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C.C.S.M. c. P35

The Personal Property Security Act

(Assented to July 27, 1993)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

DEFINITIONS AND INTERPRETATION

Definitions

1           In this Act,

"accessions" means goods that are installed in or affixed to other goods; (« accessions »)

"account" means a monetary obligation not evidenced by chattel paper or an instrument, whether or not it has been earned by performance, but does not include an investment property; (« compte »)

"advance" means the payment of money, the provision of credit or the giving of value and includes a liability of the debtor to pay interest, credit costs and other charges or costs payable by the debtor in connection with an advance or the enforcement of a security interest securing the advance; (« avance »)

"broker" means a broker as defined in The Securities Transfer Act; (« courtier »)

"building" means a structure, erection, mine or work built, constructed or opened on or in land; (« construction »)

"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 weakening the structure of the building or exposing 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 in the building or on the land; (« matériaux de construction »)

"business" includes profession; (« entreprise »)

"certificated security" means a certificated security as defined in The Securities Transfer Act; (« valeur mobilière avec certificat »)

"chattel paper" means one or more writings that evidence both a monetary obligation and a security interest in or lease of specific goods, or a security interest in or lease of specific goods and accessions, but does not include a security agreement providing for a security interest in specific goods and after-acquired goods other than accessions; (« acte mobilier »)

"clearing house" means an organization through which trades in options or standardized futures are cleared and settled; (« chambre de compensation »)

"clearing house option" means an option, other than an option on futures, issued by a clearing house to its participants; (« option de chambre de compensation »)

"collateral" means personal property that is subject to a security interest; (« biens grevés »)

"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 are delivered,

but does not include an agreement under which goods are delivered

(c) to an auctioneer for sale, or

(d) to a consignee for sale, lease or other disposition if the consignee is generally known to creditors of the consignee to be selling or leasing goods of others; (« consignation commerciale »)

"consumer goods" means goods acquired or used by the buyer or members of the buyer's family, primarily for personal, household or family purposes of the buyer or the buyer's family; (« biens de consommation »)

"court" means the Court of Queen's Bench; (« tribunal »)

"creditor" includes an executor, an administrator, an assignee for the benefit of creditors, and a committee of a creditor; (« créancier »)

"crops" means crops, whether matured or otherwise, and whether naturally grown or planted, attached to land by roots or forming part of trees or plants attached to land, and includes trees only if they

(a) are being grown as nursery stock,

(b) are being grown for uses other than for the production of lumber and wood products, or

(c) are intended to be replanted in another location for the purpose of reforestation; (« récoltes »)

"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 and 65 and subsections 59(14), 61(8) and 64(3), the transferee of a debtor's interest in the collateral, or

(f) if the person referred to in clause (a) and the person who has rights in the collateral are not the same person,

(i) where the term is used in a provision dealing with the collateral, the person who has rights in the collateral,

(ii) where the term is used in a provision dealing with the obligation, the obligor,

(iii) where the context permits, both the person who has rights in the collateral and the obligor, and

(iv) where the term is used in connection with a financing statement, the person who has an interest in the collateral; (« débiteur »)

"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 whereupon, under the terms of the security agreement, the security becomes enforceable; (« défaut »)

"discharge statement" means data that is permitted or required by this or any other Act or by a regulation under this or any other Act to be entered in the Registry to discharge a registration; (« état de mainlevée »)

"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 the transferee of that person, or to bearer or to the order of a named person; (« titre »)

"entitlement holder" means an entitlement holder as defined in The Securities Transfer Act; (« titulaire du droit »)

"entitlement order" means an entitlement order as defined in The Securities Transfer Act; (« ordre relatif à un droit »)

"equipment" means goods that are held by a debtor other than as inventory or consumer goods; (« matériel »)

"financial asset" means a financial asset as defined in The Securities Transfer Act; (« actif financier »)

"financing change statement" means data that is permitted or required by this or any other Act or by a regulation under this or any other Act to be entered in the Registry to renew, partially discharge or otherwise amend a registration; (« état de modification de financement »)

"financing statement" means data that is permitted or required by this or any other Act or by a regulation under this or any other Act to be entered in the Registry to effect the registration of a security interest in collateral, and includes, where the context permits,

(a) a financing change statement,

(b) a discharge statement, and

(c) a security agreement registered before the day The Personal Property Security Act, S.M. 1973, c. 5, came into force; (« état de financement »)

"fixture" does not include building materials; (« accessoire fixe »)

"future advance" means an advance, whether or not the advance is made pursuant to an obligation and includes advances and expenditures made for the protection, maintenance, preservation or repair of the collateral; (« avance future »)

"futures account" means an account maintained by a futures intermediary in which a futures contract is carried for a futures customer; (« compte de contrats à terme »)

"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 Manitoba Securities Commission or by a securities regulatory authority of another province or territory of Canada, or

(b) traded on a foreign futures exchange and carried on the books of a futures intermediary for a futures customer; (« contrat à terme »)

"futures customer" means a person for whom a futures intermediary carries a futures contract on its books; (« client de contrats à terme »)

"futures exchange" means an association or organization operated to provide the facilities necessary for the trading of standardized futures or options on futures; (« Bourse de contrats à terme »)

"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 Manitoba Securities Commission or by a securities regulatory authority of another province or territory of Canada; (« intermédiaire en contrats à terme »)

"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 that are not crops until they are severed, or minerals until they are extracted; (« objets »)

"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,

but does not include

(d) chattel paper, a document of title or investment property, or

(e) a writing that provides for or creates a mortgage or charge in respect of an interest in land that is specifically identified in the writing; (« instrument »)

"intangible" means personal property that is not goods, chattel paper, money, a document of title, instrument or investment property; (« bien immatériel »)

"inventory" means goods that are

(a) held by a person for sale or lease, or leased by that person as lessor,

(b) furnished or are to be furnished under a contract of service,

(c) raw materials or work in progress, or

(d) materials used or consumed in a business; (« stock »)

"investment property" means a security, whether certificated or uncertificated, security entitlement, securities account, futures contract or futures account; (« bien de placement »)

"lease for a term of more than one year" includes a lease

(a) for an indefinite term and includes a lease for an indefinite term that is determinable by one or both of the parties within one year from the date of its execution,

(b) initially for a term of one year or less than one year where 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, with the consent of the lessor, first acquired possession of them, but the lease does not become a lease for a term of more than one year until the lessee's possession extends for more than one year, and

(c) for a term of one year or less, where

(i) the lease provides that it is automatically renewable or that it is renewable at the option of one of the parties or by agreement of the parties for one or more terms, and

(ii) the total of the terms, including the original term, may exceed one year,

but does not include a lease

(d) involving a lessor who is not regularly engaged in the business of leasing goods,

(e) of household furnishings or appliances as part of a lease of land where the goods are incidental to the use and enjoyment of the land, or

(f) of prescribed kinds of goods, regardless of the length of the lease term; (« bail d'une durée supérieure à un an »)

"minerals" includes petroleum and gas; (« minéraux »)

"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)

"money" means a medium of exchange authorized by the Parliament of Canada, or authorized or adopted by a foreign government, as part of its currency; (« argent »)

"new value" means value other than antecedent debt or antecedent liability; (« nouvelle prestation »)

"obligation secured" means, when determining the amount payable under a lease that secures payment or performance of an obligation, the amount originally contracted to be paid under the lease and any other amount payable under the terms of the lease or required to be paid by the lessee to obtain ownership of the collateral, less any amount paid before the determination; (« obligation garantie »)

"obligor" means a person who, in an instrument, undertakes a duty or obligation; (« débiteur obligé »)

"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:

1.

Receive an amount of cash determinable by reference to a specified quantity of the underlying interest of the option.

2.

Purchase a specified quantity of the underlying interest of the option.

3.

Sell a specified quantity of the underlying interest of the option. (« option »)

"option on futures" means an option the underlying interest of which is a standardized future; (« option sur contrat à terme »)

"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 seller; (« prêteur sur gage »)

"personal information" means personal information within the meaning of The Freedom of Information and Protection of Privacy Act; (« renseignements personnels »)

"personal property" includes goods, chattel paper, documents of title, instruments, money, investment property and intangibles; (« biens personnels »)

"prescribed" means prescribed by regulation; (version anglaise seulement)

"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, chattel paper, instrument or investment property; and

(d) rights arising out of, or property collected on, or distributed on account of, collateral that is investment property; (« produit »)

"purchase" means taking by sale, lease, discount, assignment, negotiation, mortgage, pledge, lien, issue, reissue, gift or any other consensual transaction creating an interest in personal property; (« achat »)

"purchase money security interest" means

(a) a security interest taken or reserved in collateral, other than investment property, to the extent that it secures all or part of its purchase price,

(b) a security interest taken or reserved 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 consignor who delivers goods to a consignee under a commercial consignment,

but does not include a transaction of sale and the lease back to the seller; and for the purpose of this definition, "purchase price" and "value" include credit charges or interest payable in respect of the purchase or a loan given to enable the debtor to acquire rights in the collateral; (« sûreté en garantie du prix de vente »)

"receiver" includes receiver-manager; (« séquestre »)

"Registrar" means the Registrar of Personal Property Security designated under section 42; (« registraire »)

"Registry" means the Personal Property Registry designated under section 42; (« Bureau d'enregistrement »)

"registry service" means a service relating to the Registry that is provided by or on behalf of the government; (« service d'enregistrement »)

"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) a trustee, if a security interest is embodied in a trust indenture; (« créancier garanti »)

"securities account" means a securities account as defined in The Securities Transfer Act; (« compte de titres »)

"securities intermediary" means a securities intermediary as defined in The Securities Transfer Act; (« intermédiaire en valeurs mobilières »)

"security" means a security as defined in The Securities Transfer Act; (« valeur mobilière »)

"security agreement" means an agreement that creates or provides for a security interest, and if the context permits, includes a writing that evidences a security agreement; (« contrat de sûreté »)

"security certificate" means a security certificate as defined in The Securities Transfer Act; (« certificat de valeur mobilière »)

"security entitlement" means a security entitlement as defined in The Securities Transfer Act; (« droit intermédié »)

"security interest" means

(a) an interest in personal property that secures payment or performance of an obligation, but does not include the interest of a seller who ships goods to a buyer under a negotiable bill of lading or its equivalent to the order of the seller or an agent of the seller, unless the parties otherwise evidence 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 consignor who delivers goods to a consignee 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; (« sûreté »)

"service provider" means a person, partnership or entity designated under section 2.1; (« fournisseur de services »)

"specific goods" means goods identified and agreed upon at the time a security agreement in respect of the goods is made; (« objets déterminés »)

"standardized future" means an agreement traded on a futures exchange pursuant to standardized conditions contained in the by-laws, 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:

1.

Make or take delivery of the underlying interest of the agreement.

2.

Settle the obligation in cash instead of delivery of the underlying interest. (« contrat à terme normalisé »)

"trust indenture" means a deed, indenture or document, however designated, by the terms of which a person issues, 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; (« acte de fiducie »)

"uncertificated security" means an uncertificated security as defined in The Securities Transfer Act; (« valeur mobilière sans certificat »)

"value" means consideration sufficient to support a simple contract, and includes an antecedent debt or antecedent liability. (« prestation »)

S.M. 1997, c. 24, s. 2; S.M. 2000, c. 6, s. 2; S.M. 2008, c. 14, s. 107; S.M. 2013, c. 11, s. 46.

Determination of control

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 in 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 in 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 in 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, the secured party and the 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 further consent by 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.

S.M. 2008, c. 14, s. 108.

"Knows or has knowledge"

2(1)        For the purpose of this Act,

(a) a natural person knows or has knowledge when the person acquires information under circumstances in which a reasonable person would take cognizance of it;

(b) a partnership knows or has knowledge when information comes to the attention of one of the general partners, or a person having control or management of the partnership, under circumstances in which a reasonable person would take cognizance of it;

(c) a corporation knows or has knowledge

(i) when information comes to the attention of

(A) a managing director or officer of the corporation, or

(B) 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

(ii) when information in writing is delivered to

(A) the registered office of the corporation, or

(B) the attorney for service for the corporation;

(d) the members of an association know or have knowledge when information comes 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) a government knows or has knowledge when information comes 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.

Time of determination

2(2)        Except where otherwise provided in this Act, the determination whether goods are "consumer goods", "inventory" or "equipment" shall be made as of the time the security interest in the goods attaches.

Traceable proceeds

2(3)        Proceeds are traceable whether or not a fiduciary relationship exists 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.

2(4)        [Repealed] S.M. 2008, c. 14, s. 109.

S.M. 2008, c. 14, s. 109.

PART 1.1

SERVICE PROVIDER

LG in C may designate service provider

2.1         The Lieutenant Governor in Council may by regulation designate a person, partnership or other entity as a service provider to provide one or more registry services on behalf of the government.

S.M. 2013, c. 11, s. 47.

Collection and retention of fees

2.2(1)      The Lieutenant Governor in Council may by regulation authorize a service provider to

(a) collect on behalf of the government the fees payable under this Act; and

(b) despite Part 3 of The Financial Administration Act, retain for its own account all or a portion of the fees as compensation for providing registry services on behalf of the government.

Retained amount

2.2(2)      An amount retained by a service provider in accordance with a regulation under subsection (1) is not public money for the purpose of The Financial Administration Act.

S.M. 2013, c. 11, s. 47.

Not Crown agent

2.3         Subject to the regulations, a service provider is not an agent of the Crown.

S.M. 2013, c. 11, s. 47.

Service provider's duties

2.4         A service provider must ensure that any person employed by it to provide a registry service fulfills his or her obligations under the Act.

S.M. 2013, c. 11, s. 47.

Government records

2.5(1)      Every record created or received by a service provider for the purpose of providing registry services is deemed to be a government record under The Archives and Recordkeeping Act.

Public access

2.5(2)      Every record respecting the provision of registry services is deemed to be under the control of the minister for the purpose of Part 2 of The Freedom of Information and Protection of Privacy Act.

Confidential records

2.5(3)      Subsection (2) does not apply to

(a) a trade secret of the service provider; or

(b) commercial, financial, labour relations, scientific or technical information of a service provider that the service provider has treated consistently as confidential.

Service provider must provide records to minister

2.5(4)      If a request for access to a record to which subsection (2) applies is made under Part 2 of The Freedom of Information and Protection of Privacy Act, the service provider must

(a) provide the minister, or a person appointed by the minister, with the record and any other record the minister considers necessary to respond to the request for access; and

(b) cooperate with the minister in responding to the request.

Definition of "record"

2.5(5)      In this section, "record" means a record of information in any form, including electronic form, but does not include a mechanism or system for generating, sending, receiving, storing or otherwise processing information.

S.M. 2013, c. 11, s. 47.

