according to its terms. Writing requirements for security agreements 10 1 Subject to subsection (2) and section 12.1, a security interest is only enforceable against a third party if a the collateral is not a certificated security and is in the possession of the secured party, b the collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under section 68 of the Securities Transfer Act in accordance with the debtor's security agreement, c the collateral is investment property and the secured party has control under section 1 (1.1) in accordance with the debtor's security agreement, or d the debtor has signed a security agreement that contains i a description of the collateral by item or kind, or by reference to one or more of the following:

goods, investment property, instruments, documents of title, chattel paper, intangibles, money, crops or licences, ii a description of collateral that is a security entitlement, securities account or futures account if it describes the collateral by those terms or as investment property or if it describes the underlying financial asset or futures contract, iii a statement that a security interest is taken in all of the debtor's present and after acquired personal property, or iv a statement that a security interest is taken in all of the debtor's present and after acquired personal property except A specified items or kinds of personal property, or B one or more of the following: goods, investment property, instruments, documents of title, chattel paper, intangibles, money, crops or licences. 2 For the purposes of subsection (1) (a), a secured party is deemed not to have taken possession of collateral that is in the apparent possession or control of the debtor or the debtor's agent. 3 Subject to subsection (6), a description is inadequate for the purposes of subsection (1) (d) if it describes the collateral as consumer goods or equipment without further reference to the kind of collateral. 4 A description of collateral as inventory is adequate for the purposes of subsection (1) (d) only while it is held by the debtor as inventory. 5 A security interest in proceeds is enforceable against a third party whether or not the security agreement contains a description of the proceeds. 6 If personal property is excluded from a description of collateral, the excluded property may be described as consumer goods without further reference to the item or kind of property excluded. Debtor to have copy of written security agreement 11 If a security agreement is in writing, the secured party must deliver a copy of the security agreement to the debtor within 10 days after it is executed and, if the secured party fails to do so after a request by the debtor, a court may, on application by the debtor, order the delivery of the copy to the debtor. Attachment of security interests 12 1 A security interest, including a security interest in the nature of a floating charge, attaches when a value is given, b the debtor has rights in the collateral or power to transfer rights in the collateral to a secured party, and c except for the purpose of enforcing rights between the parties to the security agreement, the security interest becomes enforceable under section 10, unless the parties have specifically agreed to postpone the time for attachment in which case the security interest will attach at the time specified in the agreement. 2 For the purposes of subsection (1) (b) and without limiting other rights, if any, which the debtor has in the collateral, a debtor has rights in goods leased to the debtor or consigned to the debtor when the debtor obtains possession of them in accordance with the lease or consignment. 3 For the purposes of subsection (1), a debtor has no rights in any of the following: a crops until they become growing crops; b the young of animals until they are conceived; c minerals or hydrocarbons until they are extracted; d trees, other than crops, until they are severed. 4 The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account. 5 The attachment of a security interest in a futures account is also attachment of a security interest in the futures contracts carried in the futures account. Attachment of security interest in favour of securities intermediary 12.1 1 A security interest in favour of a securities intermediary attaches to a person's security entitlement if a the person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase, and b the securities intermediary credits the financial asset to the buyer's securities account before the buyer pays the securities intermediary. 2 The security interest described in subsection (1) secures the person's obligation to pay for the financial asset. 3 A security interest in favour of a person who delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if a the security or other financial asset is i in the ordinary course of business transferred by delivery with any necessary endorsement or assignment, and ii delivered under an agreement between persons in the business of dealing with such securities or financial assets, and b the agreement calls for delivery against payment. 4 The security interest described in subsection (3) secures the obligation to make payment for the delivery. Security interests in after acquired property 13 1 Subject to section 12 and subsection (2), a security agreement that provides for a security interest in after acquired property attaches to that property in accordance with the terms of the agreement without any need for a specific appropriation by the debtor. 2 A security interest does not attach to after acquired property that is a a crop that becomes a growing crop more than one year after the security agreement has been entered into, except that a security interest in a crop that is given in conjunction with a lease, purchase or mortgage of land, may, if the parties agree, attach to a crop to be grown on the land during the term of the lease, purchase or mortgage, or b consumer goods other than an accession, unless the security interest is a purchase money security interest or a security interest in collateral obtained by the debtor as replacement for collateral described in the security agreement. Future advances 14 1 A security agreement may provide for future advances. 2 Unless the parties otherwise agree, an obligation owing to a debtor to make future advances is not binding on a secured party if the collateral has been seized, attached, charged or made subject to an equitable execution under the circumstances described in section 20 (a) (i) or (ii) and the secured party has knowledge of this fact before making the advances. Application of sale of goods law 15 If a seller has a purchase money security interest in goods, the law relating to contracts of sale governs the sale including a disclaimer, limitation or modification of the seller's performance obligations with respect to the goods. Acceleration clauses 16 If a security agreement provides that a secured party may accelerate payment or performance by the debtor when the secured party is or believes themselves insecure or decides that the collateral is in jeopardy, the provision must be construed to mean that the secured party has the right to accelerate payment or performance only if the secured party, in good faith, believes and has commercially reasonable grounds to believe that the prospect of payment or performance is or is about to be impaired or that the collateral is or is about to be placed in jeopardy. Rights and obligations of secured parties in possession of collateral 17 1 In this section, secured party includes a receiver. 2 A secured party must use reasonable care in the custody and preservation of collateral in the possession of the secured party and, unless the parties otherwise agree, in the case of an instrument or chattel paper, reasonable care includes taking necessary steps to preserve rights against other persons. 3 Unless otherwise agreed, if collateral is in the secured party's possession, a reasonable expenses, including the costs of insurance and payment of taxes or other charges incurred in obtaining, maintaining possession of and preserving the collateral, are chargeable to the debtor and secured by the collateral, b the risk of loss or damage to the collateral, unless caused by the negligence of the secured party, is on the debtor to the extent of any deficiency in insurance coverage, c the secured party may hold as additional security any increase or profits, except money, such as the young of animals or dividends paid in additional shares received from the collateral, and must apply any money so received, unless remitted to the debtor, immediately on its receipt to reduce the obligation secured by the collateral, and d the secured party must keep the collateral identifiable, but fungible collateral may be commingled. 4 Subject to subsection (2), a secured party may use the collateral a in the manner and to the extent provided in the security agreement, b for the purposes of preserving the collateral, or c in accordance with an order of a court in the manner directed. Secured party having control of investment property as collateral 17.1 1 Unless otherwise agreed by the parties and despite section 17, a secured party having control, under section 1 (1.1), of investment property as collateral a may hold as additional security any proceeds received from the collateral, b must either apply money or funds received from the collateral to reduce the secured obligation or remit such money or funds to the debtor, and c may create a security interest in the collateral. 2 Despite section 17 and subsection (1) of this section, a secured party having control, under section 1 (1.1), of investment property as collateral may sell, transfer, use or otherwise deal with the collateral in the manner and to the extent provided in the security agreement. Acquisition of information from secured parties 18 1 The debtor, a creditor, a sheriff, a person with an interest in personal property of the debtor or an authorized representative of any of them may, by a demand in writing containing an address for reply and delivered to the secured party, a if an address is in the records of the registry, i at the secured party's most recent address in a registered financing statement that relates to the property, or ii at an address of the secured party, whether or not in the records of the registry, that is more recent than the address referred to in subparagraph (i), or b if no address is in the records of the registry, at the current address of the secured party, require the secured party to send or make available to the person making the demand or, if the demand is made by the debtor, to any person at an address specified by the debtor, any of the information specified in subsection (2). 2 The information that may be demanded under subsection (1) may be one or more of the following: a a copy of any security agreement providing for a security interest held by the secured party in the personal property of the debtor; b a statement in writing of the amount of the indebtedness and of the terms of payment of that indebtedness as of the date specified in the demand; c a written approval or correction of an itemized list of personal property attached to the demand indicating which items in the demand are collateral as of the date specified in the demand; d a written approval or correction of the amount of the indebtedness and of the terms of payment of the indebtedness as of the date specified in the demand; e information as to the location of the security agreement or a copy of it, as specified in the demand, sufficient to enable a person entitled to receive a copy of the security agreement to inspect it at that location. 3 A person with an interest in personal property of the debtor is entitled to make a demand under subsection (1) only with respect to a security agreement that provides for a security interest in the property in which that person has an interest. 4 A person who is entitled to make a demand under subsection (1) may demand that the secured party permit the person to inspect a copy of the security agreement by giving the secured party a written demand to that effect in accordance with subsection (1). 5 If a secured party receives a demand under subsection (4), the secured party must permit the person making the demand or that person's authorized representative to inspect, during normal business hours, the security agreement at the place specified by the secured party. 6 If a demand is made requiring an approval or correction referred to in subsection (2) (c) and the secured party claims a security interest in a all of the personal property of the debtor, b all of the personal property of the debtor, other than a specified kind or item of personal property, or c all of a specified kind of personal property of the debtor, the secured party may indicate this instead of approving or correcting the itemized list of the personal property. 7 If the secured party is a trustee under a trust indenture, the secured party must reply to a demand under subsection (1) or (4) within 25 days after the secured party receives it. 8 Any other secured party must reply to the demand within 10 days after the secured party receives it. 9 If, without reasonable excuse, a the secured party fails to comply with the demand within the specified period, or b in the case of a demand under subsection (1), the secured party's reply to the demand under subsection (1) is incomplete or incorrect, the person making the demand may, in addition to any other remedy provided for in this Act, apply to a court for an order requiring the secured party to comply with the demand. 10 If a demand is made under subsection (1) or (4) and the person receiving the demand no longer has an interest in the obligation or property of the debtor that is the subject of the demand, the person must, not later than 10 days after receiving the demand, disclose a the name and address of the person's immediate successor in interest, and b if known to the person, the current successor in interest. 11 If, without reasonable excuse, the person receiving the demand fails to comply with subsection (10), the person making the demand may, in addition to any other remedy provided for in this Act, apply to a court for an order requiring the person to whom the demand has been made to comply with this section. 12 On application under subsection (9) or (11), the court may make an order requiring the secured party or the person receiving the demand to comply with the demand or to disclose the information. 13 The court may provide for the actual or possible failure of the secured party or the person receiving the demand to comply with an order under subsection (12) by making one or more of the following orders either on application or as part of the order under subsection (12): a any order the court considers necessary to ensure compliance with the demand or the requirement for disclosure; b in the case of non-compliance by a secured party, an order that the security interest of the secured party with respect to which the demand was made is unperfected or extinguished and that any related registration be discharged. 14 On an application a under subsection (11), or b under this subsection made by i the secured party referred to in subsection (9), or ii the person referred to in subsection (10) as receiving the demand, the court, subject to section 69 (2), may, unless the demand is made by the debtor, exempt the secured party or person receiving the demand in whole or in part from complying with subsections (8) to (10) or may extend the time for compliance. 15 A secured party who has replied to a demand referred to in subsection (1) is estopped, for the purposes of this Act, against the person making the demand or against any other person who can reasonably be expected to rely on the reply from denying a the accuracy of the information referred to in subsection (2) (b) to (d) and contained in the reply to the demand, and b that the copy of the security agreement referred to in subsection (2) (a) that is provided in response to a demand under subsection (1) is a true copy of that security agreement, but only to the extent that the debtor or the other person has in fact relied on c the information referred to in paragraph (a), or d the accuracy of the copy of the security agreement referred to in paragraph (b). 16 A successor in interest referred to in subsection (10) is estopped for the purposes of this Act, against the person making the demand referred to in subsection (1) and any other person who can reasonably be expected to rely on the reply to the demand, from denying a the accuracy of the information referred to in subsection (2) (b) to (d) and contained in the reply to the demand, and b that the copy of the security agreement referred to in subsection (2) (a) that is provided in response to a demand under subsection (1) is a true copy of that security agreement, but only to the extent that the debtor or the other person has in fact relied on c the information referred to in paragraph (a), or d the accuracy of the copy of the security agreement referred to in paragraph (b). 17 A successor in interest is not estopped under subsection (16) if a the debtor or other person who relied on the reply knows that the interest has been transferred to the successor in interest and knows the successor's identity and address, or b before making the demand, a financing change statement has been registered under section 45 disclosing the successor in interest as the secured party. 18 The person to whom a demand is made under this section may require payment in advance of a fee in a prescribed amount for each reply to a demand, but the debtor is entitled to make a demand and receive a reply to it without charge once every 6 months. 19 A secured party who receives a demand that purports to be made by a person entitled to make it under subsection (1) may act as if the person is, in fact, entitled to make the demand unless the secured party knows that the person is not entitled to make it. 3 Perfection and Priorities When security interests are perfected 19 A security interest is perfected when a it has attached, and b all steps required for perfection under this Act have been completed, regardless of the order of occurrence. Perfection of security interest in securities account or futures account 19.1 1 Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account. 2 Perfection of a security interest in a futures account also perfects a security interest in the futures contracts carried in the futures account. Perfection on attachment of security interest in investment property 19.2 1 A security interest arising in the delivery of a financial asset under section 12.1 (3) is perfected when it attaches. 2 A security interest in investment property created by a broker or securities intermediary is perfected when it attaches. 