Part 7 Priority 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

If this Act provides no other way of determining priority between security interests in the same collateral,—

(a)

a perfected security interest has priority over an unperfected security interest in the same collateral:

Example

Person A’s security interest in person B’s car has been perfected by registering a financing statement.

Person C’s security interest in person B’s car has not been perfected.

Person A’s perfected security interest in person B’s car has priority over person C’s unperfected security interest in person B’s car.

(b)

priority between perfected security interests in the same collateral (where perfection has been continuous) is to be determined by the order of whichever of the following first occurs in relation to a particular security interest:

(i)

the registration of a financing statement:

(ii)

the secured party, or another person on the secured party’s behalf, taking possession of the collateral (except where possession is a result of seizure or repossession):

(iii)

the temporary perfection of the security interest in accordance with this Act:

Example

Person A registers a financing statement in respect of person B’s present and after-acquired property before person C registers a financing statement in respect of the same collateral.

Person A’s perfected security interest has priority over person C’s perfected security interest in the same collateral.

(c)

priority between unperfected security interests in the same collateral is to be determined by the order of attachment of the security interests.

Example

Person A and person C have not perfected their respective security interests in person B’s car.

Person A’s security interest in person B’s car was the first to attach.

Person A’s security interest has priority over person C’s security interest in person B’s car.

Compare: Personal Property Security Act 1993 s 35(1) (Saskatchewan)