CHATTELS SECURITIES ACT.

ARRANGEMENT OF SECTIONS.

   Section

PART I
PRELIMINARY.

   1.   Commencement.

   2.   Interpretation.

   3.   Agreement giving power of distress by way of security to be instrument.

   4.   Reservation of title.

   5.   Collateral in possession or control of debtor.

   6.   Knowledge of fact in relation to particular transaction.

   7.   Notice to be in writing.

   8.   Conflict of laws.

PART II
CREATION OF SECURITY INTEREST AND RIGHTS OF SECURED PARTY.

   9.   Creation of security interest.

   10.   Effectiveness of agreement creating security interest and duty of good faith.

   11.   Attachment of security interest.

   12.   Attachment of security interest in property after it is acquired.

   13.   Future advances.

   14.   Rights and duties where collateral is in possession of secured party.

   15.   Secured party to supply information.

   16.   Requirements for enforcement against third parties.

PART III
PERFECTION AND PRIORITY OF SECURITY INTEREST.

   17.   Perfection of security interest.

   18.   Perfection by registration.

   19.   Perfection by possession of collateral.

   20.   Temporary perfection where collateral is delivered or is available to debtor.

   21.   Security interest in proceeds.

   22.   Continuity of perfection.

   23.   Protection of purchasers of goods.

   24.   Protection of purchasers of chattel paper, negotiable instruments, documents of title and securities.

   25.   Priorities among conflicting security interests in same collateral.

   26.   Priority of purchase money security interests.

   27.   Priority where registration ceases to be effective.

   28.   Priority of negotiable document of title.

   29.   Priority of lien.

   30.   Priority of security interests in fixtures.

   31.   Priority of security interests in crops.

   32.   Priority of security interests in accessions.

   33.   Priority where goods are processed or mixed.

   34.   Priority subject to postponement.

PART IV
REGISTRATION.

   35.   Designation of registrar.

   36.   Registrar's official seal.

   37.   Register of chattels securities.

   38.   Register book and index to be kept.

   39.   Mode of registration.

   40.   Time for registration.

   41.   Duration and renewal or change of registration.

   42.   Register searches.

   43.   Certified copies.

   44.   Fees.

PART V
INSTRUMENTS.

   45.   Attestation of instrument.

   46.   Instrument not duly attested and registered to be void.

   47.   Chattel comprised in registered instrument not to be in possession of grantor.

   48.   Priority of two or more instruments registered for the same chattel.

   49.   Form of instrument.

   50.   Instrument to take effect upon registration.

   51.   Instrument to have inventory of chattels.

   52.   Instrument not to affect chattels acquired after execution of instrument.

   53.   Instrument made subject to condition or declaration of trust.

   54.   Instrument securing current account.

   55.   Instruments comprising stock.

   56.   Instrument comprising crops.

   57.   Substitution of chattels described in instrument.

   58.   Transfer of instrument.

   59.   Registration of transfer of instrument.

PART VI
FINANCING STATEMENT.

   60.   Financing statement.

   61.   Registration of financing statement.

   62.   Financing change statement for transferred security interest.

   63.   Collateral in registered financing statement.

   64.   Transfer of debtor's interest in collateral or change of debtor's name.

PART VII
RIGHTS AND REMEDIES.

   65.   Right to compensation.

   66.   Matters in respect of which compensation is payable.

   67.   Maximum compensation payable.

   68.   Factors that may prevent or reduce compensation payments.

   69.   Exemption from liability.

   70.   State's right of subrogation.

   71.   Remedies available where debtor in default.

   72.   Real and personal collateral.

   73.   Realisation of collateral.

   74.   Appointment of receiver.

   75.   Possession by secured party.

   76.   Sale by secured party.

   77.   Treatment of deficiency after sale.

   78.   Mode of sale.

   79.   Notice of sale.

   80.   Effect of sale.

   81.   Debtor's right to redeem.

   82.   Foreclosure.

   83.   Duties of secured party.

   84.   Secured party's liability for failure to comply.

   85.   Rights of landlord or mortgagee.

PART VIII
SALE OF CHATTELS.

   86.   Sale of chattel.

   87.   Mode of sale.

   88.   Vesting interest in chattels.

   89.   Grantor's interest in chattels may be sold in execution of judgment against grantor.

   90.   Interpleader process not affected by the Act.

PART IX
COVENANTS IMPLIED IN INSTRUMENTS.

