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The Personal Property Security Act
This is an unofficial archived version of The Personal Property Security Act
as enacted by SM 1987-88, c. 9 on July 17, 1987.

R.S.M. 1987, c. P35

The Personal Property Security Act

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

Definitions.

1

In this Act

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

"account" means any monetary obligation not evidenced by any chattel paper, instrument or securities; ("comptes à recevoir")

"chattel paper" means one or more than one writing that expresses both a monetary obligation and a security interest in specific goods; ("titre de créance garanti")

"collateral" means property that is subject to a security interest; ("bien grevé")

"consumer goods" means goods that are used or acquired for use primarily for personal, family or household purposes of the debtor; ("biens de consommation")

"corporate security" means every security interest in personal property or fixtures created by a corporation and contained

(a) in a trust deed or other writing to secure bonds, debentures or debenture stock of the corporation or of any other corporation, or

(b) in any bonds, debentures or debenture stock of the corporation as well as in the trust deed or other writing securing the same, or in a trust deed or other writing securing the bonds, debentures or debenture stock of any other corporation, or

(c) in any bonds, debentures or debenture stock or any series of bonds or debentures of the corporation not secured by a separate writing; ("sûreté corporative")

"creditor" includes an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver, and an executor, administrator or committee; ("créancier")

"debtor" means a person who owes payment or other performance of the obligation secured, whether or not he owns or has rights in the collateral, and includes an assignor of accounts or chattel paper, and an assignee of the debtor's interest in the collateral referred to in subsection 50(1), or such one or more of them as the context requires; but, where the debtor and the owner of the collateral are not the same person, the term "debtor"

(a) includes the owner of the collateral in any provision of the Act dealing with the collateral,

(b) means the obligor in any provision dealing with the obligation, and

(c) includes both the owner of the collateral and the obligor where the context so requires; ("débiteur")

"default" means the failure to pay or otherwise perform the obligation secured when due or the occurrence of any event whereupon, under the terms of the security agreement, the security becomes enforceable; ("défaut" )

"document of title" means any writing that purports to be issued by or addressed to a bailee and purports to cover such goods in the bailee's possession as are identified or fungible portions of an identified mass, and that, in the ordinary course of business, is treated as establishing that the person in possession of it is entitled to receive, hold and dispose of the document and the goods it covers; ("titre")

"equipment" means goods that are not inventory or consumer goods; ("matériel")

"financing statement" means a document required or permitted to be registered under section 48 or filed under section 53; ("déclaration de financement")

"goods" means all chattels personal other than choses in action and money, and includes fixtures, and emblements and industrial growing crops, and oil, gas and other minerals to be extracted, and timber to be cut, and goods are either consumer goods, equipment or inventory; ("objets")

"instrument" means a bill, note or cheque within the meaning of the Bills of Exchange Act (Canada), or any other writing that evidences a right to the 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, but does not include a writing that constitutes part of chattel paper, a document of title or securities; ("effet")

"intangible" means all personal property, including choses in action, that is not goods, chattel paper, documents of title, instruments or securities; ("bien intangible")

"inventory" means goods

(a) that are held by a person for sale or lease, or

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

(c) that are raw materials, work in process or materials used or consumed in a business or profession; ("stocks")

"judge" means a judge of the Court of Queen's Bench; ("juge")

"notify" means to take such steps as are reasonably required to give information to the person to be notified so that

(a) it comes to his attention, or

(b) it is directed to such person at his customary address or at his place of residence, or at such other place as is designated by him over his signature; ("aviser")

"prescribed" means prescribed by the regulations; ("prescrit")

"proceeds" means personal property in any form or fixtures derived directly or indirectly from any dealing with the collateral and the proceeds therefrom, and includes payment representing indemnity or compensation for loss of or damage to the collateral or proceeds therefrom; ("produit")

"purchase-money security interest" means a security interest that is

(a) taken or reserved by the seller of the collateral to secure payment of all or part of its price, or

(b) taken by a person who gives value that enables the debtor to acquire rights in or the use of the collateral, if that value is applied to acquire those rights; ("sûreté en garantie du prix d'achat")

"registrar" means the registrar of personal property security; ("registraire")

"secured party" means a party who has a security interest and, where the security interest is a corporate security and contained in a trust deed, means the trustee under the deed; ("partie garantie")

"securities" means shares, stock, warrants, bonds, debentures, debenture stock or the like issued by a corporation or other person, or a partnership, association or government; ("valeurs mobilières")

"security agreement" means an agreement that creates or provides for a security interest; ("contrat de sûreté")

"security interest" means

(a) an interest in goods, fixtures, documents of title, instruments, securities, chattel papers or intangibles that secures payment or performance of an obligation, and

(b) an interest arising from an assignment of accounts or chattel paper not intended as security; ("sûreté")

"value" means any consideration sufficient to support a simple contract. ("contrepartie" )

PART I

GENERAL

Application of Act.

2

Subject to subsection 3(1), this Act applies

(a) to every transaction without regard to its form and without regard to the person who has title to the collateral that in substance creates a security interest including, without limiting the foregoing,

(i) a chattel mortgage, conditional sale, equipment trust, floating charge, pledge, trust deed or trust receipt, and

(ii)an assignment, lease or consignment intended as security;

(b) to every assignment of accounts not intended as security other than an assignment for the general benefit of creditors to which The Assignments Act applies; and

(c) to every assignment of chattel paper not intended as security.

Where Act does not apply.

3(1)

This Act does not apply

(a) to a lien given by statute or rule of law except as provided in section 32, clause 36(4)(b) and clause 37(2)(b); or

(b) to a transfer of an interest in or under a policy of life insurance or contract of annuity; or

(c) to a transfer of an interest in or under a policy of insurance other than life insurance except in so far as section 27 applies to the proceeds thereof; or

(d) to a transaction under which goods are pledged by a debtor to a person carrying on the business commonly known as pawnbroker as security for money lent to the debtor; or

(e) to an assignment of or a transfer of a claim for wages, salary or other compensation of an employee; or

(f) to security interests in property, assets or interests of the Crown, or of a corporation that is declared by an Act of Parliament or an Act of the Legislature to be an agent of the Crown, or of a municipality, or of a corporation created under The Health Services Act or The Public Schools Act.

Rights under Sale of Goods Act.

3(2)

The rights of buyers and sellers under The Sale of Goods Act are not affected by this Act.

Errors, omissions, etc., in document.

4(1)

A document to which this Act applies is not invalidated, nor shall its effect be destroyed by reason only of a defect, irregularity, omission or error therein or in the execution thereof unless, in the opinion of the judge or court the defect, irregularity, omission or error is shown to have actually misled some person whose interests are affected by the document.

Errors, omissions, etc., in registration.

4(2)

A registration under this Act is not invalidated, nor shall its effect be destroyed, by reason only of a defect, irregularity or error therein unless, in the opinion of the judge or court, the defect, irregularity or error is shown to have actually misled some person whose interests are affected by the registration.

Effect of place of business on application of Act.

5(1)

The validity and perfection of a security interest and the possibility and effect of proper registration with regard to intangibles or with regard to goods of a type that are normally used in more than one jurisdiction, if the goods are classified as equipment or classified as inventory by reason of their being leased by the debtor to others, shall be governed

(a) where the chief place of business of the debtor is in Manitoba, by this Act; and

(b) where the chief place of business of the debtor is not in Manitoba, by the law, including the conflict of laws rules, of the jurisdiction in which the chief place of business is located.

Where a registration not provided in other jurisdiction.

5(2)

If a jurisdiction does not provide, by registration or recording in that jurisdiction, for perfection of a security interest of the kind referred to in subsection (1), the security interest may be perfected by registration under this Act.

Collateral subject to security interest on entering province.

6(1)

Where personal property, other than that governed by subsection 5(1), was already subject to a security interest when it was brought into Manitoba, the validity of the security interest in Manitoba shall be determined by the law, including the conflict of laws rules of the jurisdiction where the property was when the security interest attached; but, where the parties to the security agreement understood at the time that the security interest attached that the property would be kept in Manitoba and it was brought into Manitoba within 30 days after the security interest attached for purposes other than transportation through Manitoba, the validity of the security interest in Manitoba shall be determined by the law of Manitoba.

Right of revendication.

6(2)

Where goods brought into Manitoba are subject to the seller's right to revindicate, unless the seller registers a financing statement in the prescribed form or repossesses the goods within 20 days after he receives notice that the goods were brought into Manitoba, but in any case not later than 60 days after the day on which the goods were brought into Manitoba, the right is unenforceable against a third party.

Security interest perfected outside Manitoba.

7(1)

Subject to section 5, a security interest in collateral already perfected under the law of the jurisdiction in which the collateral was when the security interest attached and before being brought into Manitoba continues perfected in Manitoba for 60 days and also thereafter if, within the 60 day period, it is perfected in Manitoba.

Where notice received.

