Acts and Regulations

P-7.1 - Personal Property Security Act

Section 59
Disposition versions

Full text
Right to dispose of collateral after seizure or repossession
59(1)In subsections (2), (7) and (15)
“secured party” includes a receiver.
59(2)After seizing or repossessing the collateral, a secured party may dispose of it in its existing condition or after repair, processing or preparation for disposition.
59(3)The proceeds of the disposition of collateral shall be applied consecutively to
(a) the reasonable expenses of seizing, repossessing, holding, repairing, processing or preparing for disposition and disposing of the collateral and any other reasonable expenses incurred by the secured party, and
(b) the satisfaction of the obligations secured by the security interest of the party making the disposition.
59(4)Any surplus proceeds of the disposition of collateral shall be dealt with in accordance with section 60.
59(5)Collateral may be disposed of
(a) by private sale,
(b) by public sale, including public auction or closed tender,
(c) as a whole or in commercial units or parts, or
(d) if the security agreement so provides, by lease.
59(6)If the security agreement so provides, the payment for the collateral being disposed of may be deferred.
59(7)The secured party may delay disposition of the collateral in whole or in part.
59(8)Not less than twenty days before disposition of the collateral, the secured party shall give a notice to
(a) the debtor and any other person who is known by the secured party to be an owner of the collateral,
(b) a creditor or person with a security interest in the collateral whose security interest is subordinate to that of the secured party and
(i) who has registered, before the notice of disposition is given to the debtor, a financing statement that includes the name of the debtor or that includes the serial number of the collateral if the collateral is goods of a kind that are prescribed as serial numbered goods, or
(ii) whose security interest was perfected by possession when the secured party seized or repossessed the collateral,
(c) a judgment creditor whose interest in the collateral is subordinate to that of the secured party and who has registered, before the notice of disposition is given to the debtor, a notice of judgment that includes the name of the debtor or that includes the serial number of the collateral if the collateral is goods of a kind that are prescribed as serial numbered goods, and
(d) any other person with an interest in the collateral who has given a written notice to the secured party of that person’s interest in the collateral before the notice of disposition is given to the debtor.
59(9)A notice under subsection (8) shall contain
(a) a description of the collateral,
(b) a statement of the amount required to satisfy the obligation secured by the security interest,
(c) a statement of the sum actually in arrears, exclusive of the operation of an acceleration clause in the security agreement,
(d) a brief description of any default, other than non-payment, including the term of the security agreement, the breach of which constituted the default,
(e) a statement of the amount of the expenses referred to in paragraph (3)(a) or, where the amount has not been determined, a reasonable estimate,
(f) a statement that any person entitled to receive the notice may redeem the collateral on payment of the amount due under paragraphs (b) and (e),
(g) a statement that the debtor may reinstate the security agreement on payment of the sum actually in arrears exclusive of the operation of an acceleration clause in the security agreement, the curing of any other default and payment of the amount of the expenses due under paragraph (3)(a),
(h) a statement that the collateral will be disposed of and the debtor may be liable for a deficiency unless the collateral is redeemed or the security agreement is reinstated, and
(i) a statement of the date, time and place of any sale by public auction, or the place to which closed tenders may be delivered and the date after which closed tenders will not be accepted, or the date after which any private disposition of the collateral is to be made.
59(10)If a notice under subsection (8) is given to a person other than the debtor, it need not contain the information in paragraphs (9)(c), (g) and (h), and if the debtor is not entitled to reinstate the security agreement, the notice to the debtor need not contain the information in paragraphs (9)(c) and (g).
59(11)Not less than twenty days before the disposition of the collateral, a receiver shall give a notice to
(a) the debtor, and if the debtor is a body corporate, a director of the body corporate,
(b) any other person who is known by the secured party to be an owner of the collateral,
(c) a person referred to in paragraph (8)(b),
(d) a creditor referred to in paragraph (8)(c), and
(e) any other person with an interest in the collateral who has given a written notice to the receiver of that person’s interest in the collateral before the notice of disposition is given to the debtor.
59(12)A notice under subsection (11) shall contain
(a) a description of the collateral,
(b) a statement that the collateral will be disposed of unless it is redeemed, and
(c) a statement of the date, time and place of any sale by public auction, or the place to which closed tenders may be delivered and the date after which closed tenders will not be accepted, or the date after which any private disposition of the collateral is to be made.