   91.   Covenants implied in instruments.

   92.   Covenants to be several or joint.

   93.   Covenants to bind executors and administrators.

   94.   Covenants may be varied.

PART X
MISCELLANEOUS.

   95.   Defrauding or attempting to defraud grantee.

   96.   Entitlement to damages for breach of obligations.

   97.   Regulations.

   98.   Minister's power to amend Schedules.

   99.   Repeal and savings

      First Schedule   Currency point.

      Second Schedule   Covenants implied in instruments.

CHATTELS SECURITIES ACT.

Commencement:?????

   An Act to regulate the making and enforcement of security interests in chattels; to repeal the Chattels Transfer Act and for other related purposes.

PART I
PRELIMINARY.

1.   Commencement.

   This Act shall come into force on a date to be appointed by the Minister, by statutory instrument.

2.   Interpretation.

   In this Act, unless the context otherwise requires—

   "accessions" means goods that are installed in or fixed to other goods;

   "cash proceeds" means proceeds in the form of money, cheques, drafts, and deposit accounts in a deposit taking institution;

   "chattel" means any movable property that can be completely transferred by delivery, and includes machinery, book debts, stock and the natural increase of stock, crops, wool or property in respect of which a valid document of title exists but does not include—

   (a)   title deeds, chooses in action or negotiable instruments;

   (b)   shares and interests in the stock, funds or securities of any government or local authority;

   (c)   shares and interests in the capital or property of any company or other corporate body; or

   (d)   debentures and interest coupons issued by any government, or local authority, company or other corporate body;

   "chattel paper" means one or more documents that evidence—

   (a)   a monetary obligation and a security interest in a lease of specific goods; or

   (b)   a lease of specific goods;

   "chose in action" means a right which can be enforced in court;

   "collateral" means personal property that is subject to a security interest;

   "consumer goods" means goods that a debtor uses or acquires for use primarily for personal, family or household purposes; and the determination whether goods are consumer goods for the purposes of a security interest is made at the time the security interest in the goods attaches;

   "court" means a court of competent jurisdiction;

   "crops" means crops, whether matured or otherwise, and whether naturally grown or planted, attached to land by roots or forming part of trees or plants attached to land, but does not include trees;

   "currency point" has the value assigned to it in the First Schedule;

   "debtor" means—

   (a)   a person who owes payment or performance of a secured obligation, whether or not that person owns or has rights in the collateral;

   (b)   a seller of receivables;

   (c)   a lessee under a lease for a term of more than three years; or

   (d)   where the debtor and the owner of the collateral are not the same person—

      (i)   in any provision dealing with the collateral, the owner of the collateral;

      (ii)   in any provision dealing with the obligation, the person under the obligation; and

      (iii)   both the debtor and the owner, where the context permits or requires;

   "document of title" means a document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold and dispose of the goods it covers; and includes a bill of lading, dock warrant, dock receipt, warehouse receipt or order for the delivery of goods; and is issued by or addressed to a bailee and relates to goods in the possession of the bailee that are identified or are tangible portions of an identified mass;

   "executed" means signed by the grantor or his or her attorney;

   "financing change statement" means a document relating to a registered financing statement;

   "financing statement" means a document relating to a security interest or proposed security interest registered under this Act and includes a financing change statement and a security document registered under any other Act before the coming into force of this Act;

   "fungible" means goods or securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit, and includes unlike units to the extent that they are treated as equivalents under a security agreement;

   "future advance" means the payment of money, provision of credit, or giving of value secured by a security interest, occurring after the agreement creating the security interest has been entered into, whether or not given pursuant to a commitment, and includes advances and expenditures made for the protection, maintenance, preservation or repair of a collateral;

   "goods" means tangible personal property other than—

   (a)   chattel paper;

   (b)   documents of title;

   (c)   tangibles;

   (d)   money;

   (e)   negotiable instruments;

   (f)   receivables; or

   (g)   securities,

and includes crops and animals, but does not include trees until they are severed or minerals until they are extracted;

   "grantee" means a party to an instrument to whom a chattel or an interest referred to in the instrument is granted or assigned, or a party to whom a chattel or an interest referred to in the instrument is agreed to be granted or assigned, and includes his or her executors, administrators and assignees, and in the case of a company or corporation, includes the successors and assignees of the company or corporation;

   "instrument" means an instrument given to secure the payment of money or the performance of an obligation and includes a bill of sale, mortgage, lien, or a document that transfers the property or interest in a chattel, whether permanently or temporarily by way of sale, security, pledge, settlement or lease, and includes—