Collection, use and disclosure of information

2.6(1)      A service provider may collect, use and disclose personal information to the extent necessary for the purpose of providing registry services on behalf of the government.

Protection of privacy

2.6(2)      A service provider must, with respect to personal information collected or retained by it to provide registry services, comply with the restrictions and obligations respecting personal information set out in Part 3 of The Freedom of Information and Protection of Privacy Act.

Privacy policy

2.6(3)      A service provider must establish a policy, acceptable to the minister, to protect

(a) the confidentiality, security, accuracy and integrity of personal information collected or retained by it to provide registry services; and

(b) the privacy of the persons whom the personal information is about.

Publication of policy

2.6(4)      The service provider must make the policy established under subsection (3) available to the public.

S.M. 2013, c. 11, s. 47.

Conflict of interest policy

2.7(1)      A service provider must establish, and make available to the public, a conflict of interest policy that is acceptable to the minister.

Content of policy

2.7(2)      The conflict of interest policy must

(a) include a process for identifying and avoiding conflicts between an employee's personal interests and the interests of the public;

(b) prohibit an employee from using information obtained in the course of their employment for personal gain;

(c) address potential conflicts between the service provider's interests, including the interests of its affiliates, and the interests of the public;

(d) prohibit the Registrar from advising or acting as the agent of any person in relation to a security interest or registration under this Act, except in the performance of his or her duties as Registrar; and

(e) include other measures required by the minister.

S.M. 2013, c. 11, s. 47.

Agreement respecting designation and revocation of officials

2.8         If registry services are provided by a service provider, the designations and revocations of a designation under section 42 may be governed by an agreement between the government and the service provider.

S.M. 2013, c. 11, s. 47.

PART 2

APPLICATION

Application to transactions

3(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 restricting the generality of clause (a), to a chattel mortgage, conditional sale, fixed charge, floating charge, pledge, trust indenture, trust receipt, assignment, consignment, lease, trust and transfer of chattel paper, where it secures payment or performance of an obligation.

Application to transfer, lease, consignment

3(2)        Subject to section 4 and subsection 55(1), this Act applies to a transfer of an account or chattel paper, a lease for a term of more than one year and a commercial consignment that does not secure payment or performance of an obligation.

Where Act does not apply

4           Except as otherwise provided in this Act, this Act does not apply to

(a) a lien, charge or other interest given by a rule of law or a statute in force in Manitoba, unless the statute expressly provides that this Act applies;

(b) 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;

(b.1) a transfer of an interest in 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;

(c) 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;

(d) a transfer of an unearned right to payment under a contract to a transferee who is to perform the transferor's obligations under the contract;

(e) the creation or transfer of an interest in land including a lease;

(f) the creation or transfer of a right to payment that arises in connection with an interest in or a lease of land, other than a transfer of rental payments payable under a lease of land and a right to payment evidenced by investment property or an instrument;

(g) 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;

(h) a transfer of accounts made solely to facilitate the collection of accounts for the transferor;

(i) the creation or transfer of a right to damages in tort;

(j) an assignment for the general benefit of creditors made pursuant to an Act of the Parliament of Canada relating to insolvency; or

(k) a security agreement governed by a statute of the Parliament of Canada that deals with the rights of parties to the agreement or the rights of third parties affected by a security interest created by the agreement, including an agreement governed by Part VIII of the Bank Act (Canada) and a mortgage under the Canada Shipping Act.

S.M. 2008, c. 14, s. 110.

Applicable law respecting validity and perfection

5(1)        Subject to sections 6 to 8, the validity, perfection and effect of perfection or non-perfection of

(a) a security interest in goods; or

(b) a possessory security interest in an instrument, a negotiable document of title, money and chattel paper;

is governed by the law of the jurisdiction where the collateral is situated when the security interest attaches.

5(2)        [Repealed] S.M. 2008, c. 14, s. 111.

Perfection when goods previously perfected

5(3)        A security interest in goods perfected under the law of the jurisdiction in which the goods are situated at the time the security interest attaches but before the goods are brought into the province remains perfected in the province if it is perfected in the province,

(a) not later than 60 days after the goods are brought into the province;

(b) not later than 15 days after the day the secured party has knowledge that the goods have been brought into the province; or

(c) before perfection ceases under the law of the jurisdiction in which the goods were situated when the security interest attached;

whichever is earliest, but the security interest is subordinate to the interest of a buyer or lessee of the goods who acquires the interest without knowledge of the security interest and before it is perfected in the province under section 24 or 25.

Other means of perfection

5(4)        A security interest that is not perfected as provided in subsection (3) may be otherwise perfected in the province under this Act.

Perfection when goods not previously perfected

5(5)        Where a security interest referred to in subsection (1) is not perfected under the law of the jurisdiction in which the collateral is situated at the time the security interest attaches and before the collateral is brought into the province, it may be perfected under this Act.

S.M. 1997, c. 24, s. 3; S.M. 2008, c. 14, s. 111.

Applicable law where goods moved

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 a purpose other than transportation through the other jurisdiction, not later than 30 days after the security interest attaches;

the validity, perfection and effect of perfection or non-perfection of the security interest is governed by the law of the other jurisdiction.

Where goods brought into province perfected elsewhere

6(2)        If the other jurisdiction referred to in subsection (1) is not this province, and the goods are later brought into this province, the security interest in the goods is a security interest to which subsection 5(3) applies if it was perfected under the law of the jurisdiction from which the goods were removed.

Location of debtor

7(1)        For the purpose of this section and section 7.1, a debtor is located at

(a) any place of business of the debtor;

(b) the executive office of the debtor, if the debtor has more than one place of business; and

(c) the principal residence of the debtor, if the debtor has no place of business.

Applicable law for mobile goods, intangibles, etc.

7(2)        The validity, perfection and effect of perfection or non-perfection of

(a) a security interest in

(i) an intangible, or

(ii) goods that are of a type that are normally used in more than one jurisdiction, if the goods are equipment or inventory leased or held for lease by a debtor to others; and

(b) a non-possessory security interest in an instrument, a negotiable document of title, money and chattel paper;

is governed by the law, including the conflict of law rules, of the jurisdiction in which the debtor is located when the security interest attaches.

Perfection where debtor relocates

7(3)        Where a 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 the province 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 transferred an interest in the collateral to a person located in the other jurisdiction; or

(c) before the day that perfection ceases under the law of the first jurisdiction;

whichever is earliest.

Possible subordination of interest

7(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 such 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 the province; and

(b) an interest in goods, an instrument, a negotiable document of title, money or chattel paper acquired when the collateral was situated in the province;

unless it is perfected under this Act before the interest referred to in clause (a) or (b) arises.

Other perfection

7(5)        A security interest referred to in subsection (4) may be otherwise perfected under this Act.

Security interest in minerals

7(6)        Notwithstanding subsection (2) and section 6, the validity, perfection and effect of perfection or non-perfection of a security interest in minerals or in an account resulting from the sale of the minerals at the minehead

(a) that is provided for in a security agreement executed before the minerals are extracted; and

(b) that attaches to the minerals upon extraction or attaches to an account upon sale of the minerals;

is governed by the law of the jurisdiction in which the minehead is located.

"Minehead"

7(7)        In subsection (6), "minehead" includes wellhead.

S.M. 2008, c. 14, s. 112.

Conflict of laws — validity of security interest in 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 where 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.

Perfection, non-perfection and priority of security interest in investment property

7.1(2)      Except as otherwise provided in subsection (5), the perfection, effect of perfection or non-perfection and the priority of a security interest in investment property is 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.

Determining jurisdiction

7.1(3)      For the purposes of this section,

(a) the location of a debtor is determined by subsection 7(1);

(b) the issuer's jurisdiction is determined by subsection 44(5) of The Securities Transfer Act; and

(c) the securities intermediary's jurisdiction is determined by subsection 45(2) of The Securities Transfer Act.

Determining futures intermediary's jurisdiction

7.1(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 the 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 clause (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 clause (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 clauses 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 clauses applies, the futures intermediary's jurisdiction is the jurisdiction in which the chief executive office of the futures intermediary is located.

Matters governed by law of debtor's jurisdiction

7.1(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 where the secured party relies on 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 where the secured party relies on attachment of the security interest as perfection.

Perfection of security interest under law of debtor's jurisdiction

7.1(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.

Perfection of security interest under law of issuer's jurisdiction, etc.

7.1(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.

S.M. 2008, c. 14, s. 113.

Procedural and substantive issues

8(1)        Despite sections 5 to 7.1,

(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.

Perfection of interest

8(2)        For the purposes of sections 5 to 7.1, a security interest is perfected under the law of a jurisdiction if the secured party has complied with the law of the jurisdiction with respect to the creation and continuance of a security interest with the result that 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.

S.M. 2008, c. 14, s. 114.

Interpretation: law of a jurisdiction

8.1         For the purposes of section 7.1, a reference to the law of a jurisdiction means the internal law of that jurisdiction excluding its conflict of law rules.

S.M. 2008, c. 14, s. 115.

PART 3

VALIDITY OF SECURITY AGREEMENTS AND RIGHTS OF PARTIES

Effectiveness of security agreement

9           Except as otherwise provided in this or any other Act, a security agreement is effective according to its terms.

S.M. 1997, c. 24, s. 4.

Enforceability against third party

10(1)       Subject to subsection (2) and section 12.1, a security interest is enforceable against a third party only 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 pursuant to the debtor's security agreement;

(c) the collateral is investment property and the secured party has control under section 1.1 pursuant to 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 as "goods", "chattel paper", "investment property", "documents of title", "instruments", "money" or "intangibles",

(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) personal property described as "goods", "chattel paper", "investment property", "documents of title", "instruments", "money" or "intangibles".

Possession of collateral

10(2)       For the purpose of clause (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.

Enforcement of security interest in proceeds

10(3)       A security interest in proceeds is enforceable against a third party whether or not the security agreement contains a description of the proceeds.

S.M. 2008, c. 14, s. 116.

Delivery of copy of security agreement

11          Where a security agreement is in writing, the secured party shall deliver a copy of it to the debtor not later than 10 days after it is executed and, if the secured party fails to do so after a request by the debtor, the court may, on application by the debtor, order the secured party to provide a copy to the debtor.

Attachment of security interest

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 as between the parties to the security agreement, the security interest becomes enforceable within the meaning of section 10;

unless the parties specifically agree to postpone the time of attachment, in which case it attaches at the time specified in the agreement.

Right of lessee or consignee in goods

12(2)       For the purpose of clause (1)(b) and without limiting any other rights of the debtor, a lessee under a lease for a term of more than one year or a consignee under a commercial consignment has rights in the goods when the lessee or consignee obtains possession of them pursuant to the lease or consignment.

Rights of debtor in certain goods

12(3)       For the purpose of subsection (1), a debtor has no rights in

(a) crops until they become growing crops;

(b) the young of animals until they are conceived;

(c) minerals until they are extracted; or

(d) trees, other than crops, until they are severed.

Attachment in securities account

12(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.

Attachment in futures account

12(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.

S.M. 2008, c. 14, s. 117.

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.

Effect of security interest

12.1(2)     The security interest described in subsection (1) secures the person's obligation to pay for the financial asset.

Attachment of security interest to security or other financial asset

12.1(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.

Effect of security interest

12.1(4)     The security interest described in subsection (3) secures the obligation to make payment for the delivery.

S.M. 2008, c. 14, s. 118.

Interest in after-acquired property

13(1)       Subject to section 12 and subsection (2), where a security agreement provides for a security interest in after-acquired property, the security interest attaches in accordance with section 12 without specific appropriation by the debtor.

Security interest attaching to after-acquired crops

13(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 is entered into, except that a security interest in a crop that is given in conjunction with a lease, agreement for sale or mortgage of land may, if the parties so agree, attach to a crop to be grown on the land during the term of the lease, agreement for sale or mortgage; or

(b) a consumer good 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 or a related agreement may provide for future advances.

Where future advances not binding

14(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 is seized, attached, charged or made subject to an equitable execution under circumstances described in subclause 20(a)(i) or (ii), and the secured party has knowledge of it before making the advances.

Application of sale of goods law

15          Where a seller retains a purchase money security interest in goods, the law relating to contracts of sale, including a disclaimer, limitation or modification of the seller's performance obligations with respect to the goods, governs the sale.

Acceleration of payment or performance

16          Where a security agreement provides that a secured party may accelerate payment or performance by the debtor if the secured party considers that he or she is insecure or that the collateral is in jeopardy, the provision shall be construed to mean that the secured party has the right to do so only if the secured party believes and has commercially reasonable grounds to believe that the collateral is or is about to be placed in jeopardy or that the prospect of payment or performance is or is about to be impaired.

Definition

17(1)       In this section, "secured party" includes a receiver.

Custody and preservation of collateral

17(2)       A secured party shall 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.

Effect of collateral in possession of secured party

17(3)       Unless the parties otherwise agree, where collateral is in the secured party's possession,

(a) reasonable expenses, including the cost of insurance and payment of taxes or other charges incurred in obtaining and maintaining possession of the collateral, are chargeable to the debtor and are secured by the collateral;

(b) the risk of loss or damage, except where 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, resulting from the collateral, and shall apply money so received, unless remitted to the debtor, immediately upon its receipt in reduction of the obligation secured; and

(d) the secured party shall keep the collateral identifiable, but fungible collateral may be commingled.

Use of collateral

17(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 purpose of preserving the collateral or its value; or

(c) in accordance with an order of the court.

S.M. 1997, c. 24, s. 5; S.M. 2008, c. 14, s. 119.

Rights of secured party — 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 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 the money or funds to the debtor; and

(c) may create a security interest in the collateral.

Rights of secured party with control of investment property

17.1(2)     Despite subsection (1) and section 17, a secured party having control under section 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.

S.M. 2008, c. 14, s. 120.

Demand for information from secured party

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) at the secured party's most recent address set forth in a registered financing statement containing a description of personal property of the debtor; or

(b) at the current address of the secured party, if known by the person making the demand;

require the secured party to send or make available the information specified in subsection (2) to the person making the demand or, if the demand is made by the debtor, to a person at an address specified by the debtor.

Information that may be demanded

18(2)       The information that may be demanded under subsection (1) may be any 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 the 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 are collateral as of the date specified in the demand;

(d) a written approval or correction of the amount of indebtedness and of the terms of payment of the indebtedness, as of the date specified in the demand;

(e) the location of the security agreement or a copy of it to enable a person entitled to receive a copy of the security agreement to inspect it.

Extent of demand

18(3)       A person with an interest in personal property of a debtor is entitled to make a demand under subsection (1) only with respect to a security agreement providing for a security interest in the property in which the person has an interest.

Inspection of security agreement

18(4)       The secured party, on demand of the person entitled to receive a copy of the security agreement under subsection (1), shall permit the person to inspect the security agreement or a copy of it during normal business hours at the location referred to in clause (2)(e).