7(2)

Subject to section 5, and notwithstanding subsection (1), where the secured party receives notice within the 60 day period mentioned in subsection (1) that the collateral has been brought into Manitoba, his security interest in the collateral ceases to be perfected in Manitoba unless it is perfected under this Act within 15 days after the date he receives the notice, or before the expiration of the 60 day period, whichever is earlier.

Subsequent perfection.

7(3)

A security interest that has ceased to be perfected in Manitoba due to the expiration of the 60 day period, or the expiration of the 15 day period mentioned in subsection (2), may thereafter be perfected in Manitoba, but in that case the perfection takes effect from the time of its perfection in Manitoba.

Perfection after bringing within province.

8

Subject to section 5, where a security interest was not perfected under the law of the jurisdiction in which the collateral was when the security interest attached and before being brought into Manitoba, it may be perfected in Manitoba, in which case perfection dates from the time of perfection in Manitoba.

PART II

VALIDITY OF SECURITY AGREEMENTS AND RIGHTS OF PARTIES

Effectiveness of security agreement.

9

Except as otherwise provided by this or any other Act, a security agreement is effective according to its terms between the parties to it and against third parties.

Enforceability of security interest.

10

A security interest is not enforceable against a third party unless

(a) the collateral is in the possession of the secured party; or

(b) the debtor has signed a security agreement that contains a description of the collateral sufficient to enable it to be identified.

Delivery of copy of agreement.

11

Where a security interest is created or provided for by a security agreement, the secured party shall deliver, without charge to the debtor, one copy of the security agreement to the debtor within 10 days after the execution thereof, and, if he fails to do so after a request by the debtor, a judge may, on summary application by the debtor, make an order for the delivery of such a copy to the debtor and may make such order as to costs as he deems just.

When security interest attaches.

12(1)

A security interest attaches when

(a) the parties intend it to attach;

(b) value is given; and

(c) the debtor has rights in the collateral.

When debtor has rights and collateral.

12(2)

For the purposes of subsection (1), the debtor has no rights in

(a) crops until they become growing crops; or

(b) fish until they are caught; or

(c) the young of animals until they are conceived; or

(d) oil, gas or other minerals until they are extracted; or

(e) timber until it is cut.

After acquired property.

13

Except as provided in section 14, a security agreement may cover after acquired property.

Exceptions.

14

No security interest attaches under an after acquired property clause in a security agreement to consumer goods other than accessions, unless the debtor acquires rights in them within 10 days after the secured party gives value.

Future advances.

15

A security agreement may secure future advances or other value whether or not the advances or other values are given pursuant to commitment.

Agreement not to assert defence against the assignee.

16

Except as to consumer goods, an agreement by a debtor not to assert against an assignee any claim or defence that he has against his seller or lessor is enforceable by the assignee who takes the assignment for value, in good faith and without notice, except as to such defences as may be asserted against the holder in due course of a negotiable instrument under the Bills of Exchange Act (Canada).

Seller's warranties.

17

Where a seller retains a purchase-money security interest in goods,

(a) The Sale of Goods Act governs the sale and any disclaimer, limitation or modification of the seller's conditions and warranties; and

(b) except as provided in section 16, the conditions and warranties in a sale agreement shall not be affected by any security agreement.

Provision to accelerate.

18

Subject to subsections 60(5) and 63(1), where a security agreement provides that the secured party may accelerate payment or performance when he deems himself insecure, that provision shall be construed to mean that he has power to do so only if he, in good faith, believes that the prospect of payment or performance is impaired.

Care of collateral.

19(1)

A secured party shall use reasonable care in the custody and preservation of collateral in his possession, and, unless otherwise agreed, in the case of an instrument or chattel paper, reasonable care includes taking necessary steps to preserve rights against prior parties.

Rights and duties of secured party in possession of collateral.

19(2)

Unless otherwise agreed, where collateral is in the possession of the secured party,

(a) reasonable expenses, including the cost of insurance and payment of taxes or other charges incurred in the custody and preservation 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 any insurance coverage;

(c) the secured party may hold as additional security any increase or profits, except money, received from the collateral, and money so received, unless remitted to the debtor, shall be applied forthwith upon its receipt in reduction of the secured obligation;

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

(e) the secured party may create a security interest in the collateral upon terms that do not impair the debtor's right to redeem it.

Liability for loss.

19(3)

A secured party is liable for any loss or damage caused by his failure to meet any obligations imposed under subsection (1) or (2), but does not lose his security interest.

Use of collateral.

19(4)

A secured party may use the collateral

(a) in the manner and to the extent provided in the security agreement; or

(b) for the purpose of preserving the collateral or its value; or

(c) pursuant to an order of

(i) the court before which a question relating thereto is being heard, or

(ii) a judge upon application by originating notice to all persons concerned.

Liability for loss caused by use.

19(5)

A secured party

(a) is liable for any loss or damage caused by his use of the collateral otherwise than as authorized under subsection (4); and

(b) is subject to being ordered or restrained as provided in subsection 64(1).

Information from the secured party.

20(1)

A debtor, execution creditor or other person with a legal or equitable interest in the collateral may, by a notice in writing, containing his address for reply and sent by registered mail or delivered to the secured party at the address set forth in the financing statement, require the secured party to send or deliver to him at the address contained in the notice

(a) a statement in writing of the amount of the indebtedness and of the terms of payment thereof as of the date specified in the notice; or

(b) a written approval or correction as of the date specified in the notice of the itemized list of the collateral attached to the notice; or

(c) a written approval or correction as of the date specified in the notice of the amount of the indebtedness and of the terms of payment thereof; or

(d) a copy of the security agreement;

or any two or more of the foregoing.

Security interest in collateral of a class.

20(2)

If a notice is sent or delivered in accordance with clause (l)(b), and if the secured party claims a security interest in all of a particular type of collateral owned by the debtor, he may so indicate in lieu of approving or correcting the itemized list of collateral attached to the notice.

Reply to notice.

20(3)

The secured party shall reply to a notice given under subsection (1) within 15 days after he receives it, and, if without reasonable excuse he fails to do so or his answer is incomplete or incorrect, the person who has given the notice is entitled

(a) to recover from the secured party any direct loss or damage caused thereby; and

(b) to apply to a judge for an order requiring the secured party to comply with the notice.

Disclosure of successor.

20(4)

Where the person receiving a notice under subsection (1) no longer has an interest in the obligation or collateral, he shall, within 15 days after he receives the notice, disclose the name and address of the latest successor in interest known to him, and, if without reasonable excuse he fails to do so or his reply is incomplete or incorrect, he is liable for any direct loss or damage caused thereby to the person who has given the notice.

Successor deemed to be secured party.

20(5)

A successor in interest shall be deemed to be the secured party for the purposes of this section when he receives a notice under subsection (1).

Powers of judge.

20(6)

A judge may

(a) exempt, in whole or in part, the secured party from complying with a notice given under subsection (1), if the person giving the notice, not being the debtor, does not establish to the satisfaction of the judge that he has a legal or equitable interest in the collateral; or

(b) extend the time for answering the notice; or

(c) make such further or other order as is reasonable and just.

Charges by secured party.

20(7)

The secured party may require payment of

(a) $5. for each reply to a notice under subsection (1) but the debtor is entitled to a reply without charge once in every six months; and

(b) subject to section 11, 50¢ per page for each copy of the security agreement.

PART III

PERFECTION AND PRIORITIES

Time when perfected.

21

A security interest is perfected when

(a) it has attached; and

(b) all steps required for perfection under any provision of this Act have been completed;

regardless of the order of occurrence.

Subordination of unperfected security interest.

22(1)

Except as provided in subsection (3), an unperfected security interest is subordinate to

(a) the interest of a person

(i) who is entitled to a priority under this or any other Act, or

(ii) who assumes control of the collateral through legal process, or

(iii) who represents the creditors of the debtor as assignee for the benefit of creditors, trustee in bankruptcy or receiver; and

(b) the interest of a transferee who is not a secured party to the extent that he gives value without knowledge of the security interest and before it is perfected

(i) in chattel paper, documents of title, securities, instruments or goods in bulk or otherwise, not in the ordinary course of business of the transferor and where the transferee receives delivery of the collateral, or

(ii) in intangibles.

Rights of trustee in bankruptcy etc.

22(2)

The rights of a person under sub-clause (1)(a)(iii) in respect of the collateral are referable to the date from which his status has effect and arise without regard to the personal knowledge of the representatives if any represented creditor was, on the relevant date, without knowledge of the unperfected security interest.

Purchase-money security interest.

22(3)

A purchase-money security interest that is registered before, or within 10 days after, the debtor's possession of the collateral commences has priority over

(a) an interest set out in sub-clause (l)(a)(ii) or (iii); and

(b) transfers in bulk or otherwise, not in the ordinary course of business, occurring between the date on which the security interest attached and the date on which it is registered.

Continuity of perfection.

