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Personal Property Security Act

R.S.O. 1990, CHAPTER P.10

Consolidation Period: From June 20, 2012 to the e-Laws currency date.

Last amendment: 2012, c. 8, Sched. 45.

SKIP TABLE OF CONTENTS

CONTENTS

1.

Definitions and interpretation

PART I
APPLICATION AND CONFLICT OF LAWS

2.

Application of Act, general

3.

Application to Crown

4.

Non-application of Act

5.

Conflict of laws, location of collateral

6.

Goods brought into province

7.

Conflict of laws, location of debtor

7.1

Conflict of laws – validity of security interest in investment property

7.2

Transition re s. 7

7.3

Transition re s. 7.1

8.

Procedural and substantive issues

8.1

Interpretation – law of jurisdiction

PART II
VALIDITY OF SECURITY AGREEMENTS AND RIGHTS OF PARTIES

9.

Effectiveness of security agreement

10.

Delivery of copy of agreement

11.

Attachment required to enforce security interest

11.1

Attachment of security interest to security entitlement

12.

After-acquired property

13.

Future advances

14.

Agreement not to assert defence against assignee

15.

Seller’s warranties

16.

Acceleration provisions

17.

Care of collateral

17.1

Rights of secured party with control of investment property as collateral

18.

Statements of account

PART III
PERFECTION AND PRIORITIES

19.

Perfection

19.1

Perfection of security interest

19.2

Perfection of security interest on attachment

20.

Unperfected security interests

21.

Continuity of perfection

22.

Perfection

22.1

Perfection by control of collateral

23.

Perfection by registration

24.

Temporary perfection

25.

Perfecting as to proceeds

26.

Perfecting as to goods held by a bailee

27.

Goods returned or repossessed

28.

Transactions in ordinary course of business

28.1

Rights of protected purchaser

29.

Negotiable instruments, etc.

30.

Priorities

30.1

Priority rules for security interests in investment property

31.

Liens for materials and services

32.

Crops

33.

Purchase-money security interests

34.

Fixtures

35.

Accessions

36.

Real property payments

37.

Commingled goods

38.

Subordination

39.

Alienation of rights of a debtor

40.

Account debtor

PART IV
REGISTRATION

41.

Registration system

42.

Registrar

42.1

Powers of registrar

43.

Certificate of registrar

43.1

Used vehicle information package

44.

Assurance Fund

45.

Registration of financing statement

46.

Registration requirements

47.

Assignment of security interest

48.

Transfer of collateral

49.

Amendments

50.

Subordination of security interest

51.

Registration period

52.

Renewal of registration

53.

Financing change statement

54.

Notice in land registry office

55.

Discharge or partial discharge of registration

56.

Discharge or amendment

57.

Consumer goods, duty of secured party to register or provide discharge

PART V
DEFAULT — RIGHTS AND REMEDIES

57.1

Application

58.

Rights and remedies cumulative

59.

Rights and remedies of secured party

60.

Receiver, receiver and manager

61.

Collection rights of secured party

62.

Possession upon default

63.

Disposal of collateral

64.

Distribution of surplus

65.

Compulsory disposition of consumer goods

66.

Redemption of collateral

PART VI
MISCELLANEOUS

67.

Court orders and directions

68.

Service of notices, etc.

69.

Knowledge and notice

70.

Extension or abridgment of time

71.

Destruction of books, etc.

72.

Application of principles of law and equity

73.

Conflict with other Acts

73.1

Powers of Minister

73.2

Delegation

74.

Regulations

PART VII
APPLICATION AND TRANSITION

75.

Definition

76.

Application of Act

77.

Chattel mortgages, etc., under prior law

78.

Corporation securities

79.

Saving, certain corporation securities

80.

Inspection of prior law documents

81.

Priorities

82.

Use of old forms

83.

Transition

84.

Transition re Securities Transfer Act, 2006

Definitions and interpretation

1.  (1)  In this Act,

“accessions” means goods that are installed in or affixed to other goods; (“accessoires”)

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

“broker” means a broker as defined in the Securities Transfer Act, 2006; (“courtier”)

“certificated security” means a certificated security as defined in the Securities Transfer Act, 2006; (“valeur mobilière avec certificat”)

“chattel paper” means one or more than one writing that evidences both a monetary obligation and a security interest in or a lease of specific goods; (“acte mobilier”)

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

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

“collateral” means personal property that is subject to a security interest; (“bien grevé”)

“consumer goods” means goods that are used or acquired for use primarily for personal, family or household purposes; (“biens de consommation”)

“debtor” means,

(a) a person who,

(i) owes payment or other performance of the obligation secured, and

(ii) owns or has rights in the collateral, including a transferee of or successor to a debtor’s interest in collateral,

(b) if the person who owes payment or other performance of the obligation secured and the person who owns or has rights in the collateral are not the same person,

(i) in a provision dealing with the obligation secured, the person who owes payment or other performance of the obligation secured,

(ii) in a provision dealing with collateral, the person who owns or has rights in the collateral, including a transferee of or successor to a debtor’s interest in collateral, or

(iii) if the context permits, both the person who owes payment or other performance of the obligation secured and the person who owns or has rights in the collateral, including a transferee of or successor to a debtor’s interest in collateral,

(c) a lessee of goods under a lease for a term of more than one year, or

(d) a transferor of an account or chattel paper; (“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”)

“entitlement holder” means an entitlement holder as defined in the Securities Transfer Act, 2006; (“titulaire du droit”)

“entitlement order” means an entitlement order as defined in the Securities Transfer Act, 2006; (“ordre relatif à un droit”)

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

“financial asset” means a financial asset as defined in the Securities Transfer Act, 2006; (“actif financier”)

“financing change statement” means the information required for a financing change statement presented in a required format; (“état de modification du financement”)

“financing statement” means the information required for a financing statement presented in a required format; (“état de financement”)

“future advance” means the advance of money, credit or other value secured by a security agreement whether or not such advance is given pursuant to commitment; (“avance future”)

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

“futures contract” means a standardized future or an option on futures, other than a clearing house option, that is,

(a) traded on or subject to the rules of a futures exchange recognized or otherwise regulated by the Ontario Securities Commission or by a securities regulatory authority of another province or territory of Canada, or

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

“futures customer” means a person for which a futures intermediary carries a futures contract on its books; (“client de contrats à terme”, “client”)

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

“futures intermediary” means a person that,

(a) is registered as a dealer permitted to trade in futures contracts, whether as principal or agent, under the securities laws or commodity futures laws of a province or territory of Canada, or

(b) is a clearing house recognized or otherwise regulated by the Ontario Securities Commission or by a securities regulatory authority of another province or territory of Canada; (“intermédiaire en contrats à terme”)

“goods” means tangible personal property other than chattel paper, documents of title, instruments, money and investment property, and includes fixtures, growing crops, the unborn young of animals, timber to be cut, and minerals and hydrocarbons to be extracted; (“objets”)

“instrument” means,

(a) 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, or

(b) a letter of credit and an advice of credit if the letter or advice states that it must be surrendered upon claiming payment thereunder,

but does not include a writing that constitutes part of chattel paper, a document of title or investment property; (“effet”)

“intangible” means all personal property, including choses in action, that is not goods, chattel paper, documents of title, instruments, money or investment property; (“bien immatériel”)

“inventory” means goods that are held by a person for sale or lease or that have been leased or that are to be furnished or have been furnished under a contract of service, or that are raw materials, work in process or materials used or consumed in a business or profession; (“stock”)

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

“lease for a term of more than one year” includes,

(a) a lease for an indefinite term, even if the lease is determinable by one of the parties or by agreement of two or more of the parties within one year from the date of its execution,

(b) a lease for a term of one year or less if the lessee, with the consent of the lessor, retains uninterrupted or substantially uninterrupted possession of the leased goods for a continuous period of more than one year, but a lease described in this clause is not a lease for a term of more than one year during the period before the day the lessee’s possession of the leased goods exceeds one year,

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

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

(ii) it is possible for the total of the original term and the renewed terms to exceed one year,

but does not include,

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

(e) a lease of household furnishings or appliances as part of a lease of land, if the use and enjoyment of the household furnishings or appliances is incidental to the use and enjoyment of the land; (“bail de plus d’un an”)

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by adding the following definitions:

“Minister” means the member of the Executive Council to whom responsibility for the administration of this Act is assigned or transferred under the Executive Council Act; (“ministre”)

“ministry” means the ministry of the Minister; (“ministère”)

See: 2012, c. 8, Sched. 45, ss. 1, 10.

“money” means a medium of exchange authorized or adopted by the Parliament of Canada as part of the currency of Canada or by a foreign government as part of its currency; (“argent”)

“obligation secured”, for the purposes of determining the amount payable under a lease, means the amount contracted to be paid as rent under the lease and all other amounts that have or may become payable under the lease, including the amount, if any, required to be paid by the lessee to obtain full ownership of the collateral, as of the relevant date, less any amounts paid; (“obligation garantie”)

“option” means an agreement that provides the holder with the right, but not the obligation, to do one or more of the following on terms or at a price established by or determinable by reference to the agreement at or by a time established by the agreement:

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

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

3. Sell a specified quantity of the underlying interest of the option; (“option”)

“option on futures” means an option the underlying interest of which is a standardized future; (“option sur contrats à terme”)

“personal property” means chattel paper, documents of title, goods, instruments, intangibles, money and investment property, and includes fixtures but does not include building materials that have been affixed to real property; (“bien meuble”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“proceeds” means identifiable or traceable personal property in any form derived directly or indirectly from any dealing with collateral or the proceeds therefrom, and includes,

(a) any payment representing indemnity or compensation for loss of or damage to the collateral or proceeds therefrom,

(b) any payment made in total or partial discharge or redemption of an intangible, chattel paper, an instrument or investment property, and

(c) rights arising out of, or property collected on, or distributed on account of, collateral that is investment property; (“produit”)

“purchase” includes taking by sale, lease, negotiation, mortgage, pledge, lien, gift or any other consensual transaction creating an interest in personal property; (“acquisition”)

“purchase-money security interest” means,

(a) a security interest taken or reserved in collateral, other than investment property, to secure payment of all or part of its price,

(b) a security interest taken in collateral, other than investment property, by a person who gives value for the purpose of enabling the debtor to acquire rights in or to the collateral, to the extent that the value is applied to acquire the rights, or

(c) the interest of a lessor of goods under a lease for a term of more than one year,

but does not include a transaction of sale by and lease back to the seller; (“sûreté en garantie du prix d’acquisition”)

“purchaser” means a person who takes by purchase; (“acquéreur”)

“registrar” means the registrar of personal property security; (“registrateur”)

“regulations” means the regulations made under this Act; (“règlements”)

“secured party” means a person who holds a security interest for the person’s own benefit or for the benefit of any other person and includes a trustee where the holders of obligations issued, guaranteed or provided for under a security agreement are represented by a trustee as the holder of the security interest and for the purposes of sections 17, 59 to 64, 66 and 67 includes a receiver or receiver and manager; (“créancier garanti”)

“securities account” means a securities account as defined in the Securities Transfer Act, 2006; (“compte de titres”)

“securities intermediary” means a securities intermediary as defined in the Securities Transfer Act, 2006; (“intermédiaire en valeurs mobilières”)

“security” means a security as defined in the Securities Transfer Act, 2006; (“valeur mobilière”)

“security agreement” means an agreement that creates or provides for a security interest and includes a document evidencing a security interest; (“contrat de sûreté”)

“security certificate” means a security certificate as defined in the Securities Transfer Act, 2006; (“certificat de valeur mobilière”)

“security entitlement” means a security entitlement as defined in the Securities Transfer Act, 2006; (“droit intermédié”)

“security interest” means an interest in personal property that secures payment or performance of an obligation, and includes, whether or not the interest secures payment or performance of an obligation,

(a) the interest of a transferee of an account or chattel paper, and

(b) the interest of a lessor of goods under a lease for a term of more than one year; (“sûreté”)

“standardized future” means an agreement traded on a futures exchange pursuant to standardized conditions contained in the by-laws, rules or regulations of the futures exchange, and cleared and settled by a clearing house, to do one or more of the following at a price established by or determinable by reference to the agreement and at or by a time established by or determinable by reference to the agreement:

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

2. Settle the obligation in cash instead of delivery of the underlying interest; (“contrat à terme normalisé”)

“trust indenture” means any security agreement by the terms of which a body corporate, with or without share capital and wherever or however incorporated,

(a) issues or guarantees debt obligations or provides for the issue or guarantee of debt obligations, and

(b) appoints a person as trustee for the holders of the debt obligations so issued, guaranteed or provided for; (“acte de fiducie”)

“uncertificated security” means an uncertificated security as defined in the Securities Transfer Act, 2006; (“valeur mobilière sans certificat”)

“value” means any consideration sufficient to support a simple contract and includes an antecedent debt or liability. (“contrepartie”) R.S.O. 1990, c. P.10, s. 1 (1); 1991, c. 44, s. 7 (1); 1998, c. 18, Sched. E, s. 193; 2006, c. 8, s. 123 (1-8); 2006, c. 34, Sched. E, s. 1; 2010, c. 16, Sched. 5, s. 4 (1).

(1.1)  Repealed: 1996, c. 5, s. 1 (2).

Determination of control

(2)  For the purposes of this Act,

(a) a secured party has control of a certificated security if the secured party has control in the manner provided under section 23 of the Securities Transfer Act, 2006;

(b) a secured party has control of an uncertificated security if the secured party has control in the manner provided under section 24 of the Securities Transfer Act, 2006;

(c) a secured party has control of a security entitlement if the secured party has control in the manner provided under section 25 or 26 of the Securities Transfer Act, 2006;

(d) a secured party has control of a futures contract if,

(i) the secured party is the futures intermediary with which the futures contract is carried, or

(ii) the futures customer, secured party and futures intermediary have agreed that the futures intermediary will apply any value distributed on account of the futures contract as directed by the secured party without further consent by the futures customer; and

(e) a secured party having control of all security entitlements or futures contracts carried in a securities account or futures account has control over the securities account or futures account. 2006, c. 8, s. 123 (9).

(3)  Repealed: 1996, c. 5, s. 1 (2).

PART I
APPLICATION AND CONFLICT OF LAWS

Application of Act, general

2.  Subject to subsection 4 (1), this Act applies to,

(a) 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, debenture, floating charge, pledge, trust indenture or trust receipt, and

(ii) an assignment, lease or consignment that secures payment or performance of an obligation;

(b) a transfer of an account or chattel paper even though the transfer may not secure payment or performance of an obligation; and

(c) a lease of goods under a lease for a term of more than one year even though the lease may not secure payment or performance of an obligation. R.S.O. 1990, c. P.10, s. 2; 2006, c. 34, Sched. E, s. 2.

Application to Crown

3.  This Act applies to the Crown and every agency of the Crown. R.S.O. 1990, c. P.10, s. 3.

Non-application of Act

4.  (1)  Except as otherwise provided under this Act, this Act does not apply,

(a) to a lien given by statute or rule of law, except as provided in subclause 20 (1) (a) (i) or section 31;

(b) to a deemed trust arising under any Act, except as provided in subsection 30 (7);

(c) to a transfer of an interest or claim in or under any policy of insurance or contract of annuity, other than a contract of annuity held by a securities intermediary for another person in a securities account;

(d) to a transaction under the Pawnbrokers Act;

(e) to the creation or assignment of an interest in real property, including a mortgage, charge or lease of real property, other than,

(i) an interest in a fixture, or

(ii) an assignment of a right to payment under a mortgage, charge or lease where the assignment does not convey or transfer the assignor’s interest in the real property;

(f) to an assignment for the general benefit of creditors to which the Assignments and Preferences Act applies;

(g) to a sale of accounts or chattel paper as part of a transaction to which the Bulk Sales Act applies;

(h) to an assignment of accounts made solely to facilitate the collection of accounts for the assignor; or

(i) to an assignment of an unearned right to payment to an assignee who is to perform the assignor’s obligations under the contract. R.S.O. 1990, c. P.10, s. 4 (1); 2006, c. 8, s. 124.

Rights under Sale of Goods Act

(2)  The rights of buyers and sellers under subsection 20 (2) and sections 39, 40, 41 and 43 of the Sale of Goods Act are not affected by this Act. R.S.O. 1990, c. P.10, s. 4 (2).

Conflict of laws, location of collateral

5.  (1)  Except as otherwise provided in this Act, the validity, perfection and effect of perfection or non-perfection of,

(a) a security interest in goods; and

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

shall be governed by the law of the jurisdiction where the collateral is situated at the time the security interest attaches. R.S.O. 1990, c. P.10, s. 5 (1); 2006, c. 8, s. 125.

Perfection of security interest continued

(2)  A security interest in goods perfected under the law of the jurisdiction in which the goods are situated at the time the security interest attaches but before the goods are brought into Ontario continues perfected in Ontario if a financing statement is registered in Ontario before the goods are brought in or if it is perfected in Ontario,

(a) within sixty days after the goods are brought in;

(b) within fifteen days after the day the secured party receives notice that the goods have been brought in; or

(c) before the date that perfection ceases under the law of the jurisdiction in which the goods were situated at the time the security interest attached,

whichever is earliest, but the security interest is subordinate to the interest of a buyer or lessee of those goods who acquires the goods from the debtor as consumer goods in good faith and without knowledge of the security interest and before the security interest is perfected in Ontario. R.S.O. 1990, c. P.10, s. 5 (2).

Perfection otherwise

(3)  Subsection (2) does not apply so as to prevent the perfection of a security interest after the expiry of the time limit set out in that subsection. R.S.O. 1990, c. P.10, s. 5 (3).

Perfection in Ontario

(4)  Where a security interest mentioned in subsection (1) is not perfected under the law of the jurisdiction in which the collateral was situated at the time the security interest attached and before being brought into Ontario, the security interest may be perfected under this Act. R.S.O. 1990, c. P.10, s. 5 (4).

Revendication

(5)  Where goods brought into Ontario are subject to an unpaid seller’s right to revendicate or to resume possession of the goods under the law of the Province of Quebec or any other jurisdiction, the right becomes unenforceable in Ontario twenty days after the goods are brought into Ontario unless the seller registers a financing statement or repossesses the goods within that twenty-day period. R.S.O. 1990, c. P.10, s. 5 (5).

Goods brought into province

6.  (1)  Subject to section 7, if the parties to a security agreement creating a security interest in goods in one jurisdiction understand at the time the security interest attaches that the goods will be kept in another jurisdiction, and the goods are removed to that other jurisdiction, for purposes other than transportation through the other jurisdiction, within thirty days after the security interest attached, the validity, perfection and effect of perfection or non-perfection of the security interest shall be governed by the law of the other jurisdiction.

Perfection in province

(2)  If the other jurisdiction mentioned in subsection (1) is not Ontario, and the goods are later brought into Ontario, the security interest in the goods is deemed to be one to which subsection 5 (2) applies if it was perfected under the law of the jurisdiction to which the goods were removed. R.S.O. 1990, c. P.10, s. 6.