Security interest in type of collateral

18(5)       If the secured party claims a security interest in all of a particular type of collateral of the debtor, or the proceeds thereof, the secured party shall so indicate in addition to approving or correcting the itemized list of personal property attached to the demand made under clause (2)(c).

Reply within 10 days of demand

18(6)       Subject to subsection (7), the secured party, other than a trustee under a trust indenture, shall reply to the demand made under subsection (1) not later than 10 days after the demand is made.

Trustee to reply within 25 days

18(7)       A secured party who is a trustee under a trust indenture shall reply to the demand made under subsection (1) not later than 25 days after the demand is made.

Where reply not complete or correct

18(8)       Where, without reasonable excuse,

(a) the secured party fails to comply with the demand within the time specified; or

(b) in the case of a demand under subsection (1), the reply is incomplete or incorrect;

the person making the demand, in addition to any other remedy provided by this Act, may apply to the court for an order requiring the secured party to comply with the demand.

Where interest changes

18(9)       Where a person receiving a demand under subsection (1) no longer has an interest in the obligation or property of the debtor that is the subject of the demand, that person shall, not later than 10 days after receiving the demand, disclose the name and address of the immediate successor in interest and, if known, the latest successor in interest.

Where no reply made

18(10)      Where, without reasonable excuse, the person receiving the demand fails to comply with subsection (9), the person making the demand, in addition to any other remedy provided in this Act, may apply to the court for an order requiring that person to comply with subsection (9).

Content of court order

18(11)      On application under subsection (8) or (10), the court may make an order requiring

(a) the secured party referred to in subsection (8) to comply with the demand referred to in that subsection; or

(b) the person referred to in subsection (9) to disclose the information referred to in that subsection.

Further content of court order

18(12)      In an application under subsection (8) or (10) or in a separate application, the court may make

(a) any order it considers necessary to ensure compliance with the demand; and

(b) in the case of an application under subsection (8), an order that, in the event of non-compliance with the order of the court to respond to the demand, 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.

Extension of time, exemption from compliance

18(13)      On an application under subsection (8) or (10), or on an application of the secured party referred to in subsection (8) or the person referred to in subsection (9), the court may, subject to section 65,

(a) exempt the secured party or person receiving the demand in whole or in part from complying with subsection (1) or (9), other than with respect to a demand made by the debtor; or

(b) extend the time for compliance.

Secured party estopped

18(14)      A secured party who replies to a demand made under subsection (1) is estopped, for the purpose of this Act, as against

(a) the person making the demand; or

(b) any other person who can reasonably be expected to rely on the reply;

to the extent that the person relies on the reply, from denying

(c) the accuracy of information contained in the reply to the demand under clause (2)(b), (c) or (d); and

(d) that a copy of a security agreement provided under clause (2)(a) is a true copy of the security agreement required to be provided in response to the demand.

Successor in interest estopped

18(15)      A successor in interest referred to in subsection (9) is estopped, for the purpose of this Act, as against

(a) the person making the demand referred to in subsection (1); and

(b) any other person who can reasonably be expected to rely on the reply to the demand;

to the extent that the person has relied on the reply, from denying

(c) the accuracy of information contained in the reply to the demand under clause 2(b), (c) or (d); and

(d) that the copy of a security agreement provided under clause (2)(a) is a true copy of the security agreement required to be provided in response to the demand.

Successor in interest not estopped

18(16)      A successor in interest referred to in subsection (9) is not estopped under subsection (15) where

(a) the person making the demand knows the identity and address of the successor in interest; or

(b) before the demand, a financing change statement is registered as provided in section 45 disclosing the successor in interest as the secured party.

Fee

18(17)      The person to whom a demand is made under this section may require payment in advance of a fee in the amount prescribed for each demand, but the debtor is entitled to a reply without charge once every six months.

Person not entitled to information

18(18)      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.

S.M. 1997, c. 24, s. 6; S.M. 2000, c. 6, s. 3.

PART 4

PERFECTION AND PRIORITIES

Perfection of security interest

19          A security interest is perfected when it attaches and every other step required for perfection under this Act is completed, regardless of the order of occurrence.

Perfection of security interest — securities 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.

Perfection of security interest — futures account

19.1(2)     Perfection of a security interest in a futures account also perfects a security interest in the futures contracts carried in the futures account.

S.M. 2008, c. 14, s. 121.

Perfection on attachment — delivery of financial asset

19.2(1)     A security interest arising in the delivery of a financial asset under subsection 12.1(3) is perfected when it attaches.

Perfection on attachment — investment property

19.2(2)     A security interest in investment property created by a broker or securities intermediary is perfected when it attaches.

Perfection on attachment — futures contract or futures account

19.2(3)     A security interest in a futures contract or a futures account created by a futures intermediary is perfected when it attaches.

S.M. 2008, c. 14, s. 121.

Subordination of unperfected security interest

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, attachment or garnishment, or who has obtained a charging order or equitable execution affecting or relating to the collateral,

(ii) a sheriff who seizes the collateral under The Executions Act,

(iii) a judgment creditor entitled by law to participate in the distribution of property seized under legal process, or its proceeds, as provided in The Executions Act, and

(iv) a representative of creditors, but only for the purpose of enforcing the rights of persons referred to in subclause (i),

if that security interest is unperfected at the time

(v) the interest of the persons mentioned in subclause (i), (ii), or (iv) arises, or

(vi) the judgment creditor referred to in subclause (iii) causes the collateral to be seized under The Executions Act;

(b) in collateral is not effective against

(i) a trustee in bankruptcy if the security interest is unperfected at the date of bankruptcy, or

(ii) a liquidator appointed under the Winding-up Act (Canada) if the security interest is unperfected at the date that the winding-up order is made;

(c) in goods, chattel paper, a document of title, an instrument or an intangible or money is subordinate to the interest of a transferee who

(i) acquires the interest under a transaction that is not a security agreement,

(ii) gives value, and

(iii) acquires the interest without knowledge of the security interest before the security interest is perfected.

S.M. 2008, c. 14, s. 122.

Damages recovereable by lessor or consignor

21          Where 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 an execution creditor under clause 20(a) or a trustee or liquidator under clause 20(b), the lessor or consignor is deemed, as against the lessee or consignee to suffer, 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 the amount referred to in clause (a), resulting from the termination of the lease or consignment.

Priority of purchase money security interest

22(1)       A purchase money security interest in

(a) collateral, other than an intangible, that is perfected not later than 15 days after the day the debtor, or a third party, 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 interest of a person mentioned in clause 20(a) or (b).

Where goods are shipped

22(2)       For the purpose of this section, where goods are shipped by common carrier to a debtor or to a third party designated by the debtor, the debtor does not obtain possession of the goods until the debtor or the third party, at the request of the debtor, obtains 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 under this Act without an intermediate period when it is unperfected, the security interest is continuously perfected for the purpose of this Act.

Priority of transferee

23(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, repossession or seizure of 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] S.M. 2008, c. 14, s. 123;

(e) a negotiable document of title; and

(f) money;

but only while the possession, repossession or seizure is pursuant to a right given by the security agreement or this Act.

Possession of collateral by debtor

24(2)       For the purpose 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.

Perfection — certificated security

24(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.

Perfection — certificated security in registered form

24(4)       Subject to section 19, a security interest in a certificated security in registered form is perfected by delivery when delivery of the 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.

S.M. 2008, c. 14, s. 123.

Perfection of security interest in investment property

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.

Perfected by control

24.1(2)     Subject to section 19, a security interest in investment property is perfected by control under section 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.

S.M. 2008, c. 14, s. 124.

Perfection by registration

25          Subject to section 19, registration of a financing statement perfects a security interest in collateral.

Perfection under section 24

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,

(iii) registration of a 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 trans-shipping, or

(iii) manufacturing, processing, packaging or otherwise dealing with goods in a manner preliminary to their sale or exchange;

remains perfected, notwithstanding section 10, for the first 15 days after the collateral comes under the control of the debtor.

Perfection after expiry of time

26(2)       After the expiration of the period of time set out in subsection (1), a security interest referred to in this section is subject to the provisions of the Act relating to the perfection of a security interest.

S.M. 2008, c. 14, s. 125.

Perfection where goods in possession of bailee

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) perfection of a security interest in a negotiable document of title to the goods where the bailee has issued one;

(c) a holding on behalf of the secured party under section 24;

(d) deposit, by a secured party to whom a non-negotiable warehouse receipt has been transferred, of the transfer with the warehouseman who issued the receipt in accordance with subsection 22(2) of The Warehouse Receipts Act; or

(e) registration of a financing statement relating to the goods.

Issue of negotiable document of title

27(2)       The issue of a negotiable document of title covering goods does not preclude any other security interest in the goods from arising during the period that the negotiable document of title is outstanding.

Priority of negotiable document of title

27(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.

Collateral giving rise to proceeds

28(1)       Subject to this Act, where 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 such dealing; and

(b) extends to the proceeds;

but where 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 fair market value of the collateral at the date of the dealing.

Exception

28(1.1)     The limitation of the amount secured by a security interest as provided in subsection (1) does not apply where the collateral is investment property.

Security interest in proceeds

28(2)       Where the security interest was perfected by registration when the proceeds arose, the security interest in the proceeds remains continuously perfected so long as the registration remains effective or, where the security interest is perfected with respect to the proceeds by any other method permitted under this Act, for so long as the conditions of the perfection are satisfied.

S.M. 2008, c. 14, s. 126.

Returned or repossessed goods

29(1)       Where 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 clause 28(1)(a) or section 30, the security interest reattaches to the goods if

(a) the goods are returned to, seized or repossessed by the debtor or by a transferee of chattel paper created by the sale or lease; and

(b) the obligation secured remains unpaid or unperformed.

Perfection after interest reattaches

29(2)       Where 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.

Interest of transferee of account or chattel paper

29(3)       Where 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, seized or repossessed by the debtor or by the 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.

Perfection of interest in goods under ss.(3)

29(4)       A security interest in goods arising under subsection (3) 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 thereafter unless the transferee registers a financing statement relating to the security interest or takes possession of the goods by seizure, repossession or otherwise, before the expiration of that period.

Subordination of interest of transferee

29(5)       A security interest in goods that a transferee of an account has under subsection (3) is subordinate to a perfected security interest arising under subsection (1) and to a security interest of a transferee of chattel paper arising under subsection (3).

Priority of interest of transferee

29(6)       A security interest in goods that a transferee of chattel paper has under subsection (3) has priority over

(a) a security interest in goods reattaching under subsection (1); and

(b) a security interest in 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 subsection 31(7) as to the chattel paper over an interest in the chattel paper claimed by the holder of the security interest in the goods.

Interest of buyer or lessee

29(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.

Definitions

30(1)       In this section,

"buyer of goods" includes a person who obtains vested rights in goods pursuant to 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; (« acheteur d'objets »)

"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; (« cours normal des affaires du vendeur »)

"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 such a buyer of goods. (« vendeur »)

Rights of buyer or lessee of goods

30(2)       A buyer of goods 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 given by the seller or lessor or arising under section 28 or 29, whether or not the buyer of goods or lessee knows of it, unless the buyer of goods or lessee also knows that the sale or lease constitutes a breach of the security agreement under which the security interest was created.

Goods acquired free of perfected interest

30(3)       A buyer of goods or lessee of goods that are acquired as consumer goods or goods bought for farming uses takes free of a perfected or unperfected security interest in the goods if the buyer of goods or lessee

(a) gives value for the interest acquired; and

(b) buys or leases the goods without knowledge of the security interest.

Limitation

30(4)       Subsection (3) does not apply to a security interest in

(a) a fixture; or

(b) goods the purchase price of which exceeds $1,000. or, in the case of a lease, the fair market value of which exceeds $1,000.

Conditional right of buyer or lessee

30(5)       A buyer of goods or lessee of goods takes free of a security interest that is temporarily perfected under subsection 26(1) or 29(4), or a security interest the perfection of which is continued under section 51 during the 15 day periods referred to in those subsections, if the buyer of goods or lessee

(a) gives value for the interest acquired; and

(b) buys or leases the goods without knowledge of the security interest.

Sale or lease not in ordinary course of business

30(6)       Where goods that are equipment and of a kind prescribed as serial numbered goods are sold or leased, the buyer of goods or lessee takes free from any security interest in the goods perfected under section 25 if

(a) the buyer of goods or lessee buys or leases the goods without knowledge of the security interest; and

(b) the goods are not described by serial number in the registration relating to the security interest.

Types of sales and leases

30(7)       A sale or lease under subsection (2), (3), (5) or (6) may be

(a) for cash;

(b) by exchange for other property; or

(c) on credit;

and includes delivering goods or a document of title 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.

Acquiring security free from security interest

30(8)       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 that does not have control of the security; and

(c) obtains control of the security;

acquires the security free from the security interest.

No requirement to determine granting of security interest or breach of security agreement

30(9)       A purchaser referred to in subsection (8) 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.

No action against purchaser for value without notice of breach

30(10)      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.

No requirement to determine granting of security interest or breach of security agreement

30(11)      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.

No action against subsequent purchaser

30(12)      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 (10), it may not be asserted against a person who purchases a security entitlement, or an interest in it, from the entitlement holder.

S.M. 1997, c. 24, s. 7; S.M. 2008, c. 14, s. 127.

Priority of holder of money

31(1)       A holder of money has priority over a security interest in it perfected under section 25 if the holder

(a) acquired the money without knowledge that it is subject to a security interest; or

(b) is a holder for value, whether or not that person acquired the money without knowledge that it is subject to a security interest.

Right of creditor

31(2)       A creditor who receives payment of a debt owing by a debtor through a debtor initiated payment has priority over a security interest in

(a) the funds paid;

(b) the intangible which was the source of the payment; and

(c) any instrument used to effect the payment;

whether or not the creditor has knowledge of the security interest at the time of the payment.

"Debtor initiated payment"

31(3)       In subsection (2), "debtor initiated payment" means

(a) subject to clause (c), payment effected through use of an instrument, debit or transfer order, authorization or similar written payment mechanism executed by the debtor;

(b) subject to clause (c), payment effected through an electronic funds transfer initiated by the debtor;

(c) in the case of payment to a deposit-taking institution from a deposit account of the debtor held by the institution,

(i) payment referred to in clauses (a) and (b) initiated or made by the debtor at the time the debt is payable or thereafter,

(ii) payment effected through the use of a post-dated cheque drawn by the debtor, or

(iii) payment under a written authorization executed by the debtor as part of a loan or other credit transaction, under which the debtor became indebted to the deposit-taking institution, which

(A) sets out specified amounts to be debited to the deposit account at specified times or intervals, or

(B) authorizes debits to the deposit account when the credit in the deposit account exceeds an amount specified in the written authorization,

but does not include payment authorized by the deposit-taking institution as agent of the debtor.