23(1)

If a security interest is originally perfected in any way permitted under this Act, and is again perfected in some way under this Act without an intermediate period when it was unperfected, the security interest shall be deemed to be perfected continuously for the purposes of this Act.

Assignees.

23(2)

An assignee of a security interest succeeds in so far as its perfection is concerned to the position of the assignor at the time of the assignment.

Perfection by possession.

24

Except as provided in section 26, possession of the collateral by the secured party, or on his behalf by a person other than the debtor or the debtor's agent, perfects a security interest in

(a) chattel paper; or

(b) goods; or

(c) instruments; or

(d) securities; or

(e) letters of credit and advices of credit; or

(f) negotiable documents of title;

but, subject to section 23, only during its actual holding as collateral.

Perfection by registration.

25(1)

Subject to section 21, registration perfects a security interest

(a) in chattel paper; or

(b) in goods; or

(c) in intangibles; or

(d) in documents of title; or

(e) in collateral of any type the security interest in which arises under a floating charge.

Security interest not perfected until registered.

25(2)

A security interest is not perfected until it is registered except in the case of a security interest

(a) in collateral in possession of the secured party under section 24; or

(b) temporarily perfected in instruments, securities or negotiable documents of title under section 26; or

(c) in collateral that was already perfected before the collateral was brought into the province and that continues perfected for a limited period under section 7.

Temporary perfection.

26(1)

A security interest in instruments, securities or negotiable documents of title is a perfected security interest for the first 10 days after it attached to the extent that it arises for new value given under a written security agreement.

Temporary perfection where collateral under control of debtor.

26(2)

A perfected security interest in

(a) an instrument that a secured party delivers to the debtor for the purpose of

(i) ultimate sale or exchange, or

(ii) presentation, collection or renewal, or (iii) registration of transfer; or

(b) a negotiable document of title or goods held by a bailee that are not covered by a negotiable document of title, which document of title or goods the secured party makes available to the debtor for the purpose of

(i) ultimate sale or exchange,

(ii) loading, unloading, storing, shipping, or trans-shipping, or

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

remains perfected for the first 10 days after the collateral comes under the control of the debtor.

Beyond 10 days.

26(3)

Beyond the period of 10 days referred to in subsection (1) or (2), a security interest under this section becomes subject to the provisions of this Act for perfecting a security interest.

Perfecting as to proceeds.

27(1)

Subject to this Act, where proceeds arise from some dealing with the collateral, or from damage or loss to the collateral, the security interest in the collateral

(a) continues as to the collateral unless the secured party expressly or impliedly authorized the dealing with the collateral; and

(b) extends to the proceeds.

Effect of interest in proceeds.

27(2)

The security interest in proceeds is a continuously perfected security interest if the interest in the original collateral was perfected but it ceases to be a perfected security interest and becomes unperfected 10 days after receipt of the proceeds by the debtor unless

(a) a registered financing statement covers the original collateral and proceeds therefrom; or

(b) where the security interest arises from a corporate security, the trust deed, bond, debenture or debenture stock a copy of which accompanied the financing statement on registration covers the original collateral and proceeds therefrom; or

(c) the security interest in the proceeds is otherwise perfected before the expiration of the 10 day period.

Non-identifiable proceeds etc.

27(3)

Notwithstanding subsections (1) and (2), there is no perfected security interest in proceeds that are not identifiable or traceable.

Perfecting as to goods held by bailee.

28(1)

A security interest in goods in the possession of a bailee who has issued a negotiable document of title covering them is perfected by perfecting a security interest in the document, and any security interest in them otherwise perfected while they are so covered is subject thereto.

Where no negotiable document of title issued.

28(2)

A security interest in goods in the possession of a bailee, other than a bailee mentioned in subsection (1), is perfected by

(a) issuance of a document of title in the name of the secured party; or

(b) a holding on behalf of the secured party pursuant to section 24; or

(c) registration as to the goods.

Goods returned or repossessed.

29(1)

A security interest in goods that are the subject of a sale or exchange and that are returned to, or repossessed by,

(a) the person who sold or exchanged them; or

(b) a transferee of an intangible or chattel paper resulting from the sale of them;

re-attaches to the extent that the secured indebtedness remains unpaid.

Where security interest registered.

29(2)

Where the security interest was perfected by a registration that is still effective at the time of the sale or exchange, it re-attaches as a perfected interest; but otherwise requires for its perfection a registration or a taking of possession by the secured party.

Security interest of transferee.

29(3)

A transferee of

(a) an intangible resulting from a sale or lease; or

(b) chattel paper resulting from a sale;

has a security interest in the goods as against the transferor.

Priority of transferee of intangible.

29(4)

The security interest arising under subsection (3) of a transferee of intangibles is subordinate to a security interest under subsection (1) that was perfected when goods became the subject of sale, lease or exchange.

Priority of transferee of chattel paper.

29(5)

The security interest arising under subsection (3) of a transferee of chattel paper has priority over the security interest asserted under subsection (1) to the extent that the transferee of the chattel paper is entitled to priority under section 30.

Priority of security interest of unpaid transferee.

29(6)

The security interest of an unpaid transferee asserted under subsection (3) is subordinate to the interests of the transferor and purchasers of the returned or repossessed goods unless it is perfected before their interests arise.

Rights of purchaser in ordinary course of business.

30(1)

A purchaser or lessee of goods from a seller or lessor who sells or leases the goods in the ordinary course of business takes them free from any security interest therein given by his seller or lessor even though it is perfected and the purchaser or lessee actually knows of it.

Rights of purchasers of chattel paper.

30(2)

A purchaser of chattel paper who takes possession of it in the ordinary course of his business has, to the extent that he gives new value, priority over any other security interest in it

(a) that was perfected under section 25 if he did not actually know at the time he took possession that the chattel paper was subject to a security interest; or

(b) that has attached to proceeds of inventory under section 27, whatever the extent of his knowledge.

Rights of purchaser of non-negotiable instrument.

30(3)

A purchaser of a non-negotiable instrument who takes possession of it in the ordinary course of his business has priority to the extent that he gives new value over a security interest in it that was perfected under section 26 if he did not actually know at the time he took possession that the instrument was subject to a security interest.

Application of subsection (1).

30(4)

For the purposes of subsection (1), the sale may be

(a) for cash; or

(b) by exchange for other property; or

(c) on credit; or

(d) by delivery of goods or documents of title under a pre-existing contract for sale;

but not by way of a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

Rights of certain purchasers.

31(1)

The rights of

(a) a holder in due course of an instrument; or

(b) a holder of a negotiable document of title who takes it in good faith for value; or

(c) a bona fide purchaser of securities;

are to be determined without regard to this Act.

Effect of registration.

31(2)

Registration under this Act is not such notice as to affect the rights of persons mentioned in subsection (1).

Priority of possessory liens.

32(1)

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

Priority of non-possessory liens.

32(2)

Where a person in the ordinary course of business furnishes materials or services with respect to goods not in his possession that are subject to a security interest, any lien that he has under any Act in respect of the materials or services has such priority over a perfected security interest as is given by that Act.

Alienation of right of debtors.

33

The rights of a debtor in collateral may be transferred voluntarily or involuntarily notwithstanding a provision in the security agreement prohibiting transfer or declaring a transfer to be a default; but no transfer prejudices the rights of the secured party under the security agreement or otherwise.

Special priorities in crops.

34(1)

A perfected security interest in crops or their proceeds given for a consideration to enable the debtor to produce the crops during the production season and given not more than three months before the crops become growing crops by planting or otherwise has priority over an earlier perfected security interest to the extent that the earlier interest secures obligations due more than six months before the crops become growing crops by planting or otherwise, even though the person giving the consideration knew of the earlier security interest.

Purchase-money security interest in inventory.

34(2)

Subject to sections 30 and 31, and to subsection (3), a purchase-money security interest in inventory or its proceeds has priority over any other security interest in the same collateral

(a) if the purchase-money security interest was perfected at the time the debtor received possession of the collateral;

(b) if any secured party, whose security interest was actually known to the holder of the purchase-money security interest or who prior to the registration by the holder of the purchasemoney security interest had registered a financing statement covering the same items or type of inventory, had received notification of the purchase-money security interest before the debtor received possession of the collateral covered by the purchase-money security interest; and

(c) if such notification states that the person giving the notice had or expected to acquire a purchase-money security interest in inventory of the debtor, describing the inventory by item or type.

Priority of security interest in accounts.

34(3)

A security interest in proceeds arising from a purchase-money security interest in inventory and its proceeds does not have priority over a security interest in accounts given for new value where a financing statement relating to the security interest in the accounts has been registered before the purchase-money security interest in the inventory and its proceeds was perfected or the financing statement relating thereto was registered.

Purchase-money security interest in goods other than inventory.

34(4)

A purchase-money security interest in collateral, or its proceeds, other than inventory, has priority over any other security interest in the same collateral if the purchase-money security interest was perfected at the time the debtor obtained possession of the collateral or within 10 days thereafter.

