This Act is administered in the Ministry of Economic Development
Title
1 Short Title and commencement
Part 1Outline of this Act
2 Purpose of this Part
3 Status of this Part
4 What this Act is about
5 How Act arranged
6 Part 2 (Preliminary provisions)
7 Part 3 (Principles relating to enforceability of security interests)
8 Part 4 (Attachment and perfection of security interests in particular kinds of personal property)
9 Part 5 (when buyers or lessees of goods or other collateral take goods or other collateral free of unperfected security interests)
9A Part 6 (additional provisions relating to when buyers or lessees of motor vehicles take motor vehicles free of security interest)—
10 Part 7 (Priority between security interests)
11 Part 8 (Priority of other interests in collateral)
12 Part 9 (Enforcement of security interests)
13 Part 10 (Personal Property Securities Register)
14 Part 11 (Miscellaneous)
15 Part 12 (Transitional provisions)
Part 2Preliminary provisions
Interpretation
16 Interpretation
17 Meaning of security interest
17A Subordinated trusts not security interests
18 Meaning of possession in certain cases
19 Meaning of knowledge
20 Registration of financing statement not to constitute notice or knowledge
21 Status of examples
Application
22 Act to bind the Crown
23 When Act does not apply
24 Application of Act not affected by secured party having title to collateral
25 Rights or duties that apply to be exercised in good faith and in accordance with reasonable standards of commercial practice
Conflict of laws
26 When New Zealand law applies
27 Continuity of perfection where goods are moved to New Zealand
28 Temporary perfection of security interest in collateral moved to New Zealand in other cases
29 Location of debtor for purposes of sections 30 to 33
30 Validity, perfection, etc, of security interests in intangibles, movable equipment, etc
31 Position where debtor relocates to another jurisdiction, etc
32 Position where no public record, etc, of perfection of security interest
33 Validity, perfection, etc, of security interest in minerals
Part 3Principles relating to enforceability of security interests
Purpose of Part
34 Purpose of this Part
Effectiveness of security agreement
35 Effectiveness of security agreement
Enforceability of security agreements against third parties
36 Enforceability of security agreements against third parties
37 Description of collateral as consumer goods or equipment inadequate
38 What constitutes adequate description of collateral held as inventory
39 Description of proceeds not required for enforceability against third parties
Attachment of security interests generally
40 Attachment of security interests generally
Perfection of security interests generally
41 When security interest perfected
42 Continuity of perfection where perfected security interest subsequently perfected in another way
Part 4Attachment and perfection of security interests in particular kinds of personal property
After-acquired property
43 Security interests in after-acquired property
44 Attachment of security interests in after-acquired property
Proceeds
45 Continuation of security interests in proceeds
46 When security interest in proceeds is continuously perfected
47 Temporary perfection of security interests in proceeds in other cases
Collateral returned to debtor
48 Temporary perfection of security interest in negotiable instrument or investment security returned to debtor
49 Temporary perfection of security interest in negotiable document of title or goods returned to debtor
Documents of title and goods held by bailee
50 Perfection where goods in hands of bailee
Crops
51 Security interests in crops
Part 5When buyers or lessees of goods or other collateral take goods or other collateral free of security interest
52 Buyer or lessee of collateral takes collateral free of unperfected security interests
53 Buyer or lessee of goods sold or leased in ordinary course of business takes goods free of certain security interests
54 Buyer or lessee of consumer goods of certain value takes goods free of security interest
55 When buyer or lessee of serial-numbered consumer goods or equipment takes consumer goods or equipment free of security interest perfected by registration
56 When buyer or lessee of goods takes goods free of temporarily perfected security interests
Part 6Additional provisions relating to when buyers or lessees of motor vehicles take motor vehicles free of security interest
57 Interpretation
58 Buyer or lessee of motor vehicle acquired from registered trader takes motor vehicle free of security interest
59 Reimbursement of secured party by registered trader
60 Reimbursement of secured party by Fund [Repealed]
61 Procedure for making claims for reimbursement
62 Subrogation of rights of action against debtor and registered trader
63 District Court Judge may declare certain persons responsible for repayment to registered trader
64 Application of Companies Act 1993, etc, where dealer company in liquidation [Repealed]
65 Secured party subrogated to rights of registered trader against buyer or lessee
Part 7Priority between security interests
Priority of security interests generally
66 Priority of security interests in same collateral when Act provides no other way of determining priority
67 Original method of perfection applies to continuously perfected security interest
68 Time of registration, etc, of original collateral is also time of registration, etc, of proceeds
69 Transfer of security interests does not affect priority