Purchaser of instrument or security

31(4)       A purchaser of an instrument has priority over a security interest in the instrument perfected under section 25 if the purchaser

(a) gives value for the instrument;

(b) acquires the instrument without knowledge that it is subject to a security interest; and

(c) takes possession of the instrument.

Holder of negotiable instrument

31(5)       A holder to whom a negotiable document of title is negotiated has priority over a security interest in the document of title that is perfected under section 26 or subsection 29(4) if the holder

(a) gives value for the document of title; and

(b) acquires the document of title without knowledge that it is subject to a security interest.

Where purchaser or holder has knowledge

31(6)       For the purpose of subsections (4) and (5), a purchaser of an instrument or a holder of a negotiable document of title who acquires it under a transaction entered into in the ordinary course of the transferor's business has knowledge only if the purchaser or holder acquires the interest with knowledge that the transaction violates the terms of the security agreement creating or providing for the security interest.

Purchase of chattel paper

31(7)       A purchaser of chattel paper who takes possession of it in the purchaser's ordinary course business and for new value has priority over a security interest in the chattel paper that

(a) is perfected under section 25, if the purchaser does not have knowledge at the time of taking possession that the chattel paper is subject to a security interest; or

(b) attaches to proceeds of inventory under section 28, whatever the extent of the purchaser's knowledge.

S.M. 2008, c. 14, s. 128; S.M. 2011, c. 35, s. 38.

Rights of protected purchaser

31.1(1)     This Act does not limit the rights of a protected purchaser of a security under The Securities Transfer Act.

Priority of protected purchaser's interest

31.1(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.

Rights under Securities Transfer Act

31.1(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.

S.M. 2008, c. 14, s. 129.

Priority of lien of person furnishing material

32          Where a person in the ordinary course of business furnishes materials or services with respect to goods that are subject to a security interest, any lien the person has in respect of such materials or services has priority over a perfected or unperfected security interest unless the lien is given by an Act that provides that the lien does not have such priority.

"Transfer"

33(1)       In this section, "transfer" includes a sale, the creation of a security interest or a transfer under judgment enforcement proceedings.

Transfer of rights of debtor

33(2)       The rights of a debtor in collateral may be transferred consensually or by operation of law notwithstanding a provision in the security agreement prohibiting transfer or declaring a transfer to be a default, but a transfer by the debtor does not prejudice the rights of the secured party under the security agreement or otherwise, including the right to treat a prohibited transfer as an act of default.

Definitions

34(1)       In this section, "non-proceeds security interest" or "non-proceeds purchase money security interest" means a security interest or purchase money security interest in original collateral.

Priority of purchase money security interest

34(2)       Subject to subsection (6) and 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.

Security interest in inventory or proceeds

34(3)       Subject to subsection (6) 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, before the time of registration of the purchase money security interest, registers a financing statement containing a description that includes the same item or kind of collateral;

(c) the notice referred to in clause (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

(d) the notice is given before the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier.

Manner of giving notice

34(4)       A notice referred to in subsection (3) may be given in accordance with section 68 or by registered mail to the address of the person to be notified as it appears in the financing statement referred to in clause (3)(b).

Priority of purchase money interest

34(5)       Subject to section 28, a purchase money security interest in goods and their proceeds, taken by a seller, lessor or consignor of the collateral, that is perfected

(a) in the case of inventory, at the date a 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 a debtor, or another person at the request of a 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.

Non-proceeds security interest

34(6)       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 the purchase money security interest is perfected or a financing statement relating to it is registered.

Priority of non-proceeds purchase money interest

34(7)       A non-proceeds purchase money security interest has priority over a purchase money security interest in the same collateral or proceeds, if the non-proceeds purchase money security interest is perfected

(a) in the case of inventory, at the date a debtor, or another person at the request of a 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 a debtor, or another person at the request of a debtor, obtains possession of the collateral, whichever is earlier.

Debtor obtaining possession of goods

34(8)       For the purpose of this section, where goods are shipped by common carrier to a debtor or to a person designated by a debtor, the debtor is deemed not to obtain possession of the goods until the debtor obtains actual possession of the goods or a document of title to the goods, whichever is earlier.

Security interest ends on discharge of obligation

34(9)       A purchase money security interest in an item of collateral does not extend to or continue in the proceeds of the collateral after the obligation to pay the purchase price of the item, or to repay the value given for the purpose of enabling the debtor to acquire rights in the item, is discharged.

Crops

34(10)      A perfected security interest in crops or their proceeds given for value to enable a debtor to produce the crops and given while the crops are growing crops or during a period of six months immediately before the time the crops become growing crops, has priority over any other security interest in the same collateral given by the same debtor.

Animals

34(11)      A perfected security interest in animals or their proceeds given for value to enable the debtor to acquire food, drugs or hormones to be fed to or placed in the animal has priority over any other security interest in the same collateral given by the same debtor other than a perfected purchase money security interest.

S.M. 2012, c. 40, s. 35.

General determination of priority

35(1)       Where this Act provides no other method for determining priority between security interests,

(a) priority between conflicting 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 or delivery of the collateral under section 24 without regard to the date of attachment of the security interest, or

(iii) perfection under section 5, 7, 7.1, 26, 28, 29 or 74,

whichever is earliest;

(b) a perfected security interest has priority over an unperfected security interest; and

(c) priority between conflicting unperfected security interests is determined by the order of attachment of the security interests.

Continuously perfected interest

35(2)       For the purpose of subsection (1), a continuously perfected security interest shall be treated as perfected by the method by which it was originally perfected.

Time of registration, possession, perfection

35(3)       For the purpose of subsection (1), but subject to section 28, the time of registration, possession, delivery or perfection of a security interest in original collateral is the time of registration, possession, delivery or perfection of its proceeds.

Registration of interest in equipment

35(4)       A security interest in goods that are equipment and are of a kind prescribed as serial numbered goods is not registered or perfected by registration for the purpose of subsection (1), (7) or (8) or subsection 34(2) unless a financing statement relating to the security interest and containing a description of the goods by serial number is registered.

Priority applies to all advances

35(5)       Subject to subsection (6), the priority which a security interest has under subsection (1) applies to all advances, including future advances.

Priority of interest re clause 20(a)

35(6)       A perfected security interest has priority over the interests of persons referred to in clause 20(a) only to the following extent:

(a) advances made before the interests of the persons arise, or made before the sheriff seizes the collateral under The Executions 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 rights to the collateral;

(c) advances made pursuant to

(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 acquiring the knowledge referred to in clause (b);

(d) reasonable costs and expenses incurred by the secured party for the protection, preservation, maintenance or repair of the collateral.

Lapsed or discharged registration

35(7)       Where registration of a security interest lapses as a result of a failure to renew the registration or where a registration is discharged without authorization or in error, and the secured party 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 has a subordinate priority position, except to the extent that such competing security interest secures advances made or contracted for after the lapse or discharge and before the reregistration.

Debtor's transfer of interest in collateral

35(8)       Where 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 change statement showing the transferee as the new debtor; and

(b) before the secured party referred to in clause (a) amends the registration to disclose the name of the transferee as the new debtor or takes possession of the collateral.

Application of subsection (8)

35(9)       Subsection (8) does not apply where the transferee acquires the debtor's interest free from the security interest granted by the debtor.

Real property lease payments

35(10)      A security interest in a right to payment under a lease of real property to which this Act applies is subordinate to the interest of a person who acquires for value the lessor's interest in the lease or in the real property thereby demised if the interest, or notice of the interest, of the person is registered against the land before the interest or notice of the secured party is registered against the land.

S.M. 1997, c. 24, s. 8; S.M. 2000, c. 6, s. 4; S.M. 2008, c. 14, s. 130.

Priority among conflicting security interests

35.1(1)     The rules in this section govern priority among conflicting security interests in the same investment property.

Secured party with control

35.1(2)     A security interest of a secured party having control of investment property under section 1.1 has priority over a security interest of a secured party that does not have control of the investment property.

Certificated security perfected by delivery

35.1(3)     A security interest in a certificated security in registered form that is perfected by taking delivery under subsection 24(3) and not by control under section 24.1 has priority over a conflicting security interest perfected by a method other than control.

Rank by priority in time

35.1(4)     Except as otherwise provided in subsections (5) and (6), conflicting security interests of secured parties each of which has control under section 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 clause 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 the securities account, if the secured party obtained control under clause 25(1)(b) of The Securities Transfer Act, or

(iii) if the secured party obtained control through another person under clause 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 subclause 1.1(d)(ii) with respect to futures contracts carried or to be carried with the futures intermediary.

Securities intermediary

35.1(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.

Futures intermediary

35.1(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.

Interests granted by broker, intermediary

35.1(7)     Conflicting security interests granted by a broker, securities intermediary or futures intermediary that are perfected without control under section 1.1 rank equally.

Priority determined by section 35

35.1(8)     In all other cases, priority among conflicting security interests in investment property is governed by section 35.

S.M. 2008, c. 14, s. 131.

"Secured party"

36(1)       In this section, "secured party" includes a receiver.

Application of section

36(2)       Subject to the regulations, this section applies only with respect to land for which a certificate of title is issued under The Real Property Act.

Interest in goods before becoming fixtures

36(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.

Priority of interest in fixture

36(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 a person with an interest in the land at the time the goods become fixtures; and

(b) a person with a registered mortgage of the land who, after the goods become fixtures

(i) makes an advance under the mortgage, but only with respect to the advance, or

(ii) obtains an order for sale or foreclosure;

without fraud and before the security interest is registered in accordance with section 49.

Advance of mortgage money after search

36(5)       Where a search is made of a certificate of title and

(a) at the time of the search, no notice under section 49 is recorded on the certificate of title; and

(b) on the day the search is made, in reliance on the search, mortgage money is advanced under a mortgage registered against the certificate of title;

the mortgage money is deemed to be advanced before the registration of any notice under section 49 that is not disclosed by the search, notwithstanding that a notice is registered against the certificate of title on the day the search is made.

Interest in goods after becoming fixtures

36(6)       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 the 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 security interest in the goods is registered in accordance with section 49.

Subordinate interest in fixture

36(7)       A security interest referred to in subsection (3) or (6) is subordinate to

(a) the interest of a creditor of the debtor who causes a writ of execution affecting the land to be transmitted to the appropriate land titles office; and

(b) the interest of a person who registers in the appropriate land titles office a certificate affecting the land issued under The Judgments Act;

before the security interest is registered in accordance with section 49.

Priority of purchase money security interest

36(8)       The interest of a creditor or person referred to in subsection (7) does not take priority over a purchase money security interest in goods in respect of which a notice is registered in accordance with section 49 not later than 15 days after the goods become fixtures.

Removal of goods from land by secured party

36(9)       A secured party who, under this Act, has the right to remove goods from land shall exercise this right of removal in a manner that causes no greater damage or injury to the land and to other property situated on it or that puts the occupier of the land to greater inconvenience than is necessarily incidental to the removal of the goods.

Reimbursement for damages to interest in land

36(10)      A person, other than the debtor, who has an interest in the land at the time the goods subject to the security interest become fixtures is entitled to reimbursement for any damages to the interest of the person 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.

Security for reimbursement

36(11)      A person entitled to reimbursement under subsection (10) may refuse permission to remove the goods until the secured party gives adequate security for reimbursement.

Application to court by secured party

36(12)      The secured party may apply to the 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) determining the depository for the security; or

(d) authorizing the removal of the goods without the provision of security for reimbursement under subsection (11).

Payment to secured party

36(13)      A person having an interest in the land that is subordinate to a security interest as provided in this section may, before the goods are removed from the land by the secured party, retain the goods on payment to the secured party of the lesser of

(a) the amount secured by the security interest having priority over such interest; and

(b) the fair market value of the goods if the goods were removed from the land.

Notice of intention to remove goods from land

36(14)      A secured party who has a right to remove goods from land shall give to each person who appears by the records of the land titles office to have an interest in the land, a notice of the intention of the secured party to remove the goods, and the notice shall 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 fair market value of the goods, if the goods were removed from the land;

(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 (13) is paid on or before a specified date that is not less than 15 days after the notice is given in accordance with subsection (15).

Time and manner of notice

36(15)      A notice referred to in subsection (14) shall be given not less than 15 days before removal of the goods, and may be given in accordance with section 68 or by registered mail to the address of the person to be notified as it appears in the records of the land titles office.

Application for postponement of removal

36(16)      A person entitled to receive a notice under subsection (14) may apply to the court for an order postponing removal of the goods from the land.

S.M. 1997, c. 24, s. 9.

Definition

37(1)       In this section "secured party" includes a receiver.

Application to certain land

37(2)       Subject to the regulations, this section applies only with respect to land for which a certificate of title has been issued under The Real Property Act.

Priority of interest in growing crop

37(3)       Except as provided in this section, a security interest in growing crops has priority with respect to the crops claimed by a person with an interest in the land.

Subordination of interest in growing crop

37(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 a person who is an assignee for value of a person with an interest in the land while the crops are growing crops; and

(b) any 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 security interest is registered in accordance with section 49.

Interest of creditor in growing crop

37(5)       A security interest referred to in subsection (3) is subordinate to

(a) the interest of a creditor of the debtor who causes a writ of execution affecting the land to be transmitted to the appropriate land titles office; and

(b) a person who submits for registration in the appropriate land titles office a certificate affecting the land issued under The Judgments Act;

before the security interest is registered in accordance with section 49.

Priority of purchase money security interest

37(6)       The interest of a creditor or person 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 subsection 34(10), that is registered in accordance with section 49 not later than 15 days after the day the security interest in the crops attaches.

Seizure and removal of growing crop

37(7)       Subsections 36(8) to (15) apply with necessary modifications to seizure and removal of growing crops from the land.

Definitions

38(1)       In this section,

"other goods" means goods to which an accession is installed or affixed; (« autres objets »)

"secured party" includes a receiver; (« créancier garanti »)

"the whole" means an accession and the other goods to which the accession is installed or affixed. (« le tout »)

Interest attaching before goods become an accession

38(2)       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 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.

Subordination of interest

38(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 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, after the goods become an accession,

(i) makes an advance under a security agreement 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.

Interest attaching after accession of goods

38(4)       A security interest in goods that attaches after the goods becomes 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) does not consent to the security interest,

(ii) does not disclaim an interest in the goods or accessions,

(iii) does not enter into an agreement under which the 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 of the security interest and before the security interest in the accession is perfected.

Interest of creditor or sheriff

38(5)       A security interest referred to in subsections (2) and (4) is subordinate to the interest of a creditor or a sheriff who has seized or caused the whole to be seized under legal process to enforce a judgment, if the seizure occurs under circumstances referred to in section 20 and if the security interest is not perfected at the date of seizure.

