(a) at the most recent address of the secured party that was registered as part of a financing statement that includes a description of personal property of the debtor; or

(b) at a more recent address that is the current address of the secured party if known by the person making the demand.

(3) Any or all of the following may be demanded pursuant to subsection (1):

(a) a copy of any security agreement providing for a security interest held by the secured party in the personal property of the debtor;

(b) a statement in writing of the amount of the indebtedness and of the terms of payment of the indebtedness, as of the date specified in the demand;

(c) a written approval or correction of an itemized list of personal property attached to the demand indicating which items are collateral as of the date specified in the demand;

(d) a written approval or correction of the amount of indebtedness and of the terms of payment of the indebtedness, as of the date specified in the demand;

(e) sufficient information as to the location of the security agreement or a copy of it within the Province to enable a person entitled to receive a copy of the security agreement to inspect it within the Province.

(4) A person with an interest in personal property of the debtor may make a demand pursuant to subsection (1) only with respect to a security agreement providing for a security interest in the personal property in which the person has an interest.

(5) The secured party, on the demand of a person entitled to receive a copy of the security agreement referred to in clause (3)(a), shall permit the person to inspect the security agreement or a copy of it during regular business hours at the location referred to in clause (3)(e).

(6) Where a person makes a demand pursuant to subsection (1) for a written approval or correction of an itemized list referred to in clause (3)(c) and the secured party claims a security interest in all of the debtors present and after-acquired personal property, in all of the debtors present and after-acquired personal property except specified items or kinds of personal property or in all of a specified kind of the debtors personal property, the secured party may indicate this instead of approving or correcting the itemized list.

(7) A secured party shall comply with a demand made pursuant to subsection (1) or (5) within

(a) twenty-five days after the demand is made, if the secured party is a trustee under a trust indenture; or

(b) ten days after the demand is made, in the case of any other secured party.

(8) Where, without reasonable excuse, the secured party fails to comply with a demand made pursuant to subsection (1) or (5) within the time specified in subsection (7) or provides an incomplete or incorrect reply to a demand made pursuant to subsection (1), the person making the demand, in addition to any other remedy provided by this Act, may apply to the Court for an order requiring the secured party to comply with the demand.

(9) Where a person receiving a demand made pursuant to subsection (1) or (5) no longer has an interest in the obligation or property of the debtor that is the subject of the demand, that person shall, within fifteen days after receiving the demand, disclose the name and address of the immediate successor in interest and, if known, the latest successor in interest.

(10) Where, without reasonable excuse, the person receiving the demand fails to comply with subsection (9), the person making the demand, in addition to any other remedy provided in this Act, may apply to the Court for an order requiring the person receiving the demand to comply.

(11) On an application pursuant to subsection (8) or (10), the Court may make an order requiring the secured party or the person receiving the demand to comply with the demand or to disclose the information.

(12) On an application pursuant to subsection (8) or (10) or on a separate application, the Court may make

(a) any order that it considers necessary to ensure compliance with the demand;

(b) an order that, in the event of non-compliance with an order made on an application pursuant to subsection (8), the security interest of the secured party in relation to which the demand was made is unperfected or extinguished and the person making the demand may register a financing change statement discharging any registration related to that security interest.

(13) On an application pursuant to subsection (8) or (10), or on an application by the secured party referred to in subsection (8) or by the person receiving a demand referred to in subsection (9), the Court, subject to Section 67, may make

(a) an order exempting the secured party or person receiving the demand, in whole or in part, from complying with subsection (7) or (9), unless the demand is made by the debtor; or

(b) an order extending the time for compliance.

(14) Where a secured party replies to a demand made pursuant to subsection (1), the secured party and a successor in interest referred to in subsection (9) are estopped, for the purpose of this Act, as against the person making the demand, and any other person who can reasonably be expected to rely on the reply to the extent that the person relied on the reply, from denying

(a) the accuracy of any of the information referred to in clause (3)(b), (c) or (d) that is contained in the reply; or

(b) that the copy of the security agreement referred to in clause (3)(a) that is provided with the reply is a true copy of that security agreement.