General rule as to priorities.

35(1)

If no other provision of this Act is applicable, priority between security interests in the same collateral shall be determined

(a) by the order of registration, if the security interests have been perfected by registration;

(b) by the order of perfection, unless the security interests have been perfected by registration; or

(c) by the order of attachment under subsection 12(1), if no security interest has been perfected.

Effect of continuous perfection.

35(2)

For the purposes of subsection (1), a continuously perfected security interest shall be treated at all times as if perfected by registration, if it was originally so perfected, and it shall be treated at all times as if perfected otherwise than by registration if it was originally perfected otherwise than by registration.

Application of section.

36(1)

This section does not apply to building materials.

Priority of security interests, fixtures.

36(2)

Subject to subsection (4) of this section and notwithstanding subsection 34(4), a security interest that attached to goods before they became fixtures has priority as to the goods over the claim of any person who has an interest in the real property.

Priority of security interests in fixtures.

36(3)

Subject to subsection (4) a security interest that attached to goods after they became fixtures has priority over the claim of any person who subsequently acquired an interest in the real property, but not over any person who had a registered interest in the real property at the time the security interest attached to the goods and who has not consented in writing to the security interest or disclaimed an interest in the goods as fixtures.

Exceptions.

36(4)

A security interest referred to in subsection (2) or (3) is subordinate to the interest of,

(a) a subsequent purchaser or mortgagee for value of an interest in the real property; or

(b) a creditor with a lien on the real property subsequently obtained as a result of judicial process; or

(c) a creditor with a prior encumbrance of record on the real property in respect of subsequent advances;

if the subsequent purchase or mortgage was made or the lien was obtained or the subsequent advance under the prior encumbrance was made or contracted for, as the case may be, without knowledge of the security interest and before a financing statement in respect of the security interest is filed in the Land Titles Office as authorized under section 53.

Removal of collateral.

36(5)

If a secured party, by virtue of subsection (2) or (3) and subsection (4) has priority over the claim of a person having an interest in the real property, he may on default, subject to the provisions of this Act respecting default, remove his collateral from the real property if, unless otherwise agreed, he reimburses any encumbrancer or owner of the real property who is not the debtor for the cost of repairing any physical injury excluding diminution in the value of the real property caused by the absence of the goods removed or by the necessity for replacement, but a person so entitled to reimbursement may refuse permission to remove until the secured party has given adequate security for any reimbursement arising under this subsection.

Retention of collateral.

36(6)

A person having an interest in real property that is subordinate to a security interest by virtue of subsection (2) or (3) and subsection (4) may, before the collateral has been removed from the real property by the secured party in accordance with subsection (5), retain the collateral upon payment to the secured party of the amount owing under the security interest having priority over his claim.

Accessions.

37(1)

Subject to subsection (2) and to section 38 and notwithstanding subsection 34(3),

(a) a security interest in an accession that attached before the goods became an accession has priority as to the accession over the claim of any person in respect of the whole; and

(b) a security interest in goods that attached after the goods became an accession has priority over the claim of any person who subsequently acquired an interest in the whole, but not against a person who had an interest in the whole at the date of attachment of the security interest in the accession and who has not consented in writing to the security interest in the accession or disclaimed an interest in the accession as part of the whole.

Exceptions.

37(2)

A security interest referred to in subsection (1) is subordinate to the interest of,

(a) a subsequent purchaser for value of an interest in the whole; or

(b) a creditor with a lien on the whole, subsequently obtained as a result of judicial process; or

(c) a creditor with a prior perfected security interest in the whole to the extent that he makes subsequent advances, if the subsequent purchase was made, the lien was obtained or the subsequent advance under the prior perfected security interest was made or contracted for without knowledge of the security interest and before it was perfected.

Removal of collateral.

37(3)

If a secured party, by virtue of subsections (1) and (2), has an interest in an accession that has priority over the claim of any person having an interest in the whole, he may, on default, subject to the provisions of this Act respecting default, remove his collateral from the whole if, unless otherwise agreed, he reimburses any encumbrancer or owner of the whole who is not the debtor for the cost of repairing any physical injury excluding diminution in value of the whole caused by the absence of the goods removed or by the necessity for replacement, but a person so entitled to reimbursement may refuse permission to remove until the secured party has given adequate security for any reimbursement arising under this subsection.

Retention of collateral.

37(4)

A person having a security interest in the whole that is subordinate to a security interest by virtue of subsections (1) and (2) may, before the collateral has been removed by the secured party in accordance with subsection (3), retain the collateral upon payment to the secured party of the amount owing under the security interest having priority over his claim.

Commingled goods.

38

A perfected security interest in goods that subsequently become part of a product or mass continues in the product or mass if the goods are so manufactured, processed, assembled or commingled that their identity is lost in the product or mass, and, if more than one security interest attaches to the product or mass, the security interests rank equally according to the ratio that the cost of the goods to which each interest originally attached bears to the cost of the total product or mass.

Priority subject to subordination.

39

A secured party may, in the security agreement or otherwise, subordinate his security interest to any other security interest.

Persons obligated on intangibles, etc.

40(1)

Unless a person obligated on chattel paper or on an intangible has made an enforceable agreement not to assert defences or claims arising out of a contract, the rights of an assignee are subject to,

(a) all the terms of the contract between that person and the assignor and any defence or claim arising therefrom; and

(b) any other defence or claim of that person against the assignor that accrued before that person received notice of the assignment.

Modification of contract after assignment.

40(2)

So far as the right to payment under an assigned contract right has not been earned by performance, and notwithstanding notification of the assignment, any modification of or substitution for the contract made in good faith and in accordance with reasonable commercial standards and without material adverse effect upon the assignee's right under, or the assignor's ability to perform, the contract, is effective against an assignee unless the person obligated on chattel paper or by an intangible has otherwise agreed, but the assignee acquires corresponding rights under the modified or substituted contract, and the assignment may provide that the modification or substitution is a breach by the assignor.

Payment by persons obligated on intangibles, etc.

40(3)

The person obligated on the chattel paper or on an intangible may pay the assignor until that person receives notice, reasonably identifying the relevant rights, that the account has been assigned, and, if requested by that person, the assignee shall furnish proof within a reasonable time that the assignment has been made, and, if he does not do so, that person may pay the assignor.

Effect of no-assignment clause.

40(4)

A term of a contract between a person obligated on chattel paper or on an intangible and an assignor which prohibits assignment of the whole of an account is ineffective.

PART IV

REGISTRATION

Registration system.

41

A registration system, to be known as:

"The Personal Property Registry" shall be established for the purposes of registration under this Act and for registrations that are authorized or required under any other Act of the Legislature to be made in the registration system established under this Act.

Registrar, appointment.

42(1)

There shall be a registrar of personal property security and such deputy registrars as may be required for the proper operation of The Personal Property Registry.

Functions.

42(2)

It shall be the function of the registrar, under the direction of the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act, to supervise the operation of The Personal Property Registry.

Seal of office.

42(3)

The registrar and each deputy registrar shall have a seal of office in such form as the Lieutenant Governor in Council approves.

Signing officers.

43(1)

The registrar may designate persons on the staff of his office to act on his behalf.

Powers of deputy registrar.

43(2)

A deputy registrar may act for the registrar.

Registrar's certificate.

44(1)

Upon the request of any person and upon payment of the prescribed fee,

(a) the registrar or a deputy registrar shall issue a certificate stating whether there is registered in The Personal Property Registry at the time mentioned in the certificate a financing statement or other document in which the person named in the certificate is shown as a debtor and, if there is, the registration number of it, and any other information actively maintained for enquiries in The Personal Property Registry;

(b) the registrar or a deputy registrar shall issue a certificate stating whether there is registered in the personal property registry at the time mentioned in the certificate a financing statement or other document relating to any item of collateral identified in the certificate by serial number if the collateral is of a type which must be described by serial number to comply with the regulations and, if there is, the registration number of it and any other information actively maintained for inquiries in the personal property registry.

(c) any registered financing statement or a copy thereof, or other registered document or a copy thereof, shall be provided for inspection;

(d) any document or copy thereof that was registered or filed in a county court office or with the companies branch of the government, the custody of which has been transferred to the registrar, shall be provided for inspection; and

(e) a copy, certified by the registrar or deputy registrar or an officer designated by the registrar for the purpose, of any registered financing statement or other registered document or document mentioned in clause (d) shall be furnished.

Proof of certificates.

44(2)

A certificate issued under clause (1)(a) is prima facie evidence of the contents thereof.

Proof of certified copies.

44(3)

A certified copy furnished under clause (1)(e) is prima facie evidence of the contents of the registered financing statement or other registered document so certified.

Persons suffering damage to be compensated.