3 A security interest in a futures contract or a futures account created by a futures intermediary is perfected when it attaches. Subordination of unperfected security interests 20 A security interest a in collateral is subordinate to the interest of i a person who causes the collateral to be seized under legal process to enforce a judgment including execution, garnishment or attachment, or who has obtained a charging order or equitable execution affecting or relating to the collateral, ii a sheriff who has seized or has a right to the collateral under the Creditor Assistance Act , iii a judgment creditor entitled by law to participate in the distribution of property or its proceeds seized under legal process as provided in the Creditor Assistance Act , and iv a representative of creditors, but only for the purposes of enforcing the rights of a person referred to in subparagraph (i), if that security interest is unperfected at the time v the interest of a person referred to in subparagraph (i), (ii) or (iv) arises, or vi the judgment creditor referred to in subparagraph (iii) delivers a writ of execution or certificate to the sheriff under section 3 of the Creditor Assistance Act , b in collateral is not effective against i a trustee in bankruptcy if the security interest is unperfected at the date of the bankruptcy, or ii a liquidator appointed under the Winding-up and Restructuring Act (Canada) if the security interest is unperfected at the date that the winding-up order is made, and c in chattel paper, a document of title, an instrument, money, an intangible or goods is subordinate to the interest of a transferee who i acquires an interest under a transaction that is not a security agreement, ii gives value, and iii acquires the interest without knowledge of the security interest and before the security interest is perfected. Measure of damages suffered by lessor or consignor 21 If the interest of a lessor under a lease for a term of more than one year or of a consignor under a commercial consignment is not effective against a judgment creditor under section 20 (a) or a trustee or liquidator under section 20 (b), the lessor or consignor is deemed, as against the lessee or consignee, as the case may be, to have suffered, immediately before the seizure of the leased or consigned goods or the date of the bankruptcy or winding-up order, damages in an amount equal to a the value of the leased or consigned goods at the date of the seizure, bankruptcy or winding-up order, and b the amount of loss other than that referred to in paragraph (a) that results from the termination of the lease or consignment. Perfection of purchase money security interests 22 1 A purchase money security interest in a collateral, other than an intangible, that is perfected not later than 15 days after the date the debtor or a third person at the request of the debtor, obtains possession of the collateral, whichever is earlier, or b an intangible that is perfected not later than 15 days after the day the security interest attaches, has priority over the interests of persons referred to in section 20 (a) and (b). 2 For the purposes of this section, if goods are shipped by common carrier to a debtor or to a person designated by the debtor, the debtor does not have possession of the goods until the debtor or the third person at the request of the debtor has obtained actual possession of the goods or a document of title to the goods, whichever is earlier. Continuity of perfection 23 1 If a security interest is perfected under this Act and is again perfected in some other way without an intermediate period during which it is unperfected, the security interest is continuously perfected for the purposes of this Act. 2 A transferee of a security interest has the same priority with respect to perfection of the security interest as the transferor had at the time of the transfer. Perfection by possession of collateral 24 1 Subject to section 19, possession of the collateral by the secured party, or on the secured party's behalf by another person, perfects a security interest in a chattel paper, b goods, c an instrument, d [Repealed 2007-10-128.] e a negotiable document of title, and f money, unless possession is a result of seizure or repossession. 2 For the purposes of subsection (1), a secured party does not have possession of collateral that is in the actual or apparent possession or control of the debtor or the debtor's agent. 3 Subject to section 19, a secured party may perfect a security interest in a certificated security by taking delivery of the certificated security under section 68 of the Securities Transfer Act . 4 Subject to section 19 of this Act, a security interest in a certificated security in registered form is perfected by delivery when delivery of a certificated security occurs under section 68 of the Securities Transfer Act and remains perfected by delivery until the debtor obtains possession of the security certificate. Perfection of security interest in investment property by control 24.1 1 Subject to section 19, a security interest in investment property may be perfected by control of the collateral under section 1 (1.1). 2 Subject to section 19, a security interest in investment property is perfected by control under section 1 (1.1) from the time the secured party obtains control and remains perfected by control until a the secured party does not have control, and b one of the following occurs: i if the collateral is a certificated security, the debtor has or acquires possession of the security certificate; ii if the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; iii if the collateral is a security entitlement, the debtor is or becomes the entitlement holder. Perfection by registration 25 Subject to section 19, registration of a financing statement perfects a security interest in collateral. Temporary perfection 26 1 A security interest perfected under section 24 in a an instrument or a certificated security that a secured party delivers to the debtor for the purpose of i ultimate sale or exchange, ii presentation, collection or renewal, or iii registration of transfer, or b a negotiable document of title or goods held by a bailee that are not covered by a negotiable document of title, which document of title or goods the secured party makes available to the debtor for the purpose of i ultimate sale or exchange, ii loading, unloading, storing, shipping or transshipping, or iii manufacturing, processing, packaging or otherwise dealing with the goods in a manner preliminary to their sale or exchange, remains perfected, despite section 10, for the first 15 days after the collateral comes under the control of the debtor. 2 After the 15 day period expires, a security interest referred to in this section is subject to the provisions of this Act relating to the perfection of a security interest. Perfection if goods in hands of bailees 27 1 Subject to section 19, a security interest in goods in the possession of a bailee is perfected by a issue of a document of title by the bailee in the name of the secured party, b if the bailee has issued a negotiable document of title to the goods, perfection of a security interest in the negotiable document of title, c holding by the bailee on behalf of the secured party in accordance with section 24, d deposit, by a secured party to whom a non-negotiable receipt has been transferred, of the transfer with the warehouser who issued the receipt in accordance with section 21 (2) of the Warehouse Receipt Act , or e registration of a financing statement relating to the goods. 2 The issue of a negotiable document of title covering goods does not preclude any other security interest in the goods arising during the period that the negotiable document of title is outstanding. 3 A perfected security interest in a negotiable document of title covering goods takes priority over a security interest in goods otherwise perfected after the goods become covered by the negotiable document of title. Security interests in proceeds 28 1 Subject to this Act, if collateral is dealt with or otherwise gives rise to proceeds, the security interest a continues in the collateral unless the secured party expressly or impliedly authorizes the dealing, and b extends to the proceeds, but if the secured party enforces a security interest against both the collateral and the proceeds, the amount secured by the security interest in the collateral and the proceeds is limited to the market value of the collateral at the date of the dealing. 1.1 The limitation of the amount secured by a security interest as provided in subsection (1) does not apply if the collateral is investment property. 2 A security interest in proceeds is a continuously perfected security interest if the interest in the original collateral is perfected by registration of a financing statement that a contains a description of the proceeds that would be sufficient to perfect a security interest in original collateral of the same kind, b covers the original collateral, if the proceeds are of a kind that are within the description of the original collateral, or c covers the original collateral, if the proceeds consist of money, cheques or deposit accounts in deposit taking institutions. 3 If the security interest in the original collateral was perfected other than in a manner referred to in subsection (2), the security interest in the proceeds is a continuously perfected security interest, but becomes unperfected on the expiration of 15 days after the security interest in the original collateral attaches to the proceeds, unless the security interest in the proceeds is otherwise perfected by any of the methods and under the circumstances prescribed for original collateral of the same kind. Security interests in returned or repossessed goods 29 1 If a debtor sells or leases goods that are subject to a security interest under circumstances in which the buyer or lessee takes free of the security interest under section 28 or 30, the security interest reattaches to the goods if a the goods are returned to, or are seized or repossessed by, the debtor or a transferee of chattel paper created by the sale or lease, and b the obligation secured remains unpaid or unperformed. 2 If a security interest reattaches under subsection (1), the perfection of the security interest and the time of registration or perfection is determined as if the goods had not been sold or leased if the security interest was perfected by registration at the time of the sale or lease and the registration is effective at the time of the return, seizure or repossession. 3 If a sale or lease of goods creates an account or chattel paper, and a the account or chattel paper is transferred to a secured party, and b the goods are returned to, or are seized or repossessed by, the debtor or a transferee of the chattel paper, the transferee of the account or chattel paper has a security interest in the goods that attaches when the goods are returned, seized or repossessed. 4 Despite section 24 (1), a security interest arising under subsection (3) of this section is perfected if the security interest in the account or chattel paper was perfected at the time of the return, seizure or repossession, but becomes unperfected on the expiry of 15 days after that unless the transferee registers a financing statement relating to the security interest or takes possession of the goods, by seizure or repossession of the goods or otherwise, before the end of that period. 5 A security interest in goods that a transferee of an account has under subsection (3) is subordinate to a a security interest arising under subsection (1) that is a perfected security interest, and b a security interest of a transferee of chattel paper arising under subsection (3). 6 A security interest in goods that a transferee of chattel paper has under subsection (3) has priority over a a security interest in the goods that reattaches under subsection (1), and b a security interest in the goods as after acquired property that attaches on the return, seizure or repossession of the goods, if the transferee of the chattel paper would have priority under section 31 (6) as to the chattel paper over an interest in the chattel paper claimed by the holder of the security interest in the goods. 7 A security interest in goods given by a buyer or lessee of the goods referred to in subsection (1) that attaches while the goods are in the possession of the buyer, lessee or debtor and that is perfected when the goods are returned, seized or repossessed has priority over a security interest in the goods arising under this section. Protection of buyer or lessee of goods 30 1 In this section: buyer of goods includes a person who obtains vested rights in goods under a contract to which the person is a party as a consequence of the goods becoming a fixture or accession to property in which the person has an interest; seller includes a person who supplies goods that become a fixture or accession under a contract with a buyer of goods or under a contract with a person who is party to a contract with the buyer; the ordinary course of business of the seller includes the supply of goods in the ordinary course of business as part of a contract for services and materials. 2 A buyer or lessee of goods sold or leased in the ordinary course of business of the seller or lessor takes free of any perfected or unperfected security interest in the goods given by the seller or lessor or arising under section 28 or 29, whether or not the buyer or lessee knows of it, unless the buyer or lessee also knows that the sale or lease constitutes a breach of the security agreement under which the security interest was created. 3 A buyer or lessee of goods that are acquired as consumer goods takes free from a perfected or unperfected security interest in the goods if the buyer or lessee a gave value for the interest acquired, and b bought or leased the goods without knowledge of the security interest. 4 Subsection (3) does not apply to a security interest in a a fixture, b goods the purchase price of which exceeds the greater of $1 500 and a prescribed amount, or c a lease of goods the market value of which exceeds the greater of $1 500 and a prescribed amount. 5 A buyer or lessee of goods takes free from a security interest that is temporarily perfected under section 26 (1), 28 (3) or 29 (4) or a security interest the perfection of which is continued under section 51 during any of the 15 day periods referred to in those sections, if the buyer or lessee a gave value for the interest acquired, and b bought or leased the goods without knowledge of the security interest. 6 If goods are sold or leased, the buyer or lessee takes free from any security interest in the goods perfected under section 25, if a the buyer or lessee bought or leased the goods without knowledge of the security interest, and b the goods were not described by serial number in the registration relating to the security interest. 7 Subsection (6) applies only to goods that are equipment and that are defined in the regulations as serial numbered goods. 8 A sale or lease referred to in subsection (2), (3), (5) or (6) may be for cash, by exchange for other property or on credit and includes delivering goods or a document of title to goods under a pre-existing contract for sale, but does not include a transfer as security for, or in total or partial satisfaction of, a money debt or past liability. 9 A purchaser of a security, other than a secured party, who a gives value, b does not know that the transaction constitutes a breach of a security agreement granting a security interest in the security to a secured party who does not have control of the security, and c obtains control of the security acquires the security free from the security interest. 10 A purchaser referred to in subsection (9) is not required to determine whether a security interest has been granted in the security or whether the transaction constitutes a breach of a security agreement. 11 An action based on a security agreement creating a security interest in a financial asset, however framed, may not be brought against a person who acquires a security entitlement under section 95 of the Securities Transfer Act for value and did not know that there has been a breach of the security agreement. 12 A person who acquires a security entitlement under section 95 of the Securities Transfer Act is not required to determine whether a security interest has been granted in a financial asset or whether there has been a breach of the security agreement. 13 If an action based on a security agreement creating a security interest in a financial asset could not be brought against an entitlement holder under subsection (11), it may not be brought against a person who purchases a security entitlement, or an interest in it, from the entitlement holder. Protection of transferees of negotiable and quasi-negotiable collateral 31 1 A holder of money has priority over a security interest in money perfected under section 25, or temporarily perfected under section 28 (3), if the holder a acquired the money without knowledge that it was subject to a security interest, or b is a holder for value whether or not the holder acquired the money with knowledge that it was subject to a security interest. 2 A creditor who receives an instrument drawn or made by a debtor and delivered in payment of a debt owing to the creditor by that debtor has priority over a security interest in the instrument whether or not the creditor has knowledge of the security interest at the time of delivery. 3 A purchaser of an instrument has priority over a security interest in the instrument perfected under section 25 or temporarily perfected under section 26 or 28 (3) if a the purchaser gave value for the instrument, b the purchaser acquired the instrument without knowledge that it was subject to a security interest, and c the purchaser took possession of the instrument. 4 A holder of a negotiable document of title has priority over a security interest in the document of title that is perfected under section 25 or temporarily perfected under section 26 or 28 (3), if the holder a gave value for the document of title, and b acquired the document of title without knowledge that it was subject to a security interest. 5 For the purposes of subsections (3) and (4), a a purchaser of an instrument, or b a holder of a negotiable document of title, who acquired the purchaser's or holder's interest under a transaction entered into in the ordinary course of the transferor's business has knowledge only if the purchaser or the holder acquired the interest with knowledge that the transaction violates the terms of the security agreement creating or providing for the security interest. 6 A purchaser of chattel paper who takes possession of the chattel paper in the ordinary course of business and for new value has priority over any security interest in it that a was perfected under section 25, if the purchaser does not know at the time of taking possession that the chattel paper is subject to a security interest, or b has attached to proceeds of inventory under section 28, whatever the extent of the purchaser's knowledge. Act does not limit 31.1 1 This Act does not limit the rights that a protected purchaser of a security has under the Securities Transfer Act . 2 The interest of a protected purchaser of a security under the Securities Transfer Act takes priority over an earlier security interest, even if perfected, to the extent provided in that Act. 3 This Act does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under the Securities Transfer Act . Priority of liens 32 A lien on goods that arises as a result of the provision, in the ordinary course of business, of materials or services in respect of the goods, has priority over a perfected or unperfected security interest unless the lien arises under an enactment that gives priority to the security interest. Transfer of debtors' rights in collateral 33 1 For the purposes of this section, a transfer includes a sale, the creation of a security interest or a transfer under judgment enforcement proceedings. 2 Despite a provision in a security agreement prohibiting transfer or declaring a transfer to be a default, the rights of a debtor in collateral may be transferred consensually or by operation of law but a transfer by the debtor does not prejudice the rights of the secured party under the agreement or otherwise, including the right to treat a prohibited transfer as an act of default. Purchase money security interests 34 1 Subject to section 28, a purchase money security interest in a collateral or its proceeds, other than intangibles or inventory, that is perfected not later than 15 days after the day the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier, or b an intangible or its proceeds that is perfected not later than 15 days after the day the security interest in the intangible attaches, has priority over any other security interest in the same collateral given by the same debtor. 