   (a)   inventories of chattels with receipts attached to the inventories;

   (b)   receipts for purchase money of chattels;

   (c)   declaration of trust without transfer;

   (d)   powers of attorney, authorities, or licences to take possession of chattels as security for debt; and

   (e)   an agreement whether or not it is intended to be followed by the execution of an instrument in which a right in equity to a chattel, or to a charge or security is conferred,

but does not include—

      (i)   securities over, or leases of, fixtures, except trade machinery when mortgaged or charged apart from the land to which they are attached, when mortgaged, charged or leased in land or a building to which they are affixed, and whether or not the fixtures are specifically included in the mortgage, charge or lease;

      (ii)   assignments for the benefit of the creditors of the person making the assignment;

      (iii)   transfer or agreements to transfer instruments by way of security;

      (iv)   transfer or assignment of a ship or vessel;

      (v)   transfer of a chattel used in the ordinary course of business or trade;

      (vi)   debentures issued by Government or a local authority;

      (vii)   a bill of sale of a chattel in a foreign country or at sea;

      (viii)   a document used in the ordinary course of business as proof of the possession or control of chattels, or a document authorising the transfer or receipt of the chattels mentioned in the document;

      (ix)   a debenture issued by a company or corporate body and secured upon the capital stock or chattels of the company or corporate body;

      (x)   a mortgage or charge granted or created by a company incorporated or registered under the Companies Act; or

      (xi)   a hire purchase agreement;

   "lease" means a lease or bailment of goods for more than three years and includes—

   (a)   a lease of an indefinite term, even though the lease is determinable by one or both of the parties not later than three years from the date of its execution;

   (b)   a lease for a term of three years or less that is automatically renewable or that is renewable at the option of one of the parties or by agreement for one or more terms, the total of which may exceed three years; and

   (c)   a lease for a term of three years or less where the lessee retains uninterrupted or substantially uninterrupted possession of the goods leased for a period in excess of one year after the day the lessee first acquired possession of the goods, but where the lease does not become a lease for a term of more than three years until the lessee's possession extends for more than three years,

but does not include—

      (a)   a lease by a lessor who is not regularly engaged in the business of leasing; or

      (b)   a lease of household furnishings or appliances;

   "liquidator" has the meaning in the Insolvency Act;

   "machinery" means the machinery used in a factory or workshop, or in the production, preparation or manufacture of agricultural products, but does not include—

   (a)   waterwheels, engines and steam boilers;

   (b)   fixed power machinery, such as the staffs, wheels, drums and appliances used in the transmission of power; or

   (c)   pipes for steam, gas and water;

   "Minister" means the Minister responsible for justice and Constitutional affairs;

   "negotiable instrument" means a bill of exchange, note or cheque within the meaning of the Bills of Exchange Act and includes—

   (a)   any document that evidences a right to payment of money and which is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment; and

   (b)   a letter of credit, if the letter of credit states on it that it shall be presented on claiming payment,

but does not include chattel paper, a document of title or a security;

   "prior security interest" means a security interest provided for by an agreement that—

   (a)   was made or entered into before the coming into force of this Act; and

   (b)   has not been terminated before the coming into force of this Act,

but does not include a security interest which is renewed, extended or consolidated by an agreement or transaction made or entered into after the coming into force of this Act;

   "proceeds" means identifiable or traceable personal property in any form derived directly or indirectly from dealing with a collateral or proceeds of a collateral, and includes—

   (a)   a right to an insurance payment or any other payment as indemnity or compensation for loss or damage to the collateral or proceeds; and

   (b)   a payment made in total or partial discharge or redemption of an intangible, a negotiable instrument, a security or chattel paper;

   "public trustee" means the public trustee appointed under the Public Trustee Act;

   "purchase money security interest" means a security interest to the extent that it is—

   (a)   taken or retained by the seller of collateral to secure all or part of its price;

   (b)   taken by a person who, by making advances or incurring an obligation, gives value to enable a debtor acquire rights in or the use of collateral if the value is in fact used; or

   (c)   the interest of a lessor of goods under a lease for a term of three years,

but does not include a transaction of sale by and lease back to the seller, and for the purposes of this definition "price" and "value" include credit charges or interest payable for the purchase or loan credit;