45(1)

Any person who suffers loss or damage as a result of his reliance upon a certificate of the registrar issued under section 44 that is incorrect because of an error or omission in the operation of The Personal Property Registry is, subject to subsection (2), entitled to have compensation paid to him by the government in the amount of the loss or damage but not exceeding $25,000., if he makes a claim therefor under subsection (3) within one year from the time of his having suffered the loss or damage or within six years from the time the certificate was issued, whichever is the earlier.

Compensation for loss under issue of corporate securities.

45(2)

The total of all claims for compensation paid under subsection (1) to all holders of interests in any single issue of corporate securities shall not exceed $200,000.

Claim for compensation.

45(3)

A person claiming to be entitled to payment of compensation under this section shall make application therefor in writing to the registrar, setting out therein his full name and address and the particulars of his claim.

Reference.

45(4)

The registrar shall refer the application by originating notice of motion to a judge and the judge shall issue such directions as he thinks proper, hold a hearing, determine the claimant's entitlement to compensation, the amount thereof, and, if awarded, the costs of the proceedings.

Certificate.

45(5)

The judge shall make his findings and embody his conclusions in the form of an order and shall cause to be sent forthwith by registered mail one copy thereof to the claimant at the address shown in the application and one copy to the registrar.

Confirmation of certificate.

45(6)

The order of the judge shall be final and binding at the expiration of 30 days from the date of mailing it to the claimant, unless notice of appeal is filed within that time.

Appeal.

45(7)

The claimant or the registrar may appeal the order of the judge to the Court of Appeal at any time before the order of the judge is final and binding, and the procedure thereon shall be the same as upon an appeal from any other order or judgment of the judge in a civil matter.

Payment out of Cons. Fund.

45(8)

When the registrar receives an order of the judge under subsection (5) and the time for any appeal has expired or, where an appeal is taken, it is disposed of, and it is finally determined that the claimant is entitled to payment of compensation under this section, the registrar shall certify to the Minister of Finance the sum found to be payable, including any costs awarded to the claimant, and the Minister of Finance shall pay such sum to the claimant from the Consolidated Fund without any further authority than this section.

Subrogation rights.

45(9)

Where a claim is paid to a claimant under this section, the government is subrogated to the rights of the claimant against any person indebted to the claimant and whose debt to the claimant was the basis of the loss or damage in respect of which the claim was paid; and the government may sue on those rights in the name of Her Majesty the Queen in right of Manitoba.

Where documents to be registered.

46(1)

Documents to be registered under this Act shall be tendered for registration in The Personal Property Registry at such place or places as may be designated in the regulations.

Effective time of registration.

46(2)

Any registration in The Personal Property Registry is effective only from the time of the recording of the prescribed particulars thereof in The Personal Property Registry and the assignment thereto of a registration number.

Refusal of registration.

46(3)

Where, in the opinion of the registrar or a deputy registrar a document tendered for registration in The Personal Property Registry does not comply with the regulations or with this Act or with any other Act of the Legislature under which registration of the document in the registry is authorized, he may refuse to register it, and shall give the reason why he is of the opinion that it does not comply.

Registration of leases and consignments intended as security.

46(4)

Where a person registers a financing statement, or other document, in respect of a lease or consignment intended as security,

(a) the lessor or consignor, as the case may be, shall be referred to in the financing statement as the secured party; and

(b) the lessee or consignee, as the case may be, shall be referred to in the financing statement as the debtor.

Agent acting in corporate security.

47

In the case of a corporate security where there is no trust deed and more than one secured party, if the security agreement or a subsequent agreement between all the parties to the security agreement provides for a person to act as agent for all the secured parties

(a) the signature of that person on behalf of the secured parties shall be deemed to be the signature of all the secured parties for the purposes of any provision of this Part requiring the signature of the secured parties; and

(b) the disclosure of the name and address of that person, identified as the agent of the secured parties, in any document shall be deemed to be the disclosure of the names and addresses of all the secured parties for the purposes of any provision of this Act requiring the disclosure of the names and addresses of the secured parties.

Registration requirements.

48(1)

Subject to subsections (2) and (3) in order to register under this Act for the purpose of perfecting a security interest, a financing statement in the prescribed form and signed by the debtor shall be registered, and it shall contain and legibly set forth at least

(a) the name and address of the debtor;

(b) the name and address of the secured party ;

(c) a description of the collateral sufficient to identify it; and

(d) such other information, including information referred to in clauses (a) to (c) and the mode of giving the information, as may be prescribed or required by the regulations.

Registration without signature of debtor.

48(2)

A financing statement that is not signed by the debtor, but otherwise complies with subsection (1), may be registered if

(a) it relates to a corporate security and it is accompanied by the trust deed or the bonds, debentures or debenture stock containing the security interest; or

(b) it is accompanied by an order of a judge made on application and after such notice has been given to such persons and such evidence has been submitted as the judge thinks necessary in the circumstances and ordering the registration of the financing statement; or

(c) it is signed by the secured party and is registered to perfect a security interest in collateral already subject to a security interest in another jurisdiction or subject to a right to revendicate when it was brought into Manitoba if the financing statement contains a statement that the collateral was brought into Manitoba under those circumstances: or

(d) it is signed by the secured party and contains a statement that the debtor has signed the security agreement creating the security interest in the collateral described.

Filing of corporate securities.

48(3)

The financing statement that relates to a corporate security shall not be registered unless it is accompanied

(a) by the trust deed containing the security interests; or

(b) where the security interest is not contained in a trust deed, by a true copy of the bonds, debentures or debenture stock containing the security interest.

Time for registration.

48(4)

A financing statement may be registered at any time and before a security agreement is made or a security interest attaches.

Errors.

48(5)

An error of a clerical nature or in an immaterial or non-essential part of a financing statement or other document required or authorized to be registered in the personal property security registry that does not mislead does not invalidate the registration or destroy the effect of the registration.

Financing statement referring to assignments.

49(1)

A financing statement may disclose an assignment of a security interest in the collateral described in the financing statement if the financing statement contains and legibly sets forth the name and address of the assignee and is signed either by the original secured party or the assignee.

Registration of statement of assignment.

49(2)

A statement of assignment, in the prescribed form signed by the secured party of record, of a security interest evidenced by a registered financing statement may be registered if it contains and legibly sets forth at least

(a) the name and address of the debtor;

(b) the name and address of the secured party of record;

(c) the name and address of the assignee;

(d) the registration number of the financing statement; and

(e) such other information, including the mode of giving the information, as may be prescribed or required by the regulations.

Assignee becomes secured party.

49(3)

After disclosure of an assignment or registration of a statement of assignment under this section, the assignee becomes the secured party of record.

Assignee dealing with registration.

49(4)

Until

(a) a financing statement disclosing an assignment of a security interest and disclosing the name and address of the assignee has been registered; or

(b) a statement of assignment indicating the name and address of the assignee has been registered;

the assignee under the assignment is not the secured party of record and may not deal with the registration of any document regarding the security interest.

Assignment of corporate security.

49(5)

A statement of assignment that relates to a corporate security shall not be registered unless it is accompanied by the document effecting the assignment.

Transfer of collateral by debtor.

50(1)

Where a security interest has been perfected by registration, and the debtor with the consent of the secured party transfers his interest in the collateral, the transferee becomes a debtor and the security interest becomes unperfected unless the secured party registers a notice in the prescribed form within 15 days of the time he consents to the transfer.

Where a security interest becomes unperfected.

50(2)

Where a security interest has been perfected by registration, and the secured party learns that the debtor has transferred his interest in the collateral, the security interest becomes unperfected 15 days after the secured party learns of the transfer and the name and address of the transferee unless he registers a notice in the prescribed form within the 15 days.

Second registration.

50(3)

A security interest that becomes unperfected under subsection (1) or (2) may thereafter be perfected by registering a notice in the prescribed form or as otherwise provided by this Act.

Execution of notice.

50(4)

A notice under this section shall not be registered unless it is signed by the secured party of record, but it is not necessary for the notice to be signed by the debtor or the transferee of the interest in the collateral.

Amendments to financing statement.

51(1)

To effect an amendment to a financing statement or other document registered in the personal property registry, an amendment statement in the prescribed form that refers to the registration number of the financing statement or other document that it amends may be registered at any time during the period that the registration of the financing statement or other document if effective.

Amendment adding collateral or changing name of debtor.

51(2)

Where an amendment adds collateral or alters the name of, or any identifying information other than the address relating to, the debtor, it is effectively registered as to the additional collateral or the changed name or identifying information only from the date of registration of the amendment statement.

Requirements for amendment statement.

51(3)

An amendment statement effecting an amendment to a financing statement or other document shall not be registered under subsection (1) unless

(a) it is signed by the secured party of record; or

(b) it relates to a corporate security and is accompanied by the agreement effecting the change referred to in the amendment statement.

Signature of debtor.

51(4)

Subject to subsection (5), an amendment statement effecting an amendment to a financing statement or other document which adds collateral shall not be registered under subsection (1) or (2) unless it is signed by the debtor.