2 Subject to subsection (5) and section 28, a purchase money security interest in inventory or its proceeds has priority over any other security interest in the same collateral given by the same debtor if a the purchase money security interest in the inventory is perfected at the time the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier, b the secured party gives a notice to any other secured party who has, before the time of registration of the purchase money security interest, registered a financing statement containing a description that includes the same item or kind of collateral, c the secured party gives notice to any other party who has, before the time of registration of the purchase money security interest, registered a security agreement providing for a prior security interest on the same item or kind of collateral, d the notice referred to in paragraph (b) states that the person giving the notice expects to acquire a purchase money security interest in inventory of the debtor and describes the inventory by item or kind, and e the notice is given before the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier. 3 A notice referred to in subsection (2) may be given in accordance with section 72 or by registered mail addressed to the address of the person to be notified as it appears in the financing statement referred to in subsection (2) (b) or the security agreement referred to in subsection (2) (c). 4 Subject to section 28 a purchase money security interest in goods and its proceeds taken by a seller, lessor or consignor of the collateral, that is perfected a in the case of inventory, at the date the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier, and b in the case of collateral other than inventory not later than 15 days after the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier, has priority over any other purchase money security interest in the same collateral given by the same debtor. 5 A non-proceeds security interest in accounts given for new value has priority over a purchase money security interest in the accounts as proceeds of inventory if a financing statement relating to the security interest in the accounts is registered before a the purchase money security interest is perfected, or b a financing statement relating to it is registered. 6 A non-proceeds purchase money security interest has priority over a purchase money security interest in the same collateral as proceeds if the non-proceeds purchase money security interest, a in the case of inventory, is perfected at the date the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier, and b in the case of collateral other than inventory, is perfected not later than 15 days after the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier. 7 For the purposes of this section, if goods are shipped by common carrier to a debtor or to a person designated by a debtor, the debtor is deemed not to have obtained possession of the goods until the debtor, or another person at the request of the debtor, has obtained actual possession of the goods or a document of title to the goods, whichever is earlier. 8 A perfected security interest in crops or their proceeds given for value to enable a debtor to produce or harvest the crops and given a while the crops are growing crops, or b during a period of 6 months immediately prior to the time when the crops become growing crops, has priority over any other security interest in the same collateral given by the same debtor. 9 A perfected security interest in fowl, cattle, horses, sheep, swine or fish or the proceeds of any of them given for value to enable the debtor to acquire food or drugs to be fed to or placed in the animals or fish has priority over any other security interest in the same collateral given by the same debtor other than a perfected purchase money security interest. Residual priority rules 35 1 If this Act does not provide another method for determining priority between security interests, a priority between perfected security interests in the same collateral is determined by the order of the occurrence of the following: i the registration of a financing statement without regard to the date of attachment of the security interest; ii possession of the collateral in accordance with section 24 without regard to the date of attachment of the security interest; iii perfection under section 5, 7, 26, 29 or 78; whichever is the earliest, b a perfected security interest has priority over an unperfected security interest, and c priority among unperfected security interests is determined by the order of attachment of the security interests. 2 For the purposes of subsection (1), a continuously perfected security interest must be treated at all times as perfected by the method by which it was originally perfected. 3 Subject to section 28 for the purposes of subsection (1), the time of registration, possession or perfection of a security interest in original collateral is also the time of registration, possession or perfection of its proceeds. 4 A security interest in goods that are equipment and that are of a kind defined in the regulations as serial numbered goods is not registered or perfected by registration for the purposes of subsection (1), (7) or (8) unless a financing statement relating to the security interest and containing a description of the goods by serial number is registered. 5 Subject to subsection (6), the priority that a security interest has under subsection (1) applies to all advances, including future advances. 6 A perfected security interest has priority over the interest of persons referred to in section 20 (a) only to the extent of a advances made before the interests of the persons arise, or before the sheriff seizes the collateral or obtains a right to it under the Creditor Assistance Act , b advances made before the secured party acquires knowledge of i the interests of the persons, ii seizure of the collateral by the sheriff, or iii an order giving the sheriff a right to the collateral, c advances made in accordance with i a statutory requirement, or ii a legally binding obligation owing to a person other than the debtor entered into by the secured party before the secured party acquired the knowledge referred to in paragraph (b), d reasonable costs and expenses incurred by the secured party for the protection, preservation or repair of the collateral, and e the amount of taxes paid by the secured party under section 27 (1) of the Manufactured Home Act . 7 If registration of a security interest lapses as a result of failure to renew the registration or if a registration has been discharged without authorization or in error, and the secured party re-registers the security interest not later than 30 days after the lapse or discharge, the lapse or discharge does not affect the priority status of the security interest in relation to a competing perfected security interest that immediately before the lapse or discharge had a subordinate priority position, except to the extent that the competing security interest secures advances made or contracted for after the lapse or discharge and before the re-registration.

8 If a debtor transfers an interest in collateral which, at the time of the transfer, is subject to a perfected security interest, that security interest has priority over any other security interest granted by the transferee before the transfer, except to the extent that the security interest granted by the transferee secures advances made, or contracted for, a after the expiry of 15 days from the day the secured party who holds the security interest in the transferred collateral has knowledge of the information required to register a financing statement disclosing the transferee as the new debtor, and b before the secured party referred to in paragraph (a) amends the registration to disclose the name of the transferee as the new debtor or takes possession of the collateral. 9 Subsection (8) does not apply if the transferee acquires the debtor's interest free from the security interest granted by the debtor. Priority rules governing conflicting interests in investment property 35.1 1 The rules in this section govern priority among conflicting security interests in the same investment property. 2 A security interest of a secured party having control, under section 1 (1.1), of investment property has priority over a security interest of a secured party who does not have control of the investment property. 3 A security interest in a certificated security in registered form that is perfected by taking delivery under section 24 (3) and not by control under section 24.1 has priority over a conflicting security interest perfected by a method other than control. 4 Except as otherwise provided in subsections (5) and (6) of this section, conflicting security interests of secured parties, each of whom has control under section 1 (1.1), rank according to priority in time of a if the collateral is a security, obtaining control, b if the collateral is a security entitlement carried in a securities account, i the secured party's becoming the person for which the securities account is maintained, if the secured party obtained control under section 25 (1) (a) of the Securities Transfer Act , ii the securities intermediary's agreement to comply with the secured party's entitlement orders with respect to security entitlements carried or to be carried in a securities account, if the secured party obtained control under section 25 (1) (b) of the Securities Transfer Act , or iii if the secured party obtained control through another person under section 25 (1) (c) of the Securities Transfer Act , when the other person obtained control, or c if the collateral is a futures contract carried with a futures intermediary, the satisfaction of the requirement for control specified in section 1 (1.1) (d) (ii) of this Act with respect to futures contracts carried or to be carried with the futures intermediary. 5 A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party. 6 A security interest held by a futures intermediary in a futures contract or a futures account maintained with the futures intermediary has priority over a conflicting security interest held by another secured party. 7 Conflicting security interests granted by a broker, securities intermediary or futures intermediary that are perfected without control under section 1 (1.1) rank equally. 8 In all other cases, priority among conflicting security interests in investment property is governed by section 35. Security interests in fixtures 36 1 In this section, secured party includes a receiver. 2 This section applies to land for which a certificate of title has been issued under the Land Title Act and to prescribed land or classes of land. 3 Except as provided in this section and in section 30, a security interest in goods that attaches before or at the time the goods become fixtures has priority with respect to the goods over a claim to the goods made by a person with an interest in the land. 4 A security interest referred to in subsection (3) is subordinate to the interest of a a person who acquires for value an interest in the land after the goods become fixtures including an assignee for value of the interest of a person with an interest in the land at the time the goods become fixtures, and b any person with a registered mortgage on the land who i makes an advance under the mortgage after the goods become fixtures, but only with respect to the advance, or ii obtains an order for sale or foreclosure after the goods become fixtures without fraud and before the notice of the security interest is filed in accordance with section 49. 5 A security interest in goods that attaches after the goods become fixtures is subordinate to the interest of a person who a has an interest in the land at the time the goods become fixtures and who i has not consented to the security interest, ii has not disclaimed an interest in the goods or fixtures, iii has not entered into an agreement under which a person is entitled to remove the goods, or iv is not otherwise precluded from preventing the debtor from removing the goods, or b acquires an interest in the land after the goods become fixtures if the interest is acquired without fraud and before the notice of the security interest in the goods is filed in accordance with section 49. 6 A security interest referred to in subsection (3) or (5) is subordinate to the interest of a creditor of the debtor who caused to be registered under the Court Order Enforcement Act a judgment in the appropriate land title office affecting the land, after the goods become fixtures, and before the notice of the security interest is filed in accordance with section 49. 7 The interest of a creditor referred to in subsection (6) does not take priority over a purchase money security interest in goods a notice of which is filed in accordance with section 49 not later than 15 days after the goods are affixed to the land. 8 A secured party who, under this Act, has the right to remove goods from land must exercise this right of removal in a manner that causes no greater damage or injury to the land and to other property located on it or that puts the occupier of the land to no greater inconvenience than is necessarily incidental to the removal of the goods. 9 A person, other than the debtor, who has an interest in the land at the time the goods that are subject to the security interest become fixtures is entitled to reimbursement for any damages to that interest in the land caused during the removal of the goods, but is not entitled to reimbursement for diminution in the value of the land caused by the absence of the goods removed or by the necessity of replacement. 10 The person entitled to reimbursement under subsection (9) may refuse permission to remove the goods until the secured party has given adequate security for reimbursement. 11 The secured party may apply to a court for one or more of the following orders: a determining the person entitled to reimbursement under this section; b determining the amount and kind of security to be provided by the secured party; c designating the depository for the security; d authorizing the removal of the goods without the provision of security for reimbursement under subsection (10). 12 A person having an interest in the land that is subordinate to a security interest under this section may, before the goods have been removed from the land by the secured party, retain the goods on payment to the secured party of the lesser of the following: a the amount secured by the security interest having priority over the interest; b the market value of the goods if the goods were removed from the land. 13 The secured party who has a right to remove the goods from the land must give to each person, who appears by the records of the land title office to have an interest in the land, a notice of the intention of the secured party to remove the goods and the notice must contain a the name and address of the secured party, b a description of the goods to be removed, c the amount required to satisfy the obligation secured by the security interest, d the market value of the goods, e a description of the land to which the goods are affixed, and f a statement of intention to remove the goods unless the amount referred to in subsection (12) is paid on or before a specified date that is not less than 15 days after the notice is given in accordance with subsection (14). 14 A notice referred to in subsection (13) must be given at least 15 days before removal of the goods and may be given in accordance with section 72 or by registered mail addressed to the address of the person to be notified as it appears in the records of the land title office. 15 A person entitled to receive a notice under subsection (14) may apply to a court for an order postponing removal of the goods from the land. Security interests in crops 37 1 In this section, secured party includes a receiver. 2 This section applies to land for which a certificate of title has been issued under the Land Title Act and to prescribed land or classes of land. 3 Except as provided in this section, a security interest in crops has priority with respect to the crops over an interest in the crops claimed by a person with an interest in the land. 4 A security interest referred to in subsection (3) is subordinate to the interest of a a person who acquires for value an interest in the land while the crops are growing crops, including an assignee for value of the interest of a person with an interest in the land while the crops are growing crops, and b a person with a registered mortgage on the land who i makes an advance under the mortgage after the crops become growing crops, but only with respect to the advance, or ii obtains an order for sale or foreclosure after the crops become growing crops, without fraud and before the notice of the security interest in the growing crops is filed in accordance with section 49. 5 A security interest referred to in subsection (3) is subordinate to the interest of a creditor of the debtor who causes to be registered, in accordance with the Court Order Enforcement Act , a judgment in the appropriate land title office affecting the land on which the crops are growing before the notice of the security interest is filed in accordance with section 49. 6 The interest of a creditor referred to in subsection (5) does not take priority over a purchase money security interest in the crops, or a security interest in the crops referred to in section 34 (8), a notice of which is filed in accordance with section 49 not later than 15 days after the time the security interest in the crops attaches. 7 Section 36 (8) to (15) applies to seizure and removal of growing crops from land. Security interests in accessions 38 1 In this section: other goods means goods to which an accession is installed or affixed; secured party includes a receiver; the whole means an accession and the goods to which the accession is installed or affixed. 2 Except as provided in this section and section 30, a security interest in goods that attaches before or at the time the goods become an accession has priority with respect to the goods over a claim to the goods as an accession made by a person with an interest in the whole. 3 A security interest referred to in subsection (2) is subordinate to the interest of a a person who acquires for value an interest in the whole after the goods become an accession including an assignee for value of the interest of a person with an interest in the whole at the time the goods become an accession, and b a person with a security interest taken and perfected in the whole who i makes an advance under a security agreement after the goods become accessions, but only with respect to the advance, or ii acquires the right to retain the whole in satisfaction of the obligation secured, without knowledge of the security interest in the accession and before it is perfected. 4 A security interest in goods that attaches after the goods become an accession is subordinate to the interest of a person who a has an interest in the other goods at the time the goods become an accession and who i has not consented to the security interest, ii has not disclaimed an interest in the accession, iii has not entered into an agreement under which a person is entitled to remove the accession, or iv is not otherwise precluded from preventing the debtor from removing the accession, or b acquires an interest in the whole after the goods become an accession if the interest is acquired without knowledge and before the security interest in the accession is perfected. 