Conflict of laws, location of debtor

7.  (1)  The validity, the perfection, the effect of perfection or non-perfection, and the priority,

(a) of a security interest in,

(i) an intangible, or

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

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

shall be governed by the law of the jurisdiction where the debtor is located at the time the security interest attaches. 2006, c. 8, s. 126; 2006, c. 34, Sched. E, s. 3 (1).

Change of location

(2)  If a debtor relocates to another jurisdiction, a security interest perfected in accordance with the applicable law as provided in subsection (1) continues perfected until the earliest of,

(a) 60 days after the day the debtor relocates to another jurisdiction;

(b) 15 days after the day the secured party receives notice that the debtor has relocated to another jurisdiction; and

(c) the day that perfection ceases under the previously applicable law. 2006, c. 8, s. 126.

Location of debtor

(3)  For the purposes of this section and section 7.1, a debtor shall be deemed to be located at the debtor’s place of business if there is one, at the debtor’s chief executive office if there is more than one place of business, and otherwise at the debtor’s principal place of residence. 2006, c. 8, s. 126.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2006, chapter 34, Schedule E, subsection 3 (2) and the following substituted:

Location of debtor

(3)  For the purposes of this section, a debtor is located,

(a) if the debtor is an individual, in the jurisdiction where the debtor’s principal residence is located;

(b) if the debtor is a partnership, other than a limited partnership, and the partnership agreement governing the partnership states that the agreement is governed by the laws of a province or territory of Canada, in that province or territory;

(c) if the debtor is a corporation, a limited partnership or an organization and is incorporated, continued, amalgamated or otherwise organized under a law of a province or territory of Canada that requires the incorporation, continuance, amalgamation or organization to be disclosed in a public record, in that province or territory;

(d) if the debtor is a corporation incorporated, continued or amalgamated under a law of Canada that requires the incorporation, continuance or amalgamation to be disclosed in a public record, in the jurisdiction where the registered office or head office of the debtor is located,

(i) as set out in the special Act, letters patent, articles or other constating instrument under which the debtor was incorporated, continued or amalgamated, or

(ii) as set out in the debtor’s by-laws, if subclause (i) does not apply;

(e) if the debtor is a registered organization that is organized under the law of a U.S. State, in that U.S. State;

(f) if the debtor is a registered organization that is organized under the law of the United States of America,

(i) in the U.S. State that the law of the United States of America designates, if the law designates a U.S. State of location,

(ii) in the U.S. State that the registered organization designates, if the law of the United States of America authorizes the registered organization to designate its U.S. State of location, or

(iii) in the District of Columbia in the United States of America, if subclauses (i) and (ii) do not apply;

(g) if the debtor is one or more trustees acting for a trust,

(i) if the trust instrument governing the trust states that the instrument is governed by the laws of a province or territory of Canada, in that province or territory, or

(ii) in the jurisdiction in which the administration of the trust by the trustees is principally carried out, if subclause (i) does not apply;

(h) if none of clauses (a) to (g) apply, in the jurisdiction where the chief executive office of the debtor is located. 2006, c. 34, Sched. E, s. 3 (2).

Definitions

(4)  In subsection (3),

“registered organization” means an organization organized under a law of a U.S. State or of the United States of America that requires the organization of the organization to be disclosed in a public record; (“organisme inscrit”)

“U.S. State” means a State of the United States of America, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States of America. (“État américain”) 2006, c. 34, Sched. E, s. 3 (2).

Continuation of location of debtor

(5)  For the purposes of this section, a debtor continues to be located in the jurisdiction specified in subsection (3) despite,

(a) in the case of a debtor who is an individual, the death or incapacity of the individual; and

(b) in the case of any other debtor, the suspension, revocation, forfeiture or lapse of the debtor’s status in its jurisdiction of incorporation, continuation, amalgamation or organization, or the dissolution, winding-up or cancellation of the debtor. 2006, c. 34, Sched. E, s. 3 (2).

See: 2006, c. 34, Sched. E, ss. 3 (2), 26 (1).

Conflict of laws – validity of security interest in investment property

7.1  (1)  The validity of a security interest in investment property shall be governed by the law, at the time the security interest attaches,

(a) of the jurisdiction where the certificate is located if the collateral is a certificated security;

(b) of the issuer’s jurisdiction if the collateral is an uncertificated security;

(c) of the securities intermediary’s jurisdiction if the collateral is a security entitlement or a securities account;

(d) of the futures intermediary’s jurisdiction if the collateral is a futures contract or a futures account. 2006, c. 8, s. 126.

Same

(2)  Except as otherwise provided in subsection (5), perfection, the effect of perfection or of nonperfection and the priority of a security interest in investment property shall be governed by the law,

(a) of the jurisdiction in which the certificate is located if the collateral is a certificated security;

(b) of the issuer’s jurisdiction if the collateral is an uncertificated security;

(c) of the securities intermediary’s jurisdiction if the collateral is a security entitlement or a securities account;

(d) of the futures intermediary’s jurisdiction if the collateral is a futures contract or a futures account. 2006, c. 8, s. 126; 2006, c. 34, Sched. E, s. 4.

Determination of jurisdiction

(3)  For the purposes of this section,

(a) the location of the debtor is determined by subsection 7 (3);

(b) the issuer’s jurisdiction is determined under section 44 of the Securities Transfer Act, 2006;

(c) the securities intermediary’s jurisdiction is determined under section 45 of the Securities Transfer Act, 2006. 2006, c. 8, s. 126.

Same

(4)  For the purposes of this section, the following rules determine a futures intermediary’s jurisdiction:

1. If an agreement between the futures intermediary and futures customer governing the futures account expressly provides that a particular jurisdiction is the futures intermediary’s jurisdiction for purposes of the law of that jurisdiction, this Act or any provision of this Act, the jurisdiction expressly provided for in the agreement is the futures intermediary’s jurisdiction.

2. If paragraph 1 does not apply and an agreement between the futures intermediary and futures customer governing the futures account expressly provides that the agreement shall be governed by the law of a particular jurisdiction, that jurisdiction is the futures intermediary’s jurisdiction.

3. If neither paragraph 1 nor 2 applies and an agreement between the futures intermediary and futures customer governing the futures account expressly provides that the futures account is maintained at an office in a particular jurisdiction, that jurisdiction is the futures intermediary’s jurisdiction.

4. If none of the preceding paragraphs applies, the futures intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the futures customer’s account is located.

5. If none of the preceding paragraphs applies, the futures intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the futures intermediary is located. 2006, c. 8, s. 126.

Matters governed by law of debtor’s jurisdiction

(5)  The law of the jurisdiction in which the debtor is located governs,

(a) perfection of a security interest in investment property by registration;

(b) perfection of a security interest in investment property granted by a broker or securities intermediary where the secured party relies on attachment of the security interest as perfection; and

(c) perfection of a security interest in a futures contract or futures account granted by a futures intermediary where the secured party relies on attachment of the security interest as perfection. 2006, c. 8, s. 126.

Perfection of security interest

(6)  A security interest perfected pursuant to the law of the jurisdiction designated in subsection (5) remains perfected until the earliest of,

(a) 60 days after the day the debtor relocates to another jurisdiction;

(b) 15 days after the day the secured party knows the debtor has relocated to another jurisdiction; and

(c) the day that perfection ceases under the previously applicable law. 2006, c. 8, s. 126.

Same

(7)  A security interest in investment property which is perfected under the law of the issuer’s jurisdiction, the securities intermediary’s jurisdiction or the futures intermediary’s jurisdiction, as applicable, remains perfected until the earliest of,

(a) 60 days after a change of the applicable jurisdiction to another jurisdiction;

(b) 15 days after the day the secured party knows of the change of the applicable jurisdiction to another jurisdiction; and

(c) the day that perfection ceases under the previously applicable law. 2006, c. 8, s. 126.

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 2006, chapter 34, Schedule E, section 5 by adding the following section:

Transition re s. 7

Definitions

7.2  (1)  In this section,

“prior law” means the Personal Property Security Act, as it reads immediately before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, including the applicable law as determined under that Personal Property Security Act; (“loi antérieure”)

“prior security interest” means a security interest described in subsection 7 (1) that arises under a prior security agreement. (“sûreté antérieure”) 2006, c. 34, Sched. E, s. 5.

Prior security agreement

(2)  For the purposes of this section, a security agreement entered into before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force is a prior security agreement, subject to subsection (3). 2006, c. 34, Sched. E, s. 5.

Same

(3)  If a security agreement described in subsection (2) is amended, renewed or extended by agreement entered into on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, the security agreement as amended, renewed or extended is a prior security agreement, subject to subsection (4). 2006, c. 34, Sched. E, s. 5.

Same

(4)  If the security agreement as amended, renewed or extended includes additional collateral that was not previously described in the agreement, it is not a prior security agreement with respect to the additional collateral. 2006, c. 34, Sched. E, s. 5.

Validity

(5)  For the purpose of ascertaining the location of the debtor in order to determine the law governing the validity of a prior security interest, prior law continues to apply and subsections 7 (3), (4) and (5) do not apply. 2006, c. 34, Sched. E, s. 5.

Perfection

(6)  Subject to subsections (7) and (8), subsections 7 (3), (4) and (5) apply for the purpose of ascertaining the location of the debtor in order to determine the law governing the perfection of a security interest described in subsection 7 (1), whether attachment occurs before, on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force. 2006, c. 34, Sched. E, s. 5.

Same

(7)  A prior security interest that is a perfected security interest under prior law immediately before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force continues perfected until the beginning of the earlier of the following days:

1. The day perfection ceases under prior law.

2. The fifth anniversary of the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force. 2006, c. 34, Sched. E, s. 5.

Same

(8)  If a prior security interest referred to in subsection (7) is perfected in accordance with the applicable law as determined under this Act, on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force but before the earlier of the days referred to in paragraphs 1 and 2 of subsection (7), the security interest shall be deemed to be continuously perfected from the day of its perfection under prior law. 2006, c. 34, Sched. E, s. 5.

Effect of perfection or non-perfection and priority

(9)  Subject to subsections (10), (11) and (12), subsections 7 (3), (4) and (5) apply for the purpose of ascertaining the location of the debtor in order to determine the law governing the effect of perfection or non-perfection, and the priority, of a security interest referred to in subsection 7 (1), whether attachment occurs before, on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force. 2006, c. 34, Sched. E, s. 5.

Same

(10)  For the purpose of ascertaining the location of the debtor in order to determine the law governing the effect of perfection or of non-perfection, and the priority, of a prior security interest in relation to an interest, other than a security interest, in the same collateral arising before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, prior law continues to apply and subsections 7 (3), (4) and (5) do not apply, regardless of whether the prior security interest is perfected, on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, in accordance with the applicable law as determined under this Act. 2006, c. 34, Sched. E, s. 5.

Priority

(11)  For the purpose of ascertaining the location of the debtor in order to determine the law governing the priority of a prior security interest in relation to any other prior security interest in the same collateral, prior law continues to apply and subsections 7 (3), (4) and (5) do not apply, subject to subsection (12). 2006, c. 34, Sched. E, s. 5.

Same

(12)  If a prior security interest is not a perfected security interest under prior law immediately before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force but is subsequently perfected in accordance with the applicable law as determined under this Act, subsections 7 (3), (4) and (5) apply for the purpose of ascertaining the location of the debtor in order to determine the law governing the priority of the prior security interest in relation to any other security interest in the same collateral. 2006, c. 34, Sched. E, s. 5.

See: 2006, c. 34, Sched. E, ss. 5, 26 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 2006, chapter 34, Schedule E, section 6 by adding the following section:

Transition re s. 7.1

Definitions

7.3  (1)  In this section,

“prior law” means the Personal Property Security Act, as it reads immediately before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, including the applicable law as determined under that Personal Property Security Act; (“loi antérieure”)

“prior security interest” means a security interest in investment property that arises under a prior security agreement. (“sûreté antérieure”) 2006, c. 34, Sched. E, s. 6.

Prior security agreement

(2)  For the purposes of this section, a security agreement entered into before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force is a prior security agreement, subject to subsection (3). 2006, c. 34, Sched. E, s. 6.

Same

(3)  If a security agreement described in subsection (2) is amended, renewed or extended by agreement entered into on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, the security agreement as amended, renewed or extended is a prior security agreement. 2006, c. 34, Sched. E, s. 6.

Time of attachment irrelevant

(4)  Subject to subsections (5), (6) and (7) and section 84, section 7.1 applies for the purpose of determining the law governing the validity, the perfection, the effect of perfection or of non-perfection and the priority of all security interests in investment property, whether attachment occurs before, on or after the day section 126 of the Securities Transfer Act, 2006 comes into force. 2006, c. 34, Sched. E, s. 6.

Validity

(5)  For the purpose of determining the law governing the validity of a prior security interest, prior law continues to apply. 2006, c. 34, Sched. E, s. 6.

Perfection

(6)  A prior security interest that was perfected by registration and that is a perfected security interest under prior law immediately before the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force continues perfected until the beginning of the earlier of the following days:

1. The day perfection ceases under prior law.

2. The fifth anniversary of the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force. 2006, c. 34, Sched. E, s. 6.

Same

(7)  If a prior security interest referred to in subsection (6) is perfected in accordance with the applicable law as determined under this Act, on or after the day subsection 3 (2) of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force but before the earlier of the days referred to in paragraphs 1 and 2 of subsection (6), the security interest shall be deemed to be continuously perfected from the day of its perfection under prior law. 2006, c. 34, Sched. E, s. 6.

See: 2006, c. 34, Sched. E, ss. 6, 26 (1).

Procedural and substantive issues

8.  (1)  Despite sections 5 to 7.3,

(a) procedural issues involved in the enforcement of the rights of a secured party against collateral are governed by the law of the jurisdiction in which the enforcement rights are exercised; and

(b) substantive issues involved in the enforcement of the rights of a secured party against collateral are governed by the proper law of the contract between the secured party and the debtor. 2006, c. 8, s. 127; 2006, c. 34, Sched. E, s. 7.

Deemed perfection

(2)  For the purposes of this Part, a security interest shall be deemed to be perfected under the law of a jurisdiction if the secured party has complied with the law of the jurisdiction with respect to the creation and continuance of a security interest that is enforceable against the debtor and third parties. R.S.O. 1990, c. P.10, s. 8 (2).

Interpretation – law of jurisdiction

8.1  For the purposes of sections 5 to 8, a reference to the law of a jurisdiction is a reference to the internal law of that jurisdiction, excluding its conflict of law rules. 2006, c. 8, s. 128.

PART II
VALIDITY OF SECURITY AGREEMENTS AND RIGHTS OF PARTIES

Effectiveness of security agreement

9.  (1)  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. R.S.O. 1990, c. P.10, s. 9 (1).

(2), (3)  Repealed: 2006, c. 34, Sched. E, s. 8.

Delivery of copy of agreement

10.  Where a security agreement is in writing, the secured party shall deliver a copy of the security agreement to the debtor within ten days after the execution thereof, and, if the secured party fails to do so after a request by the debtor, the Superior Court of Justice, on the application of the debtor, may order the delivery of such a copy to the debtor. R.S.O. 1990, c. P.10, s. 10; 2000, c. 26, Sched. B, s. 16 (1).

Attachment required to enforce security interest

11.  (1)  A security interest is not enforceable against a third party unless it has attached. 2006, c. 8, s. 129.

When security interest attaches to collateral

(2)  Subject to section 11.1, a security interest, including a security interest in the nature of a floating charge, attaches to collateral only when value is given, the debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party and,

(a) the debtor has signed a security agreement that contains,

(i) a description of the collateral sufficient to enable it to be identified, or

(ii) a description of collateral that is a security entitlement, securities account or futures account, if it describes the collateral by any of those terms or as investment property or if it describes the underlying financial asset or futures contract;

(b) the collateral is not a certificated security and is in the possession of the secured party or a person on behalf of the secured party other than the debtor or the debtor’s agent pursuant to the debtor’s security agreement;

(c) the collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under section 68 of the Securities Transfer Act, 2006 pursuant to the debtor’s security agreement; or

(d) the collateral is investment property and the secured party has control under subsection 1 (2) pursuant to the debtor’s security agreement. 2006, c. 8, s. 129.

Same

(3)  If the parties have agreed to postpone the time for attachment, the security interest attaches at the agreed time instead of at the time determined under subsection (2). 2006, c. 8, s. 129.

Attachment in securities account

(4)  The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account. 2006, c. 8, s. 129.

Attachment in futures account

(5)  The attachment of a security interest in a futures account is also attachment of a security interest in the futures contracts carried in the futures account. 2006, c. 8, s. 129.

Attachment of security interest to security entitlement

11.1  (1)  A security interest in favour of a securities intermediary attaches to a person’s security entitlement if,

(a) the person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and

(b) the securities intermediary credits the financial asset to the buyer’s securities account before the buyer pays the securities intermediary. 2006, c. 8, s. 129.

Attachment of security interest to security or other financial asset

(2)  A security interest in favour of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if,

(a) the security or other financial asset is,

(i) in the ordinary course of business transferred by delivery with any necessary endorsement or assignment, and

(ii) delivered under an agreement between persons in the business of dealing with such securities or financial assets; and

(b) the agreement calls for delivery against payment. 2006, c. 8, s. 129.

Agreement

(3)  If the parties have agreed to postpone the time for attachment, the security interest attaches at the agreed time instead of at the time determined under subsection (1) or (2). 2006, c. 8, s. 129.

Obligation to pay for financial asset secured

(4)  The security interest described in subsection (1) secures the person’s obligation to pay for the financial asset. 2006, c. 8, s. 129.

Obligation to pay for delivery secured

(5)  The security interest described in subsection (2) secures the obligation to make payment for the delivery. 2006, c. 8, s. 129.

After-acquired property

12.  (1)  A security agreement may cover after-acquired property.

Exception

(2)  No security interest attaches under an after-acquired property clause in a security agreement,

(a) to crops that become such more than one year after the security agreement has been executed, except that a security interest in crops that is given in conjunction with a lease, purchase or mortgage of land may, if so agreed, attach to crops to be grown on the land concerned during the term of such lease, purchase or mortgage; or

(b) to consumer goods, other than accessions, unless the debtor acquires rights in them within ten days after the secured party gives value. R.S.O. 1990, c. P.10, s. 12.

Future advances

13.  A security agreement may secure future advances. R.S.O. 1990, c. P.10, s. 13.

Agreement not to assert defence against assignee

14.  (1)  An agreement by a debtor not to assert against an assignee any claim or defence that the debtor has against the debtor’s 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 a holder in due course of a negotiable instrument under the Bills of Exchange Act (Canada). R.S.O. 1990, c. P.10, s. 14 (1).

Non-application

(2)  Subsection (1) does not apply to an assignment to which section 83 of the Consumer Protection Act, 2002 applies. 2002, c. 30, Sched. E, s. 14 (1).

