Ontario PPSA

Personal Property Security Act

1. Definitions

(1)

In this Act,

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

"account" means any monetary obligation not evidenced by chattel paper, an instrument or a security, whether or not it has been earned by performance;

"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;

"collateral" means personal property that is subject to a security interest;

"consumer goods" means goods that are used or acquired for use primarily for personal, family or household purposes;

"debtor" means a person who owes payment or other performance of the obligation secured, whether or not the person owns or has rights in the collateral, and includes,

(a) an assignor of an account or chattel paper, and

(b) a transferee of or successor to a debtor‘s interest in collateral;

"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;

"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;

"equipment" means goods that are not inventory or consumer goods;

"financing change statement" means the information prescribed for a financing change statement in the prescribed form or format; (1991, c. 44, s. 7.)

"financing statement" means the information prescribed for a financing statement in the prescribed form or format; (1991, c. 44, s. 7.)

"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;

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

"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 a security;

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

"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;

"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;

"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;

"personal property" means chattel paper, documents of title, goods, instruments, intangibles, money and securities and includes fixtures but does not include building materials that have been affixed to real property;

"prescribed" means prescribed by the regulations;

"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 any payment representing indemnity or compensation for loss of or damage to the collateral or proceeds therefrom;

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

"purchase-money security interest" means,

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

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

but does not include a transaction of sale by and lease back to the seller;

"purchaser" means a person who takes by purchase;

"registrar" means the registrar of personal property security;

"regulations" means the regulations made under this Act;

"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;

"security" means a document that is,

(a) issued in bearer, order or registered form,

(b) of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,

(d) evidence of a share, participation or other interest in property or in an enterprise or is evidence of an obligation of the issuer,

and includes an uncertificated security within the meaning of Part VI (Investment Securities) of the Business Corporations Act;

"security agreement" means an agreement that creates or provides for a security interest and includes a document evidencing a security interest;

"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, the interest of a transferee of an account or chattel paper;

"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;

"value" means any consideration sufficient to support a simple contract and includes an antecedent debt or liability.

(1991, c. 44, s. 7.)

(2) Fungibles

For the purposes of this Act, fungible goods and fungible securities are goods or securities, as the case may be, of which any unit is, by nature or usage of trade, the equivalent of any other like unit, and includes unlike units to the event that they are treated as equivalents under a security agreement.

PART I — Application and Conflict of Laws

2. Application of Act, general

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; and

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

3. Application to Crown

This Act applies to the Crown and every agency of the Crown.

4. Non-application of Act

(1)

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);

(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.

(2) Rights under Sales of Goods Act

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.

5. Conflict of laws, location of collateral

(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 a security, 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.

(2) Perfection of security interest continued

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.

(3) Perfection otherwise

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.

(4) Perfection in Ontario

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.

(5) Revendication

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.

6. Goods brought into province

(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.

(1.1) Same, extended time

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.)

(2) Perfection in province

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.

7. Conflict of laws, location of debtor

(1)

The validity, perfection and effect of perfection or conflict of non-perfection,

(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 a security, 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 attaches.

(2) Change of location

If a debtor changes location to Ontario, a perfected security interest referred to in subsection (1) continues perfected in Ontario if it is perfected in Ontario,

(a) within sixty days from the day the debtor changes location;

(b) within fifteen days from the day the secured party receives notice that the debtor has changed location; or

whichever is the earliest.

(3) Idem

A security interest that is not perfected as provided in subsection (2) may be otherwise perfected under this Act.

(4) Location of debtor

For the purpose of this section, 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.

8. Procedural and substantive issues

(1)

Despite sections 5, 6 and 7,

(a) procedural matters affecting the enforcement of the right of a secured party in respect of collateral other than intangibles are governed by the law of the jurisdiction in which the collateral is located at the time of the exercise of those rights;

(b) procedural matters affecting the enforcement of the rights of a secured party against intangibles are governed by the law of the forum; and

(c) substantive matters affecting the enforcement of the rights of a secured party against collateral are governed by the proper law of the contract between the secured party and the debtor.

(2) Deemed perfection

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.

PART II — Validity of Security Agreements and Rights of Parties

9. Effectiveness of security agreement

(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.

(2) Idem

A security agreement is not unenforceable against a third party by reason only of a defect, irregularity, omission or error therein or in the execution thereof unless the third party is actually misled by the defect, irregularity, omission or error.

(3) Idem

Without restricting the generality of subsection (2), the failure to describe some of the collateral in a security agreement does not affect the effectiveness of the security agreement with respect to the collateral that is described.

10. Delivery of copy of agreement

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 Ontario Court (General Division), on the application of the debtor, may order the delivery of such a copy to the debtor.

11. Attachment required

(1)

A security interest is not enforceable against a third party unless it has attached.

(2) When security interest attaches

A security interest, including a security interest in the nature of a floating charge, attaches when,

(a) the secured party or a person on behalf of the secured party other than the debtor or the debtor´s agent obtains possession of the collateral or when the debtor signs a security agreement that contains a description of the collateral sufficient to enable it to be identified;

(b) value is given; and

unless the parties have agreed to postpone the time for attachment, in which case the security interest attaches at the agreed time.

(3) Idem

For the purpose of subsection (2), the debtor has no rights in,

(a) crops until they become growing crops;

(b) fish until they are caught;

(d) minerals or hydrocarbons until they are extracted; or

(e) timber until it is cut.

12. After-acquired property

(1)

A security agreement may cover after-acquired property.

(2) Exception

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.

13. Future advances

A security agreement may secure future advances.

14. Agreement not to assert defence against assignee

(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).

(2) Non-application

Subsection (1) does not apply to an assignment to which section 31 of the Consumer Protection Act applies.

15. Seller´s warranties

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

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

(b) except as provided in section 14, the conditions and warranties in a sale agreement shall not be affected by any security agreement.

16. Acceleration provisions

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.

17. Care of collateral

(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.

(2) Idem, rights and duties of secured party

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.

(3) Liability for loss

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.

(4) Use of collateral

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

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

(ii) the Ontario Court (General Division) upon application by the secured party.

(5) Idem

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).

18. Statements of account

(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.

(2) Exception, indenture trustee

Clauses (1)(a), (b) and (c) do not apply where the secured party is the trustee under a trust indenture.

(3) Inspection of security agreement

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).

(4) Idem

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).

(5) Time for compliance with notice, liability for failure to answer

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.

(6) Successors in interest

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.

(7) Charges

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.

(8) Court order

On an application to the Ontario Court (General Division), 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);

(d) make such other order as it considers just.

(9) Liability

An order made under clause (8)(b) or (c) does not affect the liability of the secured party under subsection (5).

(10) Extended time for compliance

Despite subsection (9), where the secured party applies to the Ontario Court (General Division) 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.

PART III — Perfection and Priorities

19. Perfection

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.

20. Unperfected security interests

(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 assumes control of the collateral through execution, attachment, garnishment, charging order, equitable execution or other legal process, or

(iii) all persons entitled by the Creditors´ Relief Act or otherwise to participate in the distribution of the property over which a person described in subclause (ii) has assumed control, 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, securities, instruments or goods is not effective against a transferee thereof who takes under a transfer 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 transfer that does not secure payment or performance of an obligation and who gives value without knowledge of the security interest.

(2) Idem

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.

(3) Purchase-money security interest

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

(a) in collateral, other than an intangible, before or within ten 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 ten days after the attachment of the security interest in the intangible,

has priority over,

(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.

21. Continuity of perfection

(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.

(2) Assignees

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.

22. Perfection by possession or repossession

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;

(d) securities;

(e) negotiable documents of title; and

(f) money,

but only while it is, actually held as collateral.

23. Perfection by registration

Registration perfects a security interest in any type of collateral.

24. Temporary perfection

(1)

A security interest in instruments, securities or negotiable documents of title is a perfected security interest for the first ten days after it attaches to the extent that it arises for new value secured by a written security agreement.

(2) Idem

A security interest perfected by possession in,

(a) an instrument or a 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) 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.

(3) Idem

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

25. Perfecting as to proceeds

(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; and

(b) extends to the proceeds.

(2) Idem

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.

(3) Idem

A security interest in proceeds is a continuously perfected security interest if the interest in the collateral was perfected when the proceeds arose.

(4) Idem

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.

(5) Motor vehicles classified as consumer goods

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.

26. Perfecting as to goods held by a bailee

(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.

(2) Idem

A security interest in collateral in the possession of a person, other than the debtor, the debtors 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

27. Goods returned or repossessed

(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

(2) Idem

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.

(3) Where sale or lease creates an account or chattel paper

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.

(4) Temporary perfection

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.

(5) Transferee of account

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.

(6) Transferee of chattel paper

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.

28. Transactions in ordinary course of business, buyers of goods

(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.

(2) Idem, lessors of goods

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.

(3) Idem, purchasers of chattel paper

A purchaser of chattel paper takes possession of it in the ordinary course of business has, to the extent that the purchaser gives new value, 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.

(4) Idem, purchasers of instruments

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

(5) Motor vehicles transaction other than in ordinary course

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.

(6) Securities

A good faith purchaser of a security, whether in the form of a security certificate or an uncertificated security, who has taken possession of it, has priority over any security interest in it perfected by registration or temporarily perfected under section 23 or 24.

(7) Idem

A purchaser of a security, whether in the form of a security certificate or an uncertificated security, who purchases the security in the ordinary course of business and has taken possession of it, has priority over any security interest in it perfected by registration or temporarily perfected under section 23 or 24. even though the purchaser knows of the security interest, if the purchaser did not know the purchase constituted a breach of the security agreement.

(8) Definitions

For the purposes of subsections (6) and (7), "good faith purchaser", "purchaser", "security", "security certificate" and "uncertificated security" have the same meaning as in sections 53 and 85 of the Business Corporations Act.

29. Negotiable instruments, etc

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.

30. Priorities, general rule

(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.

(2) Idem

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.

(3) Future advances

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.

(4) Exception

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.

(5) Proceeds

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.

(6) Reperfected security interests

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.

(7) Deemed trusts

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.

(8) Exception

Subsection (7) does not apply to a perfected purchase-money security interest in inventory or its proceeds.

31. Liens for materials and services

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.

32. Crops

(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.

(2) Idem

Where more than one perfected 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.

33. Purchase-money security interest, inventory

(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 registered a financing statement in which the collateral is classified as inventory before the date of registration by the purchase-money secured party; 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.

(2) Purchase-money security interests other than inventory

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 ten 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 ten days after the attachment of the purchase-money, security interest in the intangible.

(2.1) Extended time

Despite subsections (1) and (2), the time for perfecting a purchase-money security interest by registration and for giving the notices requried by subsection (1) is extended until April 12, 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.)

(2.2) Extended priority

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.)

(3) Priority of seller‘s purchase-money security interest

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.

34. Fixtures

(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.

(2) Exceptions

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.

(3) Removal of collateral

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.

(4) Security

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.

(5) Notice

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;

(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.

(6) Idem

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.

(7) Retention of collateral

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.

35. Accessions

(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.

(2) Exceptions

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.

(3) Idem

Despite clause (2)(b), a purchase-money security interest in an accession that is perfected before or within ten days after the debtor obtains possession of the accession has priority over the interest of a creditor referred to in that clause.

(4) Removal of collateral

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.

(5) Security

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.

(6) Notice

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;

(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.

(7) Idem

The notice mentioned in subsection (6) shall be served in accordance with section 68 at least ten days before the accession is removed.

(8) Retention of collateral

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.

36. Real property payments, rents

(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.

(2) Mortgages

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.

37. Commingled goods

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.

38. Subordination

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.

39. Alienation of rights of a debtor

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.

40. Person obligated on an account or on chattel paper

(1)

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

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

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

(2) Idem

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

(3) Modification, etc., effective against assignee

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 person obligated on the account or chattel paper has otherwise agreed, but the assignee acquires corresponding rights under the modified or substituted contract.

PART IV — Registration

41. Registration system

(1)

A registration system, including a central office and branch offices, shall be maintained for the purposes of this Act and the Repair and Storage Liens Act.

(2) Central office

The central office of the registration system shall be located at or near the City of Toronto.

(3) Branch offices

Branch offices of the registration system shall be established at such places as are designated by the regulations.

42. Registrar, branch registrars

(1)

There shall be a registrar of personal property security and a branch registrar for each branch office.

(2) Idem

The registrar shall be the public servant designated as registrar by the Minister of Consumer and Commercial Relations.

(3) Idem

The branch registrars shall be those public servants designated by name or position as branch registrars by the registrar.

(4) Seal of office

The registrar shall have a seal of office in such form as the Lieutenant Governor in Council may by order approve.

(5) Protection from personal liability

No action or other proceeding for damages shall be instituted against the registrar or any person employed in the Ministry of Consumer and Commercial Relations 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.

(6) Crown liability

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.

