Secured Transactions Act · 2022 Revised Edition · Part · Enforcement of Security Interests
65. Secured party may apply certain collateral in satisfaction of secured obligation
Official textFrom Attorney General's Chambers, unchanged
Notwithstanding section 63, if the debtor is in default, a secured party with priority over all other secured parties may collect and apply an account receivable, investment security, money or negotiable instrument taken as collateral to the satisfaction of the obligation secured by the security interest.
default
“default” means — (a) the failure to pay or otherwise perform the obligation secured when due; or (b) the occurrence of an event that, under a security agreement, gives a secured party the right to enforce a security interest;
Unless otherwise agreed, the secured party may notify the account debtor and collect payment.
secured party
“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);
Terms defined in s 3
account debtor
Defined · s 3“account debtor” means a person who is obligated under an account receivable or chattel paper;
account receivable
Defined · s 3“account receivable” means a right to payment of a monetary obligation that is not evidenced by chattel paper, a negotiable instrument or an investment security, whether or not that obligation has been earned by performance;
collateral
Defined · s 3“collateral” means personal property that is subject to a security interest;
default
Defined · s 3“default” means — (a) the failure to pay or otherwise perform the obligation secured when due; or (b) the occurrence of an event that, under a security agreement, gives a secured party the right to enforce a security interest;
investment security
Defined · s 3“investment security” means a writing, whether or not it is in the form of a security certificate, that is recognised in a place in which it is issued or dealt with as a warrant, option, share, right to participate, or other interest in property or an enterprise, or that evidences an obligation of the issuer, and that, in the ordinary course of business, is transferred by — (a) delivery with any necessary endorsement, assignment, or registration in the records of the issuer or agent of the issuer; (b) an entry in the records of a clearing house or central securities depository; (c) an entry in the records maintained for that purpose by or on behalf of the issuer; or (d) an entry in the records maintained for that purpose by or on behalf of the nominee, Secured Transactions but does not include a writing that evidences a monetary obligation that is secured by an interest in land;
negotiable instrument
Defined · s 3“negotiable instrument” means — (a) a bill of exchange or promissory note within the meaning of the Bills of Exchange Act; or (b) any other writing that evidences a right to payment of money and is of a kind that, in the ordinary course of business, is transferred by delivery with any necessary endorsement, but does not include chattel paper, document of title or investment security;
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