Seller’s warranties

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

(a) the law relating to the contract of sale governs the sale and any disclaimer, limitation or modification of the seller's conditions and warranties; and

(b) except as provided in section 14, the conditions and warranties in a sale agreement shall not be affected by any security agreement. R.S.O. 1990, c. P.10, s. 15; 2000, c. 26, Sched. B, s. 16 (2).

Acceleration provisions

16.  Where a security agreement provides that the secured party may accelerate payment or performance if the secured party considers that the collateral is in jeopardy or that the secured party is insecure, the agreement shall be construed to mean that the secured party may accelerate payment or performance only if the secured party in good faith believes and has commercially reasonable grounds to believe that the prospect of payment or performance is or is about to be impaired or that the collateral is or is about to be placed in jeopardy. R.S.O. 1990, c. P.10, s. 16.

Care of collateral

17.  (1)  A secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s 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. R.S.O. 1990, c. P.10, s. 17 (1).

Idem, rights and duties of secured party

(2)  Unless otherwise agreed, where collateral is in the secured party’s possession,

(a) reasonable expenses, including the cost of insurance and payment of taxes and other charges incurred in obtaining and maintaining possession of the collateral and in its preservation, 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 obligation secured;

(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. R.S.O. 1990, c. P.10, s. 17 (2).

Liability for loss

(3)  A secured party is liable for any loss or damage caused by the secured party’s failure to meet any obligations imposed by subsection (1) or (2), but does not lose the security interest in the collateral. R.S.O. 1990, c. P.10, s. 17 (3).

Use of collateral

(4)  A secured party may use the collateral,

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

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

(c) pursuant to an order of,

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

(ii) the Superior Court of Justice upon application by the secured party. R.S.O. 1990, c. P.10, s. 17 (4); 2000, c. 26, Sched. B, s. 16 (1).

Idem

(5)  A secured party,

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

(b) is subject to being ordered or restrained as provided in subsection 67 (1). R.S.O. 1990, c. P.10, s. 17 (5).

Rights of secured party with control of investment property as collateral

17.1  (1)  Unless otherwise agreed by the parties and despite section 17, a secured party having control under subsection 1 (2) of investment property as collateral,

(a) may hold as additional security any proceeds received from the collateral;

(b) shall either apply money or funds received from the collateral to reduce the secured obligation or remit such money or funds to the debtor; and

(c) may create a security interest in the collateral. 2006, c. 8, s. 130.

Same

(2)  Despite subsection (1) and section 17, a secured party having control under subsection 1 (2) of investment property as collateral may sell, transfer, use or otherwise deal with the collateral in the manner and to the extent provided in the security agreement. 2006, c. 8, s. 130.

Statements of account

18.  (1)  A person who is a debtor or judgment creditor or who has an interest in the collateral or who is the authorized representative of such a person, by a notice in writing given to the secured party and containing an address for reply, may require the secured party to furnish to the person any one or more of,

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

(b) a statement in writing approving or correcting as of the date specified in the notice a statement of the collateral or a part thereof as specified in a list attached to the notice;

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

(d) a true copy of the security agreement; or

(e) sufficient information as to the location of the security agreement or a true copy thereof so as to enable inspection of the security agreement or copy. R.S.O. 1990, c. P.10, s. 18 (1).

Exception, indenture trustee

(2)  Clauses (1) (a), (b) and (c) do not apply where the secured party is the trustee under a trust indenture. R.S.O. 1990, c. P.10, s. 18 (2).

Inspection of security agreement

(3)  The secured party, on the reasonable request of a person entitled to receive a true copy of the security agreement under clause (1) (d), shall permit the person or the person’s authorized representative to inspect the security agreement or a true copy thereof during normal business hours at the location disclosed under clause (1) (e). R.S.O. 1990, c. P.10, s. 18 (3).

Idem

(4)  If the secured party claims a security interest in all of the collateral or in all of a particular type of collateral owned by the debtor, the secured party may so indicate in lieu of approving or correcting the list of such collateral as required by clause (1) (b). R.S.O. 1990, c. P.10, s. 18 (4).

Time for compliance with notice, liability for failure to answer

(5)  Subject to the payment of any charge required under subsection (7), the secured party shall answer a notice given under subsection (1) within fifteen days after receiving it, and, if without reasonable excuse,

(a) the secured party does not answer within such fifteen-day period, the secured party is liable for any loss or damage caused thereby to any person who is entitled to receive information under this section; or

(b) the answer is incomplete or incorrect, the secured party is liable for any loss or damage caused thereby to any person who reasonably may be expected to rely on the answer. R.S.O. 1990, c. P.10, s. 18 (5).

Successors in interest

(6)  Where the person receiving a notice under subsection (1) no longer has a security interest in the collateral, the person shall, within fifteen days after receiving the notice, disclose the name and address of the latest successor in interest known to the person, and, if without reasonable excuse the person fails to do so or the answer is incomplete or incorrect, the person is liable for any loss or damage caused thereby to any person entitled to receive information under this section. R.S.O. 1990, c. P.10, s. 18 (6).

Charges

(7)  The secured party may require payment in advance of the charge prescribed for each statement or copy of the security agreement required under subsection (1), but the debtor is entitled to a statement without charge once in every six months. R.S.O. 1990, c. P.10, s. 18 (7).

Court order

(8)  On an application to the Superior Court of Justice, the court, by order, may,

(a) exempt, in whole or in part, the secured party from complying with a notice given under subsection (1), or a request under subsection (3), if the person giving the notice, not being the debtor, does not establish to the satisfaction of the court that the person has an interest in the collateral or that the person is a judgment creditor;

(b) extend the time for complying with the notice given under subsection (1);

(c) require the secured party to comply with a notice given under subsection (1) or a request under subsection (3); or

(d) make such other order as it considers just. R.S.O. 1990, c. P.10, s. 18 (8); 2000, c. 26, Sched. B, s. 16 (1).

Liability

(9)  An order made under clause (8) (b) or (c) does not affect the liability of the secured party under subsection (5). R.S.O. 1990, c. P.10, s. 18 (9).

Extended time for compliance

(10)  Despite subsection (9), where the secured party applies to the Superior Court of Justice for an extension of time under clause (8) (b) within fifteen days of receiving a notice under subsection (1) and the court makes an order extending the time for compliance, the secured party shall answer the notice within the time as extended and not within the time as required by subsection (5) and, if without reasonable excuse,

(a) the secured party fails to answer the notice within the time as extended, the secured party is liable for any loss or damage caused thereby to any person entitled to receive information under this section; or

(b) the answer is incomplete or incorrect, the secured party is liable for any loss or damage caused thereby to any person who reasonably may be expected to rely on the answer. R.S.O. 1990, c. P.10, s. 18 (10); 2000, c. 26, Sched. B, s. 16 (1).

PART III
PERFECTION AND PRIORITIES

Perfection

19.  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. R.S.O. 1990, c. P.10, s. 19.

Perfection of security interest

Securities account

19.1  (1)  Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account. 2006, c. 8, s. 131.

Futures account

(2)  Perfection of a security interest in a futures account also perfects a security interest in the futures contracts carried in the futures account. 2006, c. 8, s. 131.

Perfection of security interest on attachment

19.2  (1)  A security interest arising in the delivery of a financial asset under subsection 11.1 (2) is perfected when it attaches. 2006, c. 8, s. 131.

Same

(2)  A security interest in investment property created by a broker or securities intermediary is perfected when it attaches. 2006, c. 8, s. 131.

Same

(3)  A security interest in a futures contract or a futures account created by a futures intermediary is perfected when it attaches. 2006, c. 8, s. 131.

Unperfected security interests

20.  (1)  Except as provided in subsection (3), until perfected, a security interest,

(a) in collateral is subordinate to the interest of,

(i) a person who has a perfected security interest in the same collateral or who has a lien given under any other Act or by a rule of law or who has a priority under any other Act, or

(ii) a person who causes the collateral to be seized through execution, attachment, garnishment, charging order, equitable execution or other legal process, or

(iii) all persons entitled by the Creditors’ Relief Act, 2010 or otherwise to participate in the distribution of the property over which a person described in subclause (ii) has caused seizure of the collateral, or the proceeds of such property;

(b) in collateral is not effective against a person who represents the creditors of the debtor, including an assignee for the benefit of creditors and a trustee in bankruptcy;

(c) in chattel paper, documents of title, instruments or goods is not effective against a transferee thereof who takes under a transaction that does not secure payment or performance of an obligation and who gives value and receives delivery thereof without knowledge of the security interest;

(d) in intangibles other than accounts is not effective against a transferee thereof who takes under a transaction that does not secure payment or performance of an obligation and who gives value without knowledge of the security interest. R.S.O. 1990, c. P.10, s. 20 (1); 2006, c. 8, s. 132; 2010, c. 16, Sched. 4, s. 28.

Idem

(2)  The rights of a person,

(a) who has a statutory lien referred to in subclause (1) (a) (i) arise,

(i) in the case of the bankruptcy of the debtor, at the effective date of the bankruptcy, or

(ii) in any other case, when the lienholder has taken possession or otherwise done everything necessary to make the lien enforceable in accordance with the provisions of the Act creating the lien;

(b) under clause (1) (b) in respect of the collateral are to be determined as of the date from which the person’s representative status takes effect. R.S.O. 1990, c. P.10, s. 20 (2).

Purchase-money security interest

(3)  A purchase-money security interest that is perfected by registration,

(a) in collateral, other than an intangible, before or within 15 days after,

(i) the debtor obtains possession of the collateral, or

(ii) a third party, at the request of the debtor, obtains possession of the collateral,

whichever is earlier; or

(b) in an intangible before or within 15 days after the attachment of the security interest in the intangible,

has priority over,

(c) an interest set out in subclause (1) (a) (ii) and is effective against a person described in clause (1) (b); and

(d) the interest of a transferee of collateral that forms all or part of a sale in bulk within the meaning of the Bulk Sales Act. R.S.O. 1990, c. P.10, s. 20 (3); 2010, c. 16, Sched. 5, s. 4 (2).

Continuity of perfection

21.  (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

(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. R.S.O. 1990, c. P.10, s. 21.

Perfection

By possession or repossession

22.  (1)  Possession or repossession of the collateral by the secured party, or on the secured party’s behalf by a person other than the debtor or the debtor’s agent, perfects a security interest in,

(a) chattel paper;

(b) goods;

(c) instruments;

(d) negotiable documents of title; and

(e) money,

but only while it is actually held as collateral. 2006, c. 8, s. 133.

By delivery

(2)  A secured party may perfect a security interest in a certificated security by taking delivery of the certificated security under section 68 of the Securities Transfer Act, 2006. 2006, c. 8, s. 133.

Same

(3)  A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under section 68 of the Securities Transfer Act, 2006 and remains perfected by delivery until the debtor obtains possession of the security certificate. 2006, c. 8, s. 133.

Perfection by control of collateral

22.1  (1)  A security interest in investment property may be perfected by control of the collateral under subsection 1 (2). 2006, c. 8, s. 134.

Same

(2)  A security interest in investment property is perfected by control under subsection 1 (2) from the time the secured party obtains control and remains perfected by control until,

(a) the secured party does not have control; and

(b) one of the following occurs:

(i) if the collateral is a certificated security, the debtor has or acquires possession of the security certificate,

(ii) if the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner, or

(iii) if the collateral is a security entitlement, the debtor is or becomes the entitlement holder. 2006, c. 8, s. 134.

Perfection by registration

23.  Registration perfects a security interest in any type of collateral. R.S.O. 1990, c. P.10, s. 23.

Temporary perfection

24.  (1)  Repealed: 2006, c. 8, s. 135 (1).

Idem

(2)  A security interest perfected by possession in,

(a) an instrument or a certificated security that a secured party delivers to the debtor for,

(i) ultimate sale or exchange,

(ii) presentation, collection or renewal, or

(iii) registration of transfer; or

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

(i) ultimate sale or exchange,

(ii) loading, unloading, storing, shipping or 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 ten days after the collateral comes under the control of the debtor. R.S.O. 1990, c. P.10, s. 24 (2); 2006, c. 8, s. 135 (2).

Idem

(3)  Beyond the period of ten days referred to in subsection (2), a security interest under this section becomes subject to the provisions of this Act for perfecting a security interest. R.S.O. 1990, c. P.10, s. 24 (3); 2006, c. 8, s. 135 (3).

Perfecting as to proceeds

25.  (1)  Where collateral gives rise to proceeds, the security interest therein,

(a) continues as to the collateral, unless the secured party expressly or impliedly authorized the dealing with the collateral free of the security interest; and

(b) extends to the proceeds. R.S.O. 1990, c. P.10, s. 25 (1); 2000, c. 26, Sched. B, s. 16 (3).

Idem

(2)  Where the security interest was perfected by registration when the proceeds arose, the security interest in the proceeds remains continuously perfected so long as the registration remains effective or, where the security interest is perfected with respect to the proceeds by any other method permitted under this Act, for so long as the conditions of such perfection are satisfied. R.S.O. 1990, c. P.10, s. 25 (2).

Idem

(3)  A security interest in proceeds is a continuously perfected security interest if the interest in the collateral was perfected when the proceeds arose. R.S.O. 1990, c. P.10, s. 25 (3).

Idem

(4)  If a security interest in collateral was perfected otherwise than by registration, the security interest in the proceeds becomes unperfected ten days after the debtor acquires an interest in the proceeds unless the security interest in the proceeds is perfected under this Act. R.S.O. 1990, c. P.10, s. 25 (4).

Motor vehicles classified as consumer goods

(5)  Where a motor vehicle, as defined in the regulations, is proceeds, a person who buys or leases the vehicle as consumer goods in good faith takes it free of any security interest therein that extends to it under clause (1) (b) even though it is perfected under subsection (2) unless the secured party has registered a financing change statement that sets out the vehicle identification number in the designated place. R.S.O. 1990, c. P.10, s. 25 (5).

Perfecting as to goods held by a bailee

26.  (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.

Idem

(2)  A security interest in collateral in the possession of a person, other than the debtor, the debtor’s agent or a bailee mentioned in subsection (1), is perfected by,

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

(b) possession on behalf of the secured party; or

(c) registration. R.S.O. 1990, c. P.10, s. 26.

Goods returned or repossessed

27.  (1)  Where a debtor sells or leases goods that are subject to a security interest, the security interest in the goods reattaches to the goods, if,

(a) the buyer or lessee has taken free of the security interest under clause 25 (1) (a) or subsection 28 (1) or (2);

(b) the goods are returned to or repossessed by the debtor; and

(c) the obligation secured remains unpaid or unperformed.

Idem

(2)  Where a security interest in goods reattaches under subsection (1), then any question as to,

(a) whether or not the security interest in the goods is perfected; and

(b) the time of its perfection or registration,

shall be determined as if the goods had not been sold or leased.

Where sale or lease creates an account or chattel paper

(3)  If a sale or lease of goods creates an account or chattel paper and,

(a) the account or chattel paper is transferred to a secured party; and

(b) the goods are returned to or repossessed by the seller or lessor,

the transferee has a security interest in the goods.

Temporary perfection

(4)  A security interest in goods arising under subsection (3) is perfected if the security interest in the account or chattel paper was also perfected but becomes unperfected on the expiration of ten days after the return or repossession of the goods unless the transferee registers a financing statement in respect of the security interest in, or takes possession of, the goods before the expiry of that period.

Transferee of account

(5)  Where a transferee of an account has a perfected security interest in goods under subsections (3) and (4), for the purpose of determining the transferee’s priority as to the goods, the transferee shall be deemed to have perfected a security interest in the goods at the time the transferee’s security interest in the account was perfected.

Transferee of chattel paper

(6)  Where a transferee of chattel paper has a perfected security interest in goods under subsections (3) and (4),

(a) as between the transferee and the holder of a perfected security interest that attached under subsection (1), the person who had priority as to the chattel paper also has priority as to the goods; and

(b) as between the transferee and a person other than the holder of a perfected security interest that attached under subsection (1), for the purpose of determining the transferee’s priority as to the goods, the transferee shall be deemed to have perfected a security interest in the goods at the time the transferee’s security interest in the chattel paper was perfected. R.S.O. 1990, c. P.10, s. 27.

Transactions in ordinary course of business

Buyers of goods

28.  (1)  A buyer of goods from a seller who sells the goods in the ordinary course of business takes them free from any security interest therein given by the seller even though it is perfected and the buyer knows of it, unless the buyer also knew that the sale constituted a breach of the security agreement. R.S.O. 1990, c. P.10, s. 28 (1).

Same

(1.1)  Subsection (1) applies whether or not,

(a) the buyer took possession of the goods;

(b) the seller was in possession of the goods at any time;

(c) title to the goods passed to the buyer; or

(d) the seller took a security interest in the goods. 2006, c. 34, Sched. E, s. 9.

Same

(1.2)  Despite subsection (1.1), subsection (1) does not apply if the goods were not identified to the contract of sale. 2006, c. 34, Sched. E, s. 9.

Goods identified to contract

(1.3)  For the purposes of subsection (1.2), goods are identified to the contract of sale when they are,

(a) identified and agreed upon by the parties at the time the contract is made; or

(b) marked or designated to the contract,

(i) by the seller, or

(ii) by the buyer, with the seller’s consent or authorization. 2006, c. 34, Sched. E, s. 9.

Lessors of goods

(2)  A lessee of goods from a lessor who leases the goods in the ordinary course of business holds the goods, to the extent of the lessee’s rights under the lease, free from any security interest therein given by the lessor even though it is perfected and the lessee knows of it, unless the lessee also knew that the lease constituted a breach of the security agreement. R.S.O. 1990, c. P.10, s. 28 (2).

Same

(2.1)  Subsection (2) applies whether or not,

(a) the lessee took possession of the goods; or

(b) the lessor was in possession of the goods at any time. 2006, c. 34, Sched. E, s. 9.

Same

(2.2)  Despite subsection (2.1), subsection (2) does not apply if the goods were not identified to the contract of lease. 2006, c. 34, Sched. E, s. 9.

Goods identified to contract

(2.3)  For the purposes of subsection (2.2), goods are identified to the contract of lease when they are,

(a) identified and agreed upon by the parties at the time the contract is made; or

(b) marked or designated to the contract,

(i) by the lessor, or

(ii) by the lessee, with the lessor’s consent or authorization. 2006, c. 34, Sched. E, s. 9.

Purchasers of chattel paper

(3)  A purchaser of chattel paper who takes possession of it in the ordinary course of business and gives new value has priority over any security interest in it,

(a) that was perfected by registration if the purchaser did not know at the time of taking possession that the chattel paper was subject to a security interest; or

(b) that has attached to proceeds of inventory under section 25, whatever the extent of the purchaser’s knowledge. R.S.O. 1990, c. P.10, s. 28 (3); 2000, c. 26, Sched. B, s. 16 (4).

Purchasers of instruments

(4)  A purchaser of collateral that is an instrument or negotiable document of title has priority over any security interest therein perfected by registration or temporarily perfected under section 23 or 24 if the purchaser,

(a) gave value for the interest purchased;

(b) purchased the collateral without knowledge that it was subject to a security interest; and

(c) has taken possession of the collateral. R.S.O. 1990, c. P.10, s. 28 (4).