Priority of purchase money security interest

38(6)       The interest of a creditor or 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.

Removal of accession goods

38(7)       A secured party who, under this Act, has the right to remove an accession from the whole shall exercise this right of removal in a manner that causes no greater damage or injury to the whole or the other goods or that puts the person in possession of the whole to greater inconvenience that is necessarily incidental to the removal of the accession.

Reimbursement for damages

38(8)       A person, other than the debtor, who has an interest in the whole at the time the goods subject to the security interest become an accession is entitled to reimbursement for any damages to the interest of such person in the whole caused during the removal of the accession, but is not entitled to reimbursement for diminution in the value of the whole caused by the absence of the accession removed or by the necessity of its replacement.

Security for reimbursement

38(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 the reimbursement.

Application to court

38(10)      The secured party may apply to the 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) determining the depository for the security;

(d) authorizing the removal of the goods without the provision of security for reimbursement under subsection (9).

Payment to secured party

38(11)      A person who has an interest in the whole that is subordinate to a security interest as provided in this section may, before the accession goods are removed from the whole by the secured party, retain the accession on payment to the secured party of the lesser of

(a) the amount secured by the security interest entitled to priority; and

(b) the fair market value of the accession if the accession were removed from the whole.

Notice of intention to move

38(12)      The secured party who has a right to remove the accession from the whole shall 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 prescribed as serial numbered goods;

a notice of the intention of the secured party to remove the accession, and the notice shall 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;

(f) the fair market value of the accession, if the accession were removed from the whole;

(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).

Manner of giving notice

38(13)      A notice referred to in subsection (12) shall be given not less than 15 days before removal of the accession and may be given in accordance with section 68 or by registered mail to the address of the person to be notified as it appears on the financing statement.

Application for postponement

38(14)      A person entitled to receive a notice under subsection (12) may apply to the court for an order postponing removal of the accession.

Continued interest in commingled goods

39(1)       A perfected security interest in goods that later 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 or mass.

Sharing in commingled goods

39(2)       Subject to subsections (4) and (6), where 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.

Perfected interest in commingled goods

39(3)       For the purpose of section 35, perfection of a security interest in goods that later become part of a product or mass shall also be treated as perfection of the interest in the product or mass.

Interest not to exceed fair market value

39(4)       For the purpose of subsection (2), the obligation secured by a security interest does not exceed the fair market value of the goods at the date that the goods become part of the product or mass.

Priority limited to certain value

39(5)       Any priority that a perfected security interest that continues 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 that they become part of the product or mass.

Priority of purchase money security interest

39(6)       A perfected purchase money security interest in goods that continues in the product or mass 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 the secured party with the non-purchase money security interest in the product or mass who registered 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,

(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.

Manner of notice

39(7)       A notice referred to in clause (6)(c) may be given in accordance with section 68 or by registered mail to the address of the person to be notified as it appears in the financing statement referred to in clause (6)(c).

Application of section

39(8)       This section does not apply to a security interest in an accession to which section 38 applies.

S.M. 2000, c. 6, s. 5.

Secured party may subordinate interest

40(1)       A secured party may, in a security agreement or otherwise, subordinate the secured party's security interest to any other interest, and such subordination is effective according to its terms between the parties and may be enforced by a third party if such third party is the person or one of a class of persons for whose benefit the subordination is intended.

Effect of floating charge type of security interest

40(2)       The taking by a secured party of a security interest in the nature of a floating charge does not of itself subordinate the security interest to any other security interest.

"Account debtor"

41(1)       In this section, "account debtor" means a person who is obligated under an intangible or chattel paper.

Assignment of intangible or chattel paper

41(2)       Unless an account debtor makes an enforceable agreement not to assert any defence or claim arising out of a contract, the rights of an assignee of 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 from

(i) the contract, or

(ii) a contract closely connected to the contract, where the account debtor meets the requirements for an equitable set-off; and

(b) any other defence or claim of the account debtor against the assignor that accrues before the account debtor acquires knowledge of the assignment.

Modification of contract

41(3)       A modification of or substitution for a contract made in good faith and in accordance with reasonable commercial standards and without material adverse effect on the assignee's rights under the contract or the assignor's ability to perform the contract is effective against the assignee unless the account debtor has otherwise agreed.

Application of subsection (3)

41(4)       Subsection (3) applies

(a) to the extent that an assigned right to payment arising out of the contract is not earned by performance; and

(b) notwithstanding that notice of the assignment is given to the account debtor.

Rights of assignee where contract modified

41(5)       Where a contract is substituted or modified in the manner referred to in subsection (3), the assignee obtains rights that correspond to those that the assignor had under the original contract.

Modification as breach of contract

41(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.

Payment after assignment of collateral

41(7)       Where 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 the account debtor requests the assignee to furnish proof of the assignment and the assignee fails to furnish proof within 15 days after the date of the request.

Discharge of account debtor

41(8)       Payment by an account debtor to an assignee pursuant to a notice referred to in clause 7(a) discharges the obligation of the account debtor to the extent of the payment.

Provision prohibiting assignment

41(9)       A term in a contract between an account debtor and an assignor that prohibits or restricts assignment of the whole of the intangible or chattel paper for money due or to become due is binding on the assignor only to the extent of making the assignor liable in damages for breach of contract, and is unenforceable against third parties.

S.M. 1997, c. 24, s. 10; S.M. 2000, c. 6, s. 6.

PART 5

REGISTRATION

Registry continued

42(1)       The Personal Property Registry is hereby continued for the purpose of registrations under this Act, under prior registration law and under any other Act, that are permitted or required to be made in the Registry.

Designation of Registrar

42(2)       The Registrar-General must designate a Registrar of Personal Property Security.

Designation of deputy registrars

42(2.1)     The Registrar-General may designate one or more deputy registrars.

Revocation of designation

42(2.2)     The Registrar-General may revoke a designation made under this section.

Employment of Registrar and deputies

42(2.3)     A person is not eligible to be the Registrar or a deputy registrar unless he or she is employed by a service provider or employed under The Civil Service Act.

Powers and duties of Registrar

42(3)       Subject to sections 42.1 to 42.3, the Registrar and deputy registrars must supervise the Registry and shall have the powers and obligations set out in this Act and any other Act, and as prescribed in a regulation to this Act or any other Act providing for registration in the Registry.

Powers of Registrar

42(4)       Notwithstanding any regulation made under this Act or any other Act providing for registration in the Registry, when, in the opinion of the Registrar, the circumstances are such that it is not practical 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) suspend the operation of other functions of the Registry;

for such period of time as the Registrar considers necessary or advisable.

Powers and duties of deputy

42(5)       Each deputy registrar has the powers of, and may perform the duties of, the Registrar.

Deputy to assist Registrar

42(6)       A deputy registrar is to assist the Registrar in the performance of his or her duties. If the Registrar is absent, or unable to act, or if there is no Registrar, a deputy registrar must act in the Registrar's place.

S.M. 1997, c. 24, s. 11; S.M. 2013, c. 11, s. 48.

Oversight by Registrar-General

42.1(1)     The Registrar-General must exercise general oversight of the Registry.

Registrar-General's rules of practice

42.1(2)     The Registrar-General may make, amend and repeal rules of practice that relate to the Registry.

Compliance with rules

42.1(3)     The Registrar and any other person engaged in the operation of the Registry must comply with the rules under subsection (2).

Delegation of duties

42.1(4)     The Registrar-General may delegate any of his or her powers or duties to any person employed by the government, except the power to make rules.

S.M. 2013, c. 11, s. 49.

Reference to Registrar-General

42.2        The Registrar may ask the Registrar-General for an opinion on a point of law or practice. The Registrar must act in accordance with an opinion given by the Registrar-General.

S.M. 2013, c. 11, s. 49.

Referral by person to Registrar-General

42.3(1)     A person who is affected by a decision of the Registrar or any other employee of the Registry respecting the provision of a registry service may refer the matter to the Registrar-General for a decision.

Complying with Registrar-General's decision

42.3(2)     If the Registrar-General makes a decision on a matter referred under subsection (1), the Registrar must act in accordance with the decision.

S.M. 2013, c. 11, s. 49.

Disclosure

42.4(1)     The Registrar or any other person engaged in the operation of the Registry may advise the Registrar-General if they become aware of any failure to comply with this Act.

No adverse employment action

42.4(2)     A service provider must not take any of the measures listed in subsection (3) against an employee by reason only that

(a) the employee has, in good faith, provided information to the Registrar-General in accordance with subsection (1); or

(b) the service provider believes that the employee will do so.

Prohibited measures

42.4(3)     The measures prohibited by subsection (2) are

(a) a disciplinary measure;

(b) a demotion;

(c) termination of employment;

(d) any measure that adversely affects the employee's employment or working conditions; and

(e) a threat to take any of the measures referred to in clauses (a) to (d).

Complaint to Manitoba Labour Board

42.4(4)     An employee of a service provider who alleges that a prohibited measure has been taken against him or her may file a written complaint with The Manitoba Labour Board. Sections 28 and 29 of The Public Interest Disclosure (Whistleblower Protection) Act apply with necessary changes to a complaint under this subsection.

Annual report

42.4(5)     The annual report that the department presided over by the minister must file under section 18 of The Public Interest Disclosure (Whistleblower Protection) Act must include the number of disclosures received by the Registrar-General under this section and any corrective action taken or direction given as a result of a disclosure.

S.M. 2013, c. 11, s. 49.

Registration of financing statement

43(1)       A financing statement may be submitted for registration in the Registry as prescribed.

Determination of order of registration

43(2)       Registration of a financing statement is effective from the date and time assigned to it in the Registry and where two or more financing statements are assigned the same date and time, the order of registration is determined by reference to the registration numbers assigned to them in the Registry, with the lower number having the earlier registration.

Payment of fees

43(3)       The Registrar may refuse to register a financing statement or to issue a search result under this Part until any fee prescribed in respect of registrations or searches are paid or arrangements for the payment of fees are made.

Time of registration

43(4)       A financing statement may be registered before or after a security agreement is made and before or after a security interest attaches.

Registration re more than one security agreement

43(5)       A registration may relate to one or more than one security agreement.

Effect of defects and errors

43(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.

Effect of error in name of debtor

43(7)       An error in the spelling of any part of the name of a debtor set forth in a financing statement or other document required or authorized to be registered in the Registry invalidates the registration and destroys the effect of the registration if a search of the Registry under the correct name of the debtor would not reveal the registration.

Registration invalidated by error

43(8)       Subject to subsection (10), where one or more debtors are required to be disclosed in a financing statement, or where collateral consists of consumer goods prescribed as serial numbered goods, and a seriously misleading defect, irregularity, omission or error appears in

(a) 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

(b) the serial number of the collateral;

the registration is invalid.

Proof of misleading error

43(9)       Nothing in subsection (6) or (8) requires as a condition to a finding that a defect, irregularity, omission or error is seriously misleading, proof that anyone was misled by it.

Failure to provide description of collateral

43(10)      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.

Financing statement may be rejected

43(11)      Notwithstanding anything in this Part, the Registrar may reject a financing statement when, in the opinion of the Registrar, it does not comply with this Act, a regulation under this Act, or any other Act or regulation under which registration of a financing statement is authorized.

Reasons to be given

43(12)      The Registrar shall give the reason for the rejection of a financing statement under subsection (11).

Secured party to provide copy to debtor

43(13)      Unless a person entitled under this section to a copy waives in writing the entitlement, the secured party or person named as secured party in a financing statement shall give to each person named as debtor in the financing statement a copy of

(a) the financing statement reproduced on paper; or

(b) a statement confirming registration of the financing statement and issued by the Registry;

not later than 20 days after it is registered or issued.

S.M. 1997, c. 24, s. 12; S.M. 2000, c. 6, s. 7; S.M. 2013, c. 54, s. 53.

Effective time of registration

44(1)       Except as may be otherwise prescribed, a registration under this Act is effective for the period of time indicated on the financing statement by which the registration was effected.

Renewed registration

44(2)       A registration may be renewed by registering a financing change statement at any time before the registration expires, and, except as may be otherwise prescribed, the period of time for which the registration is effective shall be extended by the renewal period indicated on the financing change statement.

Amendment of registration

44(3)       An amendment to a registration may be effected by registering a financing change statement at any time during the period that the registration is effective, and the amendment is effective from the time when the financing change statement is registered to the expiry of the registration that is amended.

Registration of amendment to financing statement

44(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.

S.M. 1997, c. 24, s. 13; S.M. 2000, c. 6, s. 8.

Registration of transfer of security interest

45(1)       Where a secured party with a registered security interest transfers the security interest or a part of it, a financing change statement may be registered disclosing the transfer.

Transfer of part of collateral

45(2)       Where a financing change statement is registered under subsection (1) and an interest in part of the collateral is transferred, the financing change statement shall contain a description of the collateral in which the interest is transferred.

Transfer of interest in collateral

45(3)       Where 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.

Time of registration of transfer

45(4)       A financing statement referred to in subsection (3) or a financing change statement disclosing a transfer of a security interest may be registered before or after the transfer.

Where transferee becomes secured party

45(5)       After registration of a financing change statement disclosing a transfer of a security interest, the transferee is the secured party for the purpose of this Part.

Subordinated interest

45(6)       Where a security interest is subordinated by the secured party 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 security interest is effective.

S.M. 2000, c. 6, s. 9.

Registrar may reproduce document

46(1)       Where a document is registered in the Registry, the Registrar may have the document photographed or otherwise reproduced and the reproduction is for all purposes deemed to be the document photographed or reproduced.

Removal of information from Registry

46(2)       Information in a registered document may be removed from the records of the Registry

(a) when the registered document is no longer effective;

(b) on the receipt of a discharge statement discharging the registration or a financing change statement partially discharging the registration;

(c) if the secured party fails to submit to the Registrar a court order maintaining the registered document under section 50; or

(d) on receipt of an order of the court compelling the discharge or partial discharge of the registered document.

S.M. 1997, c. 24, s. 14; S.M. 2000, c. 6, s. 10.

Registration is not constructive notice

47          Registration of a financing statement in the Registry is not constructive notice or knowledge of its existence or contents to any person.

Registry searches

48(1)       A person may request one or more of the following from the Registry:

(a) a search according to the name of a debtor and the issue of a search result;

(b) a search according to the serial number of goods of a kind that is prescribed 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 printed result of a search referred to in clauses (a) to (c);

(e) a copy or certified copy of any printed registered document.

Printed search as evidence

48(2)       A printed search result that purports to be issued by the Registry is, in the absence of evidence to the contrary, proof 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 sequence of registration numbers.

Certification by Registrar

48(3)       A copy of a registered financing statement or other registered 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.