(15) A successor in interest referred to in subsection (9) is not estopped pursuant to subsection (14) if

(a) the person making the demand knows the identity and address of the successor in interest; or

(b) before the demand, a financing change statement has been registered pursuant to Section 46 disclosing the successor in interest as the secured party.

(16) The person to whom a demand is made pursuant to this Section may require payment in advance of a fee in the amount prescribed for each demand, but the debtor is entitled to a reply without charge once every six months.

(17) A secured party who receives a demand that purports to be made by a person entitled to make the demand pursuant to subsection (1) may act as if the person is entitled to make the demand unless the secured party knows that the person is not entitled to make it. 1995-96, c. 13, s. 19.

Time of perfection

20 A security interest is perfected when

(a) it has attached; and

(b) all steps required for perfection pursuant to this Act have been completed,

regardless of the order of occurrence. 1995-96, c. 13, s. 20.

Subordination of unperfected interest

21 (1) An unperfected security interest in collateral is subordinate to the interest of

(a) a judgment creditor who has registered a notice of judgment in the Registry pursuant to Section 2A of the Creditors Relief Act if the security interest is unperfected when the notice is registered;

(b) all persons entitled by the Creditors Relief Act or otherwise to participate in a distribution of personal property subject to the interest of a creditor referred to in clause (a); and

(c) a sheriff and a representative of creditors for the purpose of enforcing the rights of a creditor referred to in clause (a).

(2) An unperfected security interest in collateral is not effective against

(a) a trustee in bankruptcy if the security interest is unperfected at the time of the bankruptcy;

(b) a liquidator appointed pursuant to the Winding-up Act (Canada) if the security interest is unperfected when the winding-up order is made; or

(c) a creditor, assignee or sheriff who has registered a notice of claim in the Registry pursuant to Section 2C of the Creditors Relief Act for the purpose of any enforcement proceedings commenced pursuant to the enactments referred to in that Section if the security interest is unperfected at the time the notice of claim is registered.

(3) An unperfected security interest in collateral is subordinate to the interest of a transferee of the collateral if the transferee

(a) acquires the interest under a transaction that is not a security agreement;

(b) gives value; and

(c) acquires the interest without knowledge of the security interest and before the security interest is perfected.

(4) For the purpose of subsection (3), a purchaser of an instrument or a security or a holder of a negotiable document of title who acquires it under a transaction entered into in the ordinary course of the transferors business has knowledge only if the purchaser or holder acquires the interest with knowledge that the transaction violates the terms of the security agreement creating or providing for the security interest. 1995-96, c. 13, s. 21.

Deemed damages

22 Where the interest of a lessor under a lease for a term of more than one year or of a consignor under a commercial consignment is not effective against a person under clause 21(2)(a) or (b) or where the leased goods are seized pursuant to judgment enforcement proceedings by a person entitled to priority under subsection 21(1), the lessor or consignor is deemed to have suffered damages, as against the lessee or consignee in an amount equal to

(a) the value of the leased or consigned goods at the time of the bankruptcy, winding-up order or seizure; and

(b) the amount of the loss, other than that referred to in clause (a), resulting from the termination of the lease or consignment. 1995-96, c. 13, s. 22.

Priority of purchase money security interest

23 (1) A purchase money security interest in collateral, other than an intangible, has priority over the interests of persons referred to in subsections 21(1) and (2) if it is perfected not later than fifteen days after the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier.

(2) Where goods are shipped by common carrier to a debtor or to a person designated by the debtor, the debtor does not have possession of the goods for the purpose of subsection (1) until the debtor, or another person at the request of the debtor, has obtained actual possession of the goods or a document of title to the goods, whichever is earlier.

(3) A purchase money security interest in an intangible has priority over the interests of persons referred to in subsections 21(1) and (2) if it is perfected not later than fifteen days after it attaches.

(4) A security interest in goods referred to in paragraph 2(ar)(ii)(D) has priority over the interests of persons referred to in subsections 21(1) and (2) if it is perfected not later than thirty days after the sale of the goods. 1995-96, c. 13, s. 23.