Motor vehicles, transaction other than in ordinary course

(5)  Where a motor vehicle, as defined in the regulations, is sold other than in the ordinary course of business of the seller and the motor vehicle is classified as equipment of the seller, the buyer takes it free from any security interest therein given by the seller even though it is perfected by registration unless the vehicle identification number of the motor vehicle is set out in the designated place on a registered financing statement or financing change statement or unless the buyer knew that the sale constituted a breach of the security agreement. R.S.O. 1990, c. P.10, s. 28 (5).

Securities

(6)  A purchaser of a security, other than a secured party, who,

(a) gives value;

(b) does not know that the transaction constitutes a breach of a security agreement granting a security interest in the security to a secured party that does not have control of the security; and

(c) obtains control of the security,

acquires the security free from the security interest. 2006, c. 8, s. 136.

Same

(7)  A purchaser referred to in subsection (6) is not required to determine whether a security interest has been granted in the security or whether the transaction constitutes a breach of a security agreement. 2006, c. 8, s. 136.

No action against purchaser for value without notice of breach

(8)  An action based on a security agreement creating a security interest in a financial asset, however framed, may not be brought against a person who acquires a security entitlement under section 95 of the Securities Transfer Act, 2006 for value and did not know that there has been a breach of the security agreement. 2006, c. 8, s. 136.

Same

(9)  A person who acquires a security entitlement under section 95 of the Securities Transfer Act, 2006 is not required to determine whether a security interest has been granted in a financial asset or whether there has been a breach of the security agreement. 2006, c. 8, s. 136.

Same

(10)  If an action based on a security agreement creating a security interest in a financial asset could not be brought against an entitlement holder under subsection (8), it may not be brought against a person who purchases a security entitlement, or an interest in it, from the entitlement holder. 2006, c. 8, s. 136.

Rights of protected purchaser

28.1  (1)  This Act does not limit the rights that a protected purchaser of a security has under the Securities Transfer Act, 2006. 2006, c. 8, s. 137.

Same

(2)  The interest of a protected purchaser of a security under the Securities Transfer Act, 2006 takes priority over an earlier security interest, even if perfected, to the extent provided in that Act. 2006, c. 8, s. 137.

Same

(3)  This Act does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under the Securities Transfer Act, 2006. 2006, c. 8, s. 137.

Negotiable instruments, etc.

29.  The rights of a person who is,

(a) a holder in due course of a bill, note or cheque within the meaning of the Bills of Exchange Act (Canada); or

(b) a transferee from the debtor of money,

are to be determined without regard to this Act. R.S.O. 1990, c. P.10, s. 29.

Priorities

30.  (1)  If no other provision of this Act is applicable, the following priority rules apply to security interests in the same collateral:

1. Where priority is to be determined between security interests perfected by registration, priority shall be determined by the order of registration regardless of the order of perfection.

2. Where priority is to be determined between a security interest perfected by registration and a security interest perfected otherwise than by registration,

i. the security interest perfected by registration has priority over the other security interest if the registration occurred before the perfection of the other security interest, and

ii. the security interest perfected otherwise than by registration has priority over the other security interest, if the security interest perfected otherwise than by registration was perfected before the registration of a financing statement related to the other security interest.

3. Where priority is to be determined between security interests perfected otherwise than by registration, priority shall be determined by the order of perfection.

4. Where priority is to be determined between unperfected security interests, priority shall be determined by the order of attachment.

Idem

(2)  For the purpose 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.

Future advances

(3)  Subject to subsection (4), where future advances are made while a security interest is perfected, the security interest has the same priority with respect to each future advance as it has with respect to the first advance.

Exception

(4)  A future advance under a perfected security interest is subordinate to the rights of persons mentioned in subclauses 20 (1) (a) (ii) and (iii) if the advance was made after the secured party received written notification of the interest of any such person unless,

(a) the secured party makes the advance for the purpose of paying reasonable expenses, including the cost of insurance and payment of taxes or other charges incurred in obtaining and maintaining possession of the collateral and its preservation; or

(b) the secured party is bound to make the advance, whether or not a subsequent event of default or other event not within the secured party’s control has relieved or may relieve the secured party from the obligation.

Proceeds

(5)  For the purpose of subsection (1), the date for registration or perfection as to collateral is also the date for registration or perfection as to proceeds.

Reperfected security interests

(6)  Where a security interest that is perfected by registration becomes unperfected and is again perfected by registration, the security interest shall be deemed to have been continuously perfected from the time of first perfection except that if a person acquired rights in all or part of the collateral during the period when the security interest was unperfected, the registration shall not be effective as against the person who acquired the rights during such period. R.S.O. 1990, c. P.10, s. 30 (1-6).

Same, extended time

(6.1)  Despite subsection (6), where a security interest that is perfected by registration becomes unperfected between February 26, 1996 and April 3, 1996, the security interest shall be deemed to have been continuously perfected from the time of first perfection if the security interest is again perfected by registration by April 12, 1996. 1996, c. 5, s. 2.

Deemed trusts

(7)  A security interest in an account or inventory and its proceeds is subordinate to the interest of a person who is the beneficiary of a deemed trust arising under the Employment Standards Act or under the Pension Benefits Act.

Exception

(8)  Subsection (7) does not apply to a perfected purchase-money security interest in inventory or its proceeds. R.S.O. 1990, c. P.10, s. 30 (7, 8).

Priority rules for security interests in investment property

30.1  (1)  The rules in this section govern priority among conflicting security interests in the same investment property. 2006, c. 8, s. 138.

Secured party with control

(2)  A security interest of a secured party having control of investment property under subsection 1 (2) has priority over a security interest of a secured party that does not have control of the investment property. 2006, c. 8, s. 138.

Certificated security perfected by delivery

(3)  A security interest in a certificated security in registered form which is perfected by taking delivery under subsection 22 (2) and not by control under section 22.1 has priority over a conflicting security interest perfected by a method other than control. 2006, c. 8, s. 138.

Rank by priority in time

(4)  Except as otherwise provided in subsections (5) and (6), conflicting security interests of secured parties each of which has control under subsection 1 (2) rank according to priority in time of,

(a) if the collateral is a security, obtaining control;

(b) if the collateral is a security entitlement carried in a securities account,

(i) the secured party’s becoming the person for which the securities account is maintained, if the secured party obtained control under clause 25 (1) (a) of the Securities Transfer Act, 2006,

(ii) the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account, if the secured party obtained control under clause 25 (1) (b) of the Securities Transfer Act, 2006, or

(iii) if the secured party obtained control through another person under clause 25 (1) (c) of the Securities Transfer Act, 2006, when the other person obtained control; or

(c) if the collateral is a futures contract carried with a futures intermediary, the satisfaction of the requirement for control specified in subclause 1 (2) (d) (ii) with respect to futures contracts carried or to be carried with the futures intermediary. 2006, c. 8, s. 138.

Securities intermediary

(5)  A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party. 2006, c. 8, s. 138.

Futures intermediary

(6)  A security interest held by a futures intermediary in a futures contract or a futures account maintained with the futures intermediary has priority over a conflicting security interest held by another secured party. 2006, c. 8, s. 138.

Interests granted by broker, intermediary

(7)  Conflicting security interests granted by a broker, securities intermediary or futures intermediary which are perfected without control under subsection 1 (2) rank equally. 2006, c. 8, s. 138.

Priority determined under s. 30

(8)  In all other cases, priority among conflicting security interests in investment property shall be governed by section 30. 2006, c. 8, s. 138.

Liens for materials and services

31.  Where a person in the ordinary course of business furnishes materials or services with respect to goods that are subject to a security interest, any lien that the person 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. R.S.O. 1990, c. P.10, s. 31.

Crops

32.  (1)  A perfected security interest in crops or their proceeds, given not more than six months before the crops become growing crops by planting or otherwise, to enable the debtor to produce the crops during the production season, has priority over an earlier perfected security interest in the same collateral to the extent that the earlier interest secures obligations that were due more than six months before the crops become growing crops by planting or otherwise even though the person giving value has notice of the earlier security interest.

Idem

(2)  Where more than one perfected security interest is given priority by subsection (1), each ranks equally according to the ratio that the amount advanced with respect to each bears to the total amount advanced. R.S.O. 1990, c. P.10, s. 32.

Purchase-money security interests

33.  (1)  A purchase-money security interest in inventory or its proceeds has priority over any other security interest in the same collateral given by the same debtor, if,

(a) the purchase-money security interest was perfected at the time,

(i) the debtor obtained possession of the inventory, or

(ii) a third party, at the request of the debtor, obtained or held possession of the inventory,

whichever is earlier;

(b) before the debtor receives possession of the inventory, the purchase-money secured party gives notice in writing to every other secured party who has, before the date of registration by the purchase-money secured party, registered a financing statement that describes the collateral as, or as including,

(i) items or types of inventory, all or some of which are the same as the items or types of inventory that will be subject to the purchase money security interest,

(ii) inventory, or

(iii) accounts; and

(c) the notice referred to in clause (b) states that the person giving it has or expects to acquire a purchase-money security interest in inventory of the debtor, describing such inventory by item or type. R.S.O. 1990, c. P.10, s. 33 (1); 2006, c. 34, Sched. E, s. 10.

Purchase-money security interests other than inventory

(2)  Except where the collateral or its proceeds is inventory or its proceeds, a purchase-money security interest in collateral or its proceeds has priority over any other security interest in the same collateral given by the same debtor if the purchase-money security interest,

(a) in the case of collateral, other than an intangible, was perfected before or within 15 days after,

(i) the debtor obtained possession of the collateral as a debtor, or

(ii) a third party, at the request of the debtor, obtained or held possession of the collateral,

whichever is earlier; or

(b) in the case of an intangible, was perfected before or within 15 days after the attachment of the purchase-money security interest in the intangible. R.S.O. 1990, c. P.10, s. 33 (2); 2010, c. 16, Sched. 5, s. 4 (2).

Extended time

(2.1)  Despite subsections (1) and (2), the time for perfecting a purchase-money security interest by registration and for giving the notices required by subsection (1) is extended until April 13, 1996 if,

(a) the collateral subject to the purchase-money security interest is not an intangible and, between February 16, 1996 and April 3, 1996, the debtor obtained possession of the collateral or a third party, at the request of the debtor, obtained or held possession of the collateral; or

(b) the collateral subject to the purchase-money security interest is an intangible and the purchase-money security interest attached between February 16, 1996 and April 3, 1996. 1996, c. 5, s. 3.

Extended priority

(2.2)  A purchase-money security interest to which subsection (2.1) applies shall be deemed to have the priority given by subsection (1) or (2), as the case may be, if, within the extended time period mentioned in subsection (2.1), the purchase-money security interest is perfected by registration and the notices required by subsection (1) are given. 1996, c. 5, s. 3 (1).

Priority of seller’s purchase-money security interest

(3)  Where more than one purchase-money security interest is given priority by subsections (1) and (2), the purchase-money security interest, if any, of the seller has priority over any other purchase-money security interest given by the same debtor. R.S.O. 1990, c. P.10, s. 33 (3).

Fixtures

34.  (1)  A security interest in goods that attached,

(a) before the goods became a fixture, has priority as to the fixture over the claim of any person who has an interest in the real property; or

(b) after the goods became a fixture, has priority as to the fixture 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 in the goods attached and who has not consented in writing to the security interest or disclaimed an interest in the fixture.

Exceptions

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

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

(b) a creditor with a prior encumbrance of record on the real property to the extent that the creditor makes subsequent advances,

if the subsequent purchase or subsequent advance under a prior encumbrance of record is made or contracted for without knowledge of the security interest and before notice of it is registered in accordance with section 54.

Removal of collateral

(3)  If a secured party has an interest in a fixture that has priority over the claim of a person having an interest in the real property, the secured party may, on default and subject to the provisions of this Act respecting default, remove the fixture from the real property if, unless otherwise agreed, the secured party reimburses any encumbrancer or owner of the real property who is not the debtor for the cost of repairing any physical injury but excluding diminution in the value of the real property caused by the absence of the fixture or by the necessity for replacement.

Security

(4)  A person entitled to reimbursement under subsection (3) may refuse permission to remove the fixture until the secured party has given adequate security for the reimbursement.

Notice

(5)  A secured party who has the right to remove a fixture from real property shall serve, on each person who appears by the records of the proper land registry office to have an interest in the real property, a notice in writing of the secured party’s intention to remove the fixture containing,

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

(b) a description of the fixture to be removed sufficient to enable it to be identified;

(c) the amount required to satisfy the obligation secured by the security interest of the secured party;

(d) a description of the real property to which the fixture is affixed sufficient to enable the real property to be identified; and

(e) a statement of intention to remove the fixture unless the amount secured is paid on or before a specified day that is not less than ten days after service of the notice.

Idem

(6)  The notice mentioned in subsection (5) shall be served in accordance with section 68 or by registered mail addressed to the person to whom notice is to be given at the address furnished under section 168 of the Land Titles Act or section 42 of the Registry Act, or where no such address has been furnished, addressed to the solicitor whose name appears on the registered instrument by which the person appears to have an interest.

Retention of collateral

(7)  A person having an interest in real property that is subordinate to a security interest in a fixture may, before the fixture has been removed from the real property by the secured party in accordance with subsection (3), retain the fixture upon payment to the secured party of the amount owing in respect of the security interest having priority over the person’s interest. R.S.O. 1990, c. P.10, s. 34.

Accessions

35.  (1)  Subject to subsections (2) and (3) of this section and section 37, a security interest in goods that attached,

(a) 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) after the goods became an accession, has priority as to the accession over the claim of any person who subsequently acquired an interest in the whole, but not over the claim of any person who had an interest in the whole at the date the security interest attached to 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. R.S.O. 1990, c. P.10, s. 35 (1).

Exceptions

(2)  A security interest referred to in subsection (1),

(a) is subordinate to the interest of,

(i) a subsequent buyer of an interest in the whole, and

(ii) a creditor with a prior perfected security interest in the whole to the extent that the creditor makes subsequent advances,

if the subsequent sale or subsequent advance under the prior perfected security interest is made or contracted for before the security interest is perfected; and

(b) is subordinate to the interest of a creditor of the debtor who assumes control of the whole through execution, attachment, garnishment, charging order, equitable execution or other legal process, if control is assumed before the security interest is perfected. R.S.O. 1990, c. P.10, s. 35 (2).

Idem

(3)  Despite clause (2) (b), a purchase-money security interest in an accession that is perfected before or within 15 days after the debtor obtains possession of the accession has priority over the interest of a creditor referred to in that clause. R.S.O. 1990, c. P.10, s. 35 (3); 2010, c. 16, Sched. 5, s. 4 (2).

Removal of collateral

(4)  If a secured party has an interest in an accession that has priority over the claim of any person having an interest in the whole, the secured party may, on default and subject to the provisions of this Act respecting default, remove the accession from the whole if, unless otherwise agreed, the secured party 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 accession or by the necessity for replacement. R.S.O. 1990, c. P.10, s. 35 (4).

Security

(5)  A person entitled to reimbursement under subsection (4) may refuse permission to remove the accession until the secured party has given adequate security for the reimbursement. R.S.O. 1990, c. P.10, s. 35 (5).

Notice

(6)  The secured party who has the right to remove an accession from the whole shall serve, on each person known to the secured party as having an interest in the other goods and on any person with a security interest in such other goods perfected by registration against the name of the debtor or against the vehicle identification number of such other goods, if such number is required for registration, a notice in writing of the secured party’s intention to remove the accession containing,

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

(b) a description of the accession to be removed sufficient to enable it to be identified;

(c) the amount required to satisfy the obligations secured by the security interest of the secured party;

(d) a description of the other goods sufficient to enable them to be identified; and

(e) a statement of intention to remove the accession from the whole unless the amount secured is paid on or before a specified day that is not less than ten days after service of the notice. R.S.O. 1990, c. P.10, s. 35 (6).

Idem

(7)  The notice mentioned in subsection (6) shall be served in accordance with section 68 at least ten days before the accession is removed. R.S.O. 1990, c. P.10, s. 35 (7).

Retention of collateral

(8)  A person having an interest in the whole that is subordinate to a security interest in the accession may, before the accession has been removed by the secured party in accordance with subsection (3), retain the accession upon payment to the secured party of the amount owing in respect of the security interest having priority over the person’s interest. R.S.O. 1990, c. P.10, s. 35 (8).

Real property payments

Rents

36.  (1)  A security interest in a right to payment under a lease of real property, to which this Act applies, is subordinate to the interest of a person who acquires for value the lessor’s interest in the lease or in the real property thereby demised if the interest, or notice thereof, of the person is registered in the proper land registry office before the interest, or notice thereof, of the secured party is registered in the proper land registry office.

Mortgages

(2)  A security interest in a right to payment under a mortgage or charge of real property, to which this Act applies, is subordinate to the interest of a person who acquires for value the mortgagee’s or chargee’s interest in the mortgage or charge if the interest of the person is registered in the proper land registry office before a notice of the security interest is registered in the proper land registry office. R.S.O. 1990, c. P.10, s. 36.

Commingled goods

37.  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. R.S.O. 1990, c. P.10, s. 37.

Subordination

38.  A secured party may, in the security agreement or otherwise, subordinate the secured party’s security interest to any other security interest and such subordination is effective according to its terms. R.S.O. 1990, c. P.10, s. 38.

Alienation of rights of a debtor

39.  The rights of a debtor in collateral may be transferred voluntarily or involuntarily despite 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. R.S.O. 1990, c. P.10, s. 39.

Account debtor

40.  (1)  In this section,

“account debtor” means a person obligated on an account or on chattel paper. 2006, c. 34, Sched. E, s. 11 (1).

Defences available against assignee

(1.1)  An account debtor who has not made an enforceable agreement not to assert defences arising out of the contract between the account debtor and the assignor may set up by way of defence against the assignee,

(a) all defences available to the account debtor against the assignor arising out of the terms of the contract or a related contract, including equitable set-off and misrepresentation; and

(b) the right to set off any debt owing to the account debtor by the assignor that was payable to the account debtor before the account debtor received notice of the assignment. 2006, c. 34, Sched. E, s. 11 (1).

Payment by account debtor

(2)  An account debtor may pay the assignor until the account debtor receives notice, reasonably identifying the relevant rights, that the account or chattel paper has been assigned, and, if requested by the account debtor, the assignee shall furnish proof within a reasonable time that the assignment has been made, and, if the assignee does not do so, the account debtor may pay the assignor. 2006, c. 34, Sched. E, s. 11 (2).

Modification, etc., effective against assignee

(3)  To the extent that the right to payment or part payment under an assigned contract has not been earned by performance, and despite notice 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 account debtor has otherwise agreed, but the assignee acquires corresponding rights under the modified or substituted contract. R.S.O. 1990, c. P.10, s. 40 (3); 2006, c. 34, Sched. E, s. 11 (3).

