Case information

None.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Debtor and creditor - Priority of security interest - After-acquired collateral - Security interest under provincial act created first-in-time but not registered - Security under federal scheme taken before registration perfected under provincial scheme - Gap as to priority between federal and provincial regimes - Whether the Court of Appeal’s conclusion that an unregistered personal property security interest has priority over Bank Act security is commercially reasonable or required by law - Whether the Court of Appeal erred in its application of the first-in-time priority rule, and in doing so, encouraged and gave priority to secret liens - Whether the Respondent’s failure to have registered a financing statement must be considered when applying the appropriate equitable principles - Whether a bank holding rights under Bank Act security is a transferee within the meaning of subsection 20(3) of the Personal Property Security Act, 1993, S.S. 1993, c. P-6.1, such that it takes priority over an unperfected Personal Property Security Act interest.

A Saskatchewan farmer executed a General Security Agreement with the Respondent Credit Union on January 24, 1992 and granted a security interest on all present and after-acquired property. On January 22, 1996, the Appellant Bank registered its Notice of Intention to take security and began loaning money to the farmer in 1997. The Respondent Credit Union registered a financing statement in the Personal Property Registry on September 24, 1998; it subsequently was amended to extend the expiry date of the registration and to add a serial-numbered equipment and “all proceeds, all goods, chattel paper, documents of title, instruments, money, securities and intangibles, all present and after acquired cattle and livestock of every nature and description, all proceeds”. The Appellant Bank’s security interest granted it all crops growing or produced upon the farm, all products of agriculture, all livestock, and all implements pursuant to a s. 427 Bank Act assignment dated June 10, 1997 and subsequent s. 427 assignments dealing with loans and advances. The Appellant Bank seized and sold the collateral. All of the equipment sold was after-acquired property for the purposes of both the Respondent Credit Union and the Appellant Bank. The chambers judge found for the Appellant Bank; this decision was overturned on appeal.