5 A security interest referred to in subsections (2) and (4) is subordinate to the interest of a creditor or of a sheriff who has seized or caused the whole to be seized under legal process to enforce a judgment, if a the seizure occurs under circumstances referred to in section 20, and b the security interest is not perfected at the date of seizure. 6 The interest of a creditor or of a sheriff referred to in subsection (5) does not take priority over a purchase money security interest in goods that is perfected not later than 15 days after the goods become an accession. 7 A secured party who, under this Act, has the right to remove an accession from the whole must exercise the right of removal in a manner that causes no greater damage or injury to the other goods or that puts the person in possession of the whole to no greater inconvenience than is necessarily incidental to the removal of the accession. 8 A person, other than the debtor, who has an interest in the other goods at the time the goods subject to the security interest become an accession is entitled to reimbursement for any damages to the person's interest in the other goods caused during the removal of the accession, but is not entitled to reimbursement for diminution in the value of the other goods caused by the absence of the accession or by the necessity of its replacement. 9 The person entitled to reimbursement as provided in subsection (8) may refuse permission to remove the accession until the secured party has given adequate security for reimbursement. 10 The secured party may apply to a court for one or more of the following orders: a determining the person entitled to reimbursement under this section; b determining the amount and kind of security to be provided by the secured party; c prescribing the depository for the security; d authorizing the removal of the goods without the provision of security for reimbursement under subsection (9). 11 A person having an interest in the whole that is subordinate to a security interest as provided in this section may, before the accession has been removed from the whole by the secured party, retain the accession on payment to the secured party of the lesser of the following: a the amount secured by the security interest having priority over the person's interest; b the market value of the accession if the accession were removed from the other goods. 12 The secured party who has a right to remove the accession from the whole must give to each person a who is known by the secured party to have an interest in the other goods or in the whole, and b who has registered a financing statement i using the name of the debtor and referring to the other goods, or ii according to the serial number of the other goods if they are goods defined in the regulations as serial numbered goods, a notice of the intention of the secured party to remove the accession and the notice must contain c the name and address of the secured party, d a description of the goods to be removed, e the amount required to satisfy the obligation secured by the security interest, f the market value of the accession, g a description of the other goods, and h a statement of intention to remove the accession unless the amount referred to in subsection (11) is paid on or before a specified date that is not less than 15 days after the notice is given in accordance with subsection (13). 13 A notice referred to in subsection (12) must be given at least 15 days before removal of the accession and may be given in accordance with section 72 or by registered mail addressed to the address of the person to be notified as it appears on the financing statement. 14 A person entitled to receive a notice under subsection (12) may apply to a court for an order postponing removal of the accession. Security interests in processed or commingled goods 39 1 A perfected security interest in goods that subsequently become part of a product or mass continues in the product or mass if the goods are so manufactured, processed, assembled or commingled that their identity is lost in the product. 2 Subject to subsections (4) and (6), if more than one perfected security interest continues in the same product or mass under subsection (1), and each was a security interest in separate goods, the security interests are entitled to share in the product or mass according to the ratio that the obligation secured by each security interest bears to the sum of the obligations secured by all security interests. 3 For the purposes of section 35, perfection of a security interest in goods that subsequently become part of a product or mass is also a perfection of the security interest in the product or mass. 4 For the purposes of subsection (2), the obligation secured by a security interest does not exceed the market value of the goods at the date that the goods become part of the product or mass. 5 Any priority that a perfected security interest that has been continued in the product or mass under subsection (1) has over a perfected security interest in the product or mass is limited to the value of the goods at the date they became part of the product or mass. 6 A perfected purchase money security interest in goods that continues in the product or mass under subsection (1) has priority over a non-purchase money security interest a in the goods that continues in the product or mass under subsection (1), b in the product or mass, other than as inventory, given by the same debtor, and c in the product or mass as inventory given by the same debtor if i the secured party with the purchase money security interest gives a notice to any secured party with the non-purchase money security interest in the product or mass, who registers a financing statement containing a description of collateral that includes the product or mass, before the identity of the goods is lost in the product or mass or who has registered a security agreement providing for a prior security interest in the product or mass before the identity of the goods is lost in the product or mass, ii the notice contains a statement that the person giving the notice has acquired or expects to acquire a purchase money security interest in goods supplied to the debtor as inventory, and iii the notice is given before the identity of the goods is lost in the product or mass. 7 A notice referred to in subsection (6) (c) may be given in accordance with section 72 or by registered mail addressed to the address of the person to be notified as it appears in the financing statement or security agreement referred to in subsection (6) (c). 8 This section does not apply to a security interest in an accession to which section 38 applies. Subordination or postponement of right to security interests 40 1 A secured party may, in a security agreement or otherwise, subordinate the secured party's security interest to any other interest and the subordination is effective according to its terms between the parties and may be enforced by a third party if the third party is the person or one of a class of persons for whose benefit the subordination was intended. 2 An agreement or undertaking to subordinate or postpone a the right of a person to the performance of some or all of an obligation to the right of another person to the performance of some or all of another obligation by the same debtor, or b some or all of the rights of a secured party under a security agreement to some or all of the rights of another secured party under another security agreement with the same debtor, does not, because of the subordination or postponement alone, create a security interest. 3 Subsection (2) is deemed to have come into force on October 1, 1990 and is retroactive to the extent necessary to give it effect on and after that date. Assignments of intangibles or chattel paper 41 1 In this section, account debtor means a person who is obligated under an intangible or chattel paper. 2 The rights of an assignee of collateral which is either an intangible or chattel paper are subject to a the terms of the contract between the account debtor and the assignor and any defence or claim arising out of the contract or a closely connected contract, and b any other defence or claim of the account debtor against the assignor that accrues before the account debtor has knowledge of the assignment, unless the account debtor has made an enforceable agreement not to assert defences or claims arising out of the contract. 3 A modification of, or a substitution for, a contract referred to in subsection (2) (a) that is made in good faith and in accordance with reasonable commercial standards is effective against the assignee, unless the account debtor has otherwise agreed. 4 Subsection (3) applies a to the extent that an assigned right to payment arising out of the contract has not been earned by performance, and b even if there has been notice of the assignment to the account debtor. 5 If a contract has been modified or substituted in the manner referred to in subsection (3), the assignee obtains rights that correspond to those of the assignor under the modified or substituted contract. 6 Nothing in subsections (3) to (5) affects the validity of a term in an assignment agreement that provides that a modification or substitution referred to in those subsections is a breach of contract by the assignor. 7 If collateral, which is either an intangible or chattel paper, is assigned, the account debtor may make payments under the contract to the assignor a before the account debtor receives a notice that i states that the amount payable or to become payable under the contract has been assigned and payment is to be made to the assignee, and ii identifies the contract under which the amount payable is to become payable, or b after i the account debtor requests the assignee to furnish proof of the assignment, and ii the assignee fails to furnish the proof within 15 days from the date of the request. 8 Payment by an account debtor to an assignee in accordance with a notice referred to in subsection (7) (a) discharges the obligation of the account debtor to the extent of the payment. 9 A term in a contract between an account debtor and an assignor that prohibits or restricts assignment of the whole of the account or chattel paper for money due or to become due is binding on the assignor, but only to the extent of making the assignor liable in damages for breach of contract, and is unenforceable against third parties. 4 Registration Personal property registry 42 1 There must be a registry known as the personal property registry for the purposes of registrations under this Act and for registrations that are permitted or required under any other enactment to be made in the registry. 2 The registrar may have a seal of office in the form prescribed. 3 The minister may designate a person as registrar. 4 The registrar may designate one or more persons as deputy registrars. 5 Despite any regulation made under section 76, when in the opinion of the registrar the circumstances are such that it is not practicable to provide one or more registry services, the registrar may a refuse to register financing statements, b refuse to accept requests for search results, and c otherwise suspend one or more of the functions of the registry, for the period of time during which, in the opinion of the registrar, those circumstances prevail. Registration of financing statements 43 1 A person who wishes to have a financing statement registered must submit it for registration at an office of the registry. 2 Registration of a financing statement is effective from the time assigned to it in the office of the registry and, if 2 or more financing statements are assigned the same time, the order of registration is determined by reference to the registration numbers assigned to the financing statements in the registry office. 3 The registrar must not register a financing statement or issue a search result under this Part until any fees, as set out in the Schedule, have been paid or arrangements satisfactory to the registrar for their payment have been made. 4 A financing statement may be registered before a security agreement is made and before a security interest attaches. 5 A registration may relate to one or more than one security agreement. 6 The validity of the registration of a financing statement is not affected by a defect, irregularity, omission or error in the financing statement or in the registration of it unless the defect, irregularity, omission or error is seriously misleading. 7 Subject to subsection (9), if a one or more debtors are required to be disclosed in a financing statement, or b collateral is consumer goods that are defined in the regulations as serial numbered goods, and there is a seriously misleading defect, irregularity, omission or error in c the disclosure of the name of any of the debtors other than a debtor who does not own or have rights in the collateral, or d the serial number of the collateral, the registration is invalid. 8 If it is alleged that a defect, irregularity, omission or error is seriously misleading, it is not necessary to prove that anyone was actually misled by it. 9 Failure to provide a description in a financing statement in relation to any item or kind of collateral does not affect the validity of the registration with respect to other collateral described in the financing statement. 10 Failure to indicate the prior registration law on a financing statement (transition), providing for the continuation of a registration under prior law as provided in section 78, is not seriously misleading for the purposes of subsection (6). 11 A person who fails to indicate, in the prescribed manner, the appropriate prior registration law, as defined in section 78 (1), on a financing statement (transition) that provided for the continuation of the registration under prior law, as defined in section 77 (1), fails to discharge an obligation within the meaning of section 69 to any person who has suffered damages as a result of reliance on the financing statement (transition). 12 Despite anything in this Part, the registrar may reject a financing statement if, in the opinion of the registrar, it does not comply with this Act or the regulations or with any other Act or regulations under which registration of a financing statement is authorized. 13 The registrar must give written reasons for the rejection of a financing statement under subsection (12). 14 For the purposes of subsection (15), verification statement has the meaning prescribed. 15 The secured party or person named as a secured party in a financing statement that is not a financing statement (transition) must give to each person named as debtor in the statement, no later than 20 days after it is registered, a a copy of the statement reproduced on paper, or b a copy of a verification statement issued by the registry that relates to the financing statement, but a copy need not be given to a person who has agreed in writing to waive the right to a copy. Duration of and amendments to registrations 44 1 Except as otherwise prescribed, a registration under this Act is effective for the period of time indicated on the financing statement by which the registration is effected. 2 A registration may be renewed by registering a financing change statement at any time before the registration expires and, except as otherwise prescribed, the period of time for which the registration is effective is extended by the renewal period indicated on the financing change statement. 3 An amendment to a registration, whether the registration is valid or invalid, may be made by registering a financing change statement at any time during the period that the registration is effective and the amendment is effective from the date the financing change statement is registered to the expiry of the registration being amended. 4 When an amendment of a registration is not otherwise provided for in this Part, a financing change statement may be registered to amend the registration. Registration of transfers of security interests 45 1 If a secured party with a registered security interest transfers the interest or a part of it, a financing change statement that discloses the transfer may be registered. 2 If a financing change statement is registered under subsection (1) and an interest in part, but not all, of the collateral is transferred, the financing change statement must contain a description of the collateral in which the interest is transferred. 3 When a secured party transfers an interest in collateral and the security interest of the secured party is not perfected by registration, a financing statement may be registered in which the transferee is disclosed as the secured party. 4 A financing change statement disclosing a transfer of a security interest may be registered before or after the transfer. 5 After registration of a financing change statement disclosing a transfer of a security interest, the transferee is the secured party for the purposes of this Part. 6 When a secured party has subordinated the secured party's interest to the interest of another person, a financing change statement may be registered to disclose the subordination at any time during the period that the registration of the subordinated interest is effective. Registration documents 46 1 The registrar may have any record or information that is filed with the registrar under this Act, or that is otherwise maintained by the registrar, photographed, stored in electronic or digital form or reproduced in any other prescribed manner, and the photograph, stored record or reproduction is, for all purposes, deemed to be the record or information photographed, stored or reproduced. 2 Information in a registration may be removed from the records of the registry a when the registration is no longer effective, b on the receipt of a financing change statement discharging or partially discharging the registration, or c [Repealed 2010-4-48.] d on receipt of a court order compelling the discharge or partial discharge of a registration. 3 The registrar may remove information in a registration from the records of the Registrar General after the registration is reregistered in the personal property registry by means of a financing statement (transition). Registration not notice 47 Registration of a financing statement in the registry does not by itself constitute express, constructive or implied notice to any person of, or express, constructive or implied knowledge on the part of any person of, a the financing statement or its contents, or b the security interest perfected by the financing statement or the contents of any security agreement. Registry searches 48 1 A person may request one or more of the following: a a search of the name of a debtor and the issue of the search result; b a search according to the serial number of goods of a kind that are defined in the regulations as serial numbered goods and the issue of a search result; c a search according to a registration number and the issue of a search result; d a copy or a certified copy of any registered, printed document. 2 A printed search result that purports to be issued by the registry is receivable in evidence as proof, in the absence of evidence to the contrary, of its contents including a the date of registration of a financing statement to which the search result refers, and b the order of registration of the financing statement as indicated by the registration number. 3 A copy of a registered, printed financing statement or other registered, printed document bearing the certification of the registrar is receivable in evidence as a true copy of the statement or document without proof of the signature or official position of the registrar. Registration in land title office 49 1 In this section: fee means the fees payable under the Land Title Act for the filing of notices in the land title office; register has the same meaning as in the Land Title Act ; registrar means the registrar of titles for the land title district in which land affected by a security interest is located; secured party includes an assignee referred to in subsection (6); security interest means a security interest in a fixture under section 36 or growing crops under section 37. 