Continuous perfection

24 (1) Where a security interest is originally perfected pursuant to this Act and is again perfected in some other way pursuant to this Act without an intermediate period when it is unperfected, the security interest is deemed to be perfected continuously for the purpose of this Act.

(2) A transferee of a security interest has the same priority in relation to perfection of the security interest as the transferor had at the time of the transfer. 1995-96, c. 13, s. 24.

Perfection by possession

25 (1) Subject to Section 20, possession of the collateral by the secured party, or on the secured partys behalf by another person, perfects a security interest in

(a) goods;

(b) a negotiable document of title;

(c) chattel paper;

(d) a security;

(e) an instrument; or

(f) money.

(2) A secured party does not have possession of collateral for the purpose of subsection (1) if

(a) the collateral is in the actual or apparent possession or control of the debtor or the debtors agent; or

(b) possession is the result of seizure or repossession. 1995-96, c. 13, s. 25.

Perfection by registration

26 Subject to Section 20, registration of a financing statement perfects a security interest in collateral. 1995-96, c. 13, s. 26.

Effect of delivery to debtor

27 (1) Where a security interest in an instrument or a security is perfected by possession pursuant to Section 25 and the secured party delivers the instrument or security to the debtor for the purpose of

(a) ultimate sale or exchange;

(b) presentation, collection or renewal; or

(c) registration of a transfer,

the security interest remains perfected, notwithstanding Section 11, for the first fifteen days after the collateral comes under the control of the debtor.

(2) Where a security interest in a negotiable document of title or in goods held by a bailee that are not covered by a negotiable document of title is perfected by possession pursuant to Section 25 and the secured party makes the document of title or goods available to the debtor for the purpose of

(a) ultimate sale or exchange;

(b) loading, unloading, storing, shipping or trans-shipping; or

(c) manufacturing, processing, packaging or other dealing with goods in a manner preliminary to their sale or exchange,

the security interest remains perfected, notwithstanding Section 11, for the first fifteen days after the collateral comes under the control of the debtor.

(3) On the expiry of the fifteen-day period referred to in subsection (1) or (2), a security interest referred to in those subsections is subject to the other provisions of this Act relating to the perfection of a security interest. 1995-96, c. 13, s. 27.

Goods in possession of bailee

28 (1) Subject to Section 20, a security interest in goods in the possession of a bailee is perfected by

(a) possession of the goods by the bailee on the secured partys behalf pursuant to Section 25;

(b) registration of a financing statement relating to the goods pursuant to Section 26;

(c) the issue by the bailee of a document of title to the goods in the name of the secured party;

(d) the deposit by a secured party to whom a non-negotiable receipt has been transferred of the transfer with the warehouseman who issued the receipt in accordance with Section 22 of the Warehouse Receipts Act; or

(e) perfection of a security interest in a negotiable document of title to the goods if the bailee has issued one.

(2) The issue of a negotiable document of title covering goods does not preclude any other security interest in the goods from arising during the period that the negotiable document of title is outstanding.

(3) A perfected security interest in a negotiable document of title covering goods takes priority over a security interest in the goods that is otherwise perfected after the goods become covered by the negotiable document of title. 1995-96, c. 13, s. 28.

Proceeds of collateral

29 (1) Subject to this Act, where collateral is dealt with or otherwise gives rise to proceeds, the security interest

(a) continues in the collateral unless the secured party expressly or impliedly authorizes the dealing, and

(b) extends to the proceeds.

(2) Where a secured party enforces a security interest against both the collateral and the proceeds, the amount secured by the security interest in the collateral and the proceeds is limited to the market value of the collateral at the date of the dealing.

(3) A security interest in proceeds is a continuously perfected security interest if the interest in the original collateral is perfected by registration of a financing statement pursuant to Section 26 that includes a description of

(a) the proceeds that would be sufficient to perfect a security interest in original collateral of the same kind;

(b) the original collateral, if the proceeds are of a kind that are within the description of the original collateral; or

(c) the original collateral, if the proceeds consist of money, cheques or deposit accounts in a bank, credit union or similar financial institution.