(7) Delegation

The registrar and each branch registrar may designate one or more public servants to act on his or her behalf.

43. Certificate of registrar

(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 prescribed 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, 1989 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.

(2) Idem

A certificate issued under subsection (1) is proof, in the absence of evidence to the contrary, of the contents thereof.

(3) Similar names

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.

(4) Certified copies

If the financing statement or financing change statement is registered as a document in the prescribed form, a person may require that the registrar furnish a certified copy of the registered statement and, upon payment of the prescribed fee, the registrar shall furnish it to the person. (1991, c. 44, s. 7.)

(5) Idem

A certified copy furnished under subsection (4) is proof, in the absence of evidence to the contrary, of the contents of the document so certified.

(1991, c. 44, s. 7.)

43.1. Used vehicle information package

(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 prescribed fee. (1993, c. 13, s. 2.)

(2) [Definitions]

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. (1993, c. 13, s. 2.)

(3) [Abbreviated certificate]

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.)

(1993, c. 13, s. 2.)

44. Assurance Fund

(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.

(2) Idem

The prescribed portion of the fees received under this Act shall be paid into the Assurance Fund.

(3) Idem

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.

(4) Entitlement to payment

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 Lien 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.

(5) Claims

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.

(6) Idem

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.

(7) Idem

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.

(8) Duty of registrar

The registrar shall determine a claim against the Assurance Fund within ninety days of receiving an application for compensation and,

(a) where the registrar determines that the claim should not be paid, the registrar shall forthwith advise the claimant of the decision; or

(b) where the registrar determines 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,

and the decision or offer of settlement shall be deemed to be confirmed thirty days after the mailing thereof to the claimant unless the claimant requests a hearing under subsection (9).

(9) Hearing

Where the registrar makes a decision under clause (8)(a) or an offer of settlement under clause (8)(b) that is for less than the full amount of the claim, the claimant, within thirty days from the day that the decision or offer is mailed to the claimant, may request the Director of Titles appointed under the Land Titles Act to hold a hearing to determine the claimant´s entitlement to compensation and the request shall be in writing.

(10) Idem

As soon as possible after receiving a request under subsection (9), the Director of Titles or, where a person has been appointed under subsection (11), the person so appointed shall hold a hearing and decide the claimant‘s entitlement to compensation and, if he or she considers it appropriate, award costs.

(11) Delegation

The Director of Titles may appoint a person to act on his or her behalf in the hearing of a claim for compensation under this section.

(12) Confirmation of decision

A decision under subsection (10) shall be deemed to be confirmed at the expiration of thirty days from the date of the mailing of the decision to the claimant, unless a notice of an application under subsection (14) is served on the Director of Titles within that time.

(13) Application to District Court

Where the registrar fails to determine a claim for compensation under subsection (8) within ninety days, the District Court, on the application of the claimant made within sixty days of the expiry of the ninety-day period, may order the payment of such compensation as is set out in the order.

(14) Idem

Where the claimant is dissatisfied with a decision under subsection (10), the Ontario Court (General Division), on the application of the claimant made within thirty days of the mailing of the decision to the claimant, may order that the decision under subsection (10) be set aside and may order the payment of such compensation as may be set out in the order.

(15) Payment

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.

(16) Subrogation

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.

(17) Action by claimant

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.

(18) Protection from liability

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.

(19) Idem

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.

(20) Maximum payable from Assurance Fund

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.

(21) Idem

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.

45. Registration of financing statements

(1)

In order to perfect a security interest by registration under this Act, a financing statement shall be registered.

(2) Consumer goods

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.

(3) Collateral other than consumer goods

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.

(4) Subsequent security agreements

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.

46. Place of registration

(1)

A financing statement or financing change statement that is a document in the prescribed form may be tendered for registration,

(a) by delivery to any branch office; or

(b) by mail addressed to an address fixed by the regulations.

(1991, c. 44, s. 7.)

(2) Idem

A financing statement or financing change statement that is data in a prescribed format may be tendered for registration,

(a) by delivery to an address fixed by the regulations;

(b) by mail addressed to an address fixed by the regulations; or

(1991, c. 44, s. 7.)

(2.1) Format of statement

A financing statement or financing change statement to be tendered for registration shall contain the prescribed information and shall be in the form of,

(a) a document in the prescribed form; or

(b) data presented in a prescribed format.

(1991, c. 44, s. 7.)

(2.2) Authorized person

A financing statement or financing change statement in the form of data in a prescribed format may be tendered for registration by direct electronic transmission of the information only by a person who is or who is a member of a class of persons that is authorized by the registrar to do so. (1991, c. 44, s. 7.)

(2.3) Authorized record

A financing statement or financing change statement in the form of data in a prescribed format may be tendered for registration by delivery or by mail only if it is recorded on a system of electronic data storage that, in the opinion of the registrar, is capable of being read by a computer or other device used in the registration system. (1991, c. 44, s. 7.)

(3) Classification of collateral

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.

(4) Errors, etc

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.

(5) Effect of registration

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.

(6) Copy to debtor

Where a financing statement or financing change statement is registered, the secured party shall deliver to the debtor within thirty days after the date of registration,

(a) a copy of the registered statement or a copy of a verification statement, if the statement was registered as a document in the prescribed form; or

(b) a copy of a verification statement, if the statement was registered as data in a prescribed format.

(1991, c. 44, s. 7.)

(7) Penalty

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.

(1991, c. 44, s. 7.)

47. Assignment of security interest

(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.

(2) Idem

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.

(3) Idem

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.

48. Transfer of collateral

(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.

(2) Idem

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.

(3) Change of debtor name

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.

(4) Transferee in possession

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.

(5) Financing change statement

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.

(6) Notification by Registrar General

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.

(7) Idem

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.

(8) Idem

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.

49. Amendments

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.

50. Subordination of security interest

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.

51. Registration period

(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.

(2) Change of registration period

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).

(3) Duration of registration period

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,

(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.

(4) Effective period

A financing statement is effective only during its registration period.

(5) Consumer goods

Despite subsection (1), a financing statement that indicates that the collateral is or includes consumer goods 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).

(6) Idem

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.

52. Renewal of registration

(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.

(2) Reperfection

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.

53. Financing change statement

The registration of a financing change statement is effective from the time assigned to its registration by the registrar or branch registrar and is effective so long as the registration of the financing statement to which it relates is effective.

54. Notice in land registry office

(1)

A notice of security interest, in the prescribed 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.

(2) Consumer goods, registration period

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.

(3) Idem

A registration to which subsection (2) applies may be extended before the end of the registration period by the registration of an extension notice.

(4) Discharge

A notice registered under subsection (1) may be discharged or partially discharged by a certificate in the prescribed form and the certificate may be registered in the proper land registry office.

(5) Effect of registration

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.

(6) Loss of claim

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).

55. Discharge or partial discharge of registration

A registration may be discharged or partially discharged by the registration of a financing change statement discharging or partially discharging the registration.

56. Demand for discharge, where security interest existed

(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 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 sign and give to the person demanding it, at the place set out in the notice, the financing change statement or the certificate of discharge or partial discharge, or both, as the case may be.

(2) Idem, where no security interest acquired

Where a financing statement or notice of security interest is registered under this Act and the person named in the acquired 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 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 sign and give to the person demanding it, at the place set out in the notice, the financing change statement or the certificate of discharge, or both, as the case may be.

(3) Interpretation

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.

(4) Failure to deliver

Where the secured party, without reasonable excuse, fails to deliver the financing change statement or certificate of discharge or partial discharge, or both, as the case may be, required under subsection (1) or (2) within ten days after receipt of a demand therefor, the secured party 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.

(5) Security or payment into court

Upon application to the Ontario Court (General Division), 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.

(6) Successors in interest

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.

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

(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..1

(1.1) Extended time

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.)

(2) Failure to register

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.

(3) Rights not affected

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.

PART V — Default — Rights and Remedies

58. Rights and remedies cumulative

The rights and remedies mentioned in this Part are cumulative.

59. Rights and remedies of secured party

(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 of the collateral, the rights, remedies and duties provided in section 17.

(2) Enforcement by secured party

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.

(3) Rights and remedies of debtor

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.

(4) Determination of standards

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.

(5) Non-waiver of rights and duties

Despite subsection (1), the provisions of section 17, and sections 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.

(6) Where agreement covers both real and personal property

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.

(7) No merger in judgment

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.

60. Receiver, receiver and manager

(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.

(2) Idem

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 Ontario Court (General Division), 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;

(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.

61. Collection rights of secured party

(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.

(2) Idem

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.

62. Possession upon default

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

63. Disposal of collateral

(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.

(2) Methods of disposition

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.

(3) Secured party´s right to delay disposition of collateral

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.

(4) Notice required

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;

(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.

(5) Idem

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.

(6) Idem

If the notice to the debtor under clause (4)(a) is mailed, 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 and not the date of service.

(7) Notice not required

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;

(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 Ontario Court (General Division), 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.

(8) Secured party´s right to purchase collateral

The secured party may buy the collateral or any part thereof only at a public sale unless the Ontario Court (General Division), on application, orders otherwise.

(9) Effect of disposition of collateral

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.

(10) Idem

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.

(11) Certain transfers of collateral

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.

64. Distribution of surplus

(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

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.

(2) Proof of interest

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.

(3) Deficiency

Unless otherwise agreed in the security agreement, or unless otherwise provided under this or any other Act, the debtor is liable for any deficiency.

(4) Payment into court

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 Ontario Court (General Division) and the surplus shall not be paid out except upon an application under section 67 by a person claiming an entitlement thereto.

65. Compulsory disposition of consumer goods

(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 Part, 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.

(2) Acceptance of collateral

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).

(3) Objection

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 thirty days after service of the notice, the secured party shall dispose of the collateral in accordance with section 63.

(4) Proof of interest

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.

(5) Application to judge

Upon application to the Ontario Court (General Division) 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).

(6) Foreclosure

If no effective objection is made, the secured party is, at the expiration of the thirty-day period mentioned in subsection (3), deemed to have irrevocably elected to accept the collateral in full satisfaction of the obligation secured, and thereafter is entitled to the collateral free from all rights and interests therein of any person, entitled to notification under subsection (2) whose interest is subordinate to that of the secured party and who was served with such notice.

(7) Effect of disposition

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.

66. Redemption of collateral

(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.

(2) Consumer goods, re-instatement

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.

(3) Limitation

The right to reinstate under subsection (2) may not be exercised more than once during the term of the security agreement, unless the Ontario Court (General Division), on the application of the debtor, orders otherwise.

PART VI — Miscellaneous

67. Court orders and directions

(1)

Upon application to the Ontario Court (General Division) 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);

(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; and

(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.

(2) Compensation for loss or damages

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.

(3) Void provisions

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.

68. Service of notices, etc

(1)

Where 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 given to or served on the secured party by personal service or by registered mail at the most recent address of the secured party as shown in the financing statement or financing change statement; and

(b) a debtor by a secured party, the notice or document may be given to or served on the debtor by personal service or by registered mail at the last address of the debtor known to the secured party.

(2) Idem

Where under this Act, a notice or any 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 be given to or served on,

(a) an individual, by personal service or by registered mail addressed to the individual at his or her residence or place of business and, if the individual has more than one residence or place of business, at any one of the residences or places of business;

(b) a partnership,

(i) 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, or

(ii) by registered mail addressed to,

(A) the partnership,

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

at the principal address of the partnership;

(c) a municipal corporation by delivery or registered mail addressed to its head of council or chief administrative officer at its principal office;

(d) a local board, as defined in the Municipal Affairs Act, by delivery or registered mail addressed to its chair or chief administrative officer at its principal office;

(e) a corporation, other than a municipal corporation or a local board thereof,

(i) by serving any officer, director, or any agent thereof, or the manager or person in charge of any office or other place where the corporation carries on business, or

(ii) by registered mail addressed to the address of its registered or head office;

(f) upon Her Majesty in right of Ontario, unless the regulations otherwise provide, by delivery or registered mail addressed to the registrar at the central office of the registration system.

(3) Out of province

Where an individual, partnership or body corporate resides or has its principal office or its registered or head office out of Ontario but is carrying on business in Ontario, a notice or document referred to in subsection (2) may be given, delivered or served by serving any person carrying on the business in Ontario and in the case of an extra-provincial company, by serving the attorney for service in Ontario and such service may be by personal service or by registered mail at the address of the person or attorney.

(4) Service by registered mail

A notice or document given or served by registered mail shall be deemed to have been given, delivered or served when the addressee actually receives the notice or document or, except for the purposes of subsection 33(1), upon the expiry of ten days after the day of registration, whichever is earlier.

(5) Court documents

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 (4) do not apply to any such notice.

69. Knowledge and notice

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.