2 A secured party may, on application and on payment of the fee, file in the proper land title office a notice of a security interest signed by the secured party or the secured party's agent setting out a a description of the land affected by the notice that is sufficient for the registrar to identify it in the registrar's records, b the name and address of the debtor and the secured party, c the expiry date of the notice, if any, d a description of the collateral by which it may be readily identified, and e other prescribed information, and the registrar must file the notice and make an entry of it in the register. 3 The filing of a notice under subsection (2) is notice, from the date and time the application was received by the registrar, of the security interest, to every person dealing with the land. 4 After its expiry date, if any, a notice of a security interest is of no effect and the registrar a on the application of any person interested in the land and on payment of the fee, or b on the registrar's own initiative, may cancel the entry of the notice on the register. 5 If a secured party wishes to extend an expiry date specified in a notice filed under subsection (2), the secured party may, on application and on payment of the fee, file a notice of extension signed by the secured party setting out a a description of the land affected by the notice that is sufficient for the registrar to identify it in the registrar's records, b the extended expiry date, c the filing number of the notice under subsection (2), and d other prescribed information, and the registrar must file the notice and make an entry of it in the register. 6 If a secured party has assigned a security interest in respect of which a notice has been filed under this section, the assignee may, on application and on payment of the fee, file a notice of the assignment signed by the assignee setting out a the name and address of the assignee, b a description of the land affected by the notice that is sufficient for the registrar to identify it in the registrar's records, c the filing number of the notice under subsection (2), and d other prescribed information, and the registrar must file the notice and make an entry of it in the register. 7 The registrar, a on receipt of a notice of cancellation signed by the secured party or the secured party's agent setting out i a description of the land affected by the notice that is sufficient for the registrar to identify it in the registrar's records, and ii the filing number of the notice under subsection (2), and b on application and payment of the fee must, subject to subsection (8), cancel the entry of the notice filed under subsection (2) in the register. 8 If a notice of cancellation under subsection (7) a is expressed to be a partial cancellation, and b contains a description of the collateral that has been released from the security interest, the registrar must file the notice and make an entry of it in the register. 9 The registrar is not under any duty to inquire into or verify whether or not the signature of a person on a notice filed under subsection (7) or (8) is the signature of the secured party. 10 If in respect of a notice registered under this section a all of the obligations under the security agreement to which the notice relates have been performed, b the secured party has agreed to release part or all of the collateral described in the notice, c the description of the collateral contained in the notice includes an item or kind of property that is not collateral under a security agreement between the secured party and the debtor, d the security agreement to which the notice relates no longer exists between the secured party and the debtor, or e the item or kind of property described in the notice is not affixed to the land to which the notice relates, the debtor named in the notice or any person having a registered interest in the land may give a written demand in accordance with subsection (12) to the secured party. 11 A demand referred to in subsection (10) must require that the secured party, not later than 40 days after the demand is given, deliver to the person making the demand a signed notice of amendment, extension or cancellation, whichever the demand specifies. 12 The demand referred to in subsection (10) may be given a in accordance with section 72, or b by registered mail to, i if a notice of assignment under subsection (6) has not been filed, the address of the secured party set out in a notice filed under subsection (2), or ii if a notice of assignment under subsection (6) has been filed, the address of the secured party set out in that notice. 13 The registrar, on receipt of a a true copy of the demand, b an affidavit of the person who gave the demand verifying that i the demand was given in accordance with subsection (12), ii the copy referred to in paragraph (a) is a true copy, iii the person is not aware of any proceeding of the secured party to enforce the security interest or to oppose or refute the demand, and iv 40 days have elapsed since the notice was given under subsection (12), c the application of the person who gave the demand, and d the fee, must make the appropriate entry in the register to effect the filing or cancellation requested in the demand unless the registrar has received a court order not to make the entry. 14 A secured party must not charge an expense or accept a fee for compliance with a demand made under subsection (10) unless the expense or fee has been agreed to by the parties before the demand was given. Amendment or discharge of registrations 50 1 For the purposes of this section: debtor includes any person identified on a registered financing statement as a debtor; secured party includes any person identified on a registered financing statement as a secured party. 2 If a registration relates exclusively to a security interest in consumer goods, the secured party must discharge the registration not later than one month after all obligations under the security agreement creating the security interest are performed, unless before the expiry of that one-month period the registration lapses. 3 If a financing statement is registered and a all of the obligations under the security agreement to which it relates have been performed, b the secured party has agreed to release part or all of the collateral described in the financing statement, c the description of the collateral contained in the financing statement includes an item or kind of property that is not collateral under a security agreement between the secured party and the debtor or does not distinguish between original collateral and proceeds, or d no security agreement exists between the secured party and the debtor, the debtor or any person with an interest in property that falls within the collateral description on the financing statement may give a written demand to the secured party. 4 The demand under subsection (3) may require that, a in a case falling within subsection (3) (a) or (d), the registration be discharged, b in a case falling within subsection (3) (b), the registration be amended or discharged, to reflect the terms of the agreement, or c in a case falling within subsection (3) (c), the collateral description be amended to exclude items or kinds of property that are not collateral under a security agreement between the secured party and the debtor or to identify items and kinds of property as original collateral or proceeds, and the secured party must register a financing change statement amending or discharging the registration not later than 40 days after the demand is given. 5 If the secured party fails to register a financing change statement amending or discharging the registration as required in subsection (4), the person who gave the demand may, on giving the registrar proof satisfactory to the registrar that the demand has been given to the secured party, register a financing change statement amending or discharging the registration in accordance with the demand, unless in the meantime the secured party registers an order of a court maintaining the registration. 6 The demand referred to in subsection (3) may be given in accordance with section 72 or by registered mail addressed to the address of the secured party as it appears on the financing statement. 7 [Repealed 2010-4-49.] 8 On application to a court by the secured party, the court may order that the registration a be maintained on any conditions and, subject to section 44 (1), for any period of time, or b be discharged or amended. 9) and (10 [Repealed 2019-11-24.] 11 No fee or expense may be charged and no amount may be accepted by a secured party for compliance with a demand made under subsection (3), unless the charge was agreed to by the parties before the demand was given. 12 If there is no outstanding secured obligation, and the secured party is not committed to make advances, incur obligations or otherwise give value, a secured party having control of investment property under section 25 (1) (b) of the Securities Transfer Act or section 1 (1.1) (d) (ii) of this Act must, within 10 days after receipt of a written demand by the debtor, send to the securities intermediary or futures intermediary with which the security entitlement or futures contract is maintained a written record that releases the securities intermediary or futures intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party. Transfer of debtors' interests in collateral or change of debtors 51 1 If a security interest has been perfected by registration and the debtor transfers all or part of the interest in the collateral with the prior consent of the secured party, the security interest in the transferred collateral is subordinate to a an interest, other than a security interest in the transferred collateral, arising in the period from the expiry of the 15th day after the transfer to, but not including, the day the secured party amends the registration to name the transferee of the collateral as the new debtor or takes possession of the collateral, b a perfected security interest in the transferred collateral registered or perfected in the period referred to in paragraph (a), and c a perfected security interest in the transferred collateral registered or perfected after the transfer and before the expiry of the 15th day after the transfer if, before the expiry of the 15 days, i the registration of the security interest first referred to in this subsection is not amended to disclose the transferee of the interest in the collateral as the new debtor, or ii the secured party does not take possession of the collateral. 2 If a security interest is perfected by registration and the secured party has knowledge of a information required to register a financing change statement showing the transferee as the new debtor, where all or part of the debtor's interest in the collateral has been transferred, or b the new name of the debtor, where there has been a change in the debtor's name, the security interest in the collateral transferred, where paragraph (a) applies, and in the collateral, where paragraph (b) applies, is subordinate to c an interest, other than a security interest, in the collateral, arising in the period from the expiry of the 15th day after the secured party has knowledge of information referred to in paragraph (a) or the new name of the debtor, to, but not including, the day the secured party amends the registration to name the transferee of the collateral as the new debtor or to indicate the new name of the debtor, or takes possession of the collateral, d a perfected security interest in the collateral registered or perfected in the period referred to in paragraph (c), or e a perfected security interest in the collateral registered or perfected after the secured party has knowledge of the information referred to in paragraph (a) or of the new name of the debtor, and before the expiry of the 15th day referred to in paragraph (c), if before the expiry of the 15 days i the registration of the security interest first mentioned in this subsection is not amended to disclose the transferee of the collateral as the new debtor or to disclose the new name of the debtor, or ii the secured party does not take possession of the collateral. 3 This section does not have the effect of subordinating a prior security interest under prior registration law deemed under section 78 to be registered under this Act. 4 If the debtor's interest in part or all of the collateral is transferred without the consent of the secured party and there are one or more subsequent transfers of the collateral without the consent of the secured party before the secured party acquires knowledge of the name of the transferee who has possession of the collateral, the secured party is deemed to have complied with subsection (2) if the secured party registers a financing change statement not later than 15 days after acquiring knowledge of a the name of the transferee who has possession of the collateral, and b the information required to register a financing change statement, and the secured party need not register financing change statements with respect to any intermediate transferee. 5 Nothing in this section applies to a filing in a land title office under section 49. Recovery of loss caused by error in registry 52 1 Despite section 69, the government is not liable either directly or vicariously for loss or damage suffered by a person because of a verbal advice given by an agent or employee of the government respecting this Act, regulations made under this Act or the operation of the registry unless the person who brings the action proves that the agent or employee was not acting in good faith, or b failure to register or to register correctly data authorized under the regulations to be transmitted electronically, directly to the computer data base of the registry by a person defined in the regulations as a registering party, to effect a registration. 2 If an action is brought against the government for the recovery of loss or damage that results from the failure of the registrar to register a financing statement submitted for registration under section 43 (1), it is a defence to the action that the failure to register was because a the applicant did not pay the fee or make arrangements referred to in section 43 (3), b the registrar had refused to register due to circumstances referred to in section 42 (5), or c the registrar had refused to register under section 43 (12). 3 Nothing in this section limits any defences that would be available to the government in the absence of this section.

Recovery of loss if trust deeds involved 53 If an action is brought by a trustee under a trust indenture or by a person with an interest in a trust indenture, proof that each person relied on the search result is not necessary if it is established that the trustee relied on the search result, but no person is entitled to recover damages under section 52 if the person knows at the time the person loans money to the debtor that the search result relied on by the trustee is incorrect. General 54 1 If a claim is paid to a claimant under the Crown Proceeding Act , the government is subrogated to the rights of the claimant against any person indebted to the claimant whose debt to the claimant was the basis of the loss or damage in respect of which the claim was paid. 2 If the claimant recovers an amount less than the value of the interest the claimant would have had if the loss or damage had not occurred, the right of subrogation under subsection (1) does not prejudice the ability of the claimant to recover in priority to the government an amount equal to the difference between the amount paid to the claimant and the value of the interest the claimant would have had if the loss or damage had not occurred. 3 No action for damages may be brought against the government unless it is commenced not later than one year after the person entitled to bring the action became aware of the loss or damage. 4 No action may be brought against the government to recover loss or damage caused by a reliance on a printed search result, or b the failure of the registrar to register a financing statement submitted for registration, after the first to occur of c the limitation period referred to in subsection (3), and d the expiry of 6 years from the date that the search result was issued or the financing statement was submitted for registration. 5 Despite section 69, agents and employees of the government are not liable in their personal or official capacities for loss or damage suffered by a person because of anything done or omitted to be done in the exercise or purported exercise of a power or duty under this Act unless the plaintiff proves that the agent or employee was not acting in good faith. 6 Subsection (5) does not absolve the government from vicarious liability arising out of an act or omission of an agent or employee of the government for which act or omission the government would be liable if this section were not in force. 5 Rights and Remedies on Default Application and interpretation 55 1 In this section, secured party includes a receiver. 2 This Part does not apply to a a transaction referred to in section 3, or b a transaction between a pledgor and a pawnbroker. 3 Except as provided in sections 58 (3) and 67 the rights and remedies in this Part are cumulative. 4 Sections 58 (3), 59 (7) (f), 62 (1) (b) and (2) and 67 do not apply if, at the time the security interest in the goods attached, a each debtor having rights in the goods was a corporation, a partnership of corporations or a joint venture of corporations, or b all the goods were used primarily, or acquired for use primarily, for the purposes of an artificial body. 5 Subsection (4) does not affect the definition of "consumer goods". 6 Subject to any other enactment or applicable law to the contrary, if the same obligation is secured by an interest in land and a security interest to which this Act applies, the secured party may a proceed under this Part as to the personal property, or b proceed as to both the land and the personal property as if the personal property were land, in which case i the secured party's rights, remedies and duties in respect of the land apply to the personal property with necessary modifications as if the personal property were land, and ii this Part does not apply. 7 Subsection (6) (b) does not limit the rights of a secured party who has a security interest in the personal property taken before or after the security interest mentioned in subsection (6), and the secured party a has standing in proceedings taken in accordance with subsection (6) (b), and b may apply to the court for conduct of a judicially supervised sale under subsection (6) (b) and the court may grant the application. 8 For the purposes of distributing the amount received from the sale of land and personal property if the price paid is not allocated to the land and personal property separately, the amount of the total price that is attributable to the personal property is that proportion of the total price that the market value of the personal property at the time of the sale bears to the market value of the land and personal property at the time of the sale. 9 Except as provided in section 67, a security interest does not merge merely because a secured party has reduced the secured party's claim to judgment. Rights and remedies 56 1 In this section, secured party includes a receiver. 