70 Voluntary subordination of security interests
Priority of advances
71 Security agreement may provide for future advances
72 Priority of security interest applies to all advances
Priority of purchase money security interests
73 Priority of purchase money security interest in collateral or its proceeds, other than inventory or intangibles
74 Priority of purchase money security interest in inventory or its proceeds
75 Priority of purchase money security interest in intangible or its proceeds
75A Non-proceeds security interest in accounts receivable
76 Priority between purchase money security interests in goods or their proceeds taken by seller, etc
77 Priority between purchase money security interests in same goods or their proceeds not taken by seller, etc
Priority of security interests in accessions
78 Security interests in accessions
79 Priority of security interest in goods before they become accessions
80 Certain interests in whole have priority over security interests in goods before they become accessions
81 Certain interests have priority over security interests in goods that are not attached when goods become accession
Priority of security interests in processed or commingled goods
82 Continuation of security interests in goods that become part of processed or commingled goods
83 Original method of perfection of goods applies to goods that become part of processed or commingled goods
84 Limit on value of priority of goods that become part of processed or commingled goods
85 Priority where more than 1 security interest continues in processed or commingled goods
86 Priority of purchase money security interest in goods that continues in processed or commingled goods
Priority of security interests in transferred collateral
87 Rights of debtor may be transferred
88 General priority of security interest in transferred collateral over security interests granted by transferee
89 Transfer of debtor's interest in collateral with prior consent of secured party
90 Transfer of debtor's interest in collateral where secured party has knowledge of certain information
91 Transfer of debtor's interest in collateral without secured party's consent
92 Prior security interest not subordinated
Part 8Priority of other interests in collateral
Priority of liens
93 Lien has priority over security interest relating to same goods
Priority of purchasers of money, negotiable instruments, investment securities, and chattel paper
94 When holder of money takes money free of perfected security interest in money
95 Priority of creditor who receives payment of debt
96 Priority of purchaser of negotiable instrument
97 Priority of purchaser of investment security
98 Priority of purchaser of chattel paper
99 Priority of holder of negotiable document of title
Priority of certain interests in crops
100 Lessor or mortgagee of land not affected by subsequent security interest in crops
101 Perfected security interest in crops not prejudicially affected by subsequent sale, etc, of land
Priority of interests on assignment of accounts receivable or chattel paper
102 Priority of interests on assignment of account receivable or chattel paper
103 Execution creditor has priority over unperfected security interest
Part 9Enforcement of security interests
104 Meaning of surplus
105 Application of this Part
106 Part not to apply to receivers
107 When contracting out of certain provisions in this Part permitted
Rights of secured party to apply collateral in satisfaction of secured obligation
108 Secured party may apply certain collateral in satisfaction of secured obligation
Disposal of collateral on default
109 Secured party may take possession of and sell collateral
110 Duty of secured party selling collateral to obtain best price reasonably obtainable
111 Apparent possession of certain collateral permitted in some cases
112 Power of sale applies to document of title and related goods
113 Methods of sale of collateral
114 Notice of sale of collateral
115 Extinguishment of subordinate security interests on sale
116 Secured party to give statement of account to debtor, etc
117 Distribution of surplus
118 Surplus may be paid into court
119 Debtor's, etc, right to recover surplus
Retention of collateral by secured party
120 Proposal of secured party to retain collateral
121 Persons entitled to notice may object to proposal
122 Person making objection may be requested by secured party to prove interest
123 Position where persons entitled to notice do not object to retention of collateral by secured party
124 Disposal of collateral to purchaser for value and in good faith
Enforcement of security interests in accessions
125 Secured party must not damage goods when removing accession
126 Person with interest in other goods entitled to reimbursement for damage caused by removal of accession
127 Person entitled to reimbursement may refuse permission to remove accession
128 Secured party may apply to court for order in respect of removal of accession
129 Secured party must give notice of removal of accession
130 When person with interest in whole may retain accession
131 Court may make order concerning removal of accession
Right to redeem collateral and reinstate security agreement
132 Entitled persons may redeem collateral
133 Debtor may reinstate security agreement
134 Limit on reinstatement of security agreement
Part 10Personal property securities register
135 Interpretation
Registrar of personal property securities
136 Appointment of Registrar
137 Power of Registrar to delegate
138 Registrar may refuse to provide certain services relating to register