70. Extension or abridgment of time

Where in this Act, other than in sections 5, 6, 7 and 12 and in Parts III and IV and in this Part, a time prescribed within which or before which any act or thing must be done, the Ontario Court (General Division), on an application without notice to any other person, may extend or abridge the time for compliance on terms that the court considers just.

71. Destruction of books, etc

(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.

(2) Removal of information from registration system

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.

(3) Idem

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.

(4) Idem

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.

72. Application of principles of law and equity

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.

73. Conflict with other Acts

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

74. Regulations

(1)

The Lieutenant Governor in Council may make regulations,

(a) designating branch offices;

(b) prescribing the duties of the registrar and branch registrars;

(d) respecting the registration system and searches thereof;

(e) requiring the payment of fees and prescribing the amounts thereof;

(f) prescribing the amount of any charge to which a secured party is entitled for any statement or copy provided pursuant to section 18;

(g) prescribing 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;

(g.1) governing the format or formats of financing statements or financing change statements that are in the form of data and the information to be included in the statements; (1991, c. 44, s. 7.)

(g.2) governing the tendering for registration of financing statements and financing change statements that are presented as data in a prescribed format; (1991, c. 44, s. 7.)

(g.3) governing the tendering for registration of financing statements and financing change statements by direct electronic transmission. (1991, c. 44, s. 7.)

(h) requiring that the forms to be used shall be those provided or approved by the registrar;

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

(j) prescribing 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;

(k) fixing the address to which financing statements and financing change statements shall be addressed when tendered by mail for registration;

(l) prescribing additional methods of serving notices and other documents for the purposes of section 68 and prescribing methods of serving notices and other documents on persons not referred to in section 68;

(m) prescribing the portion of the fees received under this Act that shall be paid into The Personal Property Security Assurance Fund;

(n) defining "motor vehicle";

(o) prescribing a lexicon of French-English terms to be used in connection with prescribed forms and deeming the corresponding forms of expression in the lexicon to have the same effect in law.

(1991, c. 44, s. 7.)

(2) Same, inability to operate registration system

If the Lieutenant Governor in Council 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 Lieutenant Governor in Council 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 period 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.)

(3) Retroactivity

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

75. Definition

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).

76. Application of Act

(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.

(2) Idem

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.

(3) Saving

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.

(4) Priority of interest under

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.

77. Chattel mortgages, etc., under prior law

(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.

(2) Idem

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.

(3) Application of Part IV

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.

(4) Where certain changes have not been recorded

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.

(5) Effect of failure to comply

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.

78. Corporation securities

(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.

(2) Idem

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.

(3) Entries in registration system

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 Commercial Relations.

(4) Discharged registrations

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.

(5) Registration period

A registration entered into the central file of the registration system under subsection (3) expires when it is discharged in accordance with this section.

(6) Change of name of debtor

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.

(7) Effect of failure to comply

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.

(8) Discharge

A secured party may discharge a 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.

(9) Order for discharge

The debtor or any person having an interest in the collateral may make an application to the Ontario Court (General Division) 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).

(10) Idem

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.

(11) Removal of information from registration system

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).

(12) Application of ss. 30(6), 47–50

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).

(13) Election re: enforcement of security agreements

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.

(14) Trust indentures

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.

79. Saving, certain corporation securities

(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.

(2) Idem

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.

(3) Dual registration

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) applies to the security interest described in subclause (a)(i) and the predecessor of this Act and this Act applies to the security interest described in subclause (a)(ii).

80. Inspection of prior law documents

(1)

Upon the request of any person and upon payment of the prescribed fee, a document registered under a prior law shall be provided for inspection unless the document has been destroyed.

(2) Copies of documents

Upon the request of any person and upon payment of the prescribed 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.

(3) Idem

A certified copy provided under subsection (2) is prima facie proof of the contents of the document so certified.

81. Priorities

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.

82. Use of old forms

(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.

(2) Period of registration

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.

83. Transition

(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.

(2) Idem

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.

General Regulation under the Personal Property Security Act

R.R.O. 1990, Regulation 912 as amended by O. Reg. 7692.

Definitions

In this Regulation,

"address" includes the postal code or the equivalent thereof, if any;

"artificial body" includes a partnership, corporation, association, organization, estate of a deceased natural person, trade union, church or other religious organization, syndicate, joint venture, trust or trustee in bankruptcy;

"authorized signature of assignor" means the name of the assignor, typed, machine printed or stamped together with,

(a) the signature of the assignor, or

(b) the signature of a person with actual, implied or apparent authority to sign on behalf of the assignor, together with the typed, machine printed or stamped name of the person;

"authorized signature of the secured party" means the name of the secured party, typed, machine printed or stamped together with,

(a) the signature of the secured party, or

(b) the signature of a person with actual, implied or apparent authority to sign on behalf of the secured party, together with the typed, machine printed or stamped name of the person;

"maturity date" or "date of maturity" means the date, excluding days of grace, on which the debt will be fully paid if every payment is made according to the original terms of the security agreement;

"motor vehicle" means an automobile, motorcycle, motorized snow vehicle and any other vehicle that is self-propelled but does not include,

(a) a street car or other vehicle running only upon rails,

(b) a farm tractor,

(d) a machine acquired for use or used as a road-building machine, or

(e) a craft intended primarily for use in the air or in or upon the water;

"person" means an artificial body or a natural person;

"principal amount" means the amount that is secured or is intended to be secured under the original terms of the security agreement and may include interest, precalculated interest, carrying charges, insurance premiums or any other cost or charge;

"registering agent" means a person who acts as an agent for a secured party or assignor when submitting a statement for registration but does not include a clerk or other employee of the secured party or assignor;

"specific page of registration" means, in respect of a single page registration, the financing statement or financing change statement that is registered and, in respect of a multiple page registration, one of the financing statements or financing change statements that is registered and that comprises a page of the multiple page registration or a motor vehicle schedule that is attached to a statement and that comprises a page of the multiple page registration;

"vehicle identification number" means the number that the person who constructed the motor vehicle affixed to it for identification purposes.

Form of Statement and when Required

If the Act requires a financing statement or a financing change statement in the prescribed form or format to be registered, the statement shall be the form or format provided or approved by the registrar.

(O. Reg. 7692, s. 1.)

Content of Financing Statement

(1)

A financing statement shall set out in the appropriate place according to the information being entered,

(a) a "P" to indicate that a registration is being made under the Act;

(b) the number of years for the registration period;

(d) the address of the debtor;

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

(f) the classification of the collateral as consumer goods, inventory, equipment, accounts or that the classification is other than consumer goods, inventory, equipment or accounts or any combination thereof;

(g) if a motor vehicle is included in the collateral, an indication that it is included;

(h) if a motor vehicle schedule is attached, an indication that it is attached;

(i) if all the collateral is classified as consumer goods, the principal amount;

(j) if all the collateral is classified as consumer goods, the maturity date or, if there is no fixed date of maturity, an indication that there is no fixed maturity date; and

(k) the authorized signature of the secured party.

(2)

If there is more than one secured party, the name, address and authorized signature of at least one secured party shall be set out in the appropriate place on the financing statement.

(3)

If a security interest is assigned, the name, address and authorized signature of the assignor may be set out instead of the name, address and authorized signature of the secured party.

(4)

The registration period of a financing statement shall be a whole number and if the collateral,

(a) includes consumer goods, the period shall be for one year up to five years, as the case requires; or

(b) does not include consumer goods, the period shall be for one year up to twenty-five years or for a perpetual period, as the case requires.

(5)

A financing statement may set out in the appropriate place according to the information being entered,

(a) the name and address of the registering agent, if any; and

(b) the Ontario corporation number, if the debtor is a corporation incorporated in Ontario.

(6)

If a registration period of a financing statement is a perpetual period, the period shall be designated on the financing statement by the number "99".

(7)

If the collateral includes a motor vehicle and the motor vehicle is classified as consumer goods, the motor vehicle shall be described on line 11 or 12 on the financing statement or in the appropriate place on a motor vehicle schedule.

(8)

If the collateral includes a motor vehicle and the motor vehicle is not classified as consumer goods, the motor vehicle may be described on line 11 or 12 on the financing statement or in the appropriate place on a motor vehicle schedule.

(9)

The description of the motor vehicle on line 11 or 12 or on a motor vehicle schedule shall include the vehicle identification number, the last two digits of the model year, if any, the model, if any, and the make or the name of the manufacturer.

(10)

If lines 11 and 12 are completed, additional motor vehicles may be described in the appropriate place on a motor vehicle schedule.

(11)

Collateral other than a motor vehicle that is consumer goods may be described on line 13, 14 or 15 of the financing statement.

(12)

The description of a motor vehicle on line 13, 14 or 15 of a financing statement shall not include the vehicle identification number.

(13)

If the collateral includes goods other than inventory that are used or acquired for use for more than one purpose, the financing statement shall set out the classification of the goods in accordance with clause (1)(f) based on their primary use and may set out an additional classification based on any secondary use.

Collateral Brought into Ontario

A financing statement that is tendered for registration with respect to the following matters shall be designated as a caution filing and shall set out the information required by section 3 except that the date of birth of a natural personal need not be set out:

(1.) Collateral that is intended to be brought into Ontario and that is subject to a security interest in another jurisdiction.

(2.) Collateral that is brought into Ontario and that is subject to a security interest in another jurisdiction at the time that it is brought into Ontario.

(3.) Goods that are brought into Ontario and that are subject to the seller´s right to revendicate or to resume possession of the goods.

Renewal of a Registration

(1)

If a registration period is extended, the financing change statement referred to in subsection 52(1) of the Act shall be designated as a renewal and shall set out,

(a) the information required under section 19; and

(b) the number of years by which the registration period is extended.

(2)

The extension of a registration period shall be a whole number and, if the collateral,

(a) includes consumer goods, subject to subsection 51(6) of the Act, the period shall be extended for one year up to five years, as the case requires; or

(b) does not include consumer goods, the period shall be extended for one year up to twenty-five years or for a perpetual period, as the case requires.

(3)

If the registration period is extended for a perpetual period, the period shall be designated on the financing change statement by the number "99".

Registration of a Financing Statement Under Subsection 52(2) of the Act

(1)

Subject to subsection (2), if a registration ceases to be effective, the financing statement referred to in subsection 52(2) of the Act shall set out the information required under section 3.

(2)

If the secured party‘s name was changed or the secured party assigned its interest in all of the collateral since the original financing statement was registered, the financing statement referred to in subsection 52(2) of the Act shall set out the new name of the secured party or the assignee´s name, as the case requires.

Assignment by Secured Party

(1)

If the assignment by a secured party of the secured party‘s interest in all or part of the collateral is recorded, the financing change statement referred to in subsection 47(1) of the Act shall be designated as an assignment by the secured party or assignment of a security interest in part of the collateral by the secured part and shall set out,

(a) the information required by section 19;

(b) the name of the assignor as set out on the financing statement or a financing change statement that relates to the financing statement;

(d) despite clause 19(h), the authorized signature of the assignor or the authorized signature of the secured party.

(2)

If there is an assignment of the secured party´s interest in part of the collateral and the collateral to which the assignment relates includes a motor vehicle and the motor vehicle is,

(a) classified as consumer goods; or

(b) classified as equipment or inventory and is described on line 11 or 12 of the financing statement or a related financing change statement or on a motor vehicle schedule attached to a statement, the motor vehicle shall be described on line 11 or 12 of the financing change statement or on a motor vehicle schedule.

(3)

If the collateral includes a motor vehicle and the motor vehicle is not classified as set out in clause (2)(a) or classified and described as set out in clause (2)(b), the motor vehicle may be described on line 11 or 12 of the financing change statement or on a motor vehicle schedule.

(4)

The description of the motor vehicle on line 11 or 12 of the financing change statement or on a motor vehicle schedule shall include the vehicle identification number, the last two digits of the model year, if any, the model, if any, and the make or the name of the manufacturer.

(5)

If lines 11 and 12 of the financing change statement are completed, additional motor vehicles may be described in the appropriate place on the motor vehicle schedule.

(6)

If a transfer of part of the collateral relates to collateral that is not described as required in subsection (2), the collateral may be described on line 13, 14 or 15 of the financing change statement.

(7)

The description of a motor vehicle on line 13, 14 or 15 of a financing change statement shall not include the vehicle identification number.

Transfer of Collateral

(1)

If the transfer by a debtor of the debtor‘s interest in all or part of the collateral is recorded, the financing change statement referred to in section 48 of the Act shall be designated as a transfer by the debtor or transfer of part of the collateral by the debtor and shall set out,

(a) the information required by section 19;

(b) despite clause 19(d), the name of the transferor as the name is set out on the financing statement or a financing change statement that relates to the financing statement;

(d) if the transferee is a natural person, the date of birth of the person if known to the secured party; and

(e) the address of the transferee if known to the secured party.