(4) Where the security interest in the original collateral is perfected other than in a manner referred to in subsection (3), the security interest in the proceeds is a continuously perfected security interest for the first fifteen days after the security interest in the original collateral attaches to the proceeds but becomes unperfected on the expiry of that period, unless the security interest in the proceeds is otherwise perfected by any of the methods and under the circumstances specified in this Act for original collateral of the same kind. 1995-96, c. 13, s. 29.

Reattachment after sale or lease

30 (1) Where a debtor sells or leases goods that are subject to a security interest under circumstances in which the buyer or lessee takes free of the security interest under clause 29(1)(a) or Section 31, the security interest reattaches to the goods if

(a) the goods are returned to, seized or repossessed by the debtor or a transferee of chattel paper created by the sale or lease; and

(b) the obligation secured remains unpaid or unperformed.

(2) Where a security interest reattaches under subsection (1), the perfection of the security interest and the time of registration or perfection shall be determined as if the goods had not been sold or leased if

(a) the security interest was perfected by registration pursuant to Section 26 when the goods were sold or leased; and

(b) the registration is effective when the goods are returned, seized or repossessed.

(3) Where a sale or lease of goods creates an account or chattel paper that is transferred to a secured party, and the goods are returned to, seized or repossessed by the debtor or the transferee of the chattel paper, the transferee of the account or chattel paper has a security interest in the goods that attaches when the goods are returned, seized or repossessed.

(4) A security interest in goods arising under subsection (3) is perfected if the security interest in the account or chattel paper was perfected when the goods were returned, seized or repossessed, but becomes unperfected on the expiry of fifteen days after the return, seizure or repossession, unless the transferee registers a financing statement relating to the security interest or takes possession of the goods by seizure, repossession or otherwise, before the expiry of that fifteen-day period.

(5) A security interest in goods that a transferee of an account has under subsection (3) is subordinate to a perfected security interest that re-attaches under subsection (1) and to a security interest of a transferee of chattel paper that arises under subsection (3).

(6) A security interest in goods that a transferee of chattel paper has under subsection (3) has priority over

(a) a security interest in goods that re-attaches under subsection (1); and

(b) a security interest in goods as after-acquired property that attaches on the return, seizure or repossession of the goods,

if the transferee of the chattel paper would have priority under subsection 32(6) as to the chattel paper over an interest in the chattel paper claimed by the holder of the security interest in the goods.

(7) A security interest in goods given by a buyer or lessee of the goods referred to in subsection (1), that attaches while the goods are in the possession of the buyer, lessee or debtor and that is perfected when the goods are returned, seized or repossessed, has priority over a security interest in the goods arising under this Section. 1995-96, c. 13, s. 30.

Rights of certain buyers and lessees

31 (1) In this Section,

(a) "buyer of goods" includes a person who obtains vested rights in goods under a contract to which the person is a party, as a consequence of the goods becoming a fixture or accession to property in which the person has an interest;

(b) "ordinary course of business of the seller" includes the supply of goods in the ordinary course of business as part of a contract for services and materials;

(c) "seller" includes a person who supplies goods that become a fixture or accession under a contract with a buyer or under a contract with a person who is party to a contract with such a buyer.

(2) A buyer or lessee of goods sold or leased in the ordinary course of business of the seller or lessor takes free of any perfected or unperfected security interest given by the seller or lessor or arising under Section 29 or 30, whether or not the buyer or lessee knows of it, unless the buyer or lessee also knows that the sale or lease constitutes a breach of the security agreement under which the security interest was created.

(3) A buyer or lessee of goods that are acquired as consumer goods takes free of a perfected or unperfected security interest in the goods if the buyer or lessee

(a) gave value for the interest acquired; and

(b) bought or leased the goods without knowledge of the security interest.

(4) Subsection (3) does not apply to a security interest in

(a) a fixture; or

(b) goods if the purchase price of the goods exceeds one thousand dollars or if the market value of the goods, in the case of a lease, exceeds one thousand dollars.