   "receivables" means any right to payment for goods sold or leased or for services rendered which is not evidenced by chattel paper, or by a negotiable instrument or by a security, whether or not it has been earned by performance;

   "register" means the register of chattels securities interests established under section 37;

   "registrar" means the registrar of chattels securities designated under section 35;

   "secured party" means a person who holds a security interest for his or her own benefit or for the benefit of another person and includes a trustee where the holders of the obligations issued, guaranteed or provided for are represented by a trustee as the holder of the security interest;

   "security" means an instrument given to secure the payment of money or the performance of some obligation and includes share, stock, warrant, bond, debenture or any document—

   (a)   that is in a form recognised in the place in which it is issued or dealt with as evidence of a share, participation or other interest in property or an enterprise; or

   (b)   that is evidence of an obligation of the issuer and which in the ordinary course of business is transferred by—

      (i)   delivery, together with any necessary endorsement, assignment or registration in the records of the issuer or agent of the issuer; or

      (ii)   compliance with any conditions restricting transfer; and an uncertificated security;

   "security document" means a writing which creates a security interest, or which evidences a security interest;

   "security interest" means a right that is enforceable against persons generally, arising out of an interest in a chattel paper, a document of title, goods, an intangible, money, or a negotiable instrument and includes—

   (a)   a fixed charge;

   (b)   a floating charge;

   (c)   an interest created or provided for by—

      (i)   a chattel mortgage;

      (ii)   a conditional sale agreement including an agreement to sell subject to retention of title;

      (iii)   a hire purchase agreement;

      (iv)   a pledge;

      (v)   a security trust deed;

      (vi)   a trust receipt;

      (vii)   an assignment;

      (viii)   a consignment;

      (ix)   a lease; or

      (x)   a transfer of chattel paper,

which secures payment or performance of an obligation; without regard to the form of the transaction and without regard to the identity of the person who has title to the collateral, including where title to the collateral is in the secured party;

   "stock" includes sheep, goats, cattle, horses, pigs, poultry, and any other domestic animals;

   "tangibles" means personal property other than—

   (a)   chattel paper;

   (b)   documents of title;

   (c)   goods;

   (d)   money;

   (e)   negotiable instruments;

   (f)   receivables; or

   (g)   securities;

   "uncertificated security" means a security which is not evidenced by a security certificate, and the issue and transfer of which is registered by or on behalf of the issuer.

3.   Agreement giving power of distress by way of security to be instrument.

   (1) An agreement, not being a mining lease, in which a power of distress is given or agreed to be given by way of security, for present, future or contingent debt or advance, and in which any rent is reserved or paid as a means of providing for the payment of interest on the debt or advance, or for the purpose of security only, shall be an instrument covering chattels seized or taken under the power of distress.

   (2) Notwithstanding subsection (1), where a mortgagee of an interest in land enters into possession of the mortgaged land, receives rent or profits in respect of the land, or transfers the land or any part of the land to the mortgagor at a fair and reasonable rent, the instrument in which the transfer is effected shall not be taken to be an instrument within the meaning of this Act.

4.   Reservation of title.

   A reservation of title by a secured party or a seller of goods, notwithstanding shipment or delivery, is limited in effect to the reservation of a security interest.

5.   Collateral in possession or control of debtor.

   A secured party does not have possession of collateral that is in the actual or apparent possession or control of a debtor or of an agent of a debtor.

6.   Knowledge of fact in relation to particular transaction.

   (1) For the purposes of this Act, a person knows or has knowledge of a fact in relation to a particular transaction where that person—

   (a)   has actual knowledge of the fact; or

   (b)   receives actual or has constructive notice of the fact, whether or not the person acquires actual knowledge of the demand, notice or document.

   (2) A person shall be deemed to have received constructive notice of a fact if the circumstances are such that, that person would be reasonably expected to have been aware of that fact.

   (3) Circumstances from which constructive notice under this section can be imputed shall include the following—

   (a)   where an agent or employee of that person has actual notice of the fact;

   (b)   where notice is in respect of the existence of a security interest, the whole public shall be deemed to have constructive notice of that security interest upon registration of the relevant instrument.

7.   Notice to be in writing.

   (1) A demand, notice or document made under this Act shall be in writing, and shall, in the case of a request made under section 15, contain a postal address.

   (2) A demand, notice or document is deemed to be sufficiently made or given where—

   (a)   in the case of a secured party named in a financing statement, it is delivered to that person or is left at the address of that person, as specified in the financing statement or is posted in a letter ad

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