2 If the debtor is in default under a security agreement, a except as provided in subsection (3), the secured party has against the debtor only i the rights and remedies provided in the security agreement, ii the rights, remedies and obligations provided in this Part and in sections 36 to 38, and iii when the secured party is in possession or control of the collateral, the rights, remedies and obligations provided in section 17 or 17.1, and b the debtor has against the secured party the rights and remedies provided in the security agreement, the rights and remedies provided by any other statute or rule of law consistent with this Act, and the rights and remedies provided in this Part and in section 17 or 17.1. 3 Except as provided in subsection (4) and sections 17, 17.1, 59, 60 or 62, no provision of sections 17, 17.1 or 58 to 69, to the extent that it gives rights to the debtor or imposes obligations on the secured party, can be waived or varied by agreement or otherwise. 4 A spouse as defined in the Family Law Act may, with respect to a security agreement entered into by the spouse in accordance with an order under section 97 (2) (f) or (g) of the Family Law Act or a written separation agreement, in writing waive or release a right, benefit or protection given by section 67 (1) and (2) of this Act, but the waiver or release is void if the person relying on it is other than the spouse to whom it was given. Collection of payments under intangibles or chattel paper 57 1 In this section, secured party includes a receiver. 2 In the event of default under a security agreement, a secured party is entitled a to notify a debtor on an intangible or chattel paper or an obligor on an instrument or security to make payment to the secured party whether or not the assignor was making collections on the collateral before the notification, b subject to section 59, to take control of any proceeds to which the secured party is entitled under section 28, and c to apply any money taken as collateral or paid as provided in paragraph (a) to the satisfaction of the obligation secured by the security interest. 3 A secured party may deduct the secured party's reasonable collection expenses a from an amount collected i from a debtor on an intangible or chattel paper, or ii from an obligor under an instrument or security, or b from money held as collateral. 4 A secured party who enforces a security interest by giving notice as provided in subsection 2 (a) must, not later than 15 days after giving it, notify the debtor under the security agreement that it was given. Right of seizure or repossession 58 1 In this section, secured party includes a receiver. 2 Subject to subsection (3) and to sections 36 to 38, on default under a security agreement, a the secured party has unless otherwise agreed the right to take possession of the collateral or otherwise enforce the security agreement by any method permitted by law, b if the collateral is goods of a kind that cannot be readily moved from the debtor's premises or of a kind for which adequate alternative storage facilities are not readily available, the secured party may seize or repossess the collateral without removing it from the debtor's premises in the same manner by which a sheriff may seize without removal, if the secured party's interest is perfected by registration, c if paragraph (b) applies, the secured party may dispose of the collateral on the debtor's premises, but must not cause the person in possession of the premises any greater inconvenience and cost than is necessarily incidental to the disposal, d if the collateral is a document of title, the secured party may proceed either as to the document of title or as to the goods covered by it, and any method of enforcement that is available with respect to the document of title is also available, with all necessary modifications, with respect to the goods covered by it, and e if the collateral is a licence, the secured party may seize the licence by giving a notice of seizure to the debtor and doing whichever of the following applies: i if the licence was granted under an Act, sending a copy of the notice of seizure by registered mail addressed to the minister responsible for the administration of the Act at that minister's office in Victoria; ii in any other case, giving a copy of the notice of seizure to the grantor of the licence, or if there is a successor to the grantor, to the successor. 3 Subject to subsection (4), if a debtor, who is in default under a security agreement that provides for a security interest in consumer goods, has paid at least 2/3 of the total amount of the obligation secured, the secured party must not seize the consumer goods. 4 On application by the secured party, a court may order that subsection (3) does not apply and the order may be subject to conditions. 5 In an application under subsection (4) the court may take into consideration all relevant circumstances, including the value of the collateral, the amount of the obligation that has been discharged, the reasons for default and the present and future financial circumstances of the parties. Disposition of collateral 59 1 In subsections (2), (5), (14) and (17), secured party includes a receiver. 2 After seizing or repossessing the collateral, a secured party may dispose of it in its existing condition or after repairing it and the proceeds of the disposition must be applied in the following order to a the reasonable expenses of seizing, repossessing, holding, repairing, processing or preparing for disposition and disposing of the collateral and any other reasonable expenses of enforcing the security agreement incurred by the secured party, and b the satisfaction of the obligations secured by the security interest of the party making the disposition, and any surplus must be dealt with in accordance with section 60. 3 Collateral may be disposed of a by private sale, b by public sale, including public auction or closed tender, c as a whole or in commercial units or parts, and d if the security agreement provides, by lease. 4 If the security agreement provides, the payment for collateral disposed of under subsection (3) may be deferred. 5 The secured party may delay disposition of the collateral in whole or in part. 6 Not less than 20 days before the disposition of the collateral the secured party must give notice of disposition to a the debtor or any other person who is known by the secured party to be an owner of the collateral, b any creditor or person with a security interest in the collateral i who has registered, before the day that the notice of disposition is given to the debtor, a financing statement using the name of the debtor or according to the serial number of the collateral if the goods are defined in the regulations as serial numbered goods, or ii whose security interest is perfected by possession at the time the secured party seized or repossessed the collateral, and c any other person with an interest in the collateral who has given notice to the secured party of the person's interest in the collateral before the day that notice of disposition is given to the debtor. 7 The notice of disposition referred to in subsection (6) must contain a a description of the collateral, b the amount required to satisfy the obligation secured by the security interest, c the sum actually in arrears, exclusive of the operation of an acceleration clause in the security agreement and a brief description of any default other than non-payment and the provision of the security agreement the breach of which resulted in the default, d the amount of the applicable expenses referred to in subsection (2) (a) or, if the amount of the expenses has not been determined, a reasonable estimate, e a statement that on payment of the amounts due under paragraphs (b) and (d), any person entitled to receive the notice may redeem the collateral, f if the collateral is consumer goods, a statement that on payment of the sum actually in arrears, exclusive of the operation of an acceleration clause in the security agreement, or the curing of any other default, together with the amounts due under subsection (2) (a), the debtor may reinstate the security agreement, g a statement that, unless the collateral is redeemed or, if permitted, the security agreement is reinstated, it will be disposed of and the debtor may be liable for a deficiency, and h the date, time and place of any sale by public auction or the place to which closed tenders may be delivered and the date after which closed tenders will not be accepted or after which any private disposition of the collateral is to be made. 8 If the notice required by subsection (6) is given to a person other than the debtor, it need not contain the information specified in subsection (7) (c), (f) and (g) and if it is given to a debtor who is not entitled to reinstate the security agreement, the notice to the debtor need not contain the information specified in subsection (7) (c) and (f). 9 A statement referred to in subsection (7) (g) must not contain reference to any liability on the part of the debtor to pay a deficiency if under this Act or any other applicable law the secured party does not have the right to collect the deficiency from the debtor. 10 Not less than 20 days before the disposition of the collateral, a receiver must give a notice to a the debtor, and if the debtor is a corporation, a director of the corporation, b any other person who is known by the secured party to be an owner of the collateral, c a person referred to in subsection (6) (b), and d any other person with an interest in the collateral who has given notice to the receiver of the person's interest in the collateral before the day that notice of disposition is given to the debtor. 11 The notice referred to in subsection (10) must contain a a description of the collateral, b a statement that unless the collateral is redeemed it will be disposed of, and c the date, time and place of any sale by public auction, or the place to which closed tenders may be delivered and the date after which closed tenders will not be accepted or after which any private disposition of the collateral is to be made. 12 The notice required by subsection (6) or (10) may be given in accordance with section 72 or, if it is to be given to a person who has registered a financing statement, by registered mail addressed to the address of the person to whom it is to be given as it appears on the financing statement. 13 The secured party may purchase the collateral or any part of it at a public sale, as referred to in subsection (3) (b), but only for a price that bears a reasonable relationship to the market value of the collateral. 14 When a secured party disposes of collateral to a purchaser who in good faith acquires the purchaser's interest for value and who takes possession of the collateral, the purchaser acquires the collateral free from a the interest of the debtor, b an interest subordinate to that of the debtor, and c an interest subordinate to that of the secured party, whether or not the requirements of this section have been complied with by the secured party, and all obligations secured by the subordinate interests are, as regards to the purchaser, deemed performed for the purposes of sections 49 (10) (a) and 50 (3) (a). 15 Subsection (14) does not apply so as to affect the rights of a person with a security interest deemed to be registered under section 78 who has not been given a notice under this section. 16 A person who is liable to a secured party under a guarantee, endorsement, covenant, repurchase agreement or the like and who receives a transfer of collateral from the secured party or who is subrogated to the rights of the secured party has the rights and duties of the secured party, and the transfer of collateral is not a disposition of the collateral. 17 The notice referred to in subsection (6) or (10) is not required if a the collateral is perishable, b the secured party believes on reasonable grounds that the extent to which the debtor's obligation is secured at the time of default will diminish if the collateral is not disposed of immediately after default either because the collateral will decline substantially in value or for any other reason, c the collateral is of a type that is to be disposed of by sale on an organized market that handles large volumes of transactions between many different sellers and many different buyers, d the collateral is money, other than a medium of exchange authorized by the Parliament of Canada, e the cost of care and storage of the collateral is disproportionately large relative to its value, f for any other reason, a court on an application made without notice to any person is satisfied that a notice is not required, or g after default, each person entitled to receive a notice of disposition consents in writing to a disposition of the collateral without compliance with the notice requirements of subsections (6) or (10). 18 Despite any other provision of this Part, if the collateral is a licence, the licence may be disposed of under this section only in accordance with a the terms and conditions of the licence, and b the terms and conditions that, by law or contract, apply to the licence. Distribution of amounts realized from disposition of collateral 60 1 In this section, secured party includes a receiver. 2 If a security agreement secures an indebtedness and the secured party has dealt with the collateral under section 57, or has disposed of it in accordance with section 59 or otherwise, any surplus must, unless otherwise provided by law or by the agreement of all interested parties, be accounted for and paid in the following order to a a person who has a subordinate security interest in the collateral i who has registered, before the distribution, a financing statement, using the name of the debtor or according to the serial number of the collateral if the goods are defined in the regulations as serial numbered goods, or ii whose interest was perfected by possession at the time the collateral was seized, b any other person with an interest in the collateral if that person has given a notice of the person's interest to the secured party before the distribution, and c the debtor or any other person who is known by the secured party to be an owner of the collateral, but the priority of the claim of a person referred to in paragraph (a), (b) or (c) is not prejudiced by payment to anyone in accordance with this section. 3 The secured party must give a written accounting of a the amount received from the disposition of collateral or the amount collected under section 57, b the manner in which the collateral was sold, c the amount of expenses as provided in sections 17, 57 (3) and 59, d the distribution of the amount received from the disposition or collection, and e the amount of any surplus, to a person referred to in subsection (2) within 30 days after receipt of a written demand for an accounting. 4 If there is a question as to who is entitled to receive payment under subsection (2), the secured party may pay the surplus into court and the surplus must not be paid out except on an application under section 70 by a person claiming an entitlement to it. 5 Unless otherwise agreed or unless otherwise provided in this or any other enactment, the debtor is liable to pay any deficiency to the secured party. Voluntary foreclosure 61 1 After default, a secured party may propose to take the collateral in satisfaction of the obligation secured by it and must give a notice of the proposal to a the debtor or any other person who is known by the secured party to be an owner of the collateral, b a creditor or person with a security interest in the collateral whose interest is subordinate to that of the secured party i who has registered, before the date that the notice is given to the debtor, a financing statement using the name of the debtor or according to the serial number of the collateral when it is required or permitted for registration, or ii whose security interest is perfected by possession at the time the secured party seized or repossessed the collateral, and c another person with an interest in the collateral who has given a written notice to the secured party of an interest in the collateral before the date that the notice is given to the debtor. 2 If any person, who is entitled to a notice under subsection (1) and whose interest in the collateral would be adversely affected by the secured party's proposal, gives to the secured party a notice of objection within 15 days after the notice under subsection (1) is given, the secured party must dispose of the collateral under section 59. 3 If no notice of objection is given, the secured party is, at the expiry of the 15 day period or periods referred to in subsection (2), deemed to have irrevocably elected to retain the collateral in satisfaction of the obligation secured by it and is entitled to hold or dispose of the collateral free from all rights and interests of the debtor and from all rights and interests of any person entitled to receive a notice under a subsection (1) (b), or b subsection (1) (c), if that person's interest is subordinate to that of the secured party, who has been given the notice and all obligations of any person referred to in subsection (1) (b) or (c) who has been given the notice are deemed performed for the purposes of sections 49 (10) (a) and 50 (3) (a). 4 Despite any other provision of this Part, a if the collateral is a licence, the licence may be retained, held or disposed of under subsection (3) only in accordance with i the terms and conditions of the licence, and ii the terms and conditions that, by law or contract, apply to the licence, and b if the licence is a forest agreement, the licence may be retained, held or disposed of under subsection (3) only if the minister responsible for the administration of the Forest Act has consented to the application of subsection (3) to the licence. 5 The notice required by subsection (1) may be given in accordance with section 72 or, if it is to be given to a person who has registered a financing statement, by registered mail addressed to the address of the person to whom it is to be given as it appears on the financing statement. 6 The secured party may request that a person referred to in subsection (1), other than the debtor, furnish the secured party with proof of that person's interest and, unless the person furnishes the proof not later than 10 days after the secured party's request, the secured party may proceed as if no objection had been received from the person. 7 On application by a secured party, the court may determine that an objection to the proposal of a secured party is ineffective on the grounds that a the person made the objection for a purpose other than the protection of an interest in the collateral or proceeds of a disposition of the collateral, or b the market value of the collateral is less than the total amount owing to the secured party and the costs of disposition. 8 If a secured party disposes of the collateral to a purchaser who acquires the purchaser's interest for value and in good faith and who takes possession of it, the purchaser acquires the collateral free from a the interest of the debtor, b an interest subordinate to that of the debtor, and c an interest subordinate to that of the secured party, whether or not the requirements of this section have been complied with by the secured party, and all obligations secured by the subordinate interests are deemed performed for the purposes of sections 49 (10) (a) and 50 (3) (a). 