(5) A buyer or lessee of goods who buys or leases the goods during any of the fifteen-day periods referred to in subsection 27(1) or (2), 29(4), 30(4) or Section 52 takes free of the security interest referred to in those provisions if the buyer or lessee

(a) gave value for the interest acquired; and

(b) bought or leased the goods without knowledge of the security interest and

(i) in a case within subsection 27(1) or (2), 29(4) or 30(4), before the security interest was perfected by possession pursuant to Section 25 or by registration pursuant to Section 26, or

(ii) in a case within Section 52, before the registration of the security interest was amended in accordance with that Section or the secured party took possession of the collateral.

(6) A buyer or lessee of goods takes free of a security interest in the goods perfected by registration pursuant to Section 26 if

(a) the buyer or lessee bought or leased the goods without knowledge of the security interest; and

(b) the goods were not described by serial number in the registration relating to the security interest.

(7) Subsection (6) applies only to goods that are equipment and that are of a kind that are prescribed as serial numbered goods.

(8) A sale or lease under subsection (2), (3), (5) or (6) may be

(a) for cash;

(b) by exchange for other property; or

(c) on credit,

and includes the delivery of goods or a document of title under a pre-existing contract for sale but does not include a transfer as security for, or in total or partial satisfaction of, a money debt or past liability. 1995-96, c. 13, s. 31.

Money and other instruments

32 (1) A holder of money has priority over a security interest in it perfected by registration pursuant to Section 26 or temporarily perfected under subsection 29(4) if the holder

(a) acquired the money without knowledge that it is subject to the security interest; or

(b) is a holder for value, whether or not that person acquired the money without knowledge that it is subject to the security interest.

(2) A creditor who receives an instrument drawn or made by a debtor and delivered in payment of a debt owing to the creditor by that debtor has priority over a security interest in the instrument whether or not the creditor has knowledge of the security interest in the instrument at the time of delivery.

(3) A purchaser of an instrument or a security has priority over a security interest in the instrument or security perfected by registration pursuant to Section 26 or temporarily perfected under subsection 27(1) or 29(4) if the purchaser

(a) gave value for the instrument or security;

(b) acquired the instrument or security without knowledge that it is subject to a security interest; and

(c) took possession of the instrument or security.

(4) A holder to whom a negotiable document of title is negotiated has priority over a security interest in the document of title that is perfected by registration pursuant to Section 26 or temporarily perfected under subsection 27(2) or 29(4) if the holder

(a) gave value for the document of title; and

(b) acquired the document of title without knowledge that it is subject to a security interest.

(5) For the purpose of subsections (3) and (4), a purchaser of an instrument or a security or a holder of a negotiable document of title who acquires it under a transaction entered into in the ordinary course of the transferors business has knowledge only if the purchaser acquires the interest with knowledge that the transaction violates the terms of the security agreement creating or providing for the security interest.

(6) A purchaser of chattel paper who takes possession of it in the purchasers ordinary course of business and for new value has priority over any security interest in the chattel paper that

(a) was perfected by registration pursuant to Section 26, if the purchaser does not have knowledge at the time of taking possession that the chattel paper is subject to a security interest; or

(b) has attached to proceeds of inventory under Section 29, whatever the extent of the purchasers knowledge. 1995-96, c. 13, s. 32.

Priority of certain liens

33 A lien on goods that arises as a result of the provision, in the ordinary course of business, of materials or services in respect of the goods, has priority over a perfected or unperfected security interest in the goods unless the lien arises under an Act that provides that it is not to have such priority. 1995-96, c. 13, s. 33.

Transfers

34 (1) In this Section, "transfer" includes a sale, the creation of a security interest or a transfer under judgment enforcement proceedings.

(2) The rights of a debtor in collateral may be transferred consensually or by operation of law notwithstanding a provision in the security agreement prohibiting transfer or declaring a transfer to be a default, but a transfer by the debtor does not prejudice the rights of the secured party under the agreement or otherwise, including the right to treat a prohibited transfer as an act of default. 1995-96, c. 13, s. 34.

