Secured Transactions Act · 2022 Revised Edition · Part 6
26. Priority of purchase money security interests in collateral etc. or its proceeds
Official textFrom Attorney General's Chambers, unchanged
Subject to section 15, a purchase money security interest shall have priority over a non-purchase money security interest in the same collateral given by the same debtor if —
purchase money security interest
“purchase money security interest” means — (a) a security interest taken in collateral by a seller that secures the obligation to pay any unpaid portion of the purchase price of the collateral; (b) a security interest taken in collateral by a person who gives value for the purpose of enabling the debtor to acquire rights in the collateral, to the extent that the value is applied to acquire those rights; (c) the interest of a financial lessor or a lessor of goods under a lease for a term of more than one year; or (d) the interest of a consignor who delivers goods to a consignee under a commercial consignment, but does not include a transaction of sale and lease back to the seller;
in collateral or its proceeds, other than inventory, the purchase money security interest in the collateral or its proceeds is perfected within 10 working days after the day on which the debtor, or another person at the request of the debtor, obtained possession of the collateral;
collateral
“collateral” means personal property that is subject to a security interest;
in inventory or its proceeds, the purchase money security interest in the inventory or its proceeds is perfected at the time the debtor, or another person at the request of the debtor, obtains possession of the collateral; or
inventory
“inventory” means goods that are — (a) held by a person for sale or lease, or that have been leased by the person as lessor; (b) to be provided or have been provided under a contract for services; (c) raw materials or work in progress; or (d) materials used or consumed in a business;
in an intangible or its proceeds, the purchase money security interest in the intangible or its proceeds is perfected within 10 working days after the day on which the security interest in the intangible was created.
intangible
“intangible” means personal property other than goods, chattel paper, documents of title, investment securities, money or negotiable instruments;
Terms defined in s 3
collateral
Defined · s 3“collateral” means personal property that is subject to a security interest;
intangible
Defined · s 3“intangible” means personal property other than goods, chattel paper, documents of title, investment securities, money or negotiable instruments;
inventory
Defined · s 3“inventory” means goods that are — (a) held by a person for sale or lease, or that have been leased by the person as lessor; (b) to be provided or have been provided under a contract for services; (c) raw materials or work in progress; or (d) materials used or consumed in a business;
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;
purchase
Defined · s 3“purchase” means taking by sale, lease, discount, assignment, negotiation, mortgage, pledge, lien, issue, reissue, gift or any other consensual transaction that creates an interest in personal property;
purchase money security interest
Defined · s 3“purchase money security interest” means — (a) a security interest taken in collateral by a seller that secures the obligation to pay any unpaid portion of the purchase price of the collateral; (b) a security interest taken in collateral by a person who gives value for the purpose of enabling the debtor to acquire rights in the collateral, to the extent that the value is applied to acquire those rights; (c) the interest of a financial lessor or a lessor of goods under a lease for a term of more than one year; or (d) the interest of a consignor who delivers goods to a consignee under a commercial consignment, but does not include a transaction of sale and lease back to the seller;
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