9 Subsection (8) does not apply so as to affect the rights of a person with a security interest deemed to be registered under section 78 who has not received a notice under this section. Rights of redemption and reinstatement 62 1 At any time before the secured party or receiver has disposed of the collateral or contracted for its disposition under section 59, or before the secured party is deemed to have irrevocably elected to retain the collateral under section 61, a a person entitled to receive a notice of disposition under section 59 (6) or (10) may, unless the person has otherwise agreed in writing after default, redeem the collateral by tendering fulfillment of the obligations secured by the collateral, or b if all the collateral is consumer goods, the debtor, other than a guarantor or indemnitor, may, unless the debtor has otherwise agreed in writing after default, reinstate the security agreement by paying the sums actually in arrears exclusive of the operation of an acceleration clause in the security agreement and by curing any other default because of which the secured party intends to dispose of the collateral, together with a sum equal to the reasonable expenses incurred by the secured party or receiver in seizing, repossessing, holding, repairing, processing or otherwise preparing the collateral for disposition. 2 If all the collateral is consumer goods, the debtor, unless otherwise agreed, is not entitled to reinstate a security agreement a more than twice, if the security agreement provides for payment in full by the debtor within 12 months after the day value was given by the secured party, or b more than twice each year, if the security agreement provides for payment by the debtor during a period of time in excess of one year after the day value was given by the secured party. 3 If a security agreement a provides for a security interest in other than consumer goods, and b provides that, by reason of a default by the debtor, the payment or performance of an obligation secured is required at an earlier time than would have been the case if the default had not occurred, on application by the debtor or in a proceeding for the enforcement of rights under the security agreement, a court may c relieve the debtor from the consequences of the default, or d stay enforcement of any provision of a security agreement providing for acceleration of the payment or performance upon default by the debtor. 4 In granting relief under subsection (3), the court may impose a condition and make an order as to costs. Supervisory jurisdiction of court 63 1 In this section, secured party includes a receiver. 2 Subject to subsection (3), on application of a debtor, a creditor of a debtor, a secured party, a sheriff or a person with an interest in the collateral, a court may make one or more of the following orders: a an order, including a binding declaration of right and injunctive relief, that is necessary to ensure compliance with this Part or section 17, 36, 37 or 38; b an order giving directions to a person with respect to the exercise of the person's rights or the discharge of the person's obligations under this Part or section 17, 36, 37 or 38; c an order relieving a person from compliance with the requirements of this Part or section 17, 36, 37 or 38, but only on terms that are just and reasonable to all parties affected; d an order staying enforcement of rights provided in this Part or section 17, 36, 37 or 38; e an order necessary to ensure protection of the interest of any person in the collateral. 3 Nothing in subsection (2) (c) and (d) affects the application of sections 58 (3) to (5) and 67. Appointment and qualifications of receivers 64 1 A security agreement may provide for the appointment of a receiver and, except as provided in this Act, set out the rights and duties of the receiver, provided that only a person who is licensed as a trustee under the Bankruptcy Act (Canada) may be appointed under a security agreement as a receiver. 2 A person is not qualified to act as a receiver appointed under a security agreement or by a court order if the person is a under the age of 18 years, b found to be incapable of managing the person's own affairs by reason of mental infirmity, c a corporation except a trust company or credit union authorized under the Financial Institutions Act to carry on trust business by a business authorization issued to it under that Act or a corporation licensed as a trustee under the Bankruptcy Act (Canada), d an undischarged bankrupt, e a person who is or who, within the preceding 2 years, was, i if the debtor is a corporation, an insider, within the meaning of the Securities Act or section 192 of the Business Corporations Act , of the corporation, ii if the debtor is a corporation that has an affiliate, within the meaning of the Business Corporations Act , that is a corporation, A an insider, within the meaning of the Securities Act or section 192 of the Business Corporations Act , of that affiliate, or B an auditor of that affiliate, or iii an auditor of the debtor, f unless a court orders otherwise, a trustee under a trust indenture to which the debtor is a party, g unless a court orders otherwise, a person convicted in British Columbia or elsewhere of an offence in connection with the promotion, formation or management of a business or involving fraud, unless 5 years have elapsed since the expiration of the period set for suspension of the passing of sentence without sentencing or since a fine was imposed, or the term of imprisonment or probation imposed, if any, was concluded, whichever is the latest, but a person is not disqualified under this paragraph if a pardon was granted or issued, or a record suspension was ordered, under the Criminal Records Act (Canada) and the pardon or record suspension, as the case may be, has not been revoked or ceased to have effect, or h unless appointed by a court, a person who does not reside in British Columbia. 3 Every person who a appoints a person to act as a receiver, or b acts as a receiver, when the person acting as a receiver is not qualified to do so under subsection (1) or (2) is liable in damages as provided in section 69. 4 Unless otherwise ordered by a court, the acts of a person appointed as a receiver in accordance with a security agreement are valid even if the person is not qualified to act as a receiver. 5 A receiver is not personally liable on a contract if the receiver discloses in the contract that the receiver is acting as a receiver. Obligations of receivers 65 1 A receiver must, a not later than 14 days after being appointed receiver, publish a notice of the appointment in one issue of a local newspaper circulating in the district where the debtor's principal place of business in British Columbia is located, b take into custody or control the collateral in accordance with the security agreement or order providing for the appointment of the receiver, but, unless appointed a receiver-manager or unless a court orders otherwise, must not carry on the business of the debtor for more than 14 days after the appointment, c open and maintain in the receiver's name as receiver one or more accounts at a bank, credit union or other institution licensed to accept deposits in British Columbia, for the deposit of all money coming under the receiver's control as the receiver, d keep records, in accordance with accepted accounting practices, of all receipts, expenditures and transactions involving collateral or other property of the debtor, e prepare monthly summaries of accounts of the administration of the collateral or other property of the debtor, and f indicate on every business letter, invoice, contract or similar document used or executed in connection with the receivership that the receiver is acting as a receiver. 2 The debtor, a sheriff, a secured party with a security interest in the collateral in the custody or control of a receiver, the director of an incorporated debtor, the assets of which are under the management or control of the receiver, or any other person with an interest in the collateral, or their authorized representatives may, by a demand in writing delivered to a receiver, require the receiver to provide copies of the summaries of accounts prepared in accordance with subsection (1) (e) or make available the summaries for inspection during regular business hours at the place of business of the receiver in British Columbia. 3 The receiver must comply with the demand referred to in subsection (2) not later than 10 days from the date of receiving the demand. 4 The receiver may require payment in advance of a prescribed fee for each demand, but the sheriff and the debtor or, in the case of an incorporated debtor, a director of the debtor, are entitled to inspect or to receive a copy of each summary without charge. Court supervision of receiverships and exemption from compliance 66 1 On application by an interested person, a court may do one or more of the following: a appoint any person a receiver who is not disqualified under section 64 (2); b remove, replace or discharge a receiver, whether appointed by a court or in accordance with a security agreement; c give directions on any matter relating to the duties of a receiver; d approve the accounts and fix the remuneration of a receiver; e despite anything contained in a security agreement or other document providing for the appointment of a receiver, make an order requiring a receiver or a person by or on behalf of whom the receiver is appointed, to i make good any default in connection with the receiver's custody, management or disposition of collateral or other property of the debtor, or ii correct any failure to comply with this Part; f exercise with respect to receivers appointed in accordance with a security agreement the jurisdiction that it has over receivers appointed by the court. 2 The powers referred to in subsection (1) and in section 63 are in addition to any other powers a court may exercise in its jurisdiction over receivers. 3 Unless a court orders otherwise, a receiver is required to comply with sections 59 and 60 only when the receiver deals with collateral other than in the ordinary course of operating the business of a debtor. Rights and remedies: consumer goods 67 1 Subject to section 58 (3), if a debtor is in default under a security agreement that provides for a security interest in consumer goods, the secured party may a exercise the secured party's rights as provided in section 58, b proceed as provided in section 61, c accept surrender of the goods by the debtor, or d subject to the terms of the agreement, bring action to recover a judgment or take proceedings to obtain a certificate under the Creditor Assistance Act against the debtor. 2 If the secured party proceeds under subsection (1) (a), (b) or (c) with respect to consumer goods, a the debtor's unperformed obligations under i the security agreement, or ii a related agreement, other than a mortgage on land executed before July 1, 1973, and b the unperformed obligations of a guarantor of, or indemnitor respecting the obligations, are extinguished. 3 If the secured party proceeds under subsection (1) (a) or (c) with respect to both consumer goods and other collateral and the obligations of a debtor, guarantor or indemnitor are extinguished under subsection (2), those obligations are revived if the secured party returns all the consumer goods to the debtor not later than 20 days after a the exercise of rights referred to in section 58 (2) (a) with respect to the consumer goods, or b the acceptance of the consumer goods under subsection (1) (c) of this section. 4 If the secured party exercises the secured party's rights under an agreement for sale or mortgage on land that also secures the obligation secured by a security interest in consumer goods but does not exercise the secured party's rights under subsection (1) (a), (b) or (c), the obligation is not extinguished unless otherwise provided by the law relating to enforcement of security interests in land. 5 If a secured party who has a purchase money security interest in the goods referred to in subsection (1) proceeds under paragraph (a), (b) or (c) of that subsection with respect to some but not all of the goods, subsection (2) applies to that portion of the total obligation of the debt specifically identified in the security agreement as relating to the goods seized, repossessed or surrendered. 6 If a secured party proceeds under subsection (1) (d) and, as a result of legal proceedings taken to enforce a judgment against the debtor or proceedings to enforce a lien against the goods referred to in subsection (1), the goods are seized and sold and the secured party receives money or other value as a result of the proceedings, the right of the secured party to recover under the judgment against the debtor or against a guarantor of or indemnitor with respect to the debtor's obligations under the security agreement is limited to the gross amount realized from the sale of the goods referred to in subsection (1) under the proceedings. 7 When the total amount received by the secured party as a result of legal proceedings to enforce a judgment against the debtor or proceedings to enforce a lien against the goods referred to in subsection (1) is equal to the gross amount realized from the sale of the goods under the proceedings, a any remaining liability of the debtor under a judgment obtained by the secured party through an exercise of the secured party's rights under subsection (1) (d), and b the obligations of a guarantor of or indemnitor with respect to the obligations of the debtor under the security agreement, are discharged. 8 If a secured party proceeds under subsection (1) (a) or (d) and it is discovered after seizure or repossession that an accession which was collateral under the security agreement has been removed and not replaced by other goods of equivalent value and free from any prior security interest, nothing in subsection (2), (5) or (6) bars the secured party from proceeding to recover or to enforce a judgment against the debtor or a guarantor of, or indemnitor with respect to, the obligations of the debtor under the security agreement to the extent of the value of the accession. 9 If through wilful or reckless acts or neglect on the part of the debtor or on the part of anyone in possession of the goods with the consent of the debtor, the goods have been substantially damaged or have been allowed to deteriorate to an extent greater than that which would normally be expected with respect to goods of that kind, a court, on application, may order that subsections (1) to (7) or any one or more of them do not apply so as to limit the rights and remedies of the secured party as otherwise provided in this Part. 10 If the secured party brings an action or takes proceedings under subsection (1) (d), a the security interest in the goods referred to in subsection (1) is extinguished, and b the secured party must discharge any registration relating to the security interest not later than one month after the exercise of the rights. 6 Miscellaneous Supplementary law 68 1 The principles of the common law, equity and the law merchant, except insofar as they are inconsistent with the provisions of this Act, supplement this Act and continue to apply. 2 All rights, duties or obligations arising under a security agreement, this Act or any other law applicable to security agreements or security interests must be exercised or discharged in good faith and in a commercially reasonable manner. 3 A person does not act in bad faith merely because the person acts with knowledge of the interest of another person. Consequences of non-compliance with Act 69 1 In this section, secured party includes a receiver. 2 A person to whom a duty or obligation is owed under this Act has a cause of action against any person who, without reasonable excuse, fails to discharge the duty or perform the obligation. 3 Subject to subsection (5) in an action under subsection (2), the plaintiff is entitled to recover damages from the defendant for losses that are reasonably foreseeable as being liable to result from the failure to discharge the duty or perform the obligation. 4 The Lieutenant Governor in Council may prescribe damages in respect of actions brought under subsection (2) in the following circumstances: a actions where the plaintiff is a debtor and the cause of action is for failure to comply with section 43 (15), 49, 50, 58 or 67; b actions where the plaintiff is the debtor, the collateral is consumer goods and the cause of action is for failure to comply with section 17, 18, 59, 60 or 61; c actions where the plaintiff is the person named as the debtor in a notice or registered financing statement, and the cause of action is for failure to comply with section 43 (15), 49 or 50. 5 If a damages have been prescribed under subsection (4) in respect of a cause of action referred to in that subsection, and b the court finds that the defendant is liable in respect of the cause of action, the court must award the prescribed damages to the plaintiff, unless the actual damages exceed the prescribed damages in which case the court may award the actual damages. 6 A defendant is not liable for both prescribed damages and actual damages. 7 In an action for a deficiency, the defendant may raise as a defence the failure on the part of the secured party to comply with obligations in section 17, 18, 59 or 60, but non-compliance limits the right to the deficiency only to the extent that it has affected the ability of the defendant to protect the defendant's interest in the collateral or has made the accurate determination of the deficiency impracticable. 8 If a secured party fails to comply with obligations in section 17, 18, 59 or 60, the onus is on the secured party to show that the failure a if the collateral is consumer goods, did not affect the debtor's ability to protect the debtor's interest in the collateral by redemption or reinstatement of the security agreement or otherwise, or b did not make the accurate determination of the deficiency impracticable. 9 Except as otherwise provided in this Act, a provision in a security agreement or any other agreement that purports to exclude a duty or onus imposed by this Act or that purports to limit the liability of or the amount of damages recoverable from a person who has failed to discharge a duty or obligation imposed by this Act is void. Summary proceedings 70 On application of an interested person, a court may a make an order determining questions of priority or entitlement to collateral, or b direct an action to be brought or an issue to be tried. Extension of time for compliance 71 If in sections 11, 36 (14), 38 (13) and 43 (15) an act or thing must be done not later than or before a set time, a court, on application made before or after the time has expired, may extend or abridge, conditionally or otherwise, the time for compliance. Service of statements, notices and demands 72 1 A copy of a financing statement referred to in section 43 (15), a copy of a verification statement referred to in section 43 (15), a notice under this Act, a copy of a notice of seizure referred to in section 58 (2) (e) (ii) or a demand under this Act, other than a demand under section 18, may be given to a an individual, by leaving it with the individual or by sending it by registered mail addressed to i the individual by name at the individual's residence, or ii if the individual is the sole proprietor of a business, the name of the individual at the address of the business, b a partnership i by leaving it with A one or more of the general partners, or B a person having at the time the notice is given control or management of the partnership business, or ii by registered mail addressed to A the partnership, B any one or more of the general partners, or C any person having, at the time the notice is given, control or management of the partnership business, at the address of a partnership business, c a corporation i by leaving it with an officer or director of the corporation or a person in charge of any office or place of business of the corporation, ii by leaving it with or by sending it by registered mail addressed to the registered or head office of the corporation, or iii if the corporation has its registered or head office outside British Columbia, by leaving it with, or by sending it by registered mail addressed to, the attorney for service for the corporation, d a municipal corporation, by leaving it with, or sending it by registered mail addressed to, the municipal corporate officer, e an association i by leaving it with an officer of the association, or ii by sending it by registered mail addressed to an officer of the association at the address of the officer, and f the government in the manner provided by the Crown Proceeding Act . 2 A document sent by registered mail under this Act is deemed to be given on the earlier of a the date the addressee actually receives the notice, and b except when postal services are not functioning, the expiry of 10 days after the date of registration. Conflicts with legislation in general 73 Subject to section 74, if there is a conflict between this Act and any other Act, this Act prevails unless the other Act contains an express provision that it, or a provision of it, applies despite the Personal Property Security Act . Conflicts with specific legislation 74 1 If there is a conflict between a provision of this Act and a the Business Practices and Consumer Protection Act or a provision for the protection of consumers in any other Act, b the Land Title Act , or c the International Interests in Mobile Equipment (Aircraft Equipment) Act , the provision of the Business Practices and Consumer Protection Act or other Act, the Land Title Act or the International Interests in Mobile Equipment (Aircraft Equipment) Act prevails. 2 Nothing in subsection (1) affects the application of sections 36, 37 and 49 to the Land Title Act . References to other Acts 75 1 A reference in an Act, regulation, agreement or document to the Book Accounts Assignment Act , R.S.B.C. 1979, c. 32, the Chattel Mortgage Act , R.S.B.C. 1979, c. 48, the Company Act , the Manufactured Home Act or the Sale of Goods on Condition Act , R.S.B.C. 1979, c. 373, that relates to a security interest is deemed to be a reference to this Act or to the corresponding provisions of this Act. 2 A reference in an Act, regulation, agreement or document to a chattel mortgage, conditional sales contract, floating charge, pledge, assignment of book accounts or other similar agreement is deemed to be a reference to the corresponding kind of security agreement under this Act. Power to make regulations 76 1 The Lieutenant Governor in Council may make regulations as follows: a respecting the kinds of goods the leases of which are not within the scope of this Act; b respecting the location and hours for the offices of the registry or for any of the offices;