(2)

If there is a transfer of part of the collateral by a debtor and the transferred collateral includes a motor vehicle and the motor vehicle is,

(a) classified as consumer goods; or

(b) classified as equipment or inventory and is described on line 11 or 12 of the financing statement or a related financing change statement or on a motor vehicle schedule attached to a statement,

the motor vehicle shall be described on line 11 or 12 of the financing change statement or on a motor vehicle schedule.

(3)

If a transfer of part of the collateral includes a motor vehicle and the motor vehicle is not classified as set out in clause (2)(a) or classified and described as set out in clause (2)(b), the motor vehicle may be described on line 11 or 12 of the financing change statement or on a motor vehicle schedule.

(4)

(5)

If lines 11 and 12 of the financing change statement are completed, additional motor vehicles may be described in the appropriate place on the motor vehicle schedule.

(6)

(7)

The description of a motor vehicle on line 13, 14 or 15 of a financing change statement shall not include the vehicle identification number.

Debtor Name Change

If the change of a debtor name is recorded, the financing change statement referred to in section 48 of the Act shall be designated as an amendment and shall set out the information required under clause 15(c).

Registration of a Discharge

10.

If the discharge of a registration is recorded, the financing change statement referred to in section 55 of the Act shall be designated as a discharge and shall set out the information required under section 19.

Registration of a Partial Discharge

11.

(1)

If the partial discharge of a registration is recorded, the financing change statement referred to in section 55 of the Act shall be designated as a partial discharge and shall set out the information required under section 19.

(2)

If the partial discharge relates to collateral that includes a motor vehicle and the motor vehicle is,

(a) classified as consumer goods; or

(b) classified as equipment or inventory and is described on line 11 or 12 of the financing statement or a related financing change statement or on a motor vehicle schedule attached to a statement,

the motor vehicle shall be described on line 11 or 12 of the financing change statement or on a motor vehicle schedule.

(3)

If the partial discharge includes a motor vehicle and the motor vehicle is not classified as set out in clause (2)(a) or classified and described as set out in clause (2)(b), the motor vehicle may be described on line 11 or 12 of the financing change statement or on a motor vehicle schedule.

(4)

(5)

If lines 11 and 12 of the financing change statement are completed, additional motor vehicles may be described in the appropriate place on the motor vehicle schedule.

(6)

Collateral other than collateral described as required in subsection (2) may be described on line 13, 14 or 15 of the financing change statement.

(7)

The description of a motor vehicle on line 13, 14 or 15 of a financing change statement shall not include the vehicle identification number.

Other Change (Subordination)

12.

If the subordination of the interest of a secured party of record is recorded, the financing change statement referred to in section 50 of the Act shall be designated as another change, and shall set out,

(a) the information required under section 19; and

(b) the type of change as a subordination and the particulars of the subordination on line 25, 26, 27 or 28.

(O. Reg. 7692, s. 2.)

Other Change (Seizure)

13.

If the seizure of a security interest by a sheriff is recorded, the financing change statement referred to in section 27 of the Execution Act shall be designated as an other change and shall set out,

(a) the information required under section 19;

(b) the type of change as a seizure of a security interest and the particulars of the seizure on line 25, 26, 27 or 28; and (O. Reg. 7692, s. 3.)

(d) despite clause 19(h), the signature of the sheriff.

(O. Reg. 7692, s. 3.)

Amendments to Information

14.

(1)

A financing change statement referred to in section 49 of the Act shall be designated as an amendment and shall set out,

(a) if the statement being amended was registered prior to the coming into force of this Regulation or under section 82 of the Act, the registration number of the statement or the file number assigned by the registrar to the financing statement;

(b) if the statement being amended was registered under Part IV of the Act, the file number assigned by the registrar to the financing statement;

(c) if the statement relates to a registration that was entered in the central file of the registration system by the registrar under section 78 of the Act, the registration number under the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or the file number assigned by the registrar to the registration;

(d) if a motor vehicle schedule is attached, an indication that it is attached;

(e) the information required under section 15;

(f) the name and address of one of the secured parties or of the registering agent, if any;

(g) a brief statement of the reasons for the amendment; and

(h) the authorized signature of the secured party.

(2)

This section and section 15 apply to an amendment to a motor vehicle schedule that is a page of a financing statement or a financing change statement.

15.

The financing change statement referred to in section 14 shall set out,

(a) if the amendment indicates that the financing statement should or should not have been designated as a caution filing,

(i) the name of one of the debtors as the name is set out on the financing statement,

(ii) an indication in the reasons for amendment that the financing statement should or should not have been designated as a caution filing, and (O. Reg. 7692, s. 4.)

(iii) the information required under section 14;

(b) if the amendment deletes a line of information on a financing statement or financing change statement,

(i) the name of one of the debtors as the name is set out on the statement,

(ii) an indication in the reasons for amendment what information is being deleted, and (O. Reg. 7692, s. 4.)

(iii) the information required under section 14;

(c) if the amendment substitutes a line of information for a line of information on a financing statement or financing change statement,

(i) the name of one of the debtors as the name is set out on the statement,

(ii) an indication in the reasons for amendment what information is being substituted, (O. Reg. 7692, s. 4.)

(iii) the line of information substituted, and

(iv) the information required under section 14;

(d) if the amendment adds a line of information to a financing statement or financing change statement, (O. Reg. 7692, s. 4.)

(i) the name of one of the debtors as the name is set out on the statement,

(ii) the line of information added, and

(iii) the information required under section 14;

(e) if the amendment is of a nature other than that referred to in clause (a), (b), (c), or (d),

(i) the name of one of the debtors as the name is set out on the statement,

(ii) the information, if any, added or substituted in the appropriate place, and

(iii) the information required under section 14.

(O. Reg. 7692, s. 4.)

Particulars of Content of Form

16.

(1)

The name of a debtor who is a natural person shall be set out in the financing statement to show the first given name, followed by the initial of the second given name, if any, followed by the surname.

(2)

If the first given name of the debtor exceeds nineteen characters, including punctuation marks and spaces, the first nineteen characters shall be set out in the appropriate place for the name and the complete name, including the initial of the second given name, if any, shall be set out on line 13, 14 or 15.

(3)

If the surname of a debtor exceeds twenty-two characters, including punctuation marks and spaces, the first twenty-two characters shall be set out in the appropriate place for the name and the complete name, including the initial of the second given name, if any, shall be set out on line 13, 14 or 15.

(4)

The name of a debtor that is an artificial body shall be set out in the financing statement as follows:

(1.) If the artificial body is a partnership and the partnership is,

(i.) registered under the Business Names Act, the registered name of the partnership,

(ii.) a limited partnership, the name of the partnership filed under the Limited Partnerships Act, or

(iii.) a partnership other than a partnership described in subparagraph i or ii,

(A.) the name of the partnership as set out in the security agreement, and

(B.) whether or not the person creates a security interest, the name of at least one of the partners, and if the partner is,

(1.) a natural person, the name in the manner required under subsection (1), or

(2.) an artificial body, the name in the manner required under this subsection.

(2.) If the artificial body is a corporation, the incorporated name of the corporation.

(3.) If the artificial body is an unincorporated association, organization, syndicate, joint venture or church or other religious organization,

(i.) the name as set out in the constitution, charter or other document creating the association, organization, syndicate, joint venture or church or other religious organization, and

(ii.) whether or not the person signing creates a security interest, the name of each person signing the security agreement on behalf of the association, organization, syndicate, joint venture or church or other religious organization, and if the person signing is,

(A.) a natural person, the name in the manner required under subsection (1), or

(B.) an artificial body, the name in the manner required under this subsection.

(4.) If the artificial body is an estate of a deceased natural person, the first given name, followed by the initial of the second given name, if any, followed by the surname of the deceased, followed by the word "estate".

(5.) If the artificial body is a trade union,

(i.) the name of the trade union, and

(ii.) whether or not the natural person creates a security interest, for each natural person signing the security agreement on behalf of the trade union, the name in the manner required under subsection (1).

(6.) If the artificial body is a trust and the document creating the trust,

(i.) designates a name for the trust, that name followed by the word "trust", or

(ii.) does not designate a name for the trust, whether or not the trustee creates a security interest, the name of one of the trustees, and if the trustee is,

(A.) a natural person, the name in the manner required under subsection (1), or

(B.) an artificial body, the name in the manner required under this subsection.

(7.) If the artificial body is an estate of a bankrupt and the bankrupt is,

(i.) a natural person, the first given name of the person, followed by the initial of the second given name, if any, followed by the surname, followed by the word "bankrupt", or

(ii.) an artificial body, the name of the person followed by the word "bankrupt".

(8.) If the artificial body is other than an artificial body described in paragraphs 1 to 7,

(i.) the name of the artificial body, and

(ii.) whether or not the person signing creates a security interest, the name of each person signing the security agreement on behalf of the artificial body, and if the person signing is,

(A.) a natural person, the name in the manner required under subsection (1), or

(B.) an artificial body, the name in the manner required under this subsection.

(5)

If a person is identified to the public by a name or style other than the person´s own name, the name may be set out in the financing statement on the appropriate line for business debtor.

(6)

The name of a person that is required to be set out on a financing statement under subsection (1) or (4) shall be set out for,

(a) a natural person, on the appropriate line for an individual debtor; or

(b) an artificial body, on the appropriate line for a business debtor.

17.

Despite paragraph 2 of subsection 16(4), if a corporation has an English form of name and a French form of name,

(a) the English form of the name shall be set out on the appropriate line for the name of a business debtor; and

(b) the French form of the name shall be set out on another appropriate line for the name of a business debtor.

18.

The date of birth or date of maturity in a financing statement or financing change statement shall be set out to show,

(a) the day of the month in numerals;

(b) the name of the month in accordance with the abbreviation or word set out in Column 2 of Schedule 3; and

19.

A financing change statement other than a statement designated as an amendment shall set out,

(a) if the financing statement to which the financing change statement relates was registered prior to the coming into force of this Regulation or under section 82 of the Act, the registration number or the file number assigned by the registrar to the financing statement;

(b) if the financing statement to which the financing change statement relates was registered under Part IV of the Act, the file number assigned by the registrar to the financing statement;

(c) if the financing change statement relates to a registration which was entered in the central file of the registration system by the registrar under section 78 of the Act, the registration number under the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, or the file number assigned by the registrar to the registration;

(d) the name of one of the debtors as the name is set out on the financing statement or a financing change statement that relates to the financing statement;

(e) if the financing change statement relates to a registration under the Corporation Securities Registration Act, being chapter 94 of the Revised Statutes of Ontario, 1980, the name of one of the debtors as the name has been entered in the central file of the registration system by the registrar under section 78 of the Act or as the name is set out on a financing change statement that relates to the entry;

(f) if a motor vehicle schedule is attached, an indication that it is attached;

(g) the name and address of one of the secured parties or of the registering agent, if any; and

(h) the authorized signature of the secured party.

Divided Registrations

20.

The registrant shall divide a registration that exceeds ninety pages into two or more separate registrations.

Approved Forms

21.

(1)

Upon application, the registrar may approve a form or format of financing statement or financing change statement. (O. Reg. 7692, s. 5.)

(2)

An approval granted under subsection (1) may be for a limited time period and may be qualified and may require that the qualification or approval be indicated on the form or format. (O. Reg. 7692, s. 5.)

(3)

The registrar may withdraw an approval granted under subsection (1) upon written notice sent by registered mail and the approval shall be deemed to be withdrawn ten days after the mailing of the notice.

(O. Reg. 7692, s. 5.)

Procedure

22.

(1)

A financing statement or financing change statement that is submitted to a branch registrar shall be submitted unseparated in duplicate or in triplicate, as the case requires.

(2)

Despite subsection (1), a single copy of a financing statement or a financing change statement may be submitted to a branch registrar if approved by the registrar.

(3)

The original of a financing statement or a financing change statement shall be known as the central office copy, one copy shall be known as the branch registry office copy and the remaining copy, if any, shall be known as the registrant‘s copy.

(4)

If the branch registrar accepts a financing statement or a financing change statement for registration, the branch registrar shall number the statement, separate the copies and forward the central office copy to the central office.

(5)

If the registrant requests that the registrant´s copy, if any, be returned to the registrant, the branch registrar shall,

(a) give the copy to the registrant at the branch registry office; or

(b) if the registrant requests that the copy be returned by mail and the registrant provides a prepaid addressed envelope, mail the copy to the registrant.

(6)

Clause (5)(a) does not apply to the central registration branch.

(7)

Subsection (5) does not apply to a registration that is accepted at the central registration branch if the registrar sends to the registrant a verification statement that includes particulars of the registered statement referred to in subsection (1).

(8)

The verification statement may be sent in an electronic format. (O. Reg. 7692, s. 6.)

(O. Reg. 7692, s. 6.)

Manner of Recording

23.