Dispensing with debtor's signatures.

51(5)

An amending statement which effects an amendment to a financing statement or other document by adding collateral but that is not signed by the debtor may be registered if

(a) it is signed by the secured party of record and contains a statement that the debtor has signed a security agreement, or an amendment thereto, creating a security interest in the additional collateral described; or

(b) is accompanied by the order of the registrar or a judge made on application and after such notice has been given to such persons and such evidence has been submitted, as the registrar or judge thinks necessary in the circumstances, authorizing the registration of the amendment statement; or

(c) it relates to a corporate security and is accompanied by the agreement effecting the addition of the collateral referred to in the amendment statement.

Amendment releasing collateral.

51(6)

An amendment to a financing statement which releases certain collateral described therein from the security interest to which the financing statement relates may be registered without the signature of the debtor if it is signed by the secured party of record.

Renewal statements.

52(1)

A renewal statement in the prescribed form that is signed by the secured party of record and that sets out the registration number of the financing statement or the renewal statement to which it refers may be registered at any time during which the registration of the financing statement or renewal statement to which it refers is effective.

Subordination.

52(2)

Where a separate agreement that provides for the subordination of a security interest created or provided for by a security agreement in respect of which a financing statement has been registered under this Act has been entered into, a postponement statement in respect thereof in the prescribed form, signed by the secured party of record and that refers to the registration number of the financing statement may be registered at any time during the period that the registration of the financing statement is effective.

Extending statement.

52(3)

For the purpose of perfecting a security interest in proceeds under section 27, an extending statement in the prescribed form and signed by the secured party may be registered, and the extending statement shall contain legibly set forth at least

(a) the name and address of the debtor:

(b) the name and address of the secured party :

(c) a description of the original collateral sufficient to identify it:

(d) the registration number of the related financing statement if the security interest in the original collateral was perfected by registration;

(e) a statement that the security interest extends to the proceeds of the original collateral; and

(f) such other information, including information referred to in clauses (a) to (e) and the mode of giving the information, as may be prescribed or required by the regulations.

Effect of registration.

53(1)

Where the collateral covered by a security agreement is other than instruments, securities, letters of credit, advices of credit or negotiable documents of title, registration under this Act

(a) of a financing statement relating to the security agreement constitutes notice of the security agreement to all persons claiming any interest in the collateral and is effective during the period of three years following the registration of the financing statement;

(b) of a renewal statement constitutes notice of the security agreement to which it relates to all persons claiming any interest in the collateral and

(i) if it is registered in the last two months of the period of effectiveness of the financing statement to which it relates, is effective during the period of three years following the period of effectiveness of the financing statement to which it relates, and

(ii) if it is registered prior to the last two months of the period of effectiveness of the financing statement to which it relates, is effective during the period of three years following the registration of the renewal statement; and

(c) of any other document constitutes notice thereof to all persons claiming any interest in the collateral and is effective during the remainder of the period for which the registration of the financing statement or renewal statement relating to the security agreement is effective.

Filing in L.T.O.

53(2)

Where the collateral is or includes fixtures, or goods that may become fixtures, or crops, a notice in the form prescribed for Land Titles purposes setting forth at least

(a) the name and address of the debtor;

(b) the name and address of the secured party ;

(c) a description of the land affected sufficient for filing under The Real Property Act or The Registry Act, as the case may be; and

(d) such other information, including the information referred to in clauses (a) to (c), and the mode of giving the information, as may be prescribed or required by the regulations;

and to which is attached a copy of the financing statement registered under this Act showing particulars of registration under this Act certified by the registrar, may be filed in the appropriate Land Titles Office and upon being so filed the district registrar shall make a note thereof on the proper Certificate of Title or abstract of title.

Other filings in L.T.O.

53(3)

Where notice of registration of a financing statement has been filed under subsection (2) in a Land Titles Office, and the filing of the notice has not expired, a notice of registration under this Act of

(a) a renewal statement; or

(b) an amendment statement; or

(c) a statement of assignment; or

(d) a Certificate of Discharge;

relating to the collateral to which the financing statement relates or to the financing statement, may be filed in the Land Titles Office in like manner and form as prescribed under subsection (2) and upon being so filed the district registrar shall make a note thereof on the proper Certificate of Title or abstract of title; and sections 51 and 55 apply with such modifications as the circumstances require in respect of notices filed under subsection (2) or this subsection.

Expiry of notices.

53(4)

Where a notice of registration of a financing statement or notice of registration of a renewal statement has been filed under subsection (2) or (3) in a Land Titles Office,

(a) the filing of the notice of registration of the financing statement expires on the date that is three years and 30 days after the date on which the financing statement was registered under this Act unless prior thereto a notice of the registration under this Act of a renewal statement relating to the financing statement has been filed under subsection (3) in the Land Titles Office; and

(b) the filing of the notice of registration of the renewal statement and the filing of the financing statement to which it relates expire 30 days after the period of effectiveness of the registration of the renewal statement mentioned in clause (l)(b) expires unless prior thereto notice of the registration of a further renewal statement in respect thereof has been filed under subsection (3) in the Land Titles Office.

Vacating of Land Titles filings.

53(5)

Where the filing under this section in a Land Titles Office of a notice of registration of a financing statement expires, the district registrar may vacate the filing of the registration of the financing statement and the filing under subsection (3) of any other notice that relates to the same financing statement and may strike out any note thereof that he has made on a Certificate of Title or abstract of title.

Time limits not to apply to corporate securities.

53(6)

The time limits set out in subsections (1) and (4) do not apply to corporate securities, to financing statements, renewal statements or other documents relating to corporate securities or to notices of registration of financing statements that relate to corporate securities.

Registration not constructive notice.

53(7)

Registration in the personal property registry of a document relating to a security agreement or any subsidiary agreement does not constitute constructive notice of the contents of the security agreement or the subsidiary agreement unless otherwise provided in this Act.

Registration of appointment of receiver.

54(1)

Every person who obtains an order for the appointment of a receiver or manager of property of a debtor or who appoints a receiver or manager of property of a debtor under any power contained in a security agreement shall, within 14 days from the date of the order or appointment register in the personal property registry a notice thereof in the prescribed form.

Renewal notice.

54(2)

Every receiver or manager of the property of a debtor shall, while he continues to act as a receiver or manager, register renewal notices in the prescribed form as may be necessary to maintain in effect the registration made under subsection (1).

Discharge of notice.

54(3)

Every receiver or manager of property of a debtor shall, upon ceasing to act as receiver or manager, register in the personal property registry a discharge notice in the prescribed form to discharge the registration required under subsection (1) or (2).

Application of subsec. 53(1).

54(4)

Subsection 53(1) applies with such modifications as the circumstances require to registrations made under this section.

Discharge of security agreement.

55(1)

Upon performance of all obligations under a security agreement, it shall be discharged, and, upon written demand delivered either personally or by registered mail during the period that the registration of the financing statement relating thereto is effective, by any person having an interest in the collateral to the secured party of record, the secured party of record shall sign and deliver personally or by registered mail to the person demanding it, at the place set out in the demand, a certificate of discharge of the security interest in the prescribed form together with unregistered assignments, if any, of the security agreement.

Discharge of financing statement.

55(2)

Where there are no outstanding obligations under any security agreement covered by a registered financing statement, the secured party, upon written demand delivered either personally or by registered mail by a person having an interest in the collateral, shall sign and deliver personally or by registered mail to the person demanding it, at the place set out in the demand, a certificate of discharge of the security interest in the prescribed form.

Release of part of collateral.

55(3)

Where the secured party has agreed to release part of the collateral upon payment or performance of certain of the obligations under a security agreement, then, upon payment or performance of the obligations and upon written demand delivered either personally or by registered mail during the period that the registration of the financing statement relating to the security agreement is effective by any person having an interest in the collateral to the secured party, the secured party shall sign and deliver personally or by registered mail to the person demanding it, at the place set out in the demand, a release in the prescribed form of the collateral as agreed.

Failure to deliver.

55(4)

Where the secured party, without reasonable excuse, fails to deliver the required discharge and assignments or release, as the case may be, within 10 days after receipt of a demand therefor under subsection (1), (2) or (3), he shall pay $100. to the person making the demand and any damages resulting from the failure, which sum and damages are recoverable in any court of competent jurisdiction.

Security or payment into court.

55(5)

Upon application to the Court of Queen's Bench by originating notice to all persons concerned, the judge may

(a) allow security for or payment into court of the amount claimed by the secured party and such costs as he may fix, and thereupon order that the registration of the financing statement relating to the security agreement, be discharged or that a release of collateral be registered, as the case may be; or

(b) order upon any ground he deems proper that the registration of the financing statement relating to the security agreement, be discharged or that a release of collateral be registered, as the case may be.

Registration of discharges and releases.

55(6)

A certificate of discharge of a security interest in the prescribed form and any release of collateral in the prescribed form and any order made under subsection (5) may be registered under this Act.

