Secured Transactions Act · 2022 Revised Edition · Part 6
22. Priority of security interests in same collateral
Official textFrom Attorney General's Chambers, unchanged
Where the Act does not provide another method for determining priority between security interests in the same collateral —
collateral
“collateral” means personal property that is subject to a security interest;
a perfected security interest shall have priority over an unperfected security interest;
priority between perfected security interests shall be determined by the order of whichever of the following first occurs in relation to a particular security interest —
the registration of a financing statement;
the secured party, or another person acting on behalf of the secured party, taking possession of the collateral (except where possession is a result of seizure or repossession); or
the secured party, or another person acting on behalf of the secured party, acquiring control of the collateral; and
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priority between unperfected security interests in the same collateral shall be determined by the order of creation of the security interests.
For the purposes of subsection (1), a security interest that is first perfected in one manner and later perfected in another manner without a break in perfection is continuously perfected and retains its priority from the date of its original perfection.
security interest
“security interest” means a property right in personal property that is created by agreement and secures payment or other performance of an obligation, regardless of whether the parties have denominated it as a security interest, and includes the right of a seller in an instalment sale or a sale with retained title, but it does not include a personal right against a guarantor or other person liable for the payment of the secured obligation;
Subject to section 15, the priority of a security interest in original collateral shall also be the priority with respect to its proceeds.
proceeds
“proceeds” means identifiable or traceable personal property received as a result of sale, other disposition, collection, lease or licence of the collateral, including proceeds of proceeds, civil and natural fruits, dividends, distributions, insurance or takaful proceeds and claims arising from defects in, damage to or loss of collateral;
Terms defined in s 3
collateral
Defined · s 3“collateral” means personal property that is subject to a security interest;
financing statement
Defined · s 3“financing statement” means forms in writing or their electronic equivalent as provided in the regulations on which information is provided in order to effect, amend, terminate or continue a registration;
perfected security interest
Defined · s 3“perfected security interest” means the security interest that has been created and becomes effective against third parties by control, possession, registration or temporarily, as the case may be;
possession
Defined · s 3“possession”, in relation to a secured party, means possession of a collateral that is in the actual or apparent possession or control of the debtor or the debtor’s agent;
proceeds
Defined · s 3“proceeds” means identifiable or traceable personal property received as a result of sale, other disposition, collection, lease or licence of the collateral, including proceeds of proceeds, civil and natural fruits, dividends, distributions, insurance or takaful proceeds and claims arising from defects in, damage to or loss of collateral;
secured party
Defined · s 3“secured party” means a person in whose favour a security interest is created, including — (a) a consignor; (b) a financial lessor and a lessor who acquired goods under an operating lease; (c) a transferee of an intangible; (d) a seller who reserved title to the sold goods; or (e) a trustee or agent of the person referred to in paragraphs (a) to (d);
security interest
Defined · s 3“security interest” means a property right in personal property that is created by agreement and secures payment or other performance of an obligation, regardless of whether the parties have denominated it as a security interest, and includes the right of a seller in an instalment sale or a sale with retained title, but it does not include a personal right against a guarantor or other person liable for the payment of the secured obligation;
Part
Special Priority Rules
Part
Registration
Part
Enforcement of Security Interests
Part