(1)

The information that is required or permitted by this Regulation to be set out on a financing statement, financing change statement or a motor vehicle schedule shall be set out in a manner suitable for filming and, without limiting the generality of the foregoing,

(a) the information shall be typewritten or machine printed in black ink with clear, neat and legible characters without erasures, interlineation or alterations;

(b) alphabetic characters shall be in upper case only; and

(2)

An error in transcribing information onto a financing statement, a financing change statement or a motor vehicle schedule in respect of the following information may be corrected before the statement is tendered for registration by typing an "X" over the error:

1. The name or address of a person.

2. The name or address of a secured party.

3. The description of the collateral.

4. The reasons for amendment or other change description.

5. The name or address of a registering agent.

(3)

The registrar or a branch registrar may refuse to accept a statement or a motor vehicle schedule if the correction may, in the opinion of the registrar or branch registrar, create an ambiguity.

24.

A financing statement or financing change statement tendered for registration by mail shall be addressed to:

Personal Property Security Registrations Central Registration Branch Box 21100 Postal Station A Toronto, Ontario M5W 1W6

24.1.

A financing statement or financing change statement in an electronic format tendered for registration by delivery as described in clause 46(2)(a) of the Act shall be delivered to one of the following addresses:

Central Office Personal Property Security Registration Branch Registration Division Ministry of Consumer and Commercial Relations 393 University Avenue, 3rd Floor Toronto, Ontario.

Computer and Telecommunication Services Ministry of Government Services East Building 1201 Wilson Avenue Downsview, Ontario.

(O. Reg. 7692, s. 7.)

25.

(1)

The punctuation mark or symbol set out in Column 2 of Schedule 1 may be used in a financing statement, a financing change statement or a motor vehicle schedule in lieu of the information set out opposite thereto in Column I of Schedule 1.

(2)

The abbreviations or expansions set out in Column 2 of Schedule 2 may be used in lieu of the information set out opposite thereto in Column I of Schedule 2 with respect to,

(a) items 1 to 14, on lines 03, 06, 0306, 08, 0816, 16, 24 and 29 in a financing statement or a financing change statement;

(b) items 15 to 35, on lines 04, 07, 09, 0407, 0917 and 17 in a financing statement or a financing change statement;

(c) items 36 to 57, on lines 11 and 12 in a financing statement or a financing change statement or on lines 41 to 56 in a motor vehicle schedule; and

(d) items 58 to 62, on lines 13, 14 and 15 in a financing statement or a financing change statement.

26.

The time assigned to a registration shall correspond with the time at the central office.

26.1.

Despite section 26, if the registration of a financing statement or financing change statement is in an electronic format, the time assigned to the registration is the time assigned by the computer used in the registration system.

(O. Reg. 7692, s. 8.)

Registration In An Electronic Format

26.2.

(1)

Sections 1 to 26.1 apply, subject to this section, to financing statements and financing change statements tendered for registration in an electronic format by delivery, by mail or by direct electronic transmission. (O. Reg. 7692, s. 8.)

(2)

Clauses 3(1)(k), 7(1)(d), 13(d), 14(1)(h) and 19(h), subsections 22(1) to (6) and section 23 do not apply to information tendered for registration in an electronic format. (O. Reg. 7692, s. 8.)

(3)

The authorized signature of a secured party under subsection 3(2) or of the assignor under subsection 3(3) is not required in the case of a financing statement tendered for registration in an electronic format. (O. Reg. 7692, s. 8.)

(O. Reg. 7692, s. 8.)

Forms

27.

(1)

A financing statement shall be in Form 1.

(2)

A financing change statement shall be in Form 2 or Form 3, as the case requires.

(3)

A motor vehicle schedule shall be in Form 4.

(4)

A notice of a security interest in collateral that is fixtures, goods that may become fixtures, crops, oil, gas or minerals to be extracted under subsection 54(1) of the Act shall be in Form 5.

(5)

A notice of a security interest in a right to payment under a mortgage, charge or lease of real property under subsection 54(1) of the Act shall be in Form 6.

(6)

A notice of a security interest under this section shall be signed by the secured party or the secured party‘s solicitor in personal representative.

(7)

An extension notice under subsection 54(3) of the Act shall be in Form 7 and shall be signed by the secured party, the secured party´s solicitor or personal representative.

(8)

A notice registered in Form 5, 6 or 7 may be discharged by registering a certificate of discharge in Form 8.

(9)

A certificate of discharge shall be signed by the secured party or the secured parry‘s solicitor or personal representative.

(10)

If a solicitor or personal representative signs Form 5, 6, 7 or 8, the title or capacity of the person signing shall be set out on the form.

28.

The charge for a statement referred to in subsection 18(7) of the Act shall not exceed,

(a) for a statement in writing of the amount of the indebtedness and the terms of payment thereof, $10.00;

(b) for a statement in writing approving or correcting a statement of the collateral or a part thereof as specified in a list attached to the notice, $5.00;

(c) for a statement in writing approving or correcting a statement of the amount of the indebtedness and of the terms of payment thereof, $5.00;

(d) for a true copy of the security agreement, for each page thereof, 50 cents;

(e) for 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, no charge.

Schedule 1

Item Column 1 Column 2

1. Parentheses ( )

2. Apostrophe ´

3. Period .

4. Plus sign +

5. Ampersand &

6. Hyphen -

7. Virgule

8. Comma ,

9. Percent sign %

10. Quotation mark "

11. Dollar sign $

12. Number sign #

13. Question mark ?

14. asterisk *

15. colon :

16. semicolon ;

17. greater than >

18. equal =

19. less than <

20. square brackets [ ]

21. oblique \

22. exclamation mark !

Schedule 2

Item Column 1 Column 2

1. COMPANY CO

2. LIMITED LTD

3. INCORPORATED INC, INCORP, INCORPORATE

4. CORPORATION CORP

5. BROTHERS BROS, BRO‘S, BROTHER, BRO, BROTHER´S

6. DIVISION DIV, DIVS, DIVISIONS, DIVISION‘S

7. CANADA CAN

8. INTERNATIONAL INT, INTS, INT´S, INT‘L, INT´LS, INTERN, INTERNS,

INTERNATIONALS

9. CONSTRUCTION CONST, CONSTR

10. COOPERATIVE COOPERATIVES, CO-OPERATIVE, CO- OPERATIVES, COOP,

COOPS, CO-OP, CO-OPS

11. NUMBER NO, #

12. AND &

13. MISTER MR, MR‘S, MISTERS, MISTER´S

14. ASSOCIATION ASSOCIATIONS, ASSOC, ASSOCS, ASSOC‘S, ASS´N,

ASSN‘S, ASS´NS

15. 12 ONE HALF

16. STREET ST

17. AVENUE AVE

18. ROAD RD

19. BOULEVARD BLVD

20. CIRCLE CIR

21. CRESCENT CRES

22. DRIVE DR

23. COURT CT

24. HIGHWAY HWY

25. APARTMENT APT

26. EAST E

27. WEST W

28. NORTH N

29. SOUTH S

30. LOT L

31. CONCESSION CON, C

32. TOWNSHIP TWSP, TWP

33. RURAL ROUTE RR

34. TORONTO TOR

35. ONTARIO ONT, ON

36. INTERNATIONAL

HARVESTER IH, INTERNAT HARV

37. MASSEY

FERGUSON MF

38. CHEVROLET CHEV

39. PONTIAC PONT

40. OLDSMOBILE OLDS

41. CHRYSLER CHRYS

42. PLYMOUTH PLY

43. AMERICAN

MOTORS AM, AM MOTORS

44. MOTORS MTRS

45. VOLKSWAGEN VW

46. RAMBLER RAMBL

47. 12 TON TRUCK HLF TON TRK

48. 12 TON

PICKUP TRUCK HALF TON PU TRK

49. 34 TON TRUCK 3 QTR TON TRK

50. STATION WAGON STN WGN

51. 4 DOOR HARDTOP 4 DR HDTP

52. CONVERTIBLE CONV

53. COUPE CPE

54. DELIVERY VAN DEL VAN

55. SEDAN SDN

56. SUPERSPORT SS

57. SERIAL NUMBER SERIAL

58. INCH IN

59. TELEVISION TV

60. 12 HLF

61. 14 QTR

62. BEDROOM SUITE BDRM STE

Schedule 3

Item Column 1 Column 2

1. JANUARY JAN

2. FEBRUARY FEB

3. MARCH MAR

4. APRIL APR

5. MAY MAY

6. JUNE JUN, JUNE

7. JULY JUL, JULY

8. AUGUST AUG

9. SEPTEMBER SEP

10. OCTOBER OCT

11. NOVEMBER NOV

12. DECEMBER DEC

Form 1

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Form 3

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Regulation 34597 under the Personal Property Security Act

O. Reg. 34597, gazetted September 27, 1997, effective September 8, 1997.

Fees

The following fees are payable under the Act:

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Despite section 1, no fee is required to be paid under that section by,

(a) a ministry of the Government of Ontario or an agency, board or commission of the Crown in right of Ontario if that entity has entered into a written agreement with the registrar that provides that the entity is not required to pay fees under that section; or

(b) a police department, fire department or any other law enforcement agency.

Ontario Regulation 54794 and 43796 are revoked.

This Regulation comes into force on October 1, 1997.

Prepaid Services Act

R.S.O. 1990, c. P.22.

1. Definitions

In this Act,

"contract" means a contract for services to which this Act applies;

"customer" means a person who enters into, or is discussing with an operator the prospect of entering into, a contract;

"initiation fee" means a fee in addition to the annual membership fee;

"membership fee" means the amount payable by a customer for the use of services;

"operator" means a person who provides or offers to provide services;

"payment" includes an initiation fee;

"services" means facilities provided for, or instruction on,

(a) health, fitness, modelling, talent development, diet or matters of a similar nature, or

(b) martial arts, sports, dance or similar activities.

2. Application

(1)

This Act applies in respect of services or proposed services for which payment in advance is required.

(2) Idem

This Act does not apply in respect of services that are provided,

(a) on a non-profit or co-operative basis;

(b) by a private club primarily owned by its members;

(d) by an operator funded or run by a charitable or municipal organization or by the Province of Ontario or any agency thereof;

(e) for an amount less than that prescribed by regulation.

(3) Idem

This Act does not apply to a contract in force at the time this Act comes into force.

3. Contract required

(1)

No operator shall require or accept advance payment for services from a customer with whom the operator does not have a written contract that meets the conditions set out in section 4.

(2) Payments repayable

All payments received in contravention of subsection (1) are repayable to the person making the payments on demand by that person.

4. Information in contract

(1)

A contract must set out,

(a) the name and address of the operator and the customer;

(b) a description of the services contracted for by the customer that is sufficient to identify them with certainty;

(d) the conditions upon which the contract may be renewed, cancelled or rescinded;

(e) if payment is to be by instalment, the number of instalments, the amount of each instalment and the total additional cost, if any, for payment by instalment; and

(f) where any part of the services are not available at the time the contract is signed, the date that the services will be made available and the name and address of the person holding the trust funds pending availability.

(2) Renewal of contracts

A contract that provides for renewal must also provide that it is not renewable if the customer notifies the operator in writing, before the time for renewal, that the customer does not want to renew.

5. Contracts for one year only

No contract may be made for a term longer than one year after the day that all the services are made available to the customer.

6. Only one contract

(1)

No contract may be made between two parties to an existing contract unless the subsequent contract is for services that are distinctly different from the services to be provided under the existing contract.

(2) Idem

For the purposes of subsection (1), a different term or a different commencement date does not constitute a distinct difference in the services to be provided.

7. Initiation fee

(1)

No operator shall charge a customer more than one initiation fee.

(2) Idem

No operator shall charge an initiation fee that is greater than twice the annual membership fee.

8. Instalment plans

(1)

Every operator shall make available to customers at least one plan for instalment payments of membership and, where applicable, initiation fees whereby customers may make equal monthly payments over the term of the contract.

(2) Idem

In a plan for payments, the total amount paid by instalments shall not exceed the membership or initiation fee, if applicable, by more than 25 per cent.

9. Rescission

(1)

Any customer may rescind a contract by delivering written notice of rescission to the operator within five days after the contract is signed or the services are available, whichever is the later.

(2) Idem

A customer who rescinds a contract is not liable for payment for services received or used up to the rescission and is entitled to a refund of any payment made pursuant to the contract.

(3) Idem

A notice of rescission sent to an operator by registered mail shall be deemed to be delivered on the day that it is mailed.

10. Refund

Every operator who owes a refund shall pay the refund within twenty days,

(a) after receiving notice of rescission or cancellation, as the case may be; or

(b) where subsection 13(3) or (4) applies, after the day specified in the contract or the expiration of the last permission, whichever is the later.

11. Notice re renewal

(1)

Where a contract provides for renewal and the operator does not deliver to the customer a notice reminding the customer of the provision required by subsection 4(2), the provision for renewal does not apply.