Registration of release relating to corporate security.

55(7)

A release of collateral that relates to collateral under a corporate security shall not be registered unless it is accompanied by the document effecting the release.

Discharge of corporate security.

55(8)

Where a discharge of a security interest under a corporate security is tendered for registration, it may be accompanied by a release and re-conveyance of the collateral or any other document given by the secured party to indicate that the security interest of the secured party has been terminated.

Discharge for consumer goods.

55(9)

Where a financing statement relating to a security interest in consumer goods has been registered, the secured party of record shall, within one month after all obligations under the security agreement creating the security interest have been paid or performed, register a certificate of discharge of the security interest unless prior to the expiry of the month the registration of the financing statement ceases to be effective.

Partial release of consumer goods.

55(10)

Where a financing statement relating to a security interest in consumer goods has been registered and the secured party has agreed in the security agreement creating the security interest to release part of the consumer goods from the security interest upon payment or performance of certain obligations under the security agreement, the secured party of record shall, within one month after those obligations have been paid or performed, register a certificate of release of the security interest in those consumer goods unless prior to the expiry of the month the registration of the financing statement ceases to be effective.

Penalty.

55(11)

Where a secured party of record fails to comply, with subsection (9) or (10), he is liable to the debtor for $100. plus any damages suffered by the debtor by reason of the failure, which sum and damages may be recovered by the debtor from the secured party of record in a court of competent jurisdiction.

Meaning of "true copy".

56(1)

In this section and section 48 "true copy" means a legible copy of the original document produced by manual, photographic, electrical or mechanical means and certified as a true copy by notarial certificate or certificate of the debtor.

Registration of true copies.

56(2)

A document that is required or permitted to be registered or to accompany a registration under this Act may be either the original document or a true copy thereof.

Copies of signatures on true copies.

56(3)

Where a true copy of a document is registered or accompanies a registration, any signature thereon may be a reproduction of the signature on the original document or a copy thereof in type or writing indicated by means of quotation marks.

PART V

DEFAULT - RIGHTS AND REMEDIES

Rights and remedies cumulative.

57(1)

The rights and remedies referred to in this Part are cumulative but, unless otherwise specifically provided, this Part does not apply to assignments of accounts or chattel paper not intended as security.

Secured party's rights and remedies.

57(2)

Where the debtor is in default under a security agreement, the secured party has, in addition to any other rights and remedies, the rights and remedies provided in the security agreement except as limited by subsection (6), the rights and remedies provided in this Part and, when in possession, the rights, remedies and duties provided in section 19.

Appointment of receiver.

57(3)

Nothing in this Act prevents the parties from agreeing that the secured party may appoint a receiver or prevents a court from appointing a receiver and determining his rights and duties.

Secured party's remedies.

57(4)

The secured party may enforce the security interest by any method available in or permitted by law and, if the collateral is or includes documents of title, the secured party may proceed either as to the documents of title or as to the goods covered thereby; and any method of enforcement that is available with respect to the documents of title is also available, with such modifications as the circumstances require, with respect to the goods covered thereby.

Debtor's rights and remedies.

57(5)

Where the debtor is in default under a security agreement, he has, in addition to the rights and remedies provided in the security agreement and any other rights and remedies, the rights and remedies provided in this Part and section 19.

Waiver and variation of rights and duties.

57(6)

Except as provided in sections 62 and 63, the provisions of subsections 60(3), (4) and (5) and of sections 61 to 64, to the extent that they give rights to the debtor and impose duties upon the secured party, shall not be waived or varied; but the parties may by agreement determine the standards by which the rights of the debtor and the duties of the secured party are to be measured, so long as those standards are not manifestly unreasonable having regard to the nature of those rights and duties.

Where agreement covers both real and personal property.

57(7)

Where a security agreement covers both real and personal property, the secured party may proceed under this Part as to the personal property or he may proceed as to both the real and the personal property in accordance with his rights and remedies in respect of the real property, in which case this Part does not apply.

No merger in judgment.

57(8)

A security interest does not merge merely because a secured party has reduced his claim to judgment.

Collection rights of secured party.

58(1)

Where so agreed and in any event upon default under a security agreement, a secured party is entitled

(a) to notify any person obligated on chattel paper or on an intangible or any obligor on an instrument to make payment to him whether or not the assignor was theretofore making collections on the collateral; and

(b) to take control of any proceeds to which he is entitled under section 27.

Collection in commercially reasonable manner.

58(2)

A secured party who by agreement is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor and who undertakes to collect from the persons obligated on chattel paper or on an intangible or obligors on instruments shall proceed in a commercially reasonable manner and may deduct his reasonable expenses of realization from the collections.

Secured party's right to take possession upon default.

59

Upon default under a security agreement

(a) the secured party has, unless otherwise agreed, the right to take possession of the collateral by any method permitted by law;

(b) if the collateral is equipment and the security interest has been perfected by registration, the secured party may, in a reasonable manner, render the equipment unusable without removal thereof from the debtor's premises, and the secured party shall thereupon be deemed to have taken possession of the equipment; and

(c) the secured party may dispose of collateral under section 60 on the debtor's premises;

but, if the collateral is goods that have become a fixture, the secured party shall not remove the fixtures from the debtor's lands unless he has given a notice in writing of his intention to remove the fixtures to each person who appears by the records of the Land Titles Office to have an interest in the lands, and unless each person so notified fails to pay the amount due and payable on the fixture for a period of 20 days after the giving of the notice to him, or for such longer period as a judge may fix on cause shown to his satisfaction.

Secured party's right to dispose of collateral on default.

60(1)

Upon default under a security agreement, the secured party may dispose of any of the collateral in its condition either before or after any commercially reasonable repair, processing or preparation for disposition, and the proceeds of the disposition shall be applied consecutively to

(a) the reasonable expenses of retaking, holding, repairing, processing, preparing for disposition and disposing of the collateral and, to the extent provided for in the security agreement and not prohibited by law, any other reasonable expenses incurred by the secured party;

(b) the satisfaction of the obligation secured by the security interest of the party making the disposition; and

(c) the satisfaction of the obligation secured by any subordinate security interest in the collateral if written demand therefor is received by the party making the disposition before the distribution of the proceeds is completed.

Request for proof of interest.

60(2)

Where a written demand under clause (l)(c) is received by the secured party, he may request the holder of the subordinate security interest to furnish him with reasonable proof of the holder's interest, and, unless the holder furnishes the proof within a reasonable time, the secured party need not comply with the demand.

Methods of disposition.

60(3)

Collateral may be disposed of in whole or in part, and the disposition may be by public sale, private sale, lease or otherwise and, subject to subsection (5), may be made at any time and place and on any terms so long as every aspect of the disposition is commercially reasonable.

Secured party's right to delay disposition.

60(4)

The secured party may, subject to subsection 62(1), retain the collateral in whole or in part for such period of time as is commercially reasonable.

Secured party to give notice of disposition of collateral.

60(5)

Unless the collateral is perishable or unless the secured party believes on reasonable grounds that the collateral will decline speedily in value, the secured party shall give to the debtor and to any other person who has a security interest in the collateral and who has registered a financing statement under this Act indexed in the name of the debtor or who is known by the secured party to have a security interest in the collateral not less than 15 days notice in writing containing

(a) a brief description of the collateral;

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

(c) the sums actually in arrear, exclusive of the operation of any acceleration clause in the security agreement, or a brief description of any other provisions of the security agreement for the breach of which the secured party intends to dispose of the collateral;

(d) the amount of the applicable expenses referred to in clause (1)(a) or, in a case where the amount of those expenses has not been determined, his reasonable estimate thereof;

(e) a statement that, upon payment of the amounts due under clauses (b) and (d), the debtor may redeem the collateral;

(f) a statement that upon payment of the sums actually in arrear or the curing of any other default, as the case may be, together with the amounts due under clause (1)(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 any deficiency; and

(h) the date, time and place of any public sale or of the date after which any private disposition of the collateral is to be made.

Service of notice.

60(6)

The notice required under subsection (5) shall be served personally upon or left at the last known residence or place of business of the party to be served or may be sent by registered mail to his last known post office address.

Secured party's right to purchase collateral.

60(7)

The secured party may purchase the collateral or any part thereof only at a public sale.

Effect of disposition of collateral.

60(8)

Where collateral is disposed of in accordance with this section, the disposition discharges the security interest of the secured party making the disposition and, if the disposition is made to a bona fide purchaser for value, discharges also any subordinate security interest and terminates the debtor's interest in the collateral.

Effect of disposition otherwise than under this section.

60(9)

Where collateral is disposed of by a secured party after default otherwise than in accordance with this section,

(a) in the case of a public sale, if the purchaser has no knowledge of any defect in the sale and if he does not purchase in collusion with the secured party, other bidders or the person conducting the sale; or

(b) in any other case, if the purchaser acts in good faith;

the disposition discharges the security interest of the secured party making the disposition and, where the disposition is made to a purchaser for value, discharges also any subordinate security interest and terminates the debtor's interest in the collateral.