Prohibition or restriction on assignment

(4)  A term in the contract between the account debtor and the assignor that prohibits or restricts the assignment of, or the giving of a security interest in, the whole of the account or chattel paper for money due or to become due or that requires the account debtor’s consent to such assignment or such giving of a security interest,

(a) is binding on the assignor only to the extent of making the assignor liable to the account debtor for breach of their contract; and

(b) is unenforceable against third parties. 2006, c. 34, Sched. E, s. 11 (4).

PART IV
REGISTRATION

Registration system

41.  (1)  A registration system, including a central office, shall be maintained for the purposes of this Act and any other Act that provides for registration in the registration system. 2000, c. 26, Sched. B, s. 16 (5); 2006, c. 34, Sched. E, s. 12 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by striking out “including a central office”. See: 2012, c. 8, Sched. 45, ss. 2 (1), 10.

Central office

(2)  The central office of the registration system shall be located at or near the City of Toronto. R.S.O. 1990, c. P.10, s. 41 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed. See: 2012, c. 8, Sched. 45, ss. 2 (2), 10.

(3)  Repealed: 2006, c. 34, Sched. E, s. 12 (2).

Registrar

42.  (1)  There shall be a registrar of personal property security. R.S.O. 1990, c. P.10, s. 42 (1); 2006, c. 34, Sched. E, s. 13 (1).

Registrar

(2)  The registrar shall be the public servant employed under Part III of the Public Service of Ontario Act, 2006 who is designated as registrar by the Minister of Consumer and Business Services. R.S.O. 1990, c. P.10, s. 42 (2); 2001, c. 9, Sched. D, s. 13; 2006, c. 35, Sched. C, s. 108 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed and the following substituted:

Registrar

(2)  The registrar shall be the person who is designated as registrar by the Minister. 2012, c. 8, Sched. 45, s. 3 (1).

See: 2012, c. 8, Sched. 45, ss. 3 (1), 10.

(3)  Repealed: 2006, c. 34, Sched. E, s. 13 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 42 is amended by adding the following subsection:

Duties of the registrar

(3)  The registrar has general supervision over matters relating to the registration system, and shall perform the duties that are assigned to him or her or by this or any other Act. 2012, c. 8, Sched. 45, s. 3 (1).

See: 2012, c. 8, Sched. 45, ss. 3 (1), 10.

Seal of office

(4)  The registrar shall have a seal of office in such form as the Lieutenant Governor in Council may by order approve. R.S.O. 1990, c. P.10, s. 42 (4).

Protection from personal liability

(5)  No action or other proceeding for damages shall be instituted against the registrar or any person employed in the Ministry of Consumer and Business Services for any act done in good faith in the execution or intended execution of the person’s duty under this Act or the Repair and Storage Liens Act or for any alleged neglect or default in the execution in good faith of the person’s duty thereunder. R.S.O. 1990, c. P.10, s. 42 (5); 2001, c. 9, Sched. D, s. 13.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is amended by striking out “the Ministry of Consumer and Business Services” and substituting “the Ministry”. See: 2012, c. 8, Sched. 45, ss. 3 (2), 10.

Crown liability

(6)  Despite subsections 5 (2) and (4) of the Proceedings Against the Crown Act but subject to subsection 44 (18), subsection (5) does not relieve the Crown of liability in respect of a tort committed by a person mentioned in subsection (5) to which it would otherwise be subject. R.S.O. 1990, c. P.10, s. 42 (6).

Delegation

(7)  The registrar may designate one or more public servants employed under Part III of the Public Service of Ontario Act, 2006 to act on his or her behalf. 2006, c. 35, Sched. C, s. 136 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (7) is repealed and the following substituted:

Delegation

(7)  The registrar may delegate in writing any or all of his or her duties and powers under this Act or the Repair and Storage Liens Act to any person, subject to any restrictions set out in the delegation. 2012, c. 8, Sched. 45, s. 3 (3).

See: 2012, c. 8, Sched. 45, ss. 3 (3), 10.

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by adding the following section:

Powers of registrar

42.1  (1)  The registrar may make orders,

(a) specifying the time during which a document may be tendered for registration with the registration system;

(b) respecting the registration system and searches of it;

(c) specifying the information to be contained in forms, the manner of setting out information, including names, and the persons who shall sign forms;

(d) governing the tendering for registration of financing statements and financing change statements;

(e) governing the time assigned to the registration of financing statements and financing change statements;

(f) specifying abbreviations, expansions or symbols that may be used in a financing statement or financing change statement or in the recording or production of information by the registrar;

(g) specifying a lexicon of French-English terms to be used in connection with required forms and deeming the corresponding forms of expression in the lexicon to have the same effect in law. 2012, c. 8, Sched. 45, s. 4.

Not regulations

(2)  An order made under subsection (1) is not a regulation within the meaning of Part III (Regulations) of the Legislation Act, 2006. 2012, c. 8, Sched. 45, s. 4.

Forms

(3)  The forms to be used for any purpose under this Act shall be those provided or approved by the registrar. 2012, c. 8, Sched. 45, s. 4.

See: 2012, c. 8, Sched. 45, ss. 4, 10.

Certificate of registrar

43.  (1)  Upon the request of any person for a search of the individual debtor name index, business debtor name index or motor vehicle identification number index and upon payment of the required fee, the registrar shall issue a certificate stating,

(a) whether, at the time mentioned in the certificate, there is registered a financing statement or a financing change statement the registration of which is recorded in the central file of the registration system in which the name or number with respect to which the inquiry is made is shown in the designated place on the financing statement or financing change statement as a debtor or as a motor vehicle identification number, as the case may be, and, if there is, the registration number of it and any other recorded information;

(b) whether, at the time mentioned in the certificate, there is entered in the central file of the registration system any information required or permitted to be entered by section 78 in which the name with respect to which the inquiry is made is shown as debtor; and

(c) whether, at the time mentioned in the certificate, there is registered a claim for lien or a change statement under the Repair and Storage Liens Act the registration of which is recorded in the central file of the registration system in which the name or number with respect to which the inquiry is made is shown in the designated place on the claim for lien or change statement as an owner or as a motor vehicle identification number, as the case may be, and, if there is, the registration number of it and any other recorded information. R.S.O. 1990, c. P.10, s. 43 (1); 1998, c. 18, Sched. E, s. 194 (1).

Idem

(2)  A certificate issued under subsection (1) is proof, in the absence of evidence to the contrary, of the contents thereof. R.S.O. 1990, c. P.10, s. 43 (2).

Similar names

(3)  A certificate issued under subsection (1) may include information relating to a registered financing statement or financing change statement recorded in the central file of the registration system which sets out in the designated place a debtor name or vehicle identification number which is similar, in the opinion of the registrar, to the name or number with respect to which the inquiry is made. R.S.O. 1990, c. P.10, s. 43 (3).

Transition

(4)  Despite their repeal, subsections 43 (4) and (5), as they read immediately before the day section 14 of Schedule E to the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 comes into force, continue to apply to financing statements and financing change statements that were registered as documents in the required form before that day. 2006, c. 34, Sched. E, s. 14.

(5)  Repealed: 2006, c. 34, Sched. E, s. 14.

Used vehicle information package

43.1  (1)  The registrar shall issue a used vehicle information package in respect of any used motor vehicle to any person who applies therefor and pays the required fee. 1993, c. 13, s. 2; 1998, c. 18, Sched. E, s. 195.

Definitions

(2)  In this section,

“used motor vehicle” and “used vehicle information package” have the same meaning as in section 11.1 of the Highway Traffic Act.

Abbreviated certificate

(3)  The registrar may issue an abbreviated certificate under section 43 for the purposes of a used vehicle information package and the abbreviated certificate confers all the rights and liabilities that apply in respect of certificates under section 43. 1993, c. 13, s. 2.

Assurance Fund

44.  (1)  The account in the Consolidated Revenue Fund known as “The Personal Property Security Assurance Fund” is hereby continued under the name The Personal Property Security Assurance Fund in English and Caisse d’assurance des sûretés mobilières in French. R.S.O. 1990, c. P.10, s. 44 (1).

Idem

(2)  The prescribed portion of the fees received under this Act shall be paid into the Assurance Fund. R.S.O. 1990, c. P.10, s. 44 (2).

Idem

(3)  Interest shall be credited to the Assurance Fund out of the Consolidated Revenue Fund at a rate to be determined from time to time by the Lieutenant Governor in Council, and such interest shall be made up at the close of each fiscal year upon the balance in the Assurance Fund at the end of the previous calendar year. R.S.O. 1990, c. P.10, s. 44 (3).

Entitlement to payment

(4)  Any person who suffers loss or damage as a result of the person’s reliance upon a certificate of the registrar issued under section 43 that is incorrect because of an error or omission in the operation of the system of registration, recording and production of information under this Part or section 78 or under the Repair and Storage Liens Act is entitled to be paid compensation out of the Assurance Fund so far as the Assurance Fund is sufficient for that purpose, having regard to any claims which have been approved but have not been paid. R.S.O. 1990, c. P.10, s. 44 (4).

Claims

(5)  A person claiming to be entitled to payment of compensation out of the Assurance Fund shall file an application with the registrar, setting out the person’s name and address and particulars of the claim. R.S.O. 1990, c. P.10, s. 44 (5).

Idem

(6)  A claim against the Assurance Fund must be made within one year from the time that the loss or damage giving rise to the claim came to the claimant’s knowledge. R.S.O. 1990, c. P.10, s. 44 (6).

Idem

(7)  For the purposes of this section, where the holders of debt obligations issued, guaranteed or provided for under a security agreement are represented by a trustee or other person and the trustee or other person has relied upon a certificate of the registrar issued under section 43, all of the holders of the debt obligations shall be deemed to have relied on the certificate, and where a claim is made against the Assurance Fund, it shall be made by the trustee or other person on behalf of all the holders of such obligations. R.S.O. 1990, c. P.10, s. 44 (7).

Duty of registrar

(8)  Within 90 days of receiving an application for compensation, the registrar shall determine the claimant’s entitlement to compensation and advise the claimant of the decision. 1998, c. 18, Sched. E, s. 196 (1).

Hearing

(9)  The registrar may hold a hearing to determine the claimant’s entitlement to compensation but shall not determine that the claimant is not entitled to a payment out of the Assurance Fund until after having held a hearing. 1998, c. 18, Sched. E, s. 196 (1).

Claim accepted

(10)  If the registrar decides that the claimant is entitled to a payment out of the Assurance Fund, the registrar shall make an offer of settlement in satisfaction of the claim to the claimant within 30 days of making the decision. 1998, c. 18, Sched. E, s. 196 (1).

Costs

(11)  The offer of settlement may include an award of costs if the registrar considers it appropriate. 1998, c. 18, Sched. E, s. 196 (1).

Confirmation of decision

(12)  A decision under subsection (8) shall be deemed to be confirmed at the expiration of 30 days from the date of mailing of the decision to the claimant, unless the claimant serves a notice of application under subsection (14) on the registrar within that time. 1998, c. 18, Sched. E, s. 196 (1).

Application to court

(13)  If the registrar does not determine the claimant’s entitlement to compensation within 90 days of receiving an application for compensation, the claimant may apply to the Superior Court of Justice and the court may order that the compensation set out in the order be paid to the claimant. 1998, c. 18, Sched. E, s. 196 (1); 2000, c. 26, Sched. B, s. 16 (1).

Same

(14)  A claimant who is dissatisfied with a decision under subsection (8) may apply to the Superior Court of Justice within 30 days of the mailing of the decision to the claimant and the court may order that the decision be set aside and that the compensation set out in the order be paid to the claimant. 1998, c. 18, Sched. E, s. 196 (1); 2000, c. 26, Sched. B, s. 16 (1).

Note: Despite the re-enactment of subsections 44 (8), (9), (10), (11), (12), (13) and (14) by the Statutes of Ontario, 1998, chapter 18, Schedule E, subsection 196 (1), those subsections, as they read immediately before December 18, 1998, continue to apply with respect to decisions or offers of settlement that the registrar has made before December 18, 1998. See: 1998, c. 18, Sched. E, s. 196 (2).

Payment

(15)  When an offer of settlement has been accepted or the time for an application under subsection (13) or (14) has expired or, where an application has been made, it is disposed of and it is finally determined that the claimant is entitled to payment of compensation out of the Assurance Fund, the registrar shall certify to the Treasurer of Ontario the sum found to be payable, including any costs awarded to the claimant, and the Treasurer shall pay the sum to the claimant out of the Assurance Fund. R.S.O. 1990, c. P.10, s. 44 (15).

Subrogation

(16)  Where compensation is paid to a claimant under this section, the registrar is subrogated to the rights of the claimant to the amount so paid 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 claimant was paid, and the registrar may enforce those rights by action in court or otherwise in the name of Her Majesty in right of Ontario. R.S.O. 1990, c. P.10, s. 44 (16).

Action by claimant

(17)  The registrar may require a claimant to exhaust the claimant’s remedies against the collateral, the debtor and any guarantor and, where the registrar does so, the Assurance Fund is liable for the reasonable costs of the claimant, including solicitor and client costs. R.S.O. 1990, c. P.10, s. 44 (17).

Protection from liability

(18)  No action or other proceeding for damages shall be instituted against the Crown with respect to any matter in relation to which a claim against the Assurance Fund has been filed. R.S.O. 1990, c. P.10, s. 44 (18).

Idem

(19)  No claim shall be filed against the Assurance Fund with respect to any matter in relation to which an action or other proceeding for damages has been commenced in any court against the Crown. R.S.O. 1990, c. P.10, s. 44 (19).

Maximum payable from Assurance Fund

(20)  The maximum amount that may be paid out of the Assurance Fund with respect to claims related to any one security agreement shall not exceed $1,000,000 in total. R.S.O. 1990, c. P.10, s. 44 (20).

Idem

(21)  If the total of all claims against the Assurance Fund in respect of a security agreement exceeds $1,000,000, payments to claimants shall be made in accordance with the ratio that the amount of the claimant’s loss bears to the total amount of the losses of all claimants. R.S.O. 1990, c. P.10, s. 44 (21).

Registration of financing statement

45.  (1)  In order to perfect a security interest by registration under this Act, a financing statement shall be registered. R.S.O. 1990, c. P.10, s. 45 (1).

Consumer goods

(2)  Where the collateral is consumer goods, the financing statement referred to in subsection (1) shall not be registered before the security agreement is signed by the debtor and, where a financing statement is registered in contravention of this subsection, the registration of the financing statement does not constitute registration or perfection under this Act. R.S.O. 1990, c. P.10, s. 45 (2).

Collateral other than consumer goods

(3)  Where the collateral is not consumer goods, the financing statement referred to in subsection (1) may be registered before or after the security agreement is signed by the debtor. R.S.O. 1990, c. P.10, s. 45 (3).

Subsequent security agreements

(4)  Except where the collateral is consumer goods, one financing statement may perfect one or more security interests created or provided for in one or more security agreements between the parties, whether or not,

(a) the security interests or security agreements are part of the same transaction or related transactions; or

(b) the security agreements are signed by the debtor before the financing statement is registered. 2000, c. 26, Sched. B, s. 16 (6).

Registration requirements

46.  (1)  A financing statement or financing change statement that is to be registered shall contain the required information presented in a required format. 2006, c. 34, Sched. E, s. 15 (1).

Electronic transmission

(2)  A financing statement or financing change statement in a required format may be tendered for registration by direct electronic transmission to the registration system’s database. 2006, c. 34, Sched. E, s. 15 (1).

Classification of collateral

(2.1)  Except with respect to rights to proceeds, where a financing statement or financing change statement sets out a classification of collateral and also contains words that appear to limit the scope of the classification, then, unless otherwise indicated in the financing statement or financing change statement, the secured party may claim a security interest perfected by registration only in the class as limited. 2010, c. 16, Sched. 5, s. 4 (3).

(2.2), (2.3)  Repealed: 2006, c. 34, Sched. E, s. 15 (1).

Authorized person

(3)  A financing statement or financing change statement in a required format may be tendered for registration by direct electronic transmission only by a person who is, or is a member of a class of persons that is, authorized by the registrar to do so. 2006, c. 34, Sched. E, s. 15 (1).

Errors, etc.

(4)  A financing statement or financing change statement is not invalidated nor is its effect impaired by reason only of an error or omission therein or in its execution or registration unless a reasonable person is likely to be misled materially by the error or omission. R.S.O. 1990, c. P.10, s. 46 (4).

Effect of registration

(5)  Registration of a financing statement or financing change statement,

(a) does not constitute constructive notice or knowledge to or by third parties of the existence of the financing statement or financing change statement or of the contents thereof; and

(b) does not create a presumption that this Act applies to the transaction to which the registration relates. R.S.O. 1990, c. P.10, s. 46 (5).

Copy to debtor

(6)  Within 30 days after the date of registration of a financing statement or financing change statement, the secured party shall deliver a copy of a verification statement to the debtor. 2006, c. 34, Sched. E, s. 15 (2).

Penalty

(7)  Where the secured party without reasonable excuse fails to deliver a copy required under subsection (6), the secured party shall pay $500 to the debtor which sum is recoverable in the Small Claims Court. R.S.O. 1990, c. P.10, s. 46 (7).

Assignment of security interest

47.  (1)  A financing change statement may be registered where a security interest is perfected by registration and the secured party has assigned the secured party’s interest in all or part of the collateral.

Idem

(2)  Where a security interest has not been perfected by registration and the secured party has assigned the secured party’s interest, a financing statement referred to in section 46 may be registered,

(a) naming the assignor as the secured party and subsection (1) applies; or

(b) naming the assignee as the secured party and subsection (1) does not apply.

Idem

(3)  Upon the registration of the financing change statement under subsection (1) or the financing statement under subsection (2), the assignee becomes a secured party of record. R.S.O. 1990, c. P.10, s. 47.

Transfer of collateral

48.  (1)  Where a security interest is perfected by registration and the debtor, with the prior consent of the secured party, transfers the debtor’s interest in all or part of the collateral, the security interest in the collateral transferred becomes unperfected fifteen days after the transfer is made unless the secured party registers a financing change statement within such fifteen days.

Idem

(2)  Where a security interest is perfected by registration and the debtor, without the prior consent of the secured party, transfers the debtor’s interest in all or part of the collateral, the security interest in the collateral transferred becomes unperfected thirty days after the later of,

(a) the transfer, if the secured party had prior knowledge of the transfer and if the secured party had, at the time of the transfer, the information required to register a financing change statement; and

(b) the day the secured party learns the information required to register a financing change statement,

unless the secured party registers a financing change statement or takes possession of the collateral within such thirty days.

Change of debtor name

(3)  Where a security interest is perfected by registration and the secured party learns that the name of the debtor has changed, the security interest in the collateral becomes unperfected thirty days after the secured party learns of the change of name and the new name of the debtor unless the secured party registers a financing change statement or takes possession of the collateral within such thirty days.