(2) Idem

The notice under subsection (1) must be delivered at least thirty days before but not more than ninety days before the end of the contract.

(3) Idem

A notice under subsection (1) sent by registered mail to the customer at the last known address of the customer that the operator has shall be deemed to be delivered on the day that it is mailed.

(4) Monthly renewals

Subsection (1) does not apply to a contract providing for successive monthly renewals where the customer has the option of cancelling on one month‘s notice or less.

12. Trust account

Every operator shall maintain a trust account designated by the name of the operator and the words "prepaid contract trust" or "fiducie des contrats prépayés" at a bank, trust corporation, credit union or caisse populaire in which the operator shall place all funds received in respect of membership for a contract that may be rescinded under section 9.

13. Trustee

(1)

No operator shall receive payment from a customer for services that are not available at the time the payment is made except through a trust corporation registered under the Loan and Trust Corporations Act that has agreed to act as a trustee for the payment.

(2) Exception

Subsection (1) does not apply where one of the services that is not available is the use of the facility and the customer has agreed in writing to use another facility provided by the operator until the facility contracted for is available.

(3) Facility not available

Where a facility is not available for use on the day specified in the contract, the trustee shall refund all payment received from the customer unless the customer agrees in writing to permit the trustee to retain the payment.

(4) Extension

No permission given under subsection (3) applies for longer than ninety days but a subsequent permission may be given on the expiration of a permission.

(5) Duties of trustee

Where an operator has a trustee under subsection (1),

(a) any notice to the trustee shall be deemed to be notice to the operator as if the trustee were the operator; and

(b) any money payable by the operator is payable by the trustee to the extent that the trustee holds sufficient trust funds for that purpose.

(6) Idem

Every trustee under subsection (1) shall, upon receiving any payment from a customer, provide the customer with written confirmation of receipt of the payment and that the payment will be dealt with in accordance with this Act.

(7) Idem

No trustee shall release to an operator funds received from a customer except in accordance with the trust agreement.

14. Waiver invalid

A waiver by a customer of any provision of this Act is not valid.

15. Penalty

(1)

Every person who contravenes this Act or the regulations is guilty of an offence and on conviction is liable to a fine of not less than $2,000 and not more than $25,000 or to imprisonment for a term of not more than one year, or to both, or if such person is a corporation, to a fine of not more than $50,000.

(2) Idem

Where a corporation is guilty of an offence under this Act or the regulations, every director or officer of the corporation who authorized, permitted or acquiesced in the offence is also guilty of an offence and on conviction is liable to a fine of not less than $2,000 and not more than $25,000 or to imprisonment for a term of not more than one year, or to both.

16. Regulations

The Lieutenant Governor in Council may make regulations,

(a) defining any word or expression used in this Act;

(b) regulating the form of contracts including the size, type and colour of letters used therein;

(d) prescribing classes of operators;

(e) exempting any class of operator from the application of this Act or the regulations or any provision of this Act or the regulations;

(f) prescribing an amount for the purposes of clause 2(2)(e);

(g) governing trusts set up for purposes of subsection 13(1) and prescribing terms of trust agreements.

General Regulation under the Prepaid Services Act

R.R.O. 1990, Regulation 934.

1. [Definition of "amount"]

(1)

For the purposes of clause 2(2) of the Act, "amount" includes payments made or required to be made within one year with respect to a contract or series of contracts or a similar nature entered into at the same time.

(2) [Amount prescribed]

For the purposes of clause 2(2) of the Act, the amount prescribed is $50.

Repair and Storage Liens Act

R.S.O. 1990, c. R.25.

1. Definitions

(1)

In this Act,

"article" means an item of tangible personal property other than a fixture;

"lien claimant" means a person who is entitled to claim a lien for the repair, storage or storage and repair of an article;

"motor vehicle" means a motor vehicle as defined in the regulations made under the Personal Property Security Act;

"prescribed" means prescribed by a regulation made under this Act;

"registrar" and "branch registrar" mean, respectively, the registrar and a branch registrar under the Personal Property Security Act;

"repair" means an expenditure of money on, or the application of labour, skill or materials to, an article for the purpose of altering, improving or restoring its properties or maintaining its condition and includes,

(a) the transportation of the article for purpose of making a repair,

(b) the towing of an article,

"repairer" means a person who makes a repair on the understanding that the person will be paid for the repair;

"storer" means a person who receives an article for storage or storage and repair on the understanding that the person will be paid for the storage or storage and repair, as the case may be.

(2) Repair, etc., by third party

The following rules apply where an article is left for repair, storage or storage and repair and the article is forwarded by the person with whom the article is left to some other person for the repair, storage or storage and repair:

1. The person with whom the article was left shall be deemed to have performed the services and to be entitled to the rights of a repairer or storer against the person who left the article unless,

i. there is a written agreement between the person who left the article and the person with whom it was left that there is no lien, or

ii. the person with whom the article was left has agreed to act as agent for the person who left the article in forwarding it to an identified repairer or storer for the repair, storage or storage and repair.

2. Unless subparagraph ii of paragraph 1 applies, the person to whom the article was forwarded does not have a lien under this Act.

2. Act binds Crown

This Act binds the Crown.

PART I — Possessory Liens

3. Repairer´s lien

(1)

In the absence of a written agreement to the contrary, a repairer has a lien against an article that the repairer has repaired for an amount equal to,

(a) the amount that the person who requested the repair agreed to pay;

(b) where no such amount has been agreed upon, the fair value of the repair; or

and the repairer may retain possession of the article until the amount is paid.

(2) When lien arises

A repairer‘s lien arises and takes effect when the repair is commenced.

(3) Disposition

A repairer has the right to sell an article that is subject to a lien in accordance with Part III (Redemption, Sale or Other Disposition) upon the expiration of the sixty-day period following the day,

(a) on which the amount required to pay for the repair comes due; or

(b) on which the repair is completed, if no date is stated for when the amount required to pay for the repair comes due.

(4) Deemed possession

For the purposes of this Act, a repairer who commences the repair of an article that is not in the repairer´s actual possession shall be deemed to have gained possession of the article when the repair is commenced and shall be deemed to have given up possession when the repair is completed or abandoned.

(5) Idem

A repairer who, under subsection (4), is deemed to have possession of an article may remove the article from the premises on which the repair is made.

4. Storer‘s lien

(1)

Subject to subsection (2), a storer has a lien against an article that the storer has stored or stored and repaired for an amount equal to,

(a) the amount agreed upon for the storage or storage and repair of the article;

(b) where no such amount has been agreed upon, the fair value of the storage or storage and repair, including all lawful claims for money advanced, interest on money advanced, insurance, transportation, labour, weighing, packing and other expenses incurred in relation to the storage or storage and repair of the article,

and the storer may retain possession of the article until the amount is paid.

(2) Limit on storer´s lien

A storer is not entitled to a lien for a repair made to an article unless the repair is made by the storer on the understanding that the storer would be paid for the repair or unless subsection 28(2) applies.

(3) When lien arises

A storer‘s lien arises and takes effect when the storer receives possession of the article for storage or storage and repair.

(4) Notice to owner, etc., in certain cases

Where the storer knows or has reason to believe that possession of an article subject to a lien was received from a person other than,

(a) its owner; or

(b) a person having its owner´s authority,

the storer, within sixty days after the day of receiving the article, shall give written notice of the lien,

(c) to every person whom the storer knows or has reason to believe is the owner or has an interest in the article, including every person who has a security interest in the article that is perfected by registration under the Personal Property Security Act against the name of the person whom the storer knows or has reason to believe is the owner; and

(d) in addition to the notices required by clause (c) where the article is a vehicle,

(i) to every person who has a registered claim for lien against the article under Part II of this Act,

(ii) to every person who has a security interest in the vehicle that is perfected by registration under the Personal Property Security Act against the vehicle identification number of the vehicle, and

(iii) if the vehicle is registered under the Highway Traffic Act, to the registered owner.

(5) Contents of notice

A notice under subsection (4) shall contain,

(a) a description of the article sufficient to enable it to be identified;

(b) the address of the place of storage, the date that it was received and the name of the person from whom it was received;

(d) a statement advising how the article may be redeemed.

(6) Effect of failure to give notice

Where a storer fails to give the notice required by subsection (4), the storer‘s lien as against the person who should have been given the notice is limited to the unpaid amount owing in respect of the period of sixty days from the date when the article was received, and the storer shall surrender possession of the article to that person where the person proves a right to possession and pays that amount.

(7) Disposition

The storer has the right to sell an article that is subject to a lien in accordance with Part III (Redemption, Sale or Other Disposition) upon the expiration of the sixty-day period following the day on which the amount required to pay for the storage or storage and repair becomes due.

5. Loss of lien

A lien under this Part is discharged and cannot be revived as an interest in the article if possession of the article that is subject to the lien is surrendered to, or lawfully comes into the possession of, the owner or any other person who is entitled to receive a notice under subsection 15(2).

6. Priority of lien

A lien under this Part has priority over the interests of all other persons in the article.

PART II — Non-Possessory Liens

7. Non-possessory lien

(1)

A lien claimant who is entitled to a lien under Part I (Possessory Liens) against an article, and who gives up possession of the article without having been paid the full amount of the lien to which the lien claimant is entitled under Part I, has, in place of the possessory lien, a non-possessory lien against the article for the amount of the lien claimed under Part I that remains unpaid.

(2) When lien arises

A non-possessory lien arises and takes effect when the lien claimant gives up possession of the article.

(3) Priority

A non-possessory lien has priority over the interest in the article of any other person other than a lien claimant who is claiming a lien under Part I, and, where more than one non-possessory lien is claimed in the same article, priority shall be determined according to the same rules of priority as govern the distribution of proceeds under section 16.

(4) Period of credit not to affect lien

A non-possessory lien is not extinguished by reason only that the lien claimant has allowed a period of credit for the payment of the debt to which the lien relates.

(5) Acknowledgment of indebtedness required

A non-possessory lien is enforceable only if the lien claimant obtains a signed acknowledgment of the indebtedness which acknowledgment may be on an invoice or other statement of account.

(6) Idem

An acknowledgment of indebtedness under subsection (5) is without prejudice to the right of the owner or any other person to dispute in a proceeding the amount that the lien claimant is owed.

8. Transactions in ordinary course of business

(1)

A buyer of an article from a seller who sells it in the ordinary course of business takes it free of any non-possessory lien of a lien claimant whose lien arose from its repair or storage at the request of the seller or the seller´s agent, unless the buyer signs an acknowledgment referred to in subsection 7(5).

(2) Idem

Even though a buyer has signed an acknowledgment as provided in subsection (1), a purchaser purchasing the article in the ordinary course of the buyer‘s business takes it free of the lien claimant´s lien.

9. Registration of documents

(1)

A claim for lien or change statement to be registered under this Part shall be in the prescribed form and may be tendered for registration at a branch office established under Part IV of the Personal Property Security Act, or by mail addressed to an address prescribed under that Act.

(2) Errors in documents

A claim for lien or change statement is not invalidated nor is its effect impaired by reason only of 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.

10. Claim for lien

(1)

A non-possessory lien is enforceable against third parties only if a claim for lien has been registered, and, where a person acquires a right against an article after a non-possessory lien arises, the right of the person has priority over the non-possessory lien of the lien claimant if a claim for lien was not registered before the person acquired the right.

(2) Idem

A claim for lien may relate to more than one article and may be registered at any time after an acknowledgment of indebtedness has been signed.

(3) Idem

A claim for lien is effective from the time assigned to its registration by the registrar or branch registrar and expires at, and cannot be renewed after, the end of the earlier of,

(a) the end of the registration period as set out in the claim for lien or as extended by the most recent change statement registered under subsection (4) or reduced by a change statement registered under subsection (7); and

(b) the third anniversary of the registration of the claim for lien.

(4) Idem

The registration period set out in a claim for lien or change statement may be extended by filing a change statement before the end of the registration period.

(5) Assignment

A change statement may be registered to record an assignment of a non-possessory lien where a claim for lien has been registered.

(6) Idem

Where a claim for lien has not been registered and the lien claimant has assigned the non-possessory lien before the registration of the claim for lien, a claim for lien may be registered,

(a) naming the assignor as the lien claimant and subsection (5) applies; or

(b) naming the assignee as the lien claimant and subsection (5) does not apply.

(7) Changes in information

Unless the information related to a claim for lien has been removed from the central file of the registration system, a change statement may be registered at any time during the registration period,

(a) to correct an error or omission in a claim for lien or any change statement related thereto; or

(b) to amend a claim for lien or any change statement related thereto where the amendment is not otherwise provided for in this Part.

11. Change statements

The registration of a change statement is effective from the time assigned to its registration by the registrar or branch registrar and is effective so long as the registration of the claim for lien to which it relates is effective.