Definitions

49(1)       In this section,

"debtor" includes any person named in a notice under this section as a debtor; (« débiteur »)

"secured party" includes any person named in a notice under this section as a secured party. (« créancier garanti »)

L.T.O. registration re fixture, crop or lease

49(2)       A security interest

(a) in a fixture referred to in section 36;

(b) in a growing crop referred to in section 37; or

(c) in a right to payment under a lease of real property referred to in subsection 35(10);

may be registered by causing a prescribed notice to be recorded upon the land to which the fixture is affixed, or to which the lease relates, or upon which the crops are growing.

Notice to be noted on title

49(3)       The district registrar of the land titles office to which the notice in subsection (2) is tendered shall make a memorandum of the notice on the certificate of title in respect of the parcel of land to which the notice relates.

Other L.T.O. registrations

49(4)       If a notice is registered in a land titles office under subsection (2) and the registration of the notice has not expired, a prescribed notice of a renewal, amendment, transfer, discharge or partial discharge of the security interest to which the original notice relates, or a prescribed notice of a subordination of the security interest to another interest may be registered in the land titles office, and on its being registered, the district registrar of the land titles office shall make a memorandum of it on the proper certificate of title.

Application of sections 43 to 45

49(5)       Subsections 43(3), (4), (5), (7), (8) and (11) and sections 44 and 45 apply, with necessary modifications, to a notice registered under this section.

Removal of registration on expiry

49(6)       If a notice registered under this section expires, or is discharged or partially discharged, the district registrar of the land titles office in which it is registered may remove registration of the notice in relation to the security interest and any other notice that relates to the same security interest.

Written demand to secured party

49(7)       Where a notice is registered under this section and

(a) the obligations under the security agreement to which the notice relates are performed;

(b) the secured party agrees 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) no security agreement exists between the secured party and the debtor; or

(e) the collateral 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 to the secured party.

Content of demand

49(8)       The demand referred to in subsection (7) may require that

(a) in a case within clause (7)(a), (d) or (e), the registration of the notice be discharged;

(b) in a case within clause (7)(b), the registration be amended, discharged or partially discharged to reflect the terms of the agreement; and

(c) in a case within clause (7)(c), the collateral description on the notice be amended to exclude items of property that are not collateral under a security agreement between the secured party and the debtor;

and the secured party shall amend, discharge or partially discharge the registration of the notice accordingly not later than 20 days after the demand is given.

Where secured party fails to amend

49(9)       Where the secured party fails to amend, discharge or partially discharge the registration of notice in accordance with the demand given under subsection (7), the person giving the demand may submit for registration the demand referred to in subsection (7), and the district registrar of the land titles office shall amend, discharge or partially discharge the registration in accordance with the demand on receiving satisfactory proof that the demand has been given to the secured party.

Manner of giving demand

49(10)      The demand referred to in subsection (7) may be given in accordance with section 68 or by registered mail to the address of the secured party as it appears on the notice registered under this section.

Application of subsections 50(6) to (8)

49(11)      Subsections 50(6) to (8) apply with necessary modifications to a notice registered under this section.

No fee for compliance with demand

49(12)      No fee or expense shall be charged and no amount shall be accepted by a secured party for compliance with a demand made under subsections (7) and (8), unless the parties, before the demand is made, agree that a specified amount may be charged.

S.M. 1997, c. 24, s. 15; S.M. 2000, c. 6, s. 11.

Definitions

50(1)       In this section,

"debtor" includes a person named in a registered financing statement as a debtor; (« débiteur »)

"secured party" includes a person named in a registered financing statement as a secured party. (« créancier garanti »)

Discharge of security interest in consumer goods

50(2)       Where a registration relates exclusively to a security interest in consumer goods, the secured party shall discharge the registration not later than 30 days after all obligations under the security agreement creating the security interest are performed, unless before the expiry of that 30 day period the registration lapses.

Demand to discharge or amend financing statement

50(3)       Where a financing statement is registered and

(a) the obligations under the security agreement to which it relates are performed;

(b) the secured party agrees 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

(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 description of the collateral contained in the financing statement may give a written demand to the secured party.

Content of demand

50(4)       The demand referred to in subsection (3) may require that the secured party register,

(a) in a case within clause (3)(a) or (d), a discharge statement discharging the registration;

(b) in a case within clause (3)(b), a discharge statement or financing change statement, as the case may be, so as to reflect the terms of the agreement; and

(c) in a case within clause (3)(c), a financing change statement amending the description of the collateral to exclude items or kinds of property that are not collateral under a security agreement between the secured party and the debtor;

and the secured party shall comply with the demand not later than 20 days after it is given.

Registration of statement after demand

50(5)       Where the secured party

(a) fails to comply with the demand referred to in subsection (3) within 20 days after it is given; or

(b) does not give to the Registrar an order of the court confirming that the registration need not be amended or discharged;

the person giving the demand may register the discharge statement or financing change statement referred to in subsection (4) on providing to the Registrar satisfactory proof that the demand has been given to the secured party.

Manner of giving demand

50(6)       The demand referred to in subsection (3) may be given in accordance with section 68 or by registered mail to the address of the secured party as it appears on the financing statement.

Powers of court

50(7)       On application by the secured party, the court may order that the registration

(a) be maintained on any condition, and subject to section 44, for any period of time; or

(b) be discharged or amended.

Application of subsection (5)

50(8)       Subsection (5) does not apply to a registration of a security interest provided for in

(a) a security agreement registered under The Corporations Act or any statute enacted before The Corporations Act that provided for the registration of a security interest, where the registration is continued under The Personal Property Security Act, S.M. 1973, c. 5, and under this Act; or

(b) a trust indenture, if the financing statement through which the security interest is registered indicates that the security agreement providing for the security interest is a trust indenture.

Application to court for amendment

50(9)       Where registration relates to a security interest referred to in subsection (8) and the secured party fails to amend or discharge the registration as required by subsection (4), the person making the demand may apply to the court for an order directing that the registration be amended or discharged.

No fee to be charged

50(10)      No fee or expense shall be charged and no amount shall be accepted by a secured party for compliance with a demand made under subsection (3), unless the parties, before the demand is made, agree that a specified amount may be charged.

No outstanding secured obligation

50(11)      Where 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 clause 25(1)(b) of The Securities Transfer Act or subclause 1.1(d)(ii) 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.

S.M. 1997, c. 24, s. 16; S.M. 2000, c. 6, s. 12; S.M. 2008, c. 14, s. 132.

Subordination of transferred collateral

51(1)       Where a security interest is perfected by registration and all or part of the debtor's interest in the collateral is transferred by the debtor 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 collateral, arising during the period from the expiry of 15 days after the transfer to the time the secured party amends the registration to disclose the name of the transferee of the interest in the collateral as the new debtor or takes possession of the collateral;

(b) a perfected security interest in the transferred collateral that is registered or perfected in the period referred to in clause (a); and

(c) a perfected security interest in the transferred collateral registered or perfected after the transfer and before the expiry of 15 days 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.

Subordination of collateral interest

51(2)       Where a security interest is perfected by registration and the secured party has knowledge of

(a) information required to register a financing change statement disclosing the transferee as the new debtor, where all or part of the debtor's interest in the collateral is transferred by the debtor; or

(b) the new name of the debtor, where the debtor's name has been changed;

the security interest in the transferred collateral, where clause (a) applies, and in the collateral where clause (b) applies, is subordinate to

(c) an interest, other than a security interest in the collateral, arising during the period from the expiry of 15 days after the secured party has knowledge of the information referred to in clause (a) or the new name of the debtor to the time the secured party amends the registration to disclose the name of the transferee as the 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 clause (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 clause (a) or the new name of the debtor and before the expiry of the 15 days referred to in clause (c) 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 collateral as the new debtor or disclose the new name of the debtor, or

(ii) the secured party does not take possession of the collateral.

51(3)       [Repealed] S.M. 2000, c. 6, s. 13.

Transfer of debtor's interest

51(4)       Where the debtor's interest in part or all of the collateral is transferred by the debtor without the consent of the secured party and one or more subsequent transfers of the collateral are made without the consent of the secured party before the secured party acquires knowledge of the name of the most recent transferee, the secured party shall be 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 most recent 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 a financing change statement with respect to any intermediate transferee.

Application of section

51(5)       This section does not apply to a registration made in a land titles office under section 49.

S.M. 1997, c. 24, s. 17; S.M. 2000, c. 6, s. 13.

Effect of error in Registry

52(1)       A person may bring action against the Government of Manitoba to recover loss or damage suffered by that person because of an error or omission in the operation of the Registry where the loss or damage resulted

(a) from reliance on a printed search result; or

(b) except as provided by subsections 42(4) and 43(11), from the failure of the Registrar to register a printed financing statement submitted for registration under section 43.

No liability for certain losses

52(2)       The Government of Manitoba 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 of Manitoba or service provider respecting this Act, regulations made under this Act or the operation of the Registry unless the person bringing the action proves that the agent or employee did not act in good faith; or

(b) failure to register or to register correctly electronic data directly transmitted to the data base of the Registry to effect a registration.

Limitation times for action

52(3)       No action for damage under this section or section 53 lies against the Government of Manitoba unless the action is commenced within two years after the person entitled to bring the action first knew of the loss or damage, or

(a) in the case of an action brought under clause (1)(a), within 10 years from the date the search result was issued, whichever is earlier;

(b) in the case of an action brought under clause (1)(b), within 10 years from the date that the financing statement was submitted for registration, whichever is earlier.

Right of action

52(4)       Notwithstanding The Proceedings Against the Crown Act, no action may be brought against the Crown in the right of the province, a service provider, the Registrar-General, the Registrar or an officer or employee of the Registry for any error or omission of the Registrar or an officer or employee of the Registry in respect of the discharge or purported discharge of any duty or function under this Act or the regulations under this Act except as provided in this section and section 53.

Action by government

52(4.1)     Subsection (4) does not apply to an action brought against a service provider by the Government of Manitoba.

S.M. 2000, c. 6, s. 14; S.M. 2013. c. 11, s. 50.

Action under trust indenture

53(1)       An action for recovery of damages under section 52 brought by a trustee under a trust indenture or by a person with an interest in a trust indenture shall be brought on behalf of all persons with interests in the same trust indenture, and the judgment in the action, except to the extent that it provides for a subsequent determination of the amount of damages suffered by each person, constitutes a judgment between each person and the Government of Manitoba in respect of each error or omission.

Action by trustee relying on search result

53(2)       In an action 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 this section if the person knows at the time of acquisition of an interest in the collateral that the search result relied upon by the trustee is incorrect.

Court order to give notice

53(3)       In proceedings under this section, the court may make any order that it considers appropriate in order to give notice to the persons with interests in the same trust indenture.

Court order respecting trust indenture

53(4)       Subject to subsection 54(1), the court may order payment of all or a portion of the damages awarded to identified persons with interests in the same trust indenture at any time after judgment, and the obligation of the Government of Manitoba to satisfy the judgment is satisfied to the extent that payment is so made.

S.M. 1997, c. 24, s. 18.

Limit to damages

54(1)       The total amount recoverable in a single action under section 52, and the total amount recoverable for all claims in a single action under section 53, shall not exceed the amount prescribed.

Subrogation

54(2)       Where damages are paid to a claimant pursuant to section 52 or 53, the Government of Manitoba 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.

Where claim has priority over government

54(3)       Where the claimant recovers pursuant to section 52 or 53 an amount less than the value of the interest the claimant would have if the error or omission had not occurred, the right of subrogation under subsection (2) does not prejudice the right of the claimant to recover in priority to the Government of Manitoba an amount equal to the difference between the amount paid to the claimant and the value of the interest the claimant would have if the error or omission had not occurred.

Payment of claim without action

54(4)       The Minister of Finance may, without action being brought, pay the amount of a claim against the Government of Manitoba when authorized to do so by the minister on the report of the Registrar-General setting forth the facts and the opinion of the Registrar-General that the claim is just and reasonable.

Payment after appeal time expires

54(5)       When an award of damages is made in favour of a claimant and the time for appeal expires, or when an appeal is taken and disposed of in whole or in part in favour of the claimant, the Minister of Finance shall authorize payment out of the Consolidated Fund of the province, subject to subsection (1), of the amount specified in the judgment in a manner specified in the judgment, including the costs of the claimant if the judgment so provides.

S.M. 2013, c. 11, s. 51.

PART 6

RIGHTS AND REMEDIES ON DEFAULT

Application

55(1)       This Part does not apply to

(a) a transaction referred to in subsection 3(2); or

(b) a transaction between a pledgor and a pawnbroker.

Rights are cumulative

55(2)       The rights and remedies referred to in this Part are cumulative.

"Secured party"

55(3)       In this section, "secured party" includes a receiver.

Interest not merged by court action

55(4)       A security interest does not merge merely because a secured party has reduced the claim to judgment.

Enforcement where same obligation secured

55(5)       Subject to any other Act or rule of law to the contrary, where the same obligation is secured by an interest in land and by 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, in which case the secured party shall proceed as against the personal property in accordance with the secured party's rights, remedies and obligations in respect of the land, as if the personal property were land, and this Part does not apply.

Exception

55(6)       Clause (5)(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 referred to in subsection (5).

Secured party re court proceedings

55(7)       A secured party referred to in subsection (6)

(a) has standing in proceedings taken in accordance with clause (5)(b); and

(b) may apply to the court to require proceedings pertaining to the personal property to be dealt with in accordance with clause (5)(a).

Distributing proceeds of sale

55(8)       For the purpose of distributing the proceeds realized from the sale of both land and personal property where the purchase price is not allocated to each separately, the amount that is attributable to the sale of the personal property is that proportion of the total proceeds that the market value of the personal property at the time of the sale bears to the market value of the land and the personal property at the time of the sale.

S.M. 1997, c. 24, s. 19.

"Secured party"

56(1)       In this section, "secured party" includes a receiver.

Rights of secured party if debtor in default

56(2)       Where the debtor is in default under a security agreement

(a) except as provided by 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 sections 36 to 38, and

(iii) when in possession or control of the collateral, the rights, remedies and obligations provided in section 17 or 17.1; and

(b) the debtor has as against the secured party

(i) the rights and remedies provided in the security agreement,

(ii) the rights and remedies provided by any other Act or rule of law not inconsistent with this Act, and

(iii) the rights and remedies provided in this Part and in section 17 or 17.1.

Provisions may not be waived

56(3)       Except as provided in sections 17, 17.1, 59, 60 and 62, no provision of sections 17, 17.1 or 58 to 63, to the extent that it gives rights to the debtor or imposes obligations on the secured party, may be waived or varied by agreement or otherwise.

S.M. 1997, c. 24, s. 20; S.M. 2008, c. 14, s. 133.

"Secured party"

57(1)       In this section, "secured party" includes a receiver.