Certain transfers of collateral.

60(10)

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 is subrogated to his rights has thereafter the rights and duties of the secured party, and such a transfer of collateral is not a disposition of the collateral.

Application of subsecs. (5) and (6).

60(11)

Subsections (5) and (6) do not apply

(a) to corporate securities; or

(b) where a receiver or manager has been appointed by a court or pursuant to the security agreement.

Form of notice of repossession under Consumer Protection Act.

60(12)

Where a notice of repossessing collateral is required to be given to a debtor under subsection 46(2) of The Consumer Protection Act, the giving of the notice to any person in a form that complies with that Act shall be deemed to be compliance with any requirement under subsection (5) to give notice to that person.

Surplus.

61

Where a security agreement secures an indebtedness and the secured party has dealt with the collateral under section 58 or has disposed of it in accordance with section 60 or otherwise, he shall account for any surplus to any person, other than the debtor, whom the secured party knows to be the owner of the collateral, and, in the absence of such knowledge, he shall account to the debtor for any surplus.

Compulsory disposition of collateral, consumer goods.

62(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 rights under this Part, the secured party who has taken possession of the collateral shall, within 90 days after taking possession dispose of or contract to dispose of the collateral under section 60, and, if he fails to do so, the debtor may proceed under section 64 or in an action for damages or loss sustained.

Retention of collateral.

62(2)

In any case other than that mentioned in subsection (1), a secured party in possession of the collateral may, after default, propose to retain the collateral in satisfaction of the obligation secured, and notification of the proposal shall be given to the debtor and to any other person whom the secured party knows to be the owner of the collateral and, except in the case of consumer goods, to any other person who has a security interest in the collateral and who has registered a financing statement relating to that security interest under this Act indexed in the name of the debtor or who is known by the secured party in possession to have a security interest in the collateral.

Requirement to dispose of collateral.

62(3)

If any person entitled to notification under subsection (2) objects in writing within 15 days after being notified, the secured party in possession shall dispose of the collateral under section 5, and, in the absence of any such objection, the secured party shall, at the expiration of the period of 15 days, be deemed to have irrevocably elected to retain the collateral in satisfaction of the obligation secured, and thereafter is entitled to hold or dispose of the collateral free of all rights and interests therein of any person entitled to notification under subsection (2) who was given such notification.

Redemption of collateral.

63(1)

At any time before the secured party has disposed of the collateral by sale or exchange or contracted for the disposition under section 60 or before the secured party shall be deemed to have irrevocably elected to retain the collateral in satisfaction of the obligation under subsection 62(2), the debtor, or any person other than the debtor who is the owner of the collateral, or any secured party in possession, may, unless he has otherwise agreed in writing after default

(a) redeem the collateral by tendering fulfilment of all obligations secured by the collateral; or

(b) reinstate the security agreement by paying the sums actually in arrear, exclusive of the operation of any acceleration clause, or by curing any other default by reason whereof the secured party intends to dispose of the collateral; together with a sum equal to the reasonable expenses of retaking, holding, repairing, processing, preparing the collateral for disposition and in arranging for its disposition, and, to the extent provided for in the security agreement, the reasonable solicitor's costs and legal expenses.

Rights under corporate security.

63(2)

Upon application of the secured party under a corporate security, a judge may order that the debtor under the corporate security does not have any right to reinstate the security agreement under clause (l)(b).

Remedies for failure of secured party to comply with this Part.

64(1)

Where a secured party in possession of collateral is not complying with any of the obligations imposed by section 19, or, after default, is not proceeding in accordance with this Part or the account is disputed, the debtor or any person who is the owner of the collateral or the creditors of either of them or any person other than the secured party who has an interest in the collateral may apply to the Court of Queen's Bench, and the court may, upon hearing the application direct that the secured party comply with the obligations imposed by section 19, or that the collateral be or be not disposed of, or order an account to be taken or make such other or further order as the court deems just.

Rights of debtor.

64(2)

If the disposition of the collateral has been made otherwise than in accordance with this Part,

(a) the debtor or any other person entitled to notice under subsection 60(5) or whose security interest has been made known to the secured party prior to the disposition has a right to recover from the secured party any loss or damage caused by his failure to comply with this Part; and

(b) where the collateral is consumer goods, the debtor has a right to recover in any event an amount not less than the credit service charge plus 10% of the principal amount of the debt or the time price differential plus 10% of the cash price.

PART VI

MISCELLANEOUS

Extension of time.

65(1)

Where, in this Act, any time is prescribed within which or before which any act or thing must be done, a judge on application may, upon such terms and conditions and with such notice, if any, as he may order, extend the time for doing the act or thing upon being satisfied that the failure to do the act or thing within or before the time prescribed was accidental or due to inadvertence or impossibility or other sufficient cause.

Copy of order attached to document.

65(2)

A copy of an order made under this section shall be registered with the document to which the order relates.

Rights protected.

65(3)

The rights of other persons accrued up to the time of the registration of the order made under this section are not affected by the order.

Application of Act in respect of attachment.

66(1)

This Act applies only where the security interest attaches on or after the day on which this section came into force, and, where the security attached before this Act came into force, the security interest continues to have force and effect as if this Act had not been passed.

Application of prior law on priorities.

66(2)

The order of priorities between a security interest validly created under any prior law and a security interest validly created under this Act shall be determined by the law as it was prior to the date on which this section comes into force.

Registration under this Act with respect to prior law.

66(3)

For the purposes of determining priorities under any prior law, the registration under this Act of a financing statement with respect to a security agreement that could have been registered under The Assignment of Book Debts Act, The Bills of Sale Act, The Corporations Act or any Act preceding The Corporations Act providing for the registration of corporate securities shall be deemed to be a registration under one or other of those Acts.

Registration under prior law.

67(1)

Every security interest that was covered by an unexpired filing or registration under The Assignment of Book Debts Act or The Bills of Sale Act and in respect of which a financing statement or renewal statement in a form prescribed under this Act has been filed as required under that Act before this section comes into force shall be deemed to have been registered and perfected under this Act and, subject to this Act, the registration continues the effect of the prior filing or registration for the unexpired portion of the filing or registration period.

Registration under Companies Act or Corporations Act.

67(2)

Every security interest created by a corporate security that was registered under The Companies Act or The Corporations Act as required under that Act before this section comes into force shall be deemed to have been registered and perfected under this Act and, subject to this Act, the effect of the prior filing or registration is continued under this Act.

Destruction of documents.

68

Where books, documents, records, cards or papers have been preserved for the purposes of this Act for so long that it appears they need not be preserved any longer, they may be destroyed in accordance with The Legislative Library Act.

Conflicting provisions in Consumer Protection Act.

69(1)

Where there is conflict between a provision of this Act and a provision of The Consumer Protection Act, the provision of The Consumer Protection Act prevails.

Conflicting provisions in Farm Machinery and Equipment Act.

69(2)

Where there is conflict between a provision of this Act and a provision of The Farm Machinery and Equipment Act, the provision of The Farm Machinery and Equipment Act prevails.

Conflicting provisions in other Acts.

69(3)

Where there is conflict between a provision of this Act and a provision of any general or special Act other than The Consumer Protection Act or The Farm Machinery and Equipment Act, the provision of this Act prevails.

Reference to this Act.

70

The provisions of any general or special Act enacted before the coming into force of this section that relate to a security interest and that refer to The Assignment of Book Debts Act or The Bills of Sale Act or any provision thereof shall be deemed to refer to this Act or to the corresponding provision of this Act, as the case may be, and not to The Assignment of Book Debts Act or The Bills of Sale Act, as the case may be.

Regulations.

71

For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make regulations ancillary thereto and not inconsistent therewith; and every regulation made under, and in accordance with the authority granted by, this section has the force of law; and without restricting the generality of the foregoing, the Lieutenant Governor in Council may make regulations

(a) designating offices for The Personal Property Registry;

(b) approving the form of the seal of the registrar and each deputy registrar;

(c) prescribing the duties of the registrar and deputy registrars;

(d) prescribing business hours for the offices of The Personal Property Registry;

(e) respecting The Personal Property Registry;

(f) requiring the payment of fees and prescribing the amounts thereof in respect of registration, filings, searches and certificates in The Personal Property Registry, matters or proceedings before the registrar or deputy registrars, and filings authorized under this Act in Land Titles Offices;

(g) governing practice and procedure applicable to proceedings under this Act;

(h) prescribing forms for use under this Act or under any other Act under which such forms are required and providing for their use;

(i) prescribing the particulars referred to in section 48;

(j) respecting any matter necessary or advisable to carry out effectively the intent and purpose of this Act;

(k) prescribing abbreviations that may be used in The Personal Property Registry in place of words, names and expressions.

Crown bound.

72

The Crown is bound by this Act.