54 Buyer or lessee of consumer goods of certain value takes goods free of security interest

(1)

A buyer or lessee of goods that are acquired as consumer goods takes the consumer goods free of any security interest, if—

(a)

the value of the consumer goods did not exceed $2,000 at the time the security interest in the goods attached, or, if there is more than 1 security interest in those goods, at the time the security interest with priority over all other security interests attached; and

(b)

the buyer or lessee—

(i)

gave new value for the interest acquired; and

(ii)

bought or leased the goods without knowledge of the security interest.

(2)

The Governor-General may, from time to time, by Order in Council, alter the amount specified in subsection (1).

Example

Person A buys a television for $999 under a hire purchase agreement from person B.

Person A sells the television to person C for $500.

Person C does not know about person B’s security interest in the television.

Person C takes the television free of person B’s security interest in the television.

Compare: Personal Property Security Act 1993 s 30(3), (4) (Saskatchewan)