Transferee in possession

(4)  Where the debtor’s interest in all or part of the collateral is transferred by the debtor without the consent of the secured party and there is one or more subsequent transfers of the collateral without the consent of the secured party before the secured party learns of the name of the transferee who has possession of the collateral, the secured party shall be deemed to have complied with subsection (2) if the secured party registers a financing change statement within thirty days of learning of the name of the transferee who has possession of the collateral and the information required to register a financing change statement and the secured party need not register financing change statements with respect to any intermediate transferee.

Financing change statement

(5)  A security interest that becomes unperfected under subsection (1), (2) or (3) may be perfected again by registering a financing change statement at any time during the remainder of the unexpired registration period of the financing statement or any renewal thereof.

Notification by Registrar General

(6)  Where the Registrar General notifies the registrar that a debtor has changed his or her name and provides the registrar with particulars of a registration under this Act in which the debtor’s former name appears as debtor, the registrar shall amend the debtor’s name as shown in the central file of the registration system related to the registration.

Note: On a day to be named by proclamation of the Lieutenant Governor, the French version of subsection (6) is re-enacted. See: 2012, c. 8, Sched. 45, ss. 5, 10.

Idem

(7)  Subsection (3) does not apply if the registrar, under subsection (6), amends the central file of the registration system,

(a) before the secured party learns of the new name of the debtor; or

(b) within thirty days of the day the secured party learns of the new name of the debtor.

Idem

(8)  If the registrar, under subsection (6), amends the central file of the registration system more than thirty days after the day the secured party learns of the new name of the debtor, the registrar’s amendment shall be deemed to be a financing change statement registered by the secured party at the time the amendment was made. R.S.O. 1990, c. P.10, s. 48.

Amendments

49.  A financing change statement may be registered at any time during the registration period of a financing statement,

(a) to correct an error or omission in the registered financing statement or any financing change statement related thereto; or

(b) to amend the registered financing statement or any financing change statement related thereto where the amendment is not otherwise provided for in this Part. R.S.O. 1990, c. P.10, s. 49.

Subordination of security interest

50.  Where a security interest is perfected by registration and the interest of the secured party has been subordinated by the secured party to any other security interest in the collateral, a financing change statement may be registered at any time during the period that the registration of the subordinated interest is effective. R.S.O. 1990, c. P.10, s. 50.

Registration period

51.  (1)  A financing statement may be registered for a perpetual period or for such period of years as is set out in the financing statement. R.S.O. 1990, c. P.10, s. 51 (1).

Change of registration period

(2)  The registration period of a financing statement may be reduced by the registration of a financing change statement under section 49 or extended by the registration of a financing change statement under subsection 52 (1). R.S.O. 1990, c. P.10, s. 51 (2).

Duration of registration period

(3)  The registration period for a financing statement begins with the time assigned to its registration by the registrar or branch registrar and ends on the earlier of,

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is amended by striking out “or branch registrar” in the portion before clause (a). See: 2012, c. 8, Sched. 45, ss. 6, 10.

(a) the time the registration is discharged; or

(b) at the end of the registration period as set out in the financing statement or as changed by subsequent financing change statements. R.S.O. 1990, c. P.10, s. 51 (3).

Effective period

(4)  A financing statement is effective only during its registration period. R.S.O. 1990, c. P.10, s. 51 (4).

Consumer goods

(5)  Despite subsection (1), if the collateral described in a financing statement is or includes consumer goods, the financing statement shall be deemed to have a registration period of five years, unless a shorter registration period is indicated on the financing statement or unless the registration period is extended by the registration of a financing change statement under subsection 52 (1). 2006, c. 34, Sched. E, s. 16.

Idem

(6)  Every financing change statement extending the registration period of a financing statement described in subsection (5) shall be deemed to extend the registration period for a five year period that begins at the time of its registration unless a shorter extension is indicated on the financing change statement. R.S.O. 1990, c. P.10, s. 51 (6).

Renewal of registration

52.  (1)  Where a security interest has been perfected by registration, the registration may be extended before the registration ceases to be effective by the registration of a financing change statement.

Reperfection

(2)  Where a security interest has been perfected by registration and the registration has ceased to be effective, the security interest may be perfected again by the registration of a financing statement. R.S.O. 1990, c. P.10, s. 52.

Financing change statement

53.  The registration of a financing change statement is effective from the time assigned to its registration by the registrar and is effective so long as the registration of the financing statement to which it relates is effective. R.S.O. 1990, c. P.10, s. 53; 2006, c. 34, Sched. E, s. 17.

Notice in land registry office

54.  (1)  A notice of security interest, in the required form, may be registered in the proper land registry office, where,

(a) the collateral is or includes fixtures or goods that may become fixtures or crops, or minerals or hydrocarbons to be extracted, or timber to be cut; or

(b) the security interest is a security interest in a right to payment under a lease, mortgage or charge of real property to which this Act applies. R.S.O. 1990, c. P.10, s. 54 (1); 1998, c. 18, Sched. E, s. 198 (1).

Consumer goods, registration period

(2)  Where the collateral is consumer goods, a notice registered under clause (1) (a) or an extension notice registered under subsection (3), as the case may be, shall set out an expiration date, which date shall not be later than the fifth anniversary of the date of registration and the notice or extension notice is effective until the end of the expiration date.

Idem

(3)  A registration to which subsection (2) applies may be extended before the end of the registration period by the registration of an extension notice. R.S.O. 1990, c. P.10, s. 54 (2, 3).

Discharge

(4)  A notice registered under subsection (1) may be discharged or partially discharged by a certificate in the required form and the certificate may be registered in the proper land registry office. R.S.O. 1990, c. P.10, s. 54 (4); 1998, c. 18, Sched. E, s. 198 (2).

Effect of registration

(5)  Where a notice has been registered under subsection (1), every person dealing with the collateral shall be deemed for the purposes of subsection 34 (2) to have knowledge of the security interest.

Loss of claim

(6)  Where the collateral is consumer goods and the expiration date set out in a notice registered under clause (1) (a) has passed and an extension notice has not been registered or has expired, the land described in the notice is not affected by any claim under the notice but this subsection does not prevent the registration of a new notice under clause (1) (a). R.S.O. 1990, c. P.10, s. 54 (5, 6).

Discharge or partial discharge of registration

55.  A registration may be discharged or partially discharged by the registration of a financing change statement discharging or partially discharging the registration. R.S.O. 1990, c. P.10, s. 55.

Discharge or amendment

Discharge where security interest existed

56.  (1)  Where a financing statement or notice of security interest is registered under this Act, and,

(a) all the obligations under a security agreement to which it relates have been performed; or

(b) it is agreed to release part of the collateral covered by a security agreement to which it relates upon payment or performance of certain of the obligations under the security agreement, then upon payment or performance of such obligations,

any person having an interest in the collateral covered by the security agreement may deliver a written notice to the secured party demanding registration of a financing change statement referred to in section 55 or a certificate of discharge or partial discharge referred to in subsection 54 (4), or both, and the secured party shall register the financing change statement or the certificate of discharge or partial discharge, or both, as the case may be. R.S.O. 1990, c. P.10, s. 56 (1); 2006, c. 34, Sched. E, s. 18 (1).

Discharge where no security interest acquired

(2)  Where a financing statement or notice of security interest is registered under this Act and the person named in the financing statement or notice as the secured party has not acquired a security interest in the property to which the financing statement or notice relates, any person having an interest in the property may deliver a written notice to the person named as the secured party demanding registration of a financing change statement referred to in section 55 or a certificate of discharge referred to in subsection 54 (4), or both, and the person named as the secured party shall register the financing change statement or the certificate of discharge, or both, as the case may be. R.S.O. 1990, c. P.10, s. 56 (2); 2006, c. 34, Sched. E, s. 18 (2).

Amendment

(2.1)  If a financing statement is registered under this Act and the collateral description or collateral classification in the financing statement includes personal property that is not collateral under the security agreement, the person named in the financing statement as the debtor may deliver a written notice to the person named as the secured party demanding registration of a financing change statement referred to in section 49 to provide an accurate collateral description, and the person named as the secured party shall register the financing change statement. 2006, c. 34, Sched. E, s. 18 (3).

Removal of collateral classifications

(2.2)  If a financing statement is registered under this Act and the person named in the financing statement as the secured party has not acquired a security interest in any property within one or more of the collateral classifications indicated on the financing statement, the person named in the financing statement as the debtor may deliver a written notice to the person named as the secured party demanding registration of a financing change statement referred to in section 49 to correct the collateral classifications by removing any collateral classification in which the person named as the secured party has not acquired a security interest, and the person named as the secured party shall register the financing change statement. 2010, c. 16, Sched. 5, s. 4 (4).

Limiting collateral classification

(2.3)  If a financing statement is registered under this Act and the person named in the financing statement as the secured party has not included words limiting the scope of the collateral classification within the meaning of subsection 46 (2.1) and has acquired a security interest only in particular property within the classification, the person named in the financing statement as the debtor may deliver a written notice to the person named as the secured party demanding registration of a financing change statement referred to in section 49 to add words limiting the scope of the collateral classification, and the person named as the secured party shall register the financing change statement. 2010, c. 16, Sched. 5, s. 4 (4).

(2.4)  Repealed: 2006, c. 34, Sched. E, s. 18 (3).

Definition

(3)  For the purposes of subsections (4) and (5),

“secured party” includes a person named in a financing statement or notice of security interest as the secured party to whom subsection (2) applies. R.S.O. 1990, c. P.10, s. 56 (3).

Failure to deliver

(4)  Where the secured party, without reasonable excuse, fails to register the financing change statement, or certificate of discharge or partial discharge, or all of them, as the case may be, required under subsection (1), (2), (2.1), (2.2) or (2.3) within 10 days after receiving a demand for it, the secured party shall pay $500 to the person making the demand and any damages resulting from the failure; the sum and damages are recoverable in any court of competent jurisdiction. 2006, c. 34, Sched. E, s. 18 (4); 2010, c. 16, Sched. 5, s. 4 (5).

Security or payment into court

(5)  Upon application to the Superior Court of Justice, the court may,

(a) allow security for or payment into court of the amount claimed by the secured party and such costs as the court may fix, and thereupon order the secured party to discharge or partially discharge, as the case may be, the registration of the financing statement or notice of security interest; or

(b) order upon any ground that the court considers proper that,

(i) the registrar amend the information recorded in the central file of the registration system to indicate that the registration of the financing statement has been discharged or partially discharged, as the case may be, or

(ii) the land registrar delete any entry in the books of the land registry office related to the notice of security interest or that the land registrar amend the books of the land registry office to indicate that the security interest has been discharged or partially discharged, as the case may be. R.S.O. 1990, c. P.10, s. 56 (5); 2000, c. 26, Sched. B, s. 16 (1).

Successors in interest

(6)  Where the person receiving a notice under clause (1) (a) did not have a security interest in the collateral immediately before all the obligations under the security agreement to which it relates were performed, the person shall, within fifteen days after receiving the notice, disclose the name and address of the latest successor in interest known to the person, and, if without reasonable excuse, the person fails to do so or the answer is incomplete or incorrect, the person shall pay  $500 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. R.S.O. 1990, c. P.10, s. 56 (6).

No outstanding secured obligation

(7)  Where there is no outstanding secured obligation, and the secured party is not committed to make advances, incur obligations or otherwise give value, a secured party having control of investment property under clause 25 (1) (b) of the Securities Transfer Act, 2006 or subclause 1 (2) (d) (ii) of this Act shall, within 10 days after receipt of a written demand by the debtor, send to the securities intermediary or futures intermediary with which the security entitlement or futures contract is maintained a written record that releases the securities intermediary or futures intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party. 2006, c. 8, s. 139.

Consumer goods, duty of secured party to register or provide discharge

57.  (1)  Within thirty days after all the obligations under a security agreement that creates a security interest in consumer goods have been performed or forgiven, the secured party shall register,

(a) a financing change statement discharging the registration if the security interest has been perfected by registration; and

(b) a certificate of discharge, if a notice of security interest has been registered under section 54. R.S.O. 1990, c. P.10, s. 57 (1).

Extended time

(1.1)  If the 30-day period for registering a financing change statement mentioned in clause (1) (a) expires between February 26, 1996 and April 3, 1996, the period shall be extended until April 12, 1996. 1996, c. 5, s. 4.

Failure to register

(2)  Where a secured party fails to comply with subsection (1), the secured party shall, on written notice from the debtor, pay the debtor $500 and any damages resulting from the failure, which sum and damages are recoverable in any court of competent jurisdiction.

Rights not affected

(3)  Subsections (1) and (2) do not affect any rights under section 56 of the debtor or of any other person having an interest in the collateral. R.S.O. 1990, c. P.10, s. 57 (2, 3).

PART V
DEFAULT — RIGHTS AND REMEDIES

Application

57.1  Unless otherwise provided in this Part, this Part applies to a security interest only if it secures payment or performance of an obligation. 2006, c. 34, Sched. E, s. 19.

Rights and remedies cumulative

58.  The rights and remedies mentioned in this Part are cumulative. R.S.O. 1990, c. P.10, s. 58.

Rights and remedies of secured party

59.  (1)  Where the debtor is in default under a security agreement, the secured party has the rights and remedies provided in the security agreement and the rights and remedies provided in this Part and, when in possession or control of the collateral, the rights, remedies and duties provided in section 17 or 17.1, as the case may be. 2006, c. 8, s. 140 (1).

Enforcement by secured party

(2)  The secured party may enforce a security interest by any method 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 permitted with respect to the documents of title is also permitted, with necessary modifications, with respect to the goods covered thereby. R.S.O. 1990, c. P.10, s. 59 (2).

Rights and remedies of debtor

(3)  Where the debtor is in default under a security agreement, the debtor has the rights and remedies provided in the security agreement and the rights and remedies provided in this Part and in section 17. R.S.O. 1990, c. P.10, s. 59 (3).

Determination of standards

(4)  Subject to subsection (5), a security agreement may set out 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 the rights and duties. R.S.O. 1990, c. P.10, s. 59 (4).

Non-waiver of rights and duties

(5)  Despite subsection (1), the provisions of sections 17, 17.1 and 63 to 66, to the extent that they give rights to the debtor and impose duties upon the secured party, shall not be waived or varied except as provided by this Act. R.S.O. 1990, c. P.10, s. 59 (5); 2006, c. 8, s. 140 (2).

Where agreement covers both real and personal property

(6)  Where a security agreement covers both real and personal property, the secured party may proceed under this Part as to the personal property or may proceed as to both the real and the personal property in accordance with the secured party’s rights, remedies and duties in respect of the real property, with all necessary modifications, as if the personal property were real property, in which case this Part does not apply. R.S.O. 1990, c. P.10, s. 59 (6).

No merger in judgment

(7)  A security agreement does not merge merely because the claim has been reduced to judgment by the secured party or because the secured party has levied execution thereunder on the collateral. R.S.O. 1990, c. P.10, s. 59 (7).

Receiver, receiver and manager

60.  (1)  Nothing in this Act prevents,

(a) the parties to a security agreement from agreeing that the secured party may appoint a receiver or receiver and manager and, except as provided by this Act, determining the rights and duties of the receiver or receiver and manager by agreement; or

(b) a court of competent jurisdiction from appointing a receiver or receiver and manager and determining rights and duties of the receiver or receiver and manager by order. R.S.O. 1990, c. P.10, s. 60 (1).

Idem

(2)  Upon application of the secured party, the debtor or any other person with an interest in the collateral, and after notice to any other person that the court directs, the Superior Court of Justice, with respect to a receiver or receiver and manager however appointed, may,

(a) remove, replace or discharge the receiver or receiver and manager;

(b) give directions on any matter relating to the duties of the receiver or receiver and manager;

(c) approve the accounts and fix the remuneration of the receiver or receiver and manager;

(d) make any order with respect to the receiver or receiver and manager that it thinks fit in the exercise of its general jurisdiction over a receiver or receiver and manager. R.S.O. 1990, c. P.10, s. 60 (2); 2000, c. 26, Sched. B, s. 16 (1).

Collection rights of secured party

61.  (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 an account or on chattel paper or any obligor on an instrument to make payment to the secured party whether or not the assignor was theretofore making collections on the collateral; and

(b) to take control of any proceeds to which the secured party is entitled under section 25.

Idem

(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 a person obligated on an account or on chattel paper or an obligor on an instrument shall proceed in a commercially reasonable manner and the secured party may deduct the reasonable expenses of realization from the collections. R.S.O. 1990, c. P.10, s. 61.

Possession upon default

62.  (1)  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 such equipment unusable without removal thereof from the debtor’s premises, and the secured party shall thereupon be deemed to have taken possession of such equipment; and

(c) the secured party may dispose of collateral on the debtor’s premises in accordance with section 63. R.S.O. 1990, c. P.10, s. 62.

Exempt collateral

(2)  If any of the collateral in which the secured party has a security interest under the security agreement, other than a purchase-money security interest or a possessory security interest, is property that would be exempt under the Execution Act from seizure under a writ issued out of a court, that property is exempt from the rights of the secured party under subsection (1). 2006, c. 34, Sched. E, s. 20.

Disposal of collateral

63.  (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 the secured party, including the cost of insurance and payment of taxes and other charges incurred in retaking, holding, repairing, processing and preparing for disposition and disposing of the collateral and, to the extent provided for in the security agreement, any other reasonable expenses incurred by the secured party; and

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

and the surplus, if any, shall be dealt with in accordance with section 64. R.S.O. 1990, c. P.10, s. 63 (1).

Methods of disposition

(2)  Collateral may be disposed of in whole or in part, and any such disposition may be by public sale, private sale, lease or otherwise and, subject to subsection (4), may be made at any time and place and on any terms so long as every aspect of the disposition is commercially reasonable. R.S.O. 1990, c. P.10, s. 63 (2).

Secured party’s right to delay disposition of collateral

(3)  Subject to subsection 65 (1), the secured party may delay disposition of all or part of the collateral for such period of time as is commercially reasonable. R.S.O. 1990, c. P.10, s. 63 (3).

Notice required

(4)  Subject to subsection (6), the secured party shall give not less than fifteen days notice in writing of the matters described in subsection (5) to,

(a) the debtor who owes payment or performance of the obligation secured;

(b) every person who is known by the secured party, before the date that the notice is served on the debtor, to be an owner of the collateral or an obligor who may owe payment or performance of the obligation secured, including any person who is contingently liable as a guarantor or otherwise of the obligation secured;

(c) every person who has a security interest in the collateral and whose interest,

(i) was perfected by possession, the continuance of which was prevented by the secured party who has taken possession of the collateral, or

(ii) is perfected by registration before the date the notice is served on the debtor;

(d) every person with an interest in the collateral who has delivered a written notice to the secured party of the interest in the collateral before the date that the notice is served on the debtor. R.S.O. 1990, c. P.10, s. 63 (4); 2000, c. 26, Sched. B, s. 16 (9).