Personal property securities register
139 Personal property securities register
140 Contents of register
Registration of financing statements
141 Person may register financing statement
142 Data required to register financing statement
143 When financing statement or financing change statement not to be registered
144 When financing statement or financing change statement registered
145 Verification statement to be forwarded to person who registered financing statement, etc
146 When financing statement may be registered
147 Financing statement may relate to 1 or more security agreements
148 When secured party to notify debtor about registration of financing statement
Validity of registrations of financing statements
149 Registration of financing statement invalid only if seriously misleading
150 When financing statement seriously misleading
151 Proof that person actually misled not necessary
152 Validity of registration when description of part of collateral is omitted
Duration and renewal of registrations
153 Duration of registration of financing statement
154 Renewal of registration
Registrations where security interest is transferred
155 Registration of financing change statement in respect of transfer of security interest perfected by registration
156 Registration of financing statement in respect of transfer of security interest not perfected by registration
157 When disclosure of transfer of security interest may be registered
158 Transferee of security interest secured party for purposes of Act
Registrations in respect of subordinated security interests
159 Registration of financing change statement in respect of subordinated security interest
Voluntary amendments to registrations
160 Voluntary amendment to or discharges of registrations of financing statements
Compulsory discharge or amendment of registration
161 Discharge of registration relating only to consumer goods
162 When debtor, etc, may demand registration of financing change statement
163 Matters that may be required by demand
164 Application of sections 165 to 167 in cases not involving security trust deeds
165 Procedure where non-compliance with demand and no court order in cases not involving security trust deed
166 Consequences of non-receipt, and receipt, of court order in cases not involving security trust deed
167 Secured party may obtain court order in cases not involving security trust deed
168 Procedure where non-compliance with demand and security trust deed involved
169 No fee for compliance with demand
169A Restoration of registration
Removal of data from register and correction of errors or omissions
170 Removal of data from register
170A Correction of errors or omissions
Searches of register
171 Search of register
172 Search criteria
173 Search purposes, etc
174 When search constitutes interference with privacy of individual
175 Printed search result receivable as evidence
Part 11Miscellaneous
Entitlement to damages
176 Entitlement to damages for breach of obligations
Secured party to make security agreement and other information available to debtor and others
177 Secured party to provide certain information relating to security interest
178 Time for complying with request
179 Exemption from complying with request
180 Secured party may recover costs arising from request
181 Application to court for compliance with request
182 Consequences of not complying with court order
183 Obligation to disclose successor in security interest when request made
Service of notices, etc
184 Application of sections 185 to 189
185 Method of service of notices, etc
186 Court may make order concerning service of notice, etc
187 How to effect service of notice, etc, by post
188 How to effect service of notice, etc, by facsimile
189 How to effect service of notice, etc, by electronic mail
Regulations
190 Regulations
191 Acts and regulations amended
192 Repeals and revocations
Part 12Transitional provisions
193 Interpretation
Enforceability of prior security interest against third parties
194 Prior security interests continue to be enforceable against third parties during transitional period
Perfection of prior security interests
195 Prior registered security interests deemed to be perfected by registration during transitional period
196 Certain other prior security interests deemed to be perfected during transitional period
197 Prior security interests to be perfected during transitional period
198 Consequences of not perfecting certain security interests
199 Time of registration of certain prior security interests
Priority of prior security interests
200 Priority of prior security interests during transitional period
201 Priority of third party interests during transitional period
Schedule 1Acts amended
Schedule 2Regulations amended
Schedule 3Enactments repealed
Schedule 4Regulations and Orders revoked
An Act to reform the law relating to security interests in personal property and, in particular,—
(a) To provide for the creation and enforceability of security interests in personal property; and
(b) To provide for the determination of priority between security interests in the same personal property; and
(c) To provide for the determination of priority between security interests and other types of interests in the same personal property; and
(d) To provide for the enforcement of security interests in personal property other than consumer goods; and
(e) To provide for the establishment of a register of security interests in personal property
BE IT ENACTED by the Parliament of New Zealand as follows: