Bill 35, Personal Property Security Amendment Act, 1996

Sterling, Hon. Norman W. Minister of Consumer and Commercial Relations

Versions

Personal Property Security Amendment Act, 1996

EXPLANATORY NOTE

The Bill amends the Personal Property Security Act to save the priority of security interests under subsection 30 (6) of the Act that became unperfected in a period following February 26, 1996, during which the registration system's computer was not operational.

The Bill extends the time period for perfecting certain purchase-money security interests for the purpose of subsection 33 (1) or (2) of the Act. It also extends the time period for registering a financing change statement if the 30 day period mentioned in subsection 57 (1) of the Act expired in a period following February 26, 1996, during which the registration system's computer was not operational.

The Bill amends the Act to allow the Lieutenant Governor in Council to make regulations in the case of an inability to operate the registration system's computer. The regulations can have retroactive effect.

Bill 351996

An Act to amend the

Personal Property Security Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

1. (1) Section 1 of the Personal Property Security Act, as amended by the Statutes of Ontario, 1991, chapter 44, section 7, is further amended by adding the following subsections:

Definitions

(1.1) In this section and subsections 30 (6.1), 33 (2.1) and 57 (1.1),

"business day" means a day during which the registration system's computer is operational for the purpose of registering and searching under this Act; ("jour ouvrable")

"reinstatement date" means the first day after February 26, 1996 that the registration system's computer becomes operational for the purpose of registering and searching under this Act. ("date de remise en service")

. . . . .

Notice of reinstatement date

(3) For the purposes of subsections 30 (6.1), 33 (2.1) and 57 (1.1), the registrar shall publish a notice in The Ontario Gazette of the reinstatement date.

(2) On the day that the notice mentioned in subsection 1 (3) of the Act, as enacted by subsection (1) of this section, is published in The Ontario Gazette, subsections 1 (1.1) and (3) of the Act, as enacted by subsection (1) of this section, are repealed.

2. (1) Section 30 of the Act is amended by adding the following subsection:

Same, extended time

(6.1) Despite subsection (6), where a security interest that is perfected by registration becomes unperfected between February 26, 1996 and the day before the reinstatement date, the security interest shall be deemed to have been continuously perfected from the time of first perfection if the security interest is again perfected by registration within four business days from the reinstatement date.

(2) On the day that the notice mentioned in subsection 1 (3) of the Act, as enacted by subsection 1 (1) of this Act, is published in The Ontario Gazette, subsection 30 (6.1) of the Act is amended by,

(a) striking out "the day before the reinstatement date" and substituting the date of the day before the reinstatement date as "reinstatement date" is defined in subsection 1 (1.1) of the Act, as enacted by subsection 1 (1) of this Act; and

(b) striking out "within four business days from the reinstatement date" and substituting "by" followed by the date of the fourth business day from the reinstatement date as "business day" and "reinstatement date" are defined in subsection 1 (1.1) of the Act, as enacted by subsection 1 (1) of this Act.

3. (1) Section 33 of the Act is amended by adding the following subsections:

Extended time

(2.1) Despite subsections (1) and (2), the time for perfecting a purchase-money security interest by registration and for giving the notices required by subsection (1) is extended until nine days from the reinstatement date if,

(a) the collateral subject to the purchase-money security interest is not an intangible and, between February 16, 1996 and the day before the reinstatement date, the debtor obtained possession of the collateral or a third party, at the request of the debtor, obtained or held possession of the collateral; or

(b) the collateral subject to the purchase-money security interest is an intangible and the purchase-money security interest attached between February 16, 1996 and the day before the reinstatement date.

Extended priority

(2.2) A purchase-money security interest to which subsection (2.1) applies shall be deemed to have the priority given by subsection (1) or (2), as the case may be, if, within the extended time period mentioned in subsection (2.1), the purchase-money security interest is perfected by registration and the notices required by subsection (1) are given.

(2) On the day that the notice mentioned in subsection 1 (3) of the Act, as enacted by subsection 1 (1) of this Act, is published in The Ontario Gazette,

(a) subsection 33 (2.1) of the Act is amended by striking out "nine days from the reinstatement date" and substituting the date of the ninth day from the reinstatement date as "reinstatement date" is defined in subsection 1 (1.1) of the Act, as enacted by subsection 1 (1) of this Act;

(b) clause 33 (2.1) (a) of the Act is amended by striking out "the day before the reinstatement date" and substituting the date of the day before the reinstatement date as "reinstatement date" is defined in subsection 1 (1.1) of the Act, as enacted by subsection 1 (1) of this Act; and

(c) clause 33 (2.1) (b) of the Act is amended by striking out "the day before the reinstatement date" and substituting the date of the day before the reinstatement date as "reinstatement date" is defined in subsection 1 (1.1) of the Act, as enacted by subsection 1 (1) of this Act.

4. (1) Section 57 of the Act is amended by adding the following subsection:

Extended time

(1.1) If the 30 day period for registering a financing change statement mentioned in clause (1) (a) expires between February 26, 1996 and the day before the reinstatement date, the period shall be extended until four business days from the reinstatement date.

(2) On the day that the notice mentioned in subsection 1 (3) of the Act, as enacted by subsection 1 (1) of this Act, is published in The Ontario Gazette, subsection 57 (1.1) of the Act is amended by,

(b) striking out "four business days from the reinstatement date" and substituting the date of the fourth business day from the reinstatement date as "business day" and "reinstatement date" are defined in subsection 1 (1.1) of the Act, as enacted by subsection 1 (1) of this Act.

5. Section 74 of the Act, as amended by the Statutes of Ontario, 1991, chapter 44, section 7, is further amended by adding the following subsections:

Same, inability to operate registration system

(2) If the Lieutenant Governor in Council is of the opinion that, as a result of an inability to operate the registration system's computer, a security interest cannot be perfected by registration or registrations cannot be discharged within a time period specified in this Act, the Lieutenant Governor in Council may make regulations,

(a) deeming a security interest perfected by registration that has become unperfected during a prescribed time period to be continuously perfected from the time of first perfection if the security interest is again perfected within a prescribed time period;

(b) extending the time during which a prescribed class of purchase-money security interests may be perfected by registration and the notices required by this Act may be given for the purpose of obtaining priority under subsection 33 (1) or (2); and

(c) extending the time during which a financing change statement discharging a registration may be registered under subsection 57 (1), if the 30 day period mentioned in that subsection expires during a prescribed time period.

Retroactivity

(3) A regulation mentioned in subsection (2) is effective with reference to a period before it was filed, if it so provides.

Commencement

6. This Act comes into force on the day it receives Royal Assent.

Short title

7. The short title of this Act is the Personal Property Security Amendment Act, 1996.