Idem

(5)  The notice mentioned in subsection (4) shall set out,

(a) a brief description of the collateral;

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

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

(d) a statement that upon receipt of payment the payor will be credited with any rebates or allowances to which the debtor is entitled by law or under the agreement;

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

(f) a statement that unless the amounts due are paid the collateral will be disposed of and the debtor may be liable for any deficiency; and

(g) the date, time and place of any public sale or the date after which any private disposition of the collateral is to be made. R.S.O. 1990, c. P.10, s. 63 (5).

Date of giving notice

(6)  If the notice to the debtor under clause (4) (a) is mailed, sent by courier or by any other transmission provided for in section 68, then the relevant date for the purpose of clause (4) (b), subclause (4) (c) (ii) and clause (4) (d) shall be the date of mailing, the date that the notice was sent by courier or the date of transmission, as the case may be, and not the date of the service. 2000, c. 26, Sched. B, s. 16 (10).

Notice not required

(7)  The notice mentioned in subsection (4) is not required where,

(a) the collateral is perishable;

(b) the secured party believes on reasonable grounds that the collateral will decline speedily in value;

(c) the collateral is of a type customarily sold on a recognized market;

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

(e) for any reason not otherwise provided for in this subsection, the Superior Court of Justice, on an application made without notice to any other person, is satisfied that a notice is not required;

(f) after default, every person entitled to receive a notice of disposition under subsection (4) consents in writing to the immediate disposition of the collateral; or

(g) a receiver and manager disposes of collateral in the course of the debtor’s business. R.S.O. 1990, c. P.10, s. 63 (7); 2000, c. 26, Sched. B, s. 16 (1).

Secured party’s right to purchase collateral

(8)  The secured party may buy the collateral or any part thereof only at a public sale unless the Superior Court of Justice, on application, orders otherwise. R.S.O. 1990, c. P.10, s. 63 (8); 2000, c. 26, Sched. B, s. 16 (1).

Effect of disposition of collateral

(9)  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 buyer who buys in good faith for value, discharges also any subordinate security interest and terminates the debtor’s interest in the collateral. R.S.O. 1990, c. P.10, s. 63 (9).

Idem

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

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

(b) in any other case, if the buyer 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 buyer for value, discharges also any subordinate security interest and terminates the debtor’s interest in the collateral. R.S.O. 1990, c. P.10, s. 63 (10).

Certain transfers of collateral

(11)  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 the secured party’s rights has thereafter the rights and duties of the secured party, and such a transfer of collateral is not a disposition of the collateral. R.S.O. 1990, c. P.10, s. 63 (11).

Distribution of surplus

64.  (1)  Where the secured party has dealt with the collateral under section 61 or has disposed of it, the secured party shall account for and, subject to subsection (4), pay over any surplus consecutively to,

(a) any person who has a security interest in the collateral that is subordinate to that of the secured party and whose interest,

(i) was perfected by possession, the continuance of which was prevented by the secured party who took possession of the collateral, or

(ii) was, immediately before the dealing or disposition, perfected by registration;

(b) any other person with an interest in the surplus who has delivered a written notice to the secured party of the interest before the distribution of the proceeds; and

(c) the debtor or any other person who is known by the secured party to be an owner of the collateral,

but the priority of the claim of any person referred to in clauses (a), (b) and (c) against the recipient of the surplus shall not be prejudiced thereby. R.S.O. 1990, c. P.10, s. 64 (1).

Proof of interest

(2)  The secured party may require any person mentioned in subsection (1) to furnish proof of that person’s interest, and, unless the proof is furnished within ten days after demand by the secured party, the secured party need not pay over any portion of the surplus to the person. R.S.O. 1990, c. P.10, s. 64 (2).

Deficiency

(3)  Unless otherwise agreed in the security agreement, or unless otherwise provided under this or any other Act, the debtor is liable for any deficiency. R.S.O. 1990, c. P.10, s. 64 (3).

Payment into court

(4)  Where there is a question as to who is entitled to receive payment under subsection (1), the secured party may pay the surplus into the Superior Court of Justice and the surplus shall not be paid out except upon an application under section 67 by a person claiming an entitlement thereto. R.S.O. 1990, c. P.10, s. 64 (4); 2000, c. 26, Sched. B, s. 16 (1).

Compulsory disposition of consumer goods

65.  (1)  Where a security agreement secures an indebtedness and the collateral is consumer goods and the debtor has paid at least 60 per cent of the indebtedness secured and has not signed, after default, a statement renouncing or modifying the debtor’s rights under this subsection, the secured party who has taken possession of the collateral shall, within ninety days after taking possession, dispose of or contract to dispose of the collateral under section 63, and, if the secured party fails to do so, the debtor may proceed under section 67 or in an action for damages or loss sustained. R.S.O. 1990, c. P.10, s. 65 (1); 2000, c. 26, Sched. B, s. 16 (11).

Acceptance of collateral

(2)  In any case other than that mentioned in subsection (1), a secured party may, after default, propose to accept the collateral in satisfaction of the obligation secured and shall serve a notice of the proposal on the persons mentioned in clauses 63 (4) (a) to (d). R.S.O. 1990, c. P.10, s. 65 (2).

Objection

(3)  If any person entitled to notification under subsection (2), whose interest in the collateral would be adversely affected by the secured party’s proposal, delivers to the secured party a written objection within 15 days after service of the notice, the secured party shall dispose of the collateral in accordance with section 63. R.S.O. 1990, c. P.10, s. 65 (3); 2006, c. 34, Sched. E, s. 21 (1).

Extension of time

(3.1)  Upon application by any person entitled to notification under subsection (2), the Superior Court of Justice may make an order extending the 15-day period mentioned in subsection (3). 2006, c. 34, Sched. E, s. 21 (2).

Proof of interest

(4)  The secured party may require any person who has made an objection to the proposal to furnish proof of that person’s interest in the collateral and, unless the person furnishes the proof within ten days after demand by the secured party, the secured party may proceed as if no objection had been made. R.S.O. 1990, c. P.10, s. 65 (4).

Application to judge

(5)  Upon application to the Superior Court of Justice by the secured party, and after notice to every person who has made an objection to the proposal, the court may order that an objection to the proposal of the secured party is ineffective because,

(a) the person made the objection for a purpose other than the protection of the person’s interest in the collateral or in the proceeds of a disposition of the collateral; or

(b) the fair market value of the collateral is less than the total amount owing to the secured party and the estimated expenses recoverable under clause 63 (1) (a). R.S.O. 1990, c. P.10, s. 65 (5); 2000, c. 26, Sched. B, s. 16 (1).

Foreclosure

(6)  If no effective objection is made, the secured party shall be deemed to have irrevocably elected to accept the collateral in full satisfaction of the obligation secured at the earlier of,

(a) the expiration of the 15-day period mentioned in subsection (3) or, if the period was extended under subsection (3.1), the expiration of the extended period; and

(b) the time when the secured party received from each person entitled to notification under subsection (2) written consent to having the secured party retain the collateral in satisfaction of the obligation. 2000, c. 26, Sched. B, s. 16 (12); 2006, c. 34, Sched. E, s. 21 (3).

Effect of foreclosure

(6.1)  After the deemed election under subsection (6), the secured party is entitled to the collateral free from all rights and interests in it of any person entitled to notification under subsection (2) whose interest is subordinate to that of the secured party and who was served with the notice. 2000, c. 26, Sched. B, s. 16 (12).

Effect of disposition

(7)  When a secured party disposes of the collateral after expiration of the period mentioned in subsection (6) to a buyer who buys in good faith for value and who takes possession of it or, in the case of an intangible, receives an assignment of it, the buyer acquires the collateral free from any interest of the secured party and the debtor and free from every interest subordinate to that of the secured party, whether or not the requirements of this section have been complied with by the secured party. R.S.O. 1990, c. P.10, s. 65 (7).

Redemption of collateral

66.  (1)  At any time before the secured party, under section 63, has disposed of the collateral or contracted for such disposition or before the secured party under subsection 65 (6) shall be deemed to have irrevocably elected to accept the collateral, any person entitled to receive notice under subsection 63 (4) may, unless the person has otherwise agreed in writing after default, redeem the collateral by tendering fulfilment of all obligations secured by the collateral together with a sum equal to the reasonable expenses referred to in clause 63 (1) (a) incurred by the secured party, but if more than one person elects to redeem, the priority of their rights to redeem shall be the same as the priority of their respective interests. R.S.O. 1990, c. P.10, s. 66 (1).

Consumer goods, re-instatement

(2)  Where the collateral is consumer goods, at any time before the secured party under section 63 has disposed of the collateral or contracted for such disposition or before the secured party under subsection 65 (6) shall be deemed to have irrevocably elected to accept the collateral, the debtor may reinstate the security agreement by paying,

(a) the sum actually in arrears, exclusive of the operation of any acceleration clause, and by curing any other default which entitles the secured party to dispose of the collateral; and

(b) a sum equal to the reasonable expenses referred to in clause 63 (1) (a) incurred by the secured party. R.S.O. 1990, c. P.10, s. 66 (2).

Limitation

(3)  The right to reinstate under subsection (2) may not be exercised more than once during the term of the security agreement, unless the Superior Court of Justice, on the application of the debtor, orders otherwise. R.S.O. 1990, c. P.10, s. 66 (3); 2000, c. 26, Sched. B, s. 16 (1).

PART VI
MISCELLANEOUS

Court orders and directions

67.  (1)  Upon application to the Superior Court of Justice by a debtor, a creditor of a debtor, a secured party, an obligor who may owe payment or performance of the obligation secured or any person who has an interest in collateral which may be affected by an order under this section, the court may,

(a) make any order, including binding declarations of right and injunctive relief, that is necessary to ensure compliance with Part V, section 17 or subsection 34 (3) or 35 (4);

(b) give directions to any party regarding the exercise of the party’s rights or the discharge of the party’s obligations under Part V, section 17 or subsection 34 (3) or 35 (4);

(c) make any order necessary to determine questions of priority or entitlement in or to the collateral or its proceeds;

(d) relieve any party from compliance with the requirements of Part V, section 17 or subsection 34 (3) or 35 (4), but only on terms that are just for all parties concerned;

(e) make any order necessary to ensure protection of the interests of any person in the collateral, but only on terms that are just for all parties concerned;

(f) make an order requiring a secured party to make good any default in connection with the secured party’s custody, management or disposition of the collateral of the debtor or to relieve the secured party from any default on such terms as the court considers just, and to confirm any act of the secured party; and

(g) despite subsection 59 (6), if the secured party has taken security in both real and personal property to secure payment or performance of the debtor’s obligation, make any order necessary to enable the secured party to accept both the real and personal property in satisfaction of the obligation secured or to enable the secured party to enforce any of its other remedies against both the real and personal property, including an order requiring notice to be given to certain persons and governing the notice, an order permitting and governing redemption of the real and personal property, and an order requiring the secured party to account to persons with an interest in the real property or personal property for any surplus. R.S.O. 1990, c. P.10, s. 67 (1); 2000, c. 26, Sched. B, s. 16 (1); 2006, c. 34, Sched. E, s. 22.

Compensation for loss or damages

(2)  Where a person fails to discharge any duties or obligations imposed upon the person by Part V, section 17 or subsection 34 (3) or 35 (4), the person to whom the duty or obligation is owed has a right to recover compensation for any loss or damage suffered because of the failure and which was reasonably foreseeable, and, where the collateral is consumer goods, the debtor has a right to recover in any event an amount equal to the greater of $500 or the actual loss or damages. R.S.O. 1990, c. P.10, s. 67 (2).

Void provisions

(3)  Except as otherwise provided in this Act, any provision in any security agreement which purports to exclude any duty or obligation imposed under this Act or to exclude or limit liability for failure to discharge duties or obligations imposed by this Act is void. R.S.O. 1990, c. P.10, s. 67 (3).

Service of notices, etc.

68.  (1)  If, under this Act, a notice or any other document may be or is required to be given or delivered to or served on,

(a) a secured party named in a registered financing statement or financing change statement, the notice or document may be,

(i) served by personal service,

(ii) delivered by prepaid courier, or sent by registered mail, to the most recent address of the secured party as shown in the financing statement or financing change statement,

(iii) sent by telephone transmission of a facsimile, or

(iv) sent by electronic transmission;

(b) a debtor by a secured party, the notice or document may be,

(i) served by personal service,

(ii) delivered by prepaid courier, or sent by registered mail, to the most recent address of the debtor known to the secured party,

(iii) sent by telephone transmission of a facsimile, or

(iv) sent by electronic transmission. 2006, c. 34, Sched. E, s. 23.

Same

(2)  If, under this Act, a notice or any other document may be or is required to be given or delivered to or served on a person, other than a person to whom subsection (1) applies, the notice or document may,

(a) in the case of an individual,

(i) be served by personal service,

(ii) be delivered by prepaid courier, or sent by registered mail, to the individual’s residence or place of business or, if the individual has more than one residence or place of business, to any one of the residences or places of business,

(iii) be sent by telephone transmission of a facsimile, or

(iv) be sent by electronic transmission;

(b) in the case of a partnership,

(i) be served by personal service,

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

(B) upon any person having control or management of the partnership business at the principal place of business of the partnership,

(ii) be delivered by prepaid courier, or sent by registered mail, to,

(A) the partnership,

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

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

at the principal address of the partnership, or

(iii) be sent by telephone transmission of a facsimile, or by electronic transmission, to any person mentioned in subclause (i);

(c) in the case of a municipal corporation,

(i) be delivered by prepaid courier, or sent by registered mail, to its head of council or chief administrative officer at its principal office, or

(ii) be sent by telephone transmission of a facsimile, or by electronic transmission, to its head of council or chief administrative officer;

(d) in the case of a local board, as defined in the Municipal Affairs Act,

(i) be delivered by prepaid courier, or sent by registered mail, to its chair or chief administrative officer at its principal office, or

(ii) be sent by telephone transmission of a facsimile, or by electronic transmission, to its chair or chief administrative officer;

(e) in the case of a corporation, other than a municipal corporation or local board,

(i) be served by personal service,

(A) upon any officer, director or agent of the corporation, or

(B) upon the manager or person in charge of any office or other place where the corporation carries on business,

(ii) be delivered by prepaid courier, or sent by registered mail, to its registered or head office, or

(iii) be sent by telephone transmission of a facsimile, or by electronic transmission, to any person mentioned in subclause (i);

(f) in the case of Her Majesty in right of Ontario, unless the regulations otherwise provide, be delivered by prepaid courier, sent by registered mail, sent by telephone transmission of a facsimile, or sent by electronic transmission, to the registrar. 2006, c. 34, Sched. E, s. 23.

Out of province

(3)  If, under this Act, a notice or any other document may be or is required to be given or delivered to or served on an individual, partnership or body corporate, other than one to which subsection (1) applies, that is carrying on business in Ontario but resides or has its principal office or its registered or head office outside Ontario, the notice or document may be,

(a) served by personal service,

(i) upon the individual, partnership or body corporate carrying on the business in Ontario, or

(ii) in the case of a corporation incorporated or continued under the laws of a jurisdiction outside of Canada or an extra-provincial limited partnership under the Limited Partnerships Act, upon the agent or attorney for service in Ontario;

(b) delivered by prepaid courier, or sent by registered mail, to the address of the individual, partnership, body corporate, agent or attorney; or

(c) sent by telephone transmission of a facsimile, or by electronic transmission, to the individual, partnership, body corporate, agent or attorney. 2006, c. 34, Sched. E, s. 23.

Deemed receipt, registered mail

(4)  Any notice or other document sent by registered mail shall be deemed to have been given, delivered or served when the addressee actually receives the notice or document or upon the expiry of 10 days after the day of registration, whichever is earlier. 2006, c. 34, Sched. E, s. 23.

Deemed receipt, fax and electronic transmission

(5)  Any notice or other document sent by telephone transmission of a facsimile or by electronic transmission shall be deemed to have been given, delivered or served when the addressee actually receives the notice or document or upon the first business day after the day of transmission, whichever is earlier. 2006, c. 34, Sched. E, s. 23.

Court documents

(6)  Any notice or other document to be served on any person in relation to a proceeding in a court shall be served in accordance with the rules of the court and subsections (1) to (5) do not apply to such notice or other document. 2006, c. 34, Sched. E, s. 23.

Knowledge and notice

69.  For the purposes of this Act, a person learns or knows or has notice or is notified when service is effected in accordance with section 68 or the regulations or when,

(a) in the case of an individual, information comes to his or her attention under circumstances in which a reasonable person would take cognizance of it;

(b) in the case of a partnership, information has come to the attention of one or more of the general partners or of a person having control or management of the partnership business under circumstances in which a reasonable person would take cognizance of it;

(c) in the case of a corporation, other than a municipal corporation or local board thereof, information has come to the attention of a senior employee of the corporation with responsibility for matters to which the information relates under circumstances in which a reasonable person would take cognizance of it. R.S.O. 1990, c. P.10, s. 69.

Extension or abridgment of time

70.  Where in this Act, other than in sections 5, 6, 7 and 12 and in Parts III and IV and in this Part, a required time within which or before which any act or thing must be done, the Superior Court of Justice, on an application without notice to any other person, may extend or abridge the time for compliance on terms that the court considers just. R.S.O. 1990, c. P.10, s. 70; 1998, c. 18, Sched. E, s. 199; 2000, c. 26, Sched. B, s. 16 (1).

Destruction of books, etc.

71.  (1)  The registrar may authorize the destruction of books, documents, records or paper, including those related to a prior law as defined in Part VII,

(a) that have been microfilmed; or

(b) that in the registrar’s opinion need not be preserved any longer.

Removal of information from registration system

(2)  The registrar may remove from the central file of the registration system information related to a financing statement or financing change statement,

(a) if the financing statement is no longer effective;

(b) upon the receipt of a financing change statement discharging the registration of a financing statement;

(c) upon receipt of a court order requiring the registrar to amend the information recorded in the central file to indicate the discharge of a financing statement or a financing change statement.

Idem

(3)  The registrar, upon notice to the secured party, may remove from the central file of the registration system information related to a financing change statement if,

(a) it does not set out the correct registration or file number of the financing statement or financing change statement to which it relates; or

(b) it does not set out the name of the debtor as that name is set out in the financing statement or financing change statement to which it relates.

Idem

(4)  Where the destruction of a document has been authorized under subsection (1), the registrar, instead of destroying the document, may release the document to the secured party or the secured party’s agent. R.S.O. 1990, c. P.10, s. 71.

Application of principles of law and equity

72.  Except in so far as they are inconsistent with the express provisions of this Act, the principles of law and equity, including the law merchant, the law relating to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake and other validating or invalidating rules of law, shall supplement this Act and shall continue to apply. R.S.O. 1990, c. P.10, s. 72.

Conflict with other Acts

73.  Where there is conflict between a provision of this Act and a provision of the Consumer Protection Act, 2002, the provision of the Consumer Protection Act, 2002 prevails and, 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, 2002, the provision of this Act prevails. R.S.O. 1990, c. P.10, s. 73; 2002, c. 30, Sched. E, s. 14 (2).