Entitlement of secured party

57(2)       Where the parties to a security agreement agree and, in any event, on 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 to make payment to the secured party whether or not the assignor was making collections on the collateral before the notification;

(b) 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 to the satisfaction of the obligation secured.

Deduction of expenses of secured party

57(3)       A secured party may deduct reasonable expenses of collection

(a) from amounts collected from a debtor on an intangible or chattel paper or from an obligor under an instrument; or

(b) from money held as collateral.

"Secured party"

58(1)       In this section, "secured party" includes a receiver.

Seizure of collateral

58(2)       Subject 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) where the collateral is goods of a kind that cannot be readily moved from the debtor's premises or of a kind for which adequate storage facilities are not readily available, the secured party may seize or repossess the collateral, without removing it from the debtor's premises, in any manner by which a sheriff may seize without removal, if the secured party's interest is perfected by registration;

(c) where clause (b) applies, the secured party may dispose of collateral on the debtor's premises but shall not cause the person in possession of the premises any greater inconvenience and cost than is necessarily incidental to the disposal; and

(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 a method of enforcement that is available with respect to the document of title is also available, with necessary modifications, with respect to the goods covered by it.

"Secured party"

59(1)       In subsections (2), (5), (14) and (17), "secured party" includes a receiver.

Disposal of collateral by secured party

59(2)       After seizing or repossessing the collateral, a secured party may dispose of it in its existing condition or after repair, processing or preparation for disposition, and the proceeds of the disposition shall be applied consecutively in the following order:

(a) first, the reasonable expenses of seizing, repossessing, holding, repairing, processing or preparing for disposition, and disposing of the collateral and any other reasonable expenses incurred by the secured party; and

(b) second, the satisfaction of the obligations secured by the security interest of the secured party making the disposition;

and any surplus shall be dealt with in accordance with section 60.

Manner of disposal of collateral

59(3)       Collateral may be disposed of

(a) by private sale;

(b) by public sale, including a public auction or closed tender;

(c) as a whole, in parts or in commercial units; or

(d) if the security agreement so provides, by lease.

Deferred payment for collateral

59(4)       Where the security agreement so provides, the payment for the collateral being disposed of may be deferred.

Secured party may delay disposition

59(5)       The secured party may delay disposition of the collateral in whole or in part.

Secured party to give notice before disposition

59(6)       Not less than 20 days before disposition of the collateral, the secured party shall give a 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) a creditor or person with a security interest in the collateral whose security interest is subordinate to that of the secured party

(i) who has registered before the date that the notice of disposition is given to the debtor a financing statement according to the name of the debtor or according to the serial number of the collateral in the case of goods of a kind prescribed as serial numbered goods, or

(ii) whose security interest was 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 a written notice to the secured party of that person's interest in the collateral before the date that the notice of disposition is given to the debtor.

Content of notice

59(7)       The notice referred to in subsection (6) shall contain

(a) a description of the collateral;

(b) the amount required to satisfy the obligation secured by the security interest;

(c) the sums in arrears, exclusive of the operation of an acceleration clause in the security agreement, and a brief description of any other default 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 clause (2)(a) or, where the amount of the expenses has not been determined, a reasonable estimate;

(e) a statement that on payment of the amounts due under clauses (b) and (d), any person entitled to receive the notice may redeem the collateral;

(f) a statement that on payment of the sums in arrears exclusive of the operation of any acceleration clause in the security agreement, and on the curing of any other default, together with the amount due under clause (2)(a), the debtor may reinstate the security agreement;

(g) a statement that unless the collateral is redeemed or the security agreement is reinstated, the collateral 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 the date after which any private disposition of the collateral is to be made.

Content of notice to other persons

59(8)       Where the notice required in subsection (6) is given to a person other than the debtor, it need not contain the information specified in clauses (7)(c), (f) and (g), and where the debtor is not entitled to reinstate the security agreement, the notice to the debtor need not contain the information specified in clauses (7)(c) and (f).

Content of notice respecting deficiency

59(9)       A statement referred to in clause (7)(g) shall not contain a reference to any liability on the part of the debtor to pay a deficiency if under any Act or rule of law the secured party does not have the right to collect the deficiency from the debtor.

Receiver to give notice

59(10)      Not less than 20 days before the disposition of the collateral, a receiver shall give a notice to

(a) the debtor, and where 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 clause (6)(b); and

(d) any other person with an interest in the collateral who has given a notice in writing to the receiver of that interest before the day notice of disposition is given to the debtor.

Content of notice

59(11)      The notice referred to in subsection (10) shall 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 the date after which any private disposition of the collateral is to be made.

Giving notice

59(12)      The notice required in subsection (6) or (10) may be given in accordance with section 68 or, where it is to be given to a person who has registered a financing statement, by registered mail to the address of the person to whom it is to be given as it appears on the financing statement.

Purchase of collateral by secured party

59(13)      The secured party may purchase the collateral or any part of it only at a public sale as referred to in clause (3)(b), and only for a price that bears a reasonable relationship to the fair market value of the collateral.

Rights of purchaser for value in good faith

59(14)      When a secured party disposes of collateral to a purchaser who acquires the 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 to be performed for the purpose of sections 49 and 50.

Right under section 74 security interest

59(15)      Subsection (14) does not apply so as to affect the rights of a person who has a security interest deemed to be registered under section 74 and who has not been given a notice under this section.

Where transfer of collateral not disposition

59(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 thereafter the rights and duties of the secured party, and the transfer of collateral is not a disposition of the collateral.

Where notice is not required

59(17)      The notice referred to in subsection (6) or (10) is not required where

(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 cost of care and storage of the collateral is disproportionately large relative to its value;

(d) the collateral is a security or instrument that is to be disposed of by sale on an organized market that handles large volumes of transactions between many sellers and many buyers;

(e) the collateral is money, other than a medium of exchange authorized by the Parliament of Canada;

(f) for any other reason, the court on an application without notice 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 the disposition of the collateral without compliance with the notice requirements of subsection (6) or (10).

Notice of repossession under Consumer Protection Act

59(18)      Where a notice of repossessing collateral is required to be given to a debtor under The Consumer Protection Act, the giving of the notice to a person in a form that complies with that Act is deemed to be compliance with any requirement under subsections (6) and (10) to give notice to the person.

S.M. 1997, c. 24, s. 21.

"Secured party"

60(1)       In this section, "secured party" includes a receiver.

Use of surplus after disposal of collateral

60(2)       Where 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 shall, 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 of the surplus a financing statement using the name of the debtor or according to the serial number of the collateral in the case of goods of a kind prescribed as serial numbered goods, or

(ii) whose security interest was perfected by possession at the time the collateral was seized;

(b) any other person with an interest in the surplus, if the person has given a written notice thereof 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 claim of any person referred to in clause (a), (b) or (c) is not prejudiced by payment to anyone under this section.

Secured party to give written accounting

60(3)       The secured party shall give to a person referred to in subsection (2), not later than 30 days after receipt of a written demand for an accounting, 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 disposed of;

(c) the amount of expenses as provided in sections 17, 57 and 59;

(d) the distribution of the amount received from the disposition or collection; and

(e) the amount of any surplus.

Payment of surplus into court

60(4)       Where a question arises as to who is entitled to receive payment under subsection (2), the secured party may pay the surplus into court and the surplus shall not be paid out except upon an application under section 66 by a person claiming an entitlement to it.

Debtor liable for deficiency

60(5)       Except as provided in this or any other Act or unless otherwise agreed, the debtor is liable to pay to the secured party any deficiency.

S.M. 1997, c. 24, s. 22.

Compulsory disposal of collateral, consumer goods

61(1)       Where the security agreement secures an indebtedness and the collateral is consumer goods and the debtor has paid at least 60% of the indebtedness secured and has not signed, after default, a statement renouncing or modifying his or her rights under this Part, the secured party who has taken possession of the collateral shall, not later than 90 days after taking possession, dispose of or contract to dispose of the collateral under section 59, and, if the secured party fails to do so, the debtor may proceed under section 65 or in an action for damages or loss sustained.

Where secured party takes collateral in satisfaction

61(2)       After default, the secured party may propose to take the collateral in satisfaction of the obligation secured by it, and shall give 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 in the case of goods of a kind prescribed 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 a written notice to the secured party of that interest before the date that the notice is given to the debtor.

Notice of objection by person adversely affected

61(3)       If a person who is entitled to a notice under subsection (2) 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 not later than 15 days after the notice under subsection (2), the secured party shall dispose of the collateral in accordance with section 59.

Deemed acceptance of collateral in satisfaction

61(4)       If no notice of objection is given under subsection (3), the secured party is, on the expiry of the 15 day period or periods referred to in subsection (3), deemed to irrevocably elect to take 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 any person entitled to receive notice under clause (2)(b) or (c) who is given such notice, and all obligations secured by such interests are deemed performed for the purpose of sections 49 and 50.

Giving notice

61(5)       The notice required under subsection (2) may be given in accordance with section 68 or, where it is to be given to a person who has registered a financing statement, by registered mail to the address of the person to whom it is to be given as it appears on the financing statement.

Request for proof of interest

61(6)       The secured party may request that any person referred to in subsection (2), other than the debtor, furnish proof of that person's interest and, unless the person furnishes proof not later than 10 days after the secured party's request, the secured party may proceed as if no objection were received from the person.

Court determination re notice of objection

61(7)       Upon application by a secured party, the court may determine that an objection to the proposal of a secured party is ineffective on the ground 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 fair market value of the collateral is less than the total amount owing to the secured party and the costs of disposition.

Right of purchaser for value of collateral

61(8)       Where a secured party disposes of the collateral to a purchaser 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) any interest subordinate to that of the debtor; and

(c) any 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 interest are deemed to be performed for the purpose of section 49 and 50.

Application of ss. (8) to s. 74 interest

61(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 74 who has not received a notice under this section.

S.M. 1997, c. 24, s. 23.

Right to redemption and reinstatement

62(1)       At any time before the secured party or a receiver disposes of the collateral or contracted for disposition under section 59 or before the secured party is deemed to irrevocably elect to retain the collateral under section 61

(a) a person entitled to receive a notice of disposition under subsection 59(6) or (10) may, unless that person otherwise agrees in writing after default, redeem the collateral by tendering fulfilment of the obligations secured by the collateral; or

(b) 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 in arrears, exclusive of the operation of an acceleration clause in the security agreement, and by curing any other default by reason 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 and preparing the collateral for disposition or otherwise in enforcing the security agreement.

Where debtor not entitled to reinstate agreement

62(2)       Unless otherwise agreed, the debtor is not entitled to reinstate a security agreement

(a) more than twice, if the security agreement provides for payment in full by the debtor not later than 12 months after the day value was given by the secured party; or

(b) more than twice in each year, if the security agreement provides for payment by the debtor during a period of time other than is provided in clause (a).

"Secured party"

63(1)       In this section "secured party" includes a receiver.

Court order respecting collateral

63(2)       On application by a debtor, a creditor of a debtor, a secured party, a sheriff or any person with an interest in the collateral, the court may do one or more of the following:

(a) make any order, including a binding declaration of a right and injunctive relief, that is necessary to ensure compliance with this Part or section 17, 36, 37 or 38;

(b) give directions to any person regarding the exercise of rights or the discharge of obligations under this Part or section 17, 36, 37 or 38;

(c) relieve 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 for all persons affected;

(d) stay enforcement of rights provided in this Part or section 17, 36, 37 or 38;

(e) make any order necessary to ensure protection of the collateral.

Appointment of receiver

64(1)       A security agreement may provide for the appointment of a receiver and, except as provided in this or any other Act, the rights and duties of a receiver.

Duties of receiver

64(2)       A receiver shall

(a) take custody and control of the collateral in accordance with the security agreement or order under which the receiver is appointed, but unless appointed a receiver-manager or unless the court orders otherwise, shall not carry on the business of the debtor;

(b) as soon as possible and not later than 10 days after becoming a receiver, register a financing statement or financing change statement in the Registry disclosing the appointment and specifying an office in the province where the records referred to in clause (d) shall be maintained;

(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 the province for the deposit of all money coming under the receiver's control as 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 at least once in every six month period after the date of the appointment, financial statements of the administration;

(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;

(g) on completion of the receiver's duties, prepare a final account of the administration; and

(h) on termination of the receivership, discharge the registration of the receivership under clause (b) by registering a discharge statement or financing change statement.

Demand for inspection of records

64(3)       The debtor, and where the debtor is a corporation, a director of the debtor, or the authorized representative of any of them, may, by a demand in writing delivered to the receiver, require the receiver to make available for inspection the records referred to in clause (2)(d) during regular business hours at the place of business of the receiver in the province.

Demand for copy of financial statement

64(4)       The debtor and, where the debtor is a corporation, a director of the debtor, a sheriff, and a person with an interest in the collateral in the custody or control of the receiver, or the authorized representative of any of them, may, by a demand in writing delivered to the receiver, require the receiver to provide copies of the financial statements referred to in clause (2)(e) or the final accounts referred to in clause (2)(g) or to make them available for inspection during regular business hours at the place of business of the receiver in the province.

Receiver to comply within 10 days

64(5)       The receiver shall comply with the demand referred to in subsection (3) or (4) not later than 10 days from the date of receipt of the demand.

When receiver entitled to fee

64(6)       The receiver may require the payment in advance of a fee in the amount prescribed 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 the financial statements and final account without charge.

Powers of court respecting receiver

64(7)       Upon application by an interested person, the court may do one or more of the following:

(a) appoint a receiver;

(b) remove, replace or discharge a receiver, whether appointed by the court or pursuant to 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) notwithstanding 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 make good a default in connection with the receiver's custody, management or disposition of the collateral of the debtor or to relieve the receiver or person from any default on such terms as the court thinks fit;

(f) exercise with respect to receivers appointed pursuant to a security agreement the jurisdiction that it has over receivers appointed by the court.

Additional powers of court

64(8)       The powers referred to in subsection (7) and in section 63 are in addition to any other powers the court may exercise in its jurisdiction over receivers.

Compliance with sections 59 and 60

64(9)       Unless the court orders otherwise, a receiver shall comply with sections 59 and 60 when the receiver disposes of the collateral other than in the course of operating the business of a debtor.

S.M. 1997, c. 24, s. 24; S.M. 2000, c. 6, s. 15.

Definition

65(1)       In this section, "secured party" includes a receiver.

Application of common law, equity

65(2)       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.

Rights and duties to be exercised in good faith

65(3)       The rights, duties and obligations arising under a security agreement, under this Act or under any other applicable law shall be exercised or discharged in good faith and in a commercially reasonable manner.

Good faith

65(4)       A person does not act in bad faith merely because the person acts with knowledge of the interest of some other person.

