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Security Interests in Personal Property: The Ppsa Section III Enforcement
Security Interests in Personal Property: The Ppsa Section III Enforcement
Security Interests in Personal Property: The Ppsa Section III Enforcement
Security Interests in
Personal Property: The
PPSA
Section III
Enforcement
Outline
SP rights
Rights against collateral
Enforcement options set out in Part V of PPSA
Rights on the debt
Deficiency action
Same rights as any unsecured creditor if SP so chooses
Outline
Debtor rights
Right of redemption
Right of reinstatement
Right to surplus
Exemptions
Introduction – S.55
55(1) This Part does not apply to
(a) a transaction referred to in subsection 3(2), or
Deemed security interests – treated as security
interests only for priority purposes
Introduction – S.55
55(1) This Part does not apply to
(b) a transaction between a pledgor and a
pawnbroker.
Regulated by common law
(b) the rights and remedies provided in this Part and sections 36, 37
and 38 [fixtures, crops and accessions], and
(c) when in possession of the collateral, the rights and remedies
provided in section 17 [rights of SP in possession].
No common law remedies
Only contract (2)(a) and statutory (2)(b),(c)
remedies
Debtor Rights – S.56
56(3) Subject to subsection (4), if the debtor is in default under a security
agreement, the debtor has against the secured party
(a) the rights and remedies provided in the security agreement,
(b) the rights and remedies provided by any other Act or rule of law
not inconsistent with this Act, and
(c) the rights and remedies provided in this Part and in section 17.
. . .substantially all. . .
Enforcement by notification
Right to Collect on Intangibles
-Notice
57(3) A secured party who enforces a security
by giving notice in accordance with paragraph
(2)(a) shall notify the debtor within fifteen
days after doing so.
Right to Collect on Intangibles
-Notice
41(7) If collateral which is either an intangible or
chattel paper is assigned, the account debtor may
make payments to the assignor
(a) before the account debtor receives notice of the
assignment in accordance with subsection (8), or
(b) after the account debtor receives notice of the
assignment if the account debtor requests the
assignee to furnish proof of the assignment and the
assignee fails to furnish proof within fifteen days
after the request.
Right to Collect on Intangibles
41(9) Payment by an account debtor to an
assignee after the account debtor receives
notice of the assignment in accordance with
subsection (8) discharges the obligation of the
account debtor to the extent of the payment.
Right to sue on the Deficiency
Some jurisdictions (e.g. Alberta, California)
prohibit deficiency actions against individual
mortgagors of real property
Should SP have the right to sue on the deficiency?
Is there any reason why land and personal property
should be treated differently?
Is there any reason why individual mortgagors of real
property should be treated differently from businesses?
Right to Appoint a Receiver
Receiver operates the business as a going
concern
Wears “two hats”
Agent of the debtor
Agent of the SP