Powers of Minister

73.1(1)  The Minister responsible for the administration of this Act may make orders,

(a) Repealed: 2006, c. 34, Sched. E, s. 24 (1).

(b) specifying business hours for the offices of the registration system or any of them;

(c) respecting the registration system and searches of it;

(d) requiring the payment of fees, other than fees mentioned in subsection 74 (1), and specifying the amounts of those fees;

(e) specifying forms, the information to be contained in forms, the manner of recording the information, including the manner of setting out names, and the persons who shall sign forms;

(f) governing the format or formats of financing statements or financing change statements, the format or formats of verification statements and the information to be included in the statements;

(g) governing the tendering for registration of financing statements and financing change statements;

(h) Repealed: 2006, c. 34, Sched. E, s. 24 (2).

(i) requiring that the forms to be used shall be those provided or approved by the registrar;

(j) governing the time assigned to the registration of financing statements and financing change statements;

(k) specifying abbreviations, expansions or symbols that may be used in a financing statement or financing change statement or in the recording or production of information by the registrar;

(l) Repealed: 2006, c. 34, Sched. E, s. 24 (3).

(m) specifying a lexicon of French-English terms to be used in connection with required forms and deeming the corresponding forms of expression in the lexicon to have the same effect in law. 1998, c. 18, Sched. E, s. 200; 2006, c. 34, Sched. E, s. 24.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed and the following substituted:

Powers of Minister

(1)  The Minister responsible for the administration of this Act may make orders,

(a) requiring the payment of fees, other than fees mentioned in subsection 74 (1), and specifying the amounts of those fees; and

(b) respecting the duties of the registrar. 2012, c. 8, Sched. 45, s. 7.

See: 2012, c. 8, Sched. 45, ss. 7, 10.

Not regulations

(2)  An order made by the Minister under subsection (1) is not a regulation within the meaning of Part III (Regulations) of the Legislation Act, 2006. 1998, c. 18, Sched. E, s. 200; 2006, c. 21, Sched. F, s. 136 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by adding the following section:

Delegation

73.2  The Minister may delegate in writing any or all of his or her duties and powers under this Act to any person, subject to any restrictions set out in the delegation. 2012, c. 8, Sched. 45, s. 8.

See: 2012, c. 8, Sched. 45, ss. 8, 10.

Regulations

74.  (1)  The Lieutenant Governor in Council may make regulations,

(a) prescribing the duties of the registrar;

(b) prescribing the amount of the charge to which a secured party is entitled for any statement or copy provided pursuant to section 18;

(c) prescribing the portion of the fees received under this Act that shall be paid into The Personal Property Security Assurance Fund under section 44;

(d) for the purpose of clause 68 (2) (f), varying the method of giving notices or other documents to Her Majesty in right of Ontario or varying the person to whom the notice or other document must be given;

(e) defining “motor vehicle”;

(f) providing for any transitional matter that the Lieutenant Governor in Council considers necessary or advisable for the effective implementation of this Act or the regulations or to facilitate transition from provisions of this Act as it read before being amended by the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 to provisions of this Act as it reads after being amended by that Act. 1998, c. 18, Sched. E, s. 201 (1); 2006, c. 34, Sched. E, s. 25.

Note: Despite the re-enactment of subsection 74 (1) by the Statutes of Ontario, 1998, chapter 18, Schedule E, subsection 201 (1), regulations made under clause 74 (1) (a), (c), (d), (e), (g), (g.1), (g.2), (g.3), (h), (i), (j), (k) or (o), as those clauses read immediately before December 18, 1998, continue until the Minister makes an order under section 73.1, as enacted by the Statutes of Ontario, 1998, chapter 18, Schedule E, section 200, that is inconsistent with those regulations. See: 1998, c. 18, Sched. E, s. 201 (2).

Note: Despite the re-enactment of subsection 74 (1) by the Statutes of Ontario, 1998, chapter 18, Schedule E, subsection 201 (1), the Lieutenant Governor in Council may by regulation revoke regulations made under clause 74 (1) (a), (c), (d), (e), (g), (g.1), (g.2), (g.3), (h), (i), (j), (k) or (o), as those clauses read immediately before December 18, 1998, if the Minister makes an order under section 73.1, as enacted by the Statutes of Ontario, 1998, chapter 18, Schedule E, section 200, that is inconsistent with those regulations. See: 1998, c. 18, Sched. E, s. 201 (3).

Same, inability to operate registration system

(2)  If the Minister responsible for the administration of this Act is of the opinion that, as a result of an inability to operate the registration system’s computer, a security interest cannot be perfected by registration or registrations cannot be discharged within a time period specified in this Act, the Minister responsible for the administration of this Act may make regulations,

(a) deeming a security interest perfected by registration that has become unperfected during a prescribed time period to be continuously perfected from the time of first perfection if the security interest is again perfected within a prescribed time period;

(b) extending the time during which a prescribed class of purchase-money security interests may be perfected by registration and the notices required by this Act may be given for the purpose of obtaining priority under subsection 33 (1) or (2); and

(c) extending the time during which a financing change statement discharging a registration may be registered under subsection 57 (1), if the 30 day period mentioned in that subsection expires during a prescribed time period. 1996, c. 5, s. 5; 2006, c. 19, Sched. G, s. 8 (2).

Retroactivity

(3)  A regulation mentioned in subsection (2) is effective with reference to a period before it was filed, if it so provides. 1996, c. 5, s. 5.

PART VII
APPLICATION AND TRANSITION

Definition

75.  In this Part,

“prior law” means,

(a) the law related to a security agreement made before the 1st day of April, 1976, where the security agreement was one to which The Assignment of Book Debts Act, The Bills of Sale and Chattel Mortgages Act or The Conditional Sales Act, being chapters 33, 45 and 76, respectively, of the Revised Statutes of Ontario, 1970, or the predecessors thereof, applied,

(b) the law related to a security agreement made before the 10th day of October, 1989 where the security agreement was one to which the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or predecessor thereof, applied,

(c) the law related to a security agreement made before the 1st day of April, 1976, where the security agreement is not a security agreement described in clause (a) or (b). R.S.O. 1990, c. P.10, s. 75.

Application of Act

76.  (1)  Except as otherwise provided in this Part, this Act applies,

(a) to every security agreement made on or after the 10th day of October, 1989; and

(b) to every security agreement made on or after the 1st day of April, 1976 if the security agreement was one to which the Personal Property Security Act, being chapter 375 of the Revised Statutes of Ontario, 1980, applied immediately before the repeal of that Act.

Idem

(2)  Except as otherwise provided in this Part, this Act does not apply,

(a) to a security agreement to which a prior law applied at the time of its making including any advance or extension of credit, delivery of goods or other event occurring pursuant thereto whether before or after the 10th day of October, 1989; or

(b) to a transfer of chattel paper or an account, other than a transfer of a book debt, made before the 10th day of October, 1989 which does not secure payment or performance of an obligation.

Saving

(3)  This Act does not affect the rights acquired by any person from a judgment or order of any court given or made before the 10th day of October, 1989, or affect the outcome of any litigation commenced on or before that day.

Priority of interest

(4)  Priority between security interests under security agreements described in clause (1) (b) shall be determined in accordance with the law as it existed immediately before the 10th day of October, 1989 if the security interests have been continuously perfected since that day. R.S.O. 1990, c. P.10, s. 76.

Chattel mortgages, etc., under prior law

77.  (1)  Every security agreement to which the prior law as described in clause 75 (a) applied at the time of its making continues to have such force and effect as if the Acts referred to in that clause had not been repealed if the security interest was covered by an unexpired registration under the Personal Property Security Act, being chapter 375 of the Revised Statutes of Ontario, 1980, immediately before the 10th day of October, 1989.

Idem

(2)  Where a security interest under a security agreement described in subsection (1) was not covered under an unexpired registration immediately before the 10th day of October, 1989, the security interest may be perfected by the registration of a financing statement.

Application of Part IV

(3)  Part IV applies to the perfection, continuation of perfection and reperfection of a security interest under a security agreement to which subsection (1) or (2) applies.

Where certain changes have not been recorded

(4)  Where before the 10th day of October, 1989, a secured party under a security agreement to which the prior law as described in clause 75 (a) applied at the time of its making failed to register a financing change statement after learning of the transfer of collateral and the information required to register a financing change statement or after learning of the change of name and the new name of the debtor, the secured party shall register a financing change statement recording the transfer or the new name of the debtor, as the case may be, by the 10th day of October, 1991.

Effect of failure to comply

(5)  Where a secured party fails to register a financing change statement under subsection (4) by the 10th day of October, 1991, the security interest created by the security agreement shall be subordinate to the interest of any person without knowledge of the security interest who has subsequently acquired rights in the collateral and has relied upon a search made in the central file of the registration system in the name of the transferee or the changed name of the debtor, as the case may be. R.S.O. 1990, c. P.10, s. 77.

Corporation securities

78.  (1)  A mortgage, charge or assignment, the registration of which was provided for in the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or a predecessor thereof, (collectively referred to in this section as the former Act) that was registered under the former Act before the 10th day of October, 1989, continues to have such force and effect as if the former Act had not been repealed and except as provided in this section and sections 43 and 44, this Act does not apply to any such mortgage, charge or assignment. R.S.O. 1990, c. P.10, s. 78 (1).

Idem

(2)  Where a mortgage, charge or assignment, the registration of which was provided for in the former Act, was made before the 10th day of October, 1989 but was not registered under that Act,

(a) this Act shall be deemed always to have applied to the mortgage, charge or assignment; and

(b) the security interest created by the mortgage, charge or assignment may be perfected under this Act. R.S.O. 1990, c. P.10, s. 78 (2).

Entries in registration system

(3)  The registrar shall, with respect to each mortgage, charge and assignment, and each assignment thereof, registered under the former Act for which no certificate of discharge has been registered as of the 10th day of October, 1989, enter into the central file of the registration system established for the purposes of this Act,

(a) the name of the debtor as shown in the registration under the former Act;

(b) the registration number under the former Act; and

(c) a notation, in English or French, indicating that the registration was made under the Corporation Securities Registration Act or a predecessor of that Act and that a copy of the instrument is available for inspection in the offices (giving the appropriate address) of the Ministry of Consumer and Business Services. R.S.O. 1990, c. P.10, s. 78 (3); 2001, c. 9, Sched. D, s. 13.

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (c) is amended by striking out “the Ministry of Consumer and Business Services” and substituting “the Ministry”. See: 2012, c. 8, Sched. 45, ss. 9, 10.

Discharged registrations

(4)  Mortgages, charges and assignments, and assignments thereof, registered under the former Act for which a certificate of discharge has been registered before the 10th day of October, 1989 shall not be entered into the registration system established for the purposes of this Act. R.S.O. 1990, c. P.10, s. 78 (4).

Registration period

(5)  A registration entered into the central file of the registration system under subsection (3) expires when it is discharged in accordance with this section. R.S.O. 1990, c. P.10, s. 78 (5).

Change of name of debtor

(6)  Where before the 10th day of October, 1989 and after the original registration under the former Act the debtor changed its name and the secured party learned of the change before that day, the secured party shall register a financing change statement recording the change of name by the 10th day of October, 1991. R.S.O. 1990, c. P.10, s. 78 (6).

Effect of failure to comply

(7)  Where a secured party fails to register a financing change statement under subsection (6) by the 10th day of October, 1991, the security interest created by the mortgage, charge or assignment shall be subordinate to the interest of any person without knowledge of the security interest who has subsequently acquired rights in the collateral and has relied upon a search made in the central file of the registration system in the changed name of the debtor. R.S.O. 1990, c. P.10, s. 78 (7).

Discharge

(8)  A secured party may discharge in whole or in part a mortgage, charge or assignment or any assignment thereof entered into the central file of the registration system under subsection (3) by the registration of a financing change statement. R.S.O. 1990, c. P.10, s. 78 (8).

Order for discharge

(9)  The debtor or any person having an interest in the collateral may make an application to the Superior Court of Justice for an order discharging or partially discharging a mortgage, charge or assignment or any assignment thereof entered into the central file of the registration system under subsection (3). R.S.O. 1990, c. P.10, s. 78 (9); 2000, c. 26, Sched. B, s. 16 (1).

Idem

(10)  Upon hearing an application made under subsection (9) and upon being satisfied that no security interest was created or that the security interest is released or partially released, the court may order,

(a) that the registration be discharged where no security interest was ever created or the security interest has been released; or

(b) that a financing change statement be registered where the security interest is partially released. R.S.O. 1990, c. P.10, s. 78 (10).

Removal of information from registration system

(11)  The registrar may remove from the registration system information related to a registration, upon receipt of,

(a) a financing change statement under subsection (8) that wholly discharges the registration entered into the central file of the registration system under subsection (3); or

(b) a certified copy of an order made under clause (10) (a). R.S.O. 1990, c. P.10, s. 78 (11).

Application of ss. 30 (6), 47-50

(12)  Subsection 30 (6) and sections 47, 48, 49 and 50, except subsections 48 (1) and (2), apply to the perfection, continuation of perfection and reperfection of a security interest under a mortgage, charge or assignment entered into the central file of the registration system under subsection (3). R.S.O. 1990, c. P.10, s. 78 (12).

Election re: enforcement of security agreements

(13)  Where there is a default under a mortgage, charge or assignment entered into the central file of the registration system under subsection (3), the secured party may elect to enforce the security agreement in accordance with Part V by stating in the notice referred to in subsection 63 (4) or 65 (2) that the secured party has elected to be bound by Part V. R.S.O. 1990, c. P.10, s. 78 (13).

Trust indentures

(14)  Subsections (6) and (12) do not apply so as to require a trustee under a trust indenture to file a financing change statement recording the change of a debtor’s name unless after the 10th day of October, 1989 the trust indenture is amended. R.S.O. 1990, c. P.10, s. 78 (14).

Saving, certain corporation securities

79.  (1)  A mortgage, charge or assignment, the registration of which was provided for in the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or a predecessor thereof, shall not be invalid by reason only that it was not registered under that Act, if the security interest created by the mortgage, charge or assignment was perfected by registration in compliance with the Personal Property Security Act, being chapter 375 of the Revised Statutes of Ontario, 1980, and the said Personal Property Security Act shall be deemed to have applied to the security interest so created from its creation and as of the 10th day of October, 1989, this Act applies to the security interest.

Idem

(2)  Subsection (1) applies even if after the perfection of a security interest by registration under the Personal Property Security Act, being chapter 375 of the Revised Statutes of Ontario, 1980, the mortgage, charge or assignment was registered under the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or a predecessor thereof.

Dual registration

(3)  Despite subsections (1) and (2), where,

(a) a security agreement created or provided for both,

(i) a security interest in any class or classes of collateral and the security interest was a mortgage, charge or assignment, the registration of which was provided for in the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or a predecessor thereof, and

(ii) a security interest in collateral other than collateral described in subclause (i) and the security interest was not a mortgage, charge or assignment, the registration of which was provided for in the said Corporation Securities Registration Act, or a predecessor thereof; and

(b) regardless of which occurred first,

(i) the mortgage, charge or assignment described in subclause (a) (i) was registered under the said Corporation Securities Registration Act, or a predecessor thereof, and

(ii) a financing statement was registered under a predecessor of this Act in relation to the security interest described in subclause (a) (ii) and the financing statement and the financing change statements, if any, in relation thereto, do not claim a security interest in the collateral described in subclause (a) (i),

the said Corporation Securities Registration Act and this Act, except subsections (1) and (2), apply to the security interest described in subclause (a) (i) and the predecessor of this Act and this Act apply to the security interest described in subclause (a) (ii). R.S.O. 1990, c. P.10, s. 79.

Inspection of prior law documents

80.  (1)  Upon the request of any person and upon payment of the required fee, a document registered under a prior law shall be provided for inspection unless the document has been destroyed. R.S.O. 1990, c. P.10, s. 80 (1); 1998, c. 18, Sched. E, s. 202 (1).

Copies of documents

(2)  Upon the request of any person and upon payment of the required fee, the registrar shall furnish the person with a certified copy of a document registered under a prior law unless the document has been destroyed. R.S.O. 1990, c. P.10, s. 80 (2); 1998, c. 18, Sched. E, s. 202 (2).

Idem

(3)  A certified copy provided under subsection (2) is proof, in the absence of evidence to the contrary, of the contents of the document so certified. R.S.O. 1990, c. P.10, s. 80 (3).

Priorities

81.  Except as provided in subsections 78 (7) and (12), the order of priorities between a security interest created under a prior law and any other security interest shall be determined without regard to the priority rules set out in this Act. R.S.O. 1990, c. P.10, s. 81.

Use of old forms

82.  (1)  A financing statement or financing change statement prepared in accordance with the Personal Property Security Act, being chapter 375 of the Revised Statutes of Ontario, 1980 and the regulations thereunder, as they read immediately before the repeal of that Act, shall be accepted for registration if it is received by the registrar or a branch registrar by the 8th day of November, 1989.

Period of registration

(2)  Every financing statement or financing change statement received by the registrar or a branch registrar before the repeal of the Personal Property Security Act, being chapter 375 of the Revised Statutes of Ontario, 1980, or received under subsection (1) expires on the expiry of the third anniversary of its registration or, in the case of a financing change statement that does not extend a period of registration, with the expiry of the financing statement to which it relates and may be renewed under this Act. R.S.O. 1990, c. P.10, s. 82.

Transition

83.  (1)  No sale of goods to which the Bills of Sale Act, being chapter 43 of the Revised Statutes of Ontario, 1980, applied before its repeal shall be void for failure to comply with that Act.

Idem

(2)  Subsection (1) does not affect the rights acquired by any person from a judgment or order of any court before the 10th day of October, 1989 or affect the outcome of any litigation commenced on or before the 8th day of June, 1988. R.S.O. 1990, c. P.10, s. 83.

Transition re Securities Transfer Act, 2006

84.  (1)  The provisions of the Securities Transfer Act, 2006, including the provisions in Part VIII of that Act, do not affect an action or other proceeding commenced before this section comes into force. 2006, c. 8, s. 141.

Same

(2)  No further action is required to continue perfection of a security interest in a security if,

(a) the security interest in the security was a perfected security interest immediately before this section comes into force; and

(b) the action by which the security interest was perfected would suffice to perfect the security interest under this Act. 2006, c. 8, s. 141.

Same

(3)  A security interest in a security remains perfected for a period of four months after this section comes into force and continues to be perfected thereafter where appropriate action to perfect the security interest under this Act is taken within that period if,

(a) the security interest in the security was a perfected security interest immediately before this section comes into force; but

(b) the action by which the security interest was perfected would not suffice to perfect the security interest under this Act. 2006, c. 8, s. 141.

Same

(4)  A financing statement or financing change may be registered under this Act within the four-month period referred to in subsection (3) to continue that perfection, or thereafter to perfect, if,

(a) the security interest was a perfected security interest immediately before this section comes into force; and

(b) the security interest can be perfected by registration under this Act. 2006, c. 8, s. 141.

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