c respecting the registry and the duties of the registrar, including the transition from a prior registry system to the system established by this Act; d [Repealed 1999-32-69.] e respecting the registration of financing statements; f respecting i the form, content and manner of use of financing statements and other writings, ii the form, content and manner of use of notices and certificates referred to in this Act, including notices referred to in section 49, and iii the manner in which collateral, including proceeds collateral, is described in financing statements and prescribing what kinds of goods may be or must be described in part by serial number; g respecting the manner in which a registration may be made under this Act; h respecting searches of the registry, the meaning of "search result" and the method of disclosure of registered information, including the form of a search result; i requiring or permitting the use of statements to confirm the registration of information on financing statements and other writings; j respecting the registrar's power to amend a registration, whether the registration is valid or invalid, that contains an error caused by the act of the registrar or registry employees; k respecting abbreviations, expansions or symbols that may be used in a financing statement or other form, notice or document used in connection with the registration of security interests or the disclosure of information in the registry; l defining a word or expression used in this Act; m respecting any matter required or authorized by this Act to be prescribed; n respecting the registration of a financing statement in the registry under the authority of another enactment and the disclosure, by the registrar, of information related to the financing statement; o respecting the retention and disposition of registry records; p respecting the period of time during which a registration is effective; q authorizing the registrar to enter into agreements under which fees may be charged on account; r authorizing the registrar to enter into agreements respecting access to the data base of the registry; s respecting agreements under paragraph (q); t respecting i the application of all or part of sections 36 and 37 to land or classes of land for which a certificate of title has not been issued under the Land Title Act , and ii the place at which a registration is to be made, for the purposes of subparagraph (i), and the manner of that registration; u respecting the manner and form in which, and the method by which, records and information may be provided or submitted to, or provided or certified by, the registrar; v prescribing records and information that must be provided or submitted to the registrar in, or in conjunction with, any record provided to the registrar or submitted to the registrar for filing, with power to prescribe different records and information for different situations; w respecting the manner in which, and the method by which, records and information may be mailed, sent or otherwise provided, and the requirements that a person must meet to mail, send or otherwise provide or receive records or information in an electronic or other format for the purposes of this Act, with power to prescribe different manners, methods and requirements for different records, information and situations. 2 A regulation under this section may be made in respect of different classes of persons or transactions. 3 A power to make a regulation under this section includes the power to make it in respect of an interest that is permitted or required to be registered in the registry by an enactment other than this Act and the provisions of this section must be read with the necessary changes to achieve this purpose. 4 A regulation made under this section is not invalid merely because it is made in respect of an interest that is permitted or required to be registered in the registry by an enactment other than the Personal Property Security Act . 5 Subsections (3) and (4) are deemed to have come into force on October 1, 1990 and are retroactive to the extent necessary to give them effect on and after that date. Fees 76.1 1 There must be paid to the registrar in respect of a matter mentioned in Column 1 of the Schedule the fee set out opposite that matter in Column 2 of that Schedule, and payment of the specified fee is a condition precedent to the registrar accepting any filing and taking any other action under this Act. 2 Despite subsection (1), for the purposes of section 43 (3), payment of the specified fee or making an arrangement with the registrar under that section is a condition precedent to the registrar registering a financing statement or issuing a search result under Part 4. Transition: applicable law 77 1 In this section and section 78, prior law means the law in force immediately before October 1, 1990. 2 Subject to subsection (4), this Act applies a to every security agreement made after October 1, 1990, including an agreement that renews, extends or consolidates an agreement made before that date, b to every security agreement made before October 1, 1990 that has not been validly terminated in accordance with prior law before that date, c subject to subsections (5) and (6), to every prior security interest that is not enforced or otherwise validly terminated in accordance with prior law before October 1, 1990, and d to a receiver appointed before or after October 1, 1990. 3 Sections 10 and 11 do not apply to security agreements referred to in subsection (2) (b). 4 Sections 23, 24 (3) and (4), 25 (2), 26, 27 and 28 of the Chattel Mortgage Act , R.S.B.C. 1979, c. 48, and sections 19, 20 (3) and (4), 22, 23 and 24 of the Sale of Goods on Condition Act , R.S.B.C. 1979, c. 373, as they existed immediately before their repeal continue to apply to chattel mortgages and conditional sale contracts, respectively, executed before October 1, 1990, and sections 58 (3) to (5) and 67 of this Act do not apply to such transactions. 5 The validity of a prior security interest is governed by prior law. 6 The order of priorities a between security interests is determined by prior law, if all of the competing security interests arose under security agreements entered into before October 1, 1990, and b between a security interest and the interest of a third party is determined by prior law, if the third party interest arose before October 1, 1990 and the security interest arose under a security agreement entered into before that date. Transition: registrations 78 1 In this section, prior registration law means the Book Accounts Assignment Act , R.S.B.C. 1979, c. 32, the Chattel Mortgage Act , R.S.B.C. 1979, c. 48, the Company Act , the Homeowner Interest Assistance Act , S.B.C. 1982, c. 70, the Manufactured Home Act and the Sale of Goods on Condition Act , R.S.B.C. 1979, c. 373, as they existed immediately before October 1, 1990. 2 Except as otherwise provided in this section, a prior security interest that, on October 1, 1990, is covered by an unexpired filing or registration under prior registration law is deemed to be either registered and perfected or filed under this Act, and, subject to this Act, the registered and perfected status or the filed status of the interest continues for 3 years or the unexpired portion of the filing or registration, whichever period expires first, and may be further continued by registration or filing, under this Act if the security interest could have been perfected by registration if it had attached after October 1, 1990 or if the notice of the security interest could have been filed after that date. 3 A prior security interest in the form of a floating charge, whether or not crystallized, under which a manufactured home as defined in the Manufactured Home Act is collateral, is deemed to have been registered and perfected under this Act and the perfected status of the interest expires 3 years from October 1, 1990, but may be further continued under this Act by registration under this Act if the security interest could have been perfected by registration if it had attached after that date. 4 Except as otherwise provided in this section, a prior security interest that under prior law had the status of a perfected security interest without filing or registration and without the secured party taking possession of the collateral, is perfected under this Act as of the date the security interest was created and that perfection continues for 3 years from October 1, 1990 after which it becomes unperfected unless, being a security interest that could have been perfected under this Act if it had arisen after that date, it is otherwise perfected under this Act. 5 For the purposes of subsection (4), a security interest was perfected under prior law when the secured party complied with the prior law with respect to the creation and continuance of the security interest and the security interest has the status in relation to the interests of other secured parties, buyers, judgment creditor or the trustee in bankruptcy of the debtor, similar to that of an equivalent security interest created and perfected under this Act. 6 A prior security interest in the form of an assignment of an account that is not an "assignment of book accounts" as defined in the Book Accounts Assignment Act , R.S.B.C. 1979, c. 32, as it was immediately before its repeal, a is deemed perfected for the purposes of section 20 (a) and (b), and b is perfected under this Act for all other purposes as of the date a notice of the assignment was given to the account debtor, and that perfection continues for 3 years from October 1, 1990, after which it becomes unperfected unless it is otherwise perfected under this Act. 7 A prior security interest that, on October 1, 1990, could have been, but was not a filed or registered under prior registration law, or b perfected under prior law through possession of the collateral by the secured party, may, if it is a security interest that could have been perfected by registration or possession under this Act if it had arisen after October 1, 1990, be perfected by registration or possession in accordance with this Act. 8 A prior security interest that under this Act may be perfected by the secured party taking possession of the collateral is perfected for the purposes of this Act when possession of the collateral is taken in accordance with section 24 whether the possession was taken before or after October 1, 1990 and even though under prior law the security interest could not be perfected by taking possession of the collateral. 9 A prior security interest that, on October 1, 1990, was covered by an unexpired filing or registration under prior registration law and that is perfected under this Act without registration or the secured party taking possession of the collateral, remains perfected under this Act. 10 A prior security interest that, on October 1, 1990, could have been, but was not, covered by a filing or registration under prior registration law and that, under this Act, may be perfected without registration or the secured party taking possession of the collateral, is perfected under this Act if all of the conditions for perfection of a security interest are met. 11 If the perfection of a prior security interest that is deemed registered or perfected under this section is continued by registration under this Act, a registration under this Act continues any registration or perfected status under prior registration law for the purposes of section 77 (6), and b the registration supersedes any registration or perfection under prior law. Transition: Securities Transfer Act 79 1 The provisions of the Securities Transfer Act , including any consequential amendments under that Act made to this Act, do not affect an action or proceeding commenced before the coming into force of this section. 2 No further action is required to continue perfection of a security interest in a security if a the security interest in the security was a perfected security interest immediately before the coming into force of this section, and b the action by which the security interest was perfected would suffice to perfect the security interest under this Act. 3 A security interest in a security remains perfected for a period of 4 months from the coming into force of this section and continues to be perfected after that if appropriate action to perfect the security interest under this Act is taken within that period, if a the security interest in the security was a perfected security interest immediately before the coming into force of this section, but b the action by which the security interest was perfected would not suffice to perfect the security interest under this Act. 4 A financing statement or financing change statement may be registered within the 4 month period referred to in subsection (3) to continue that perfection or after that to perfect, if a the security interest was a perfected security interest immediately before the coming into force of this section, and b the security interest can be perfected by registration under this Act. Schedule Item Column 1 Matter Column 2 Fee   The processing fee referred to in this column does not apply where the matter in Column 1 is submitted by electronic means  Financing Statement  1 For the registration of a financing statement where the registration is authorized under this Act, the Commercial Liens Act , the Forestry Service Providers Protection Act or the Sale of Goods Act  (a) where the life of the registration is 1 to 25 years, or $5* per year plus a $10 processing fee (b) where the life of the registration is infinity $500* plus a $10 processing fee 2 For the registration of a financing statement registering a tax lien under section 27 or 28 of the Manufactured Home Act or section 7 of the Land Tax Deferment Act no charge 3 For the registration of a financing statement registering a property agreement under section 100 of the Family Law Act $10* plus a $10 processing fee 4 [Repealed 2022-9-85.]  Financing Statement (Transition)  5 For the registration of a financing statement (transition) re-registering a "prior registration" as defined in section 64 of the Personal Property Security Regulation  (a) subject to paragraph (c), where the prior registration was not an infinity registration and   (i) the life of the registration in the personal property registry is 1 to 25 years, or $5* per year plus a $5 processing fee  (ii) the life of the registration in the personal property registry is infinity, $500* plus a $5 processing fee (b) subject to paragraph (c) of this item, where the prior registration was an infinity registration, or $3* plus a $5 processing fee (c) where the prior registration was the registration of a tax lien under section 27 or 28 of the Manufactured Home Act no charge  Financing Change Statement and Verification Financing Change Statement  6 For the renewal, by means of a financing change statement or a verification financing change statement, of the registration of an agreement where the registration is authorized under this Act, the Commercial Liens Act , the Forestry Service Providers Protection Act or the Sale of Goods Act  (a) where the life of the registration is 1 to 25 years, or $5 per year plus a $5 processing fee (b) where the life of the registration is infinity $500 plus a $5 processing fee 6.1 For the registration of a financing change statement under section 7.2 of the Land Tax Deferment Act no charge 7 For the correction, by means of a financing change statement, of an error made by the registrar no charge 8 For a total discharge by means of a financing change statement or a verification financing change statement no charge 9 For - a secured party transfer - a debtor transfer - a debtor release - a partial discharge - an addition of collateral - a substitution of collateral - a court order - an amendment by means of a financing change statement  $10 plus a $5 processing fee  Form 13  10 For a change to multiple registrations, by means of Form 13 as prescribed by the Personal Property Security Regulation, to a secured party code or to the name or address of a code holder $100  Search  11 For a search of the registry  (a) using the BC Online information service and a person's own computer   (i) if combined with a search of the manufactured home registry and no fee is charged under the regulations to the Manufactured Home Act $12*  (ii) in any other case $7* (b) using a computer terminal provided by the government   (i) if combined with a search of the manufactured home registry and no fee is charged under the regulations to the Manufactured Home Act $13*  (ii) in any other case $8* (c) conducted by government personnel   (i) if combined with a search of the manufactured home registry and no fee is charged under the regulations to the Manufactured Home Act $15  (ii) in any other case $10  Copies  12 For photocopying 50¢ per page  Certification  13 For certification of any document $25  Verification Reprint  14 For a reprint of a verification statement $10 * In addition to a fee marked by an asterisk, a further operator fee of $1.50, plus any tax imposed under Part IX [Goods and Services Tax] of the Excise Tax Act (Canada) applicable to the operator fee, may be charged for any transaction done by electronic means from a location outside a government office or at a government office by a person who is not a government employee.