12. Discharge

(1)

A non- possessory lien is discharged and cannot be revived as an interest in the article,

(a) upon payment to the lien claimant of the amount of the lien claimed;

(b) upon payment into court under Part IV (Dispute Resolution) of the amount set out in the claim for lien;

(d) upon the registration of a change statement recording the discharge;

(e) upon the expiry of the registration period of the claim for lien; and

(f) if the article is a motor vehicle, upon a change of ownership of the vehicle if a claim for lien was not registered before the change of ownership occurred.

(2) Partial discharge

Where a claim for lien relates to more than one article and it is agreed to release one or more, but not all, of the articles from the lien, a change statement recording the release may be registered.

(3) Idem

Where a release described in subsection (2) is given, any person may, by written request, require the lien claimant to deliver to the person making the request a change statement recording the release.

(4) Time limit

Within thirty days after a registered claim for lien is discharged under clause (1)(a), (b), (c) or (f) or within thirty days of a request being made under subsection (3), the lien claimant shall register a change statement recording the discharge or partial discharge.

(5) Penalty

Where a lien claimant fails to comply with subsection (4), the claimant, on written notice from the owner or other person with an interest in the article, shall pay the owner or other person $100 and any damages resulting from the failure, which sum and damages are recoverable in any court of competent jurisdiction.

13. Correction of registrar‘s records

Upon application to the Ontario Court (General Division), the court may order the registrar to amend the information recorded in the central file of the registration system to indicate that the registration of a claim for lien has been discharged or has been partially discharged, upon any grounds and subject to any conditions that the court considers appropriate in the circumstances.

14. Seizure of article

(1)

A lien claimant who has a non-possessory lien and who has registered a claim for lien may deliver at any time to the sheriff for the area in which the article is located a copy of the registered claim for lien and a direction to seize the article.

(2) Idem

Upon receipt of a copy of a registered claim for lien and a direction to seize an article under subsection (1), the sheriff shall seize the article described in the direction wherever it may be found and shall deliver it to the lien claimant who issued the direction.

(3) Other powers of seizure not affected

Nothing in subsection (1) or (2) prevents a lien claimant from exercising any lawful power of seizure with respect to the article whether provided for by contract or otherwise available to the lien claimant by law.

(4) Limitation

An article shall not be seized if it is in the possession of a lien claimant who claims to be entitled to a lien against it under Part I (Possessory Liens).

(5) Disposition

A lien claimant who has a non-possessory lien against an article has a right to sell the article in accordance with Part III (Redemption, Sale or Other Disposition) if,

(a) the article has been seized and is in the possession of the lien claimant;

(b) at least sixty days have expired since the day when the non-possessory lien arose; and

(6) Liability for damages

The lien claimant is liable to any person who suffers damages as a result of a seizure under subsection (1) if the lien claimant has entered into an agreement for payment of the debt to which the claim for lien relates and there has been no default under the agreement.

PART III — Redemption, Sale or Other Disposition

15. Sale of article

(1)

A lien claimant who has a right, under this Act, to sell an article shall not exercise that right unless the lien claimant has given notice of intention to sell the article.

(2) Idem

A notice of intention to sell an article shall be in writing and shall be given at least fifteen days before the sale to,

(a) the person from whom the article was received for repair, storage or storage and repair;

(b) where the article was received for repair, storage or storage and repair from a person other than the owner,

(i) the person who is the registered owner of the article, if the article is a motor vehicle, or

(ii) the person the lien claimant knows or has reason to believe is the owner, if the article is not a motor vehicle;

(c) every person who has a security interest in the article under the Personal Property Security Act that is perfected by registration against,

(i) the name of the owner, if the owner is a person entitled to notice under clause (a) or (b),

(ii) the vehicle identification number, if the article is a motor vehicle; and

(d) every person who has registered a claim for lien under Part II (Non-possessory Liens) against,

(i) the name of the owner, if the owner is a person entitled to notice under clause (a) or (b),

(ii) the vehicle identification number, if the article is a motor vehicle.

(3) Contents of notice

The notice required by subsection (2) shall contain,

(a) a description of the article sufficient to enable it to be identified;

(b) a statement of the amount required to satisfy the lien, as of the time when the notice is given, and any costs of seizure;

(c) a statement of the method of calculating, on a daily basis, any further costs for storage or preservation of the article that may be incurred between the time when the notice is given and the time when the sale is to take place;

(d) a statement that the article may be redeemed by any person entitled to receive notice by payment of the amount determined under clauses (b) and (c) plus any other reasonable costs incurred in preparing the article for sale;

(e) a statement of,

(i) the name of the person to whom payment may be made,

(ii) the address where the article may be redeemed,

(iii) the times during which redemption may be made,

(iv) the telephone number, if any, of the person giving notice;

(f) a statement of the date, time and place of any public sale at which the article is to be sold, or the date after which any private sale of the article is to be made; and

(g) a statement that the article may be sold unless it is redeemed on or before the day required to be specified in the notice by clause (f).

(4) Method of sale

The article may be sold in whole or in part, by public or private sale, at any time and place, on any terms, so long as every aspect of the sale is commercially reasonable.

(5) Purchase by lien claimant

The lien claimant may purchase the article only at a public sale.

16. Proceeds of sale

(1)

Where a lien claimant has sold an article under this Part, the proceeds of sale shall be applied consecutively,

(a) to the reasonable expenses of selling the article;

(b) to the costs of seizure;

(c) where the lien claimant making the sale has a possessory lien under Part I, to the satisfaction of the lien of the lien claimant making the sale;

(d) where the lien claimant making the sale has a possessory lien under Part I, to the satisfaction of the lien of every lien claimant who has a registered non-possessory lien under Part II against the article, who gives the lien claimant making the sale written notice of the amount owing in respect of the registered non-possessory lien claimed by the person giving the notice before or within ten days after the sale, in reverse order to the order in which the lien claimants gave up possession;

(e) where the lien claimant making the sale has a non-possessory lien under Part II, to the satisfaction of the lien of the lien claimant making the sale and to the satisfaction of the lien of every other lien claimant who has a registered non-possessory lien under Part II against the article, who gives the lien claimant making the sale written notice of the amount owing in respect of the registered non-possessory lien claimed by the person giving the notice before or within ten days after the sale, in reverse order to the order in which the lien claimants gave up possession;

(f) to the payment of every person who has a perfected security interest in the article under the Personal Property Security Act who was entitled to notice under subsection 15(2), who gives the lien claimant written notice of the amount owing in respect of the perfected security interest claimed by the person giving the notice before or within ten days after the sale, in accordance with the priority rules under that Act; and

(g) to the payment of the owner or other person entitled thereto, if the lien claimant has actual knowledge of the claim of that person.

(2) Payment into court

Where there is a question concerning the right of any person to share in the proceeds of a sale, the lien claimant may pay the proceeds or any part thereof into court and the proceeds shall not be paid out of court except in accordance with an order made under section 23.

17. Retention of article

(1)

A lien claimant who has a right to sell an article may propose, in lieu of selling it, to retain the article in satisfaction of the amount of the lien claimed by giving written notice of the proposal to the persons entitled to notice under subsection 15(2).

(2) Objection

Where a person entitled to notice under subsection (1) gives the lien claimant a written objection to the proposal within thirty days of the receipt of the proposal, the lien claimant, subject to subsections (3) and (4), shall sell the article in accordance with section 15.

(3) Application to Court

Upon application to the Ontario Court (General Division) and upon notice to every person who has given a written objection to the proposal, the court may order that the objection is ineffective because,

(a) the objection was made for a purpose other than the protection of the interest in the article of the person who made the objection; or

(b) the fair market value of the article is less than the amount of the lien of the lien claimant and the estimated expenses to which the lien claimant is entitled under this Act.

(4) Foreclosure

If no effective objection is made, the lien claimant, at the expiration of the thirty-day period mentioned in subsection (2), shall be deemed to have irrevocably elected to retain the article and thereafter is entitled to hold or dispose of the article free from the rights and interests of every person to whom the written notice of the proposal was given.

18. Effect of sale or foreclosure; amount of lien deemed satisfied

Where a lien claimant,

(a) sells an article under section 15; or

(b) is deemed to have elected irrevocably to retain the article under subsection 17(4),

the lien claimant shall be deemed to have sold the article or retained the article in full satisfaction of the amount owing in respect of the lien.

19. Gift to charity

(1)

A lien claimant who has retained possession of an article for twelve months after the right to sell the article arose may give the article to a charity registered under the Income Tax Act (Canada) if,

(a) the article has a fair market value of less than the total of the amount of the lien claimed by the lien claimant and the amount of the estimated expenses to which the lien claimant is entitled under this Act; and

(b) the lien claimant has not given a notice of intention to sell under section 15 or a notice of a proposal to retain the article under section 17.

(2) Records to be maintained

A lien claimant who disposes of an article under this section shall maintain for six years a record of the article disposed of and the charity to which it was given.

20. Effect of disposition on title of article

(1)

Although a lien claimant has failed to comply with this Part, a purchaser who buys an article in good faith,

(a) in a sale under section 15; or

(b) from a lien claimant who has retained an article under section 17,

acquires the article free of the interest of the owner and any person entitled to notice under this Part.

(2) Idem

A charity that is given an article by a lien claimant under section 19, acquires the article free of the interest of the owner and all other persons.

21. Liability of lien claimant for non-compliance

A lien claimant who fails to comply with the requirements of this Part is liable to any person who suffers damages as a result and shall pay the person an amount equal to the greater of $200 or the actual damages.

22. Redemption of article

At any time before the lien claimant,

(a) has sold the article under section 15 or contracted for such sale;

(b) is deemed to have irrevocably elected to retain the article under section 17; or

the owner and any person referred to in subsection 15(2) may redeem the article by paying the amount required to satisfy the lien.

PART IV — Dispute Resolution

23. Determination of rights by court

(1)

Any person may apply to a court for a determination of the rights of the parties where a question arises with respect to,

(a) the seizure of an article under Part II (Non-possessory Liens) or any right of seizure in respect of an article;

(b) the sale of an article under Part III (Redemption, Sale or Other Disposition);

(c) the distribution of the proceeds of the sale of an article under Part III, including the right of any person to share in those proceeds, and the obligation of any lien claimant to account for those proceeds;

(d) the amount of a lien or the right of any person to a lien; and

(e) any other matter arising out of the application of this Act,

and the court may make such order as it considers necessary to give effect to those rights.

(2) Limitation

An application shall not be made under clause (1)(d) where an application has been made under section 24.

24. Possessory liens; return of article

(1)

Where a lien is claimed under Part I (Possessory Liens) and the lien claimant refuses to surrender possession of the article to its owner or any other person entitled to it, and there is,

(a) a dispute concerning the amount of the lien of the lien claimant including any question relating to the quality of the repair, storage or storage and repair;

(b) in the case of a repair, a dispute concerning the amount of work that was authorized to be made to the article; or

the owner or other person lawfully entitled to the article may apply to the court in accordance with the procedure set out in this section to have the dispute resolved and the article returned.

(2) Respondent

The lien claimant shall be named as the respondent in the application.

(3) Form

The application shall be in the prescribed form and may include an offer of settlement.

(4) Payment into court

The applicant shall pay into court, or deposit security with the court in the amount of, the full amount claimed by the respondent but where the applicant includes an offer of settlement in the application, the applicant shall pay into court the amount offered in settlement and shall pay into court, or deposit security with the court for, the balance of the full amount claimed by the respondent and payments and deposits under this subsection shall be made to the credit of the application.

(5) Initial certificate

Where money is paid into court or a deposit is made with the court under subsection (4), the clerk or registrar of the court shall issue an initial certificate in the prescribed form and under the seal of the court stating that the amount indicated therein, or security therefor, has been paid into or posted with the court to the credit of the application, and where applicable, indicating the portion of that amount that is offered in settlement of the dispute.

(6) Release on interim certificate

The applicant shall give the initial certificate to the respondent who, within three days of receiving the initial certificate, shall release the article described therein to the applicant unless, within the three day period, the respondent files with the court a notice of objection in the prescribed form.

(7) Final certificate

Where an objection has been filed with the court, the applicant may pay into court or post security with the court, to the credit of the application, the additional amount claimed as owing in the objection, and where the additional amount has been paid into court or the additional security has been posted, the clerk or registrar shall issue a final certificate in the prescribed form and under the seal of the court.

(8) Release on final certificate

The applicant shall give the final certificate to the respondent who, upon receiving the final certificate, shall release immediately the article described therein.

(9) Writ of seizure

Where the respondent does not release the article as required, the applicant may obtain from the clerk or registrar of the court, without notice to the respondent, a writ of seizure directing the sheriff or bailiff to seize the article and, upon receipt of the writ, the sheriff or bailiff shall seize the article and return it to the applicant.