59(13)A notice under subsection (8) or (11) may be given in accordance with section 69 or, if it is to be given to a person who has registered a financing statement or a notice of judgment, by registered mail addressed to the address of that person that was registered as part of the financing statement or notice of judgment.
59(14)The secured party may purchase the collateral or any part of it but only at public sale, including public auction or closed tender, and only for a price that bears a reasonable relationship to the market value of the collateral.
59(15)If a secured party disposes of collateral to a purchaser for value and in good faith who takes possession of it, the purchaser acquires the collateral, whether or not the requirements of this section have been complied with by the secured party, free from
(a) the interest of the debtor,
(b) an interest subordinate to that of the debtor,
(c) an interest subordinate to that of the secured party,
and all obligations secured by the subordinate interests shall be deemed to be performed for the purposes of sections 49 and 50.
59(16)Subsection (15) does not affect the rights of a person with a security interest that is deemed by section 74 to be registered under this Act if the person has not been given a notice under this section.
59(17)A person who is liable to a secured party under a guarantee, endorsement, covenant, repurchase agreement or the like and who receives a transfer of collateral from the secured party or who is subrogated to the rights of the secured party has thereafter the rights and duties of the secured party, and the transfer of collateral is not a disposition of the collateral.
59(18)Notice under subsection (8) or (11) need not be given if
(a) the collateral is perishable,
(b) the secured party believes on reasonable grounds that the collateral will decline substantially in value if not disposed of immediately after default,
(c) the cost of care and storage of the collateral is disproportionately large relative to its value,
(d) the collateral is of a type that is customarily sold on an organized market that handles large volumes of transactions between many different sellers and many different buyers,
(e) the collateral is money, other than a medium of exchange authorized by the Parliament of Canada as part of the currency of Canada,
(f) for any other reason, the Court, on an application made without notice to any other person, is satisfied that a notice is not required, or
(g) after default, every person entitled to receive a notice of disposition under subsection (8) or (11) consents in writing to the immediate disposition of the collateral.
1994, c.22, s.12
Right to dispose of collateral after seizure or repossession
59(1)In subsections (2), (7) and (15)
“secured party” includes a receiver.
59(2)After seizing or repossessing the collateral, a secured party may dispose of it in its existing condition or after repair, processing or preparation for disposition.
59(3)The proceeds of the disposition of collateral shall be applied consecutively to
(a) the reasonable expenses of seizing, repossessing, holding, repairing, processing or preparing for disposition and disposing of the collateral and any other reasonable expenses incurred by the secured party, and
(b) the satisfaction of the obligations secured by the security interest of the party making the disposition.
59(4)Any surplus proceeds of the disposition of collateral shall be dealt with in accordance with section 60.
59(5)Collateral may be disposed of
(a) by private sale,
(b) by public sale, including public auction or closed tender,
(c) as a whole or in commercial units or parts, or
(d) if the security agreement so provides, by lease.
59(6)If the security agreement so provides, the payment for the collateral being disposed of may be deferred.
59(7)The secured party may delay disposition of the collateral in whole or in part.
59(8)Not less than twenty days before disposition of the collateral, the secured party shall give a notice to
(a) the debtor and any other person who is known by the secured party to be an owner of the collateral,
(b) a creditor or person with a security interest in the collateral whose security interest is subordinate to that of the secured party and
(i) who has registered, before the notice of disposition is given to the debtor, a financing statement that includes the name of the debtor or that includes the serial number of the collateral if the collateral is goods of a kind that are prescribed as serial numbered goods, or
(ii) whose security interest was perfected by possession when the secured party seized or repossessed the collateral,
(c) a judgment creditor whose interest in the collateral is subordinate to that of the secured party and who has registered, before the notice of disposition is given to the debtor, a notice of judgment that includes the name of the debtor or that includes the serial number of the collateral if the collateral is goods of a kind that are prescribed as serial numbered goods, and
(d) any other person with an interest in the collateral who has given a written notice to the secured party of that person’s interest in the collateral before the notice of disposition is given to the debtor.