Right to damages for failure to discharge

65(5)       If a person, without reasonable excuse, fails to discharge any duty or obligation imposed upon the person by this Act, the person to whom the duty or obligation is owed has a right to recover loss or damage that was reasonably foreseeable as likely to result from the failure.

Damages for failing to comply with obligations

65(6)       Where a secured party, without reasonable excuse, fails to comply with obligations

(a) in subsection 43(13) or section 49 or 50; or

(b) in section 17, 18, 59, 60 or 61 and the collateral is consumer goods;

the debtor or, in a case of non-compliance with subsection 43(13) or section 49 or 50, the person named as debtor in a registration or financing statement, is deemed to suffer damages of not less than the amount prescribed.

Deemed damages

65(7)       Where a debtor or other person with an interest in land or collateral referred to in section 49 or 50, respectively, without reasonable excuse, causes the district registrar of the land titles office or the Registrar to act as provided in subsection 49(9) or 50(5), the secured party referred to in those sections is deemed to suffer damages of not less than the amount prescribed.

Debtor's defence in action for deficiency

65(8)       In an action for a deficiency, the debtor 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 affects the right of the debtor to protect the debtor's interest in the collateral or makes the accurate determination of the deficiency impracticable.

Where secured party fails to comply

65(9)       Where 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) where 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; and

(b) did not make the accurate determination of the deficiency impracticable.

Provision to limit duty or onus is void

65(10)      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 purports to limit the liability of, or the amount of damages recoverable from, a person who fails to discharge a duty or obligation imposed by this Act is void.

S.M. 1997, c. 24, s. 25.

Powers of court re collateral or directing an action

66(1)       On application of an interested person, the 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.

Appeal

66(2)       An appeal lies to The Court of Appeal from an order, judgment or direction of the court made under this Act.

Extension of time

67          Where under section 11, subsections 36(14), 38(13) and 43(13) and Part 6, an act or thing must be done not later than or before a set time, the court, on application made before or after the time expires, may extend or abridge, conditionally or otherwise, the time for compliance.

S.M. 1997, c. 24, s. 26.

Giving notice

68(1)       A notice, demand, other than a demand under section 18, or copy of a financing statement or confirmation statement referred to in subsection 43(13) may be given

(a) to an individual, by leaving it with the individual or by sending it by registered mail addressed to

(i) the individual at his or her residence, or

(ii) where the individual is the sole proprietor of a business, the name of the individual at the address of the business;

(b) to a partnership

(i) by leaving it with

(A) any one or more of the general partners, or

(B) any person having, at the time of the delivery, control or management of the partnership business, or

(ii) by sending it registered mail addressed to

(A) the partnership,

(B) any one or more of the general partners, or

(C) any person having, at the time of the delivery, control or management of the partnership business,

at the address of the partnership business;

(c) to a corporation, other than a municipality

(i) where the corporation is a secured party, by sending it by registered mail to the address shown in the registered financing statement or by leaving it with the person in charge of the secured party's place of business at that address,

(ii) by leaving it with an officer or director of the corporation,

(iii) by leaving it at, or sending it by registered mail addressed to, the registered or head office of the corporation, or

(iv) where the corporation has its registered or head office outside the province, by leaving it with, or by sending it by registered mail addressed to, the attorney for the corporation;

(d) to a municipal corporation by leaving it with, or sending it by registered mail addressed to, the principal office of the corporation or the chief administrative officer of the corporation;

(e) to 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) to Her Majesty in the right of Manitoba as provided in The Proceedings Against the Crown Act.

Giving document by registered mail

68(2)       A document referred to in subsection (1) is given by registered mail

(a) when the addressee receives the notice or demand; or

(b) except in cases where the postal services are not functioning, on the expiry of 10 days after the date of registration;

whichever is earlier.

S.M. 1997, c. 24, s. 27.

Conflict with certain legislation

69(1)       If a conflict exists between a provision of this Act and a provision of The Farm Machinery and Equipment Act, The Consumer Protection Act or a provision for the protection of consumers in any other Act, the provision of that other Act prevails.

Conflict with other legislation

69(2)       Except as otherwise provided in this or any other Act, where a conflict exists between a provision of this Act and a provision of any Act other than those referred to in subsection (1), the provision of this Act prevails.

Reference to security interest

70(1)       A reference in any Act, regulation or writing to The Assignment of Book Debts Act, The Bills of Sale Act, The Corporations Act or The Sale of Goods Act, or that relates to a security interest is deemed to be a reference to this Act or to the corresponding provision of this Act.

Where reference deemed to be to security agreement

70(2)       A reference in any Act to a chattel mortgage, lien note, conditional sales contract, floating charge, pledge or assignment of book debts or to any other agreement that under this Act is a security agreement is deemed to be a reference to the corresponding kind of security agreement under this Act.

Crown bound

71          The Crown is bound by this Act.

PART 7

REGULATIONS

By L.G. in C.

72          The Lieutenant Governor in Council may make regulations

(a) prescribing the kinds of goods the leases of which are not within the scope of this Act;

(b) respecting duties to be performed by the Registrar;

(c) prescribing the location and hours for the offices of the Registry or any of them;

(d) respecting the Registry, including the transition from any prior registry system to the system established by this Act;

(e) prescribing fees payable under this Act, prescribing fees payable under any other Act for services in relation to the Registry, and respecting the manner in which fees must be paid;

(f) prescribing the time, place and all other matters pertaining to the registration of documents that may be or are required to be registered under this Act;

(g) prescribing

(i) the form, content and manner of use of financing statements, discharge statements and financing change statements to be used under this Act,

(ii) the form, content and manner of use of notices referred to in this Act, including notices registered under section 49 in a land titles office,

(iii) the manner in which collateral is to be described in financing statements and prescribing what kinds of goods may be described in part by serial number and what kinds of goods may be or shall be described in part by serial number;

(h) prescribing the time, place and all other matters pertaining to searches of the Registry 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;

(j) permitting the Registrar to amend a registration that contains an error caused by the act of the Registrar or Registry employees and prescribing the limits of the amendments;

(k) prescribing abbreviations, expansions or symbols that may be used in a financing statement, discharge statement, financing change 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) prescribing the length of time during which a registration is to be effective and the manner in which the period of time is to be indicated;

(m) prescribing the maximum amounts of compensation payable or recoverable under sections 52 to 54;

(n) defining any word or expression used in this Act that is required to be defined for the purpose of the regulations;

(o) [repealed] S.M. 2013, c. 11, s. 52;

(p) prescribing the amount of any charge to which a secured party or a person named as a secured party in a financing statement is entitled under sections 18 and 64;

(q) prescribing the amount of damages payable by a secured party, debtor or other person under section 65;

(r) prescribing any matter required or authorized by this Act to be prescribed;

(s) respecting the circumstances in which the address or other information about a debtor or secured party may be withheld from a search of the Registry and respecting the terms and conditions governing an application to have information withheld.

S.M. 1997, c. 24, s. 28; S.M. 2000, c. 6, s. 16; S.M. 2013, c. 11, s. 52.

PART 8

TRANSITIONAL

Definitions

73(1)       In this section and section 74,

"prereform law" means law in force immediately before the coming into force of prior law; (« loi antérieure à la réforme »)

"prereform security interest" means a security interest created, reserved or provided for by a valid security agreement or other transaction made before prior law came 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 made; (« sûreté antérieure à la réforme »)

"prior law" means law in force immediately before the coming into force of this Act; (« loi antérieure »)

"prior security interest" means an interest that is both

(a) a security interest as defined in The Personal Property Security Act S.M. 1973, c. 5, and to which that Act applied, and

(b) a security interest within the meaning of this Act that was created, reserved or provided for by a valid security agreement or other transaction made or entered into before this Act comes into force and to which this Act would have applied if it had been in force at the time the security agreement or other transaction was made or entered into. (« sûreté antérieure »)

Validity of prior security interest

73(2)       Subject to subsections (9) and (10), nothing in this Act affects the continued validity and enforceability under prior law of a prior security interest that is not a security interest under this Act.

Application to security agreements and receiver

73(3)       Except as herein provided, this Act applies

(a) to every security agreement made after this Act comes into force, including an agreement that renews, extends, or consolidates an agreement made before this Act comes into force;

(b) to every security agreement made before this Act comes into force that has not been validly terminated in accordance with prereform law or prior law before this Act comes into force;

(c) subject to subsection (5), to every prereform security interest or prior security interest that is not enforced or otherwise validly terminated in accordance with prereform law or prior law before this Act comes into force; and

(d) to a receiver appointed before or after this section comes into force.

Application of subsections (10) and (11) to clause (3)(b)

73(4)       Subsections (10) and (11) do not apply to a security agreement referred to in clause (3)(b).

Application to prereform or prior security interest

73(5)       Except as provided in subsections (6), (7), (8) and (10), this Act does not apply to a prereform security interest or prior security interest that is not a security interest under this Act.

Law governing prereform or prior security interest

73(6)       The validity of a prereform security interest or prior security interest is governed by the law in force when the security interest was created.

Order of priorities determined by prereform law

73(7)       The order of priorities

(a) between a prereform security interest and a prior security interest;

(b) between a prereform security interest and the interest of a third party; and

(c) between a prereform security interest and a security interest arising after this Act comes into force;

is determined by prereform law.

Order of priorities determined by prior law

73(8)       The order of priorities

(a) between prior security interests is determined by prior law; and

(b) between a prior security interest and the interest of a third party is determined by prior law, if the third party interest arose before this Act comes into force.

Security interest arising before and after this Act

73(9)       The order of priorities between a security interest arising after this Act comes into force and a prior security interest is determined by this Act.

Priorities re interest that is not security interest under this Act

73(10)      The order of priorities between a security interest arising after this Act comes into force and a prior security interest that is not a security interest under this Act is determined by this Act as would be the case if the prior security interest were within the scope of this Act.

73(11)      [Repealed] S.M. 2000, c. 6, s. 17.

Continuing force of law

73(12)      Notwithstanding the repeal of prereform law or prior law, such law continues in force as if it were not repealed, to the extent necessary to give effect to this section and section 74.

S.M. 1997, c. 24, s. 29; S.M. 2000, c. 6, s. 17.

"Prior registration law"

74(1)       In this section, "prior registration law" means

(a) Part VIII (Registration of Corporation Securities) of The Companies Act, as it existed before the coming into force of The Corporations Act, S.M. 1976, c. 40;

(b) The Assignment of Book Debts Act, The Bills of Sale Act and Part XXV (Registration of Corporation Securities) of The Corporations Act as they existed before the coming into force of The Personal Property Security Act, S.M. 1973, c. 5; and

(c) The Personal Property Security Act as it existed immediately before the coming into force of this Act.

Perfection under prior registration law

74(2)       Except as otherwise provided in this section, a prereform security interest or prior security interest that, when this Act comes into force, is covered by an unexpired filing or registration under prior registration law is deemed to be registered and perfected under this Act and, subject to this Act, the registered and perfected status of such interest continues for the unexpired portion of the filing or registration and may be further continued by registration under this Act if

(a) the prereform security interest or prior security interest could have been perfected by registration if it arose after this Act comes into force; or

(b) the prior security interest is a security interest referred to in subsection 73(2) of this Act.

Perfection under prior registration law

74(3)       A prereform security interest or prior security interest is covered by an unexpired filing or registration under prior registration law within the meaning of subsection (2) where the requirements for perfection of the security interest under prior registration law have been met, whether or not the requirements for perfection of the security interest under this Act are met.

Perfection of security interest

74(4)       For the purpose of subsection (3), the requirements for perfection of a security interest are met when the security interest has status in relation to the interest of other secured parties, buyers, judgment creditors or the trustee in bankruptcy of the debtor, similar to that of an equivalent security interest created and perfected under this Act.

Continuation of registration

74(5)       A registration of a prereform security interest or prior security interest that, when this Act comes into force, has not expired under prior registration law, is deemed to continue for the purposes of prior registration law for the unexpired portion of the registration period, and may be further continued by registration under this Act.

Interest in crops continues for six months

74(6)       A prior perfected security interest in crops is deemed to be registered in accordance with section 49 as of the day this Act comes into force and such registration continues for six months after this Act comes into force and may thereafter be continued by registration in accordance with section 49.

Perfection of security interest by possession

74(7)       A prior security interest in an instrument in the form of a letter of credit or advice of credit that was perfected by registration that continues after this Act comes into force is deemed to be perfected by possession in accordance with section 24 for a period of six months after the day this Act comes into force, and thereafter the security interest is perfected by possession only when the secured party takes actual possession of it in accordance with section 24.

74(8) and (9) [Repealed] S.M. 2000, c. 6, s. 18.

Interest not filed or perfected

74(10)      A prior security interest that, when this Act comes into force, could have been, but was not

(a) filed or registered under prior registration law; or

(b) perfected under prior registration 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 this Act comes into force, be perfected by registration or possession in accordance with this Act.

Application of subsection 7(3)

74(11)      Subsection 7(3), to the extent that it requires registration in the jurisdiction where the transferee of the collateral is located, does not apply to a security interest created before this Act comes into force.

S.M. 1997, c. 24, s. 30; S.M. 2000, c. 6, s. 18.

Transition — The Securities Transfer Act

74.1(1)      The provisions of The Securities Transfer Act, including any consequential amendments under Part 7 of that Act made to this Act, do not affect an action or proceeding commenced before this section comes into force.

Perfection of security interest

74.1(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 this section comes into force; and

(b) the action by which the security interest was perfected would suffice to perfect the security interest under this Act.

Perfection period

74.1(3)     A security interest in a security remains perfected for a period of four months after this section comes into force and continues to be perfected after that four-month period where 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 this section comes into force; but

(b) the action by which the security interest was perfected would not suffice to perfect the security interest under this Act.

Registration of financing statement or financing change

74.1(4)     A financing statement or financing change statement may be registered within the four-month period referred to in subsection (3) to continue that perfection or after that four-month period to perfect the security interest, if

(a) the security interest was a perfected security interest immediately before this section comes into force; and

(b) the security interest can be perfected by registration under this Act.

S.M. 2008, c. 14, s. 134.

PART 9

CONSEQUENTIAL AMENDMENTS

75 to 90    

NOTE:  These sections made up Part 9 of the original Act and contained consequential amendments to other Acts, which are now included in those Acts.

PART 10

REPEAL, C.C.S.M. REFERENCE AND COMING INTO FORCE

Repeal

91          The Personal Property Security Act, R.S.M. 1987, c. P35, is repealed.

C.C.S.M. reference

92          This Act may be cited as The Personal Property Security Act and referred to as chapter P35 of the Continuing Consolidation of the Statutes of Manitoba.

Coming into force

93          This Act comes into force on a day fixed by proclamation.

NOTE:  S.M. 1993, c. 14 came into force by proclamation on September 5, 2000.

 

 


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