(10) Idem

Before obtaining a writ of seizure, the applicant shall file an affidavit with the clerk or registrar of the court confirming that the respondent has not released the article as required.

(11) Payment out of court of settlement

Where the respondent releases the article to the applicant in compliance with an initial or final certificate, or where the article is seized by a sheriff or bailiff under a writ of seizure, the respondent may demand a receipt in the prescribed form to this effect, and upon presentation of the receipt to the clerk or registrar of the court and signing a waiver of further claim in the prescribed form, the respondent shall be paid the portion of the amount paid into court that was offered in settlement of the dispute.

(12) Notice to applicant

Where the respondent accepts the amount offered in settlement of the dispute, the clerk or registrar of the court shall notify the applicant and upon request shall return to the applicant the balance of the amount deposited into court and deliver up any security deposited by the applicant for cancellation.

(13) Substitution of security

Where the article is released to the applicant by the respondent or is seized by the sheriff or bailiff under subsection (9), the lien is discharged as a right against the article and becomes instead a charge upon the amount paid into court or the security posted with the court, and where the respondent seeks to recover the full amount claimed by the respondent to be owing, the respondent may commence an action to recover that amount.

(14) Discharge

The charge upon the money paid into court or the security posted with the court is discharged ninety days after the article was returned to the applicant or seized unless, before the end of the ninety days, the respondent has accepted the applicant´s offer of settlement or has commenced an action to recover the amount claimed.

(15) Return of money or security

Upon the expiry of the ninety days referred to in subsection (14), the clerk or registrar of the court may return to the applicant the money paid into court and deliver up for cancellation any security posted with the court if the applicant files with the clerk or registrar an affidavit confirming that the respondent has neither accepted an offer of settlement nor commenced an action to recover the money claimed.

(16) Costs of enforcing writ seizure

The respondent is liable for the costs of enforcing a writ of seizure and these costs shall be set off against the amount paid into court under this section.

25. Proper court

An application under this Part may be brought in any court of appropriate monetary jurisdiction.

PART V — General

26. Separate liens

(1)

A separate lien arises under this Act each time an article is repaired, stored or stored and repaired.

(2) No tacking

A lien under this Act cannot be tacked onto another lien under this Act.

27. Service of documents

(1)

A document required to be given or that may be given under this Act is sufficiently given if it is given personally to the intended recipient or if it is sent by certified or registered mail or prepaid courier to the intended recipient at,

(a) the intended recipient‘s address for service if there is one;

(b) the last known mailing address of the intended recipient according to the records of the person sending the document, where there is no address for service; or

(c) the most recent address of the intended recipient as shown on a claim for lien or change statement registered under this Act or as shown on financing statement or financing change statement registered under the Personal Property Security Act.

(2) Service by mail

A document sent to the intended recipient by certified or registered mail shall be deemed to have been given on the earlier of,

(a) the day the intended recipient actually receives it; or

(b) the tenth day after the day of mailing.

28. Lien claimant´s rights and obligations

(1)

Where an article that is subject to a lien is in the lien claimant‘s possession, the lien claimant,

(a) shall use reasonable care in the custody and preservation of the article, unless a higher standard of care is imposed by law; and

(b) unless otherwise agreed,

(i) shall keep the article identifiable, and

(ii) may create a security interest under the Personal Property Security Act in the article, but only upon terms that do not impair a right of redemption under that Act or this Act.

(2) Reasonable expenses

Unless otherwise agreed, a lien claimant is entitled to recover the commercially reasonable expenses incurred in the custody, preservation and preparation for sale of an article that is subject to a lien, including the cost of insurance and the payment of taxes or other charges incurred therefor, and the expenses are chargeable to and secured by the article and may be included by the lien claimant in determining the amount required to satisfy the lien.

(3) Interest

Except as provided in clause 4(1)(b), a lien claimant is not entitled to a lien for interest on the amount owing with respect to an article but this subsection does not affect any right that the lien claimant may otherwise have to recover such interest.

(4) Effect of failure to meet obligation

A lien claimant is liable for any loss or damage caused by a failure to meet any obligation imposed by this section but does not lose the lien against the article by reason only of that failure.

(5) Use of article

A lien claimant may use an article,

(a) for the purpose of preserving the article or its value;

(b) for the purpose of making a reasonable demonstration of the quality or properties of the article in order to facilitate the making of a sale under this Act;

(c) in accordance with an order of any court before which an application is being heard or an action is being tried in respect of that article; or

(d) in accordance with any agreement with the owner.

(6) Effect of unauthorized use or dealing

Where the lien claimant uses or deals with an article in a manner not authorized by this Act, the lien claimant is liable for any loss or damage caused by that use or dealing and may be restrained by an injunction.

29. Assignment of lien

(1)

A lien claimant may assign the lien claimant´s right to a lien by an instrument in writing.

(2) Idem

An assignment of a possessory lien under Part I becomes effective when the lien claimant delivers possession of the article to the assignee.

(3) Idem

An assignment of a non-possessory lien under Part II is enforceable against third parties only if a change statement recording the assignment has been registered under subsection 10(5) or a claim for lien has been registered under clause 10(6)(b).

30. Destruction of books, records, etc

(1)

The registrar may authorize the destruction of books, documents, records or paper that have been microfilmed or that in the registrar‘s opinion need not be preserved any longer.

(2) Removal of information from registration system

The registrar may remove from the central file of the registration system information related to a claim for lien or a change statement,

(a) if the claim for lien is no longer effective;

(b) upon the receipt of a change statement discharging the registration of a claim for lien;

(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 claim for lien or a change statement.

(3) Idem

The registrar, upon notice to the lien claimant, may remove from the central file of the registration system information related to a change statement if,

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

(b) it does not set out the name of the person against whom the lien is claimed as that name is set out in the claim for lien or change statement to which it relates.

31. Power of sheriffs and bailiffs

(1)

A sheriff acting under a direction to seize an article or a writ of seizure, or a bailiff acting under a writ of seizure, may use reasonable force to enter land and premises if the sheriff or bailiff believes, on reasonable and probable grounds, that the article to be seized is there and reasonable force may be used to execute the direction or writ.

(2) Restriction

A sheriff acting under a direction to seize an article or a writ of seizure, or a bailiff acting under a writ of seizure, in respect of an article in a dwelling shall not use force to enter the dwelling or to execute the direction or writ except under the authority of,

(a) the order of a court of competent jurisdiction, in the case of a direction to seize an article;

(b) the order of the court that issued the writ, in the case of a writ of seizure.

(3) Court orders

A court may make an order for the purposes of subsection (2) if, in the opinion of the court, there is reasonable and probable grounds to believe that the article to be seized is in the dwelling.

32. Regulations

The Lieutenant Governor in Council may make regulations,

(a) requiring the payment of fees and prescribing the amounts thereof;

(b) prescribing 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;

(c) requiring that claim for lien forms and change statements forms to be registered under Part II shall be those provided or approved by the registrar;

(d) governing the time assigned to the registration of claims for lien and change statements;

(e) prescribing abbreviations, expansions or symbols that may be used in a claim for lien or change statement or in the recording or production of information by the registrar;

(f) prescribing the types of security that may be deposited with a court under section 24.

General Regulation under the Repair and Storage Liens Act

R.R.O. 1990, Regulation 1003 as amended by O. Reg. 75793.

Definitions

In this Regulation,

"address" includes the postal code or the equivalent thereof, if any;

"authorized signature of assignor" means the name of the assignor, typed, machine printed or stamped together with,

(a) the signature of the assignor, or

(b) the signature of a person with actual, implied or apparent authority to sign on behalf of the assignor, together with the typed, machine printed or stamped name of the person;

"authorized signature of the lien claimant" means the name of the lien claimant, typed, machine printed or stamped together with,

(a) the signature of the lien claimant, or

(b) the signature of a person with actual, implied or apparent authority to sign on behalf of the lien claimant, together with the typed, machine printed or stamped name of the person;

"branch registrar" means a branch registrar appointed under the Personal Property Security Act;

"debtor" means the person who is responsible for the cost of the repair, storage or storage and repair;

"person" means an artificial body or a natural person;

"registering agent" means a person who acts as an agent for a lien claimant or assignor when submitting a statement for registration, but does not include a clerk or other employee of the lien claimant or assignor;

"registrar" means the registrar of personal property security appointed under the Personal Property Security Act;

"specific page of registration" means, in respect of a single page registration, the claim for lien or change statement that is registered and in respect of a multiple page registration, one of the claims for lien or change statements that is registered and that comprises a page of the multiple page registration or a motor vehicle schedule that is attached to a claim for lien or a change statement and that comprises a page of the multiple page registration;

"vehicle identification number" means the number that the person who constructed the motor vehicle affixed to it for identification purposes.

Form of Statement and When Required

If the Act requires a claim for lien or a change statement in the prescribed form to be registered, the claim for lien or change statement shall be in the form provided or approved by the registrar or in the electronic format approved by the registrar for the purposes of clause 6(2)(a) of the Electronic Registration Act (Ministry of Consumer and Commercial Relations Statutes), 1991.

(O. Reg. 75793, s. 1.)

Contents of Claim for Lien

(1)

A claim for lien shall set out in the appropriate place according to the information being entered,

(a) an "R" to indicate that a registration is being made under the Act;

(b) the number of whole years for the registration period which shall be one, two or three years, as the case requires;

(d) the address of the debtor;

(e) the name and address of the lien claimant;

(f) if a lien relates to a motor vehicle, an indication to that effect;

(g) if a motor vehicle schedule is attached, an indication that it is attached;

(h) the amount of the lien; and

(i) the authorized signature of the lien claimant.

(2)

If a lien is assigned, the name, address and authorized signature of the assignor may be set out instead of the name, address and authorized signature of the lien claimant.

(3)

A claim for lien may set out in the appropriate place, according to the information being entered,

(a) the name and the address of the registering agent, if any; and

(b) the Ontario corporation number, if the debtor is a corporation incorporated in Ontario.

(4)

A motor vehicle shall be described on line 11 or 12 on the claim for lien or in the appropriate place on a motor vehicle schedule.

(5)

The description of the motor vehicle shall include the vehicle identification number, the last two digits of the model year, if any, the model, if any, and the make or the name of the manufacturer.

(6)

If lines 11 and 12 are completed, additional motor vehicles may be described in the appropriate place on a motor vehicle schedule.

(7)

Articles other than motor vehicles shall be described on line 13, 14 or 15 of the claim for lien in a manner that is sufficient to enable the articles to be identified.

Renewal of Registration Period

(1)

If a registration period is extended, the change statement referred to in subsection 10(4) of the Act shall be designated as a renewal and shall set out,

(a) the information required under section 13; and

(b) the number of years by which the registration period is extended.

(2)

The extension of a registration period shall be for one or two whole years, as the case requires.

Assignment by Lien Claimant

If the assignment by a lien claimant of a non-possessory lien is recorded, the change statement referred to in subsection 10(5) of the Act shall be designated as an assignment by the lien claimant and shall set out,

(a) the information required by section 13;

(b) the name of the assignor as set out on the claim for lien or a change statement that relates to the claim for lien;

(d) despite clause 13(e), the authorized signature of the assignor or the authorized signature of the lien claimant.

Registration of a Discharge

If the discharge of a registration is recorded, the change statement referred to in clause 12(1)(d) of the Act shall be designated as a discharge and shall set out the information required under section 13.

Registration of a Partial Discharge

(1)

If the release of some of the articles subject to the lien is recorded, the change statement referred to in subsection 12(2) of the Act shall be designated as a partial discharge and shall set out the information required under section 13.

(2)

Motor vehicles included in the released articles shall be described on line 11 or 12 of the change statement or on a motor vehicle schedule.

(3)

The description of the motor vehicle shall include the vehicle identification number, the first two digits of the model year, if any, the model, if any, and the make or the name of the manufacturer.

(4)

If lines 11 and 12 of the change statement are completed, additional motor vehicles may be described in the appropriate place on the motor vehicle schedule.

(5)

Released articles, other than motor vehicles, shall be described on line 13, 14 or 15 of the change statement in a manner that is sufficient to enable the articles to be identified.

Amendments to Information

(1)

A change statement referred to in subsection 10(7) of the Act shall be designated as an amendment and shall set out,

(a) the file number of the claim for lien that is being amended or the file number of the claim for lien to which the change statement that is being amended relates;

(b) the information required under section 9;

(d) the name and address of one of the lien claimants or of the registering agent, if any;

(e) a brief statement of the reasons for the amendment; and

(f) the authorized signature of the lien claimant.

(2)

This section and section 9 apply to an amendment to a motor vehicle schedule that is a page of a claim for lien or change statement.

The change statement referred to in section 8 shall set out,

(a) if the amendment deletes a line of information on a claim for lien or change statement,

(i) the page number on which the line of information appears,