59(9)A notice under subsection (8) shall contain
(a) a description of the collateral,
(b) a statement of the amount required to satisfy the obligation secured by the security interest,
(c) a statement of the sum actually in arrears, exclusive of the operation of an acceleration clause in the security agreement,
(d) a brief description of any default, other than non-payment, including the term of the security agreement, the breach of which constituted the default,
(e) a statement of the amount of the expenses referred to in paragraph (3)(a) or, where the amount has not been determined, a reasonable estimate,
(f) a statement that any person entitled to receive the notice may redeem the collateral on payment of the amount due under paragraphs (b) and (e),
(g) a statement that the debtor may reinstate the security agreement on payment of the sum actually in arrears exclusive of the operation of an acceleration clause in the security agreement, the curing of any other default and payment of the amount of the expenses due under paragraph (3)(a),
(h) a statement that the collateral will be disposed of and the debtor may be liable for a deficiency unless the collateral is redeemed or the security agreement is reinstated, and
(i) a statement of the date, time and place of any sale by public auction, or the place to which closed tenders may be delivered and the date after which closed tenders will not be accepted, or the date after which any private disposition of the collateral is to be made.
59(10)If a notice under subsection (8) is given to a person other than the debtor, it need not contain the information in paragraphs (9)(c), (g) and (h), and if the debtor is not entitled to reinstate the security agreement, the notice to the debtor need not contain the information in paragraphs (9)(c) and (g).
59(11)Not less than twenty days before the disposition of the collateral, a receiver shall give a notice to
(a) the debtor, and if the debtor is a body corporate, a director of the body corporate,
(b) any other person who is known by the secured party to be an owner of the collateral,
(c) a person referred to in paragraph (8)(b),
(d) a creditor referred to in paragraph (8)(c), and
(e) any other person with an interest in the collateral who has given a written notice to the receiver of that person’s interest in the collateral before the notice of disposition is given to the debtor.
59(12)A notice under subsection (11) shall contain
(a) a description of the collateral,
(b) a statement that the collateral will be disposed of unless it is redeemed, and
(c) a statement of the date, time and place of any sale by public auction, or the place to which closed tenders may be delivered and the date after which closed tenders will not be accepted, or the date after which any private disposition of the collateral is to be made.
59(13)A notice under subsection (8) or (11) may be given in accordance with section 69 or, if it is to be given to a person who has registered a financing statement or a notice of judgment, by registered mail addressed to the address of that person that was registered as part of the financing statement or notice of judgment.
59(14)The secured party may purchase the collateral or any part of it but only at public sale, including public auction or closed tender, and only for a price that bears a reasonable relationship to the market value of the collateral.
59(15)If a secured party disposes of collateral to a purchaser for value and in good faith who takes possession of it, the purchaser acquires the collateral, whether or not the requirements of this section have been complied with by the secured party, free from
(a) the interest of the debtor,
(b) an interest subordinate to that of the debtor,
(c) an interest subordinate to that of the secured party,
and all obligations secured by the subordinate interests shall be deemed to be performed for the purposes of sections 49 and 50.
59(16)Subsection (15) does not affect the rights of a person with a security interest that is deemed by section 74 to be registered under this Act if the person has not been given a notice under this section.
59(17)A person who is liable to a secured party under a guarantee, endorsement, covenant, repurchase agreement or the like and who receives a transfer of collateral from the secured party or who is subrogated to the rights of the secured party has thereafter the rights and duties of the secured party, and the transfer of collateral is not a disposition of the collateral.
59(18)Notice under subsection (8) or (11) need not be given if
(a) the collateral is perishable,
(b) the secured party believes on reasonable grounds that the collateral will decline substantially in value if not disposed of immediately after default,
(c) the cost of care and storage of the collateral is disproportionately large relative to its value,
(d) the collateral is of a type that is customarily sold on an organized market that handles large volumes of transactions between many different sellers and many different buyers,
(e) the collateral is money, other than a medium of exchange authorized by the Parliament of Canada as part of the currency of Canada,
(f) for any other reason, the Court, on an application made without notice to any other person, is satisfied that a notice is not required, or
(g) after default, every person entitled to receive a notice of disposition under subsection (8) or (11) consents in writing to the immediate disposition of the collateral.
1994, c.22, s.12