Priority of certain security interests

35 (1) Subject to Section 29, a purchase money security interest in

(a) collateral or its proceeds, other than intangibles or inventory, that is perfected not later than fifteen days after the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier; or

(b) an intangible or its proceeds that is perfected not later than fifteen days after the security interest in the intangible attaches,

has priority over any other security interest in the same collateral given by the same debtor.

(2) Subject to Section 29, a purchase money security interest in inventory or its proceeds has priority over any other security interest in the same collateral given by the same debtor if

(a) the purchase money security interest in the inventory is perfected when the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier;

(b) the secured party gives a notice to any other secured party who has registered, before the registration of the financing statement relating to the purchase money security interest in the inventory, a financing statement where the collateral description in the financing statement includes the same item or kind of collateral or includes accounts;

(c) the notice referred to in clause (b) states that the person giving the notice expects to acquire a purchase money security interest in inventory of the debtor, and describes the inventory by item or kind; and

(d) the notice is given before the debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier.

(3) A notice pursuant to subsection (2) may be given in accordance with Section 70 or by registered mail addressed to the address of the person to be notified that was registered as part of the financing statement referred to in clause (2)(b).

(4) A purchase money security interest in goods or, subject to Section 29, in their proceeds, taken by a seller, lessor or consignor of the collateral, that is perfected

(a) in the case of inventory, when a debtor, or another person at the request of the debtor, obtains possession of the collateral, whichever is earlier; and

(b) in the case of collateral other than inventory, not later than fifteen days after a debtor, or another person at the request of a debtor, obtains possession of the collateral, whichever is earlier,

has priority over any other purchase money security interest in the same collateral given by the same debtor.

(5) A purchase money security interest in collateral as original collateral has priority over a purchase money security interest in the same collateral as proceeds, if it is perfected

(a) in the case of inventory, when a debtor, or another party at the request of a debtor, obtains possession of the collateral, whichever is earlier; and

(b) in the case of collateral other than inventory, not later than fifteen days after a debtor, or another person at the request of a debtor, obtains possession of the collateral, whichever is earlier.

(6) Where goods are shipped by common carrier to a debtor or to a person designated by a debtor, the debtor does not have possession of the goods for the purpose of this Section until the debtor, or another person at the request of the debtor, has obtained actual possession of the goods or a document of title to the goods, whichever is earlier.

(7) A purchase money security interest in an item of collateral does not extend to or continue in the proceeds of the item after the obligation to pay the purchase price of the item or repay the value given for the purpose of enabling the debtor to acquire rights in it has been discharged.

(8) A perfected security interest in crops or their proceeds, given for value to enable a debtor to produce the crops and given while the crops are growing crops or during a period of six months immediately before the time the crops become growing crops, has priority over any other security interest in the same collateral given by the same debtor.

(9) A perfected security interest in fowl, cattle, horses, sheep, swine or fish or their proceeds given for value to enable the debtor to acquire food, drugs or hormones to be fed to or placed in the animals or fish has priority over any other security interest in the same collateral or its proceeds given by the same debtor other than a perfected purchase money security interest. 1995-96, c. 13, s. 35.

Priority rules

36 (1) Where this Act provides no other method for determining priority between competing security interests in the same collateral,

(a) priority between perfected security interests is determined by the order of the occurrence of

(i) the registration of a financing statement pursuant to Section 26 without regard to the time of attachment of the security interest,

(ii) possession of the collateral pursuant to Section 25 without regard to the time of attachment of the security interest, or

(iii) perfection under Sections 6, 8, 27, 30 or 75,

whichever is earliest;

(b) a perfected security interest has priority over an unperfected security interest; and

(c) priority between unperfected security interests is determined by the order of attachment of the security interests.

(2) For the purpose of subsection (1), a continuously perfected security interest shall be treated at all times as if perfected by the method by which it was originally perfected.

(3) For the purpose of subsection (1) and subject to Section 29, the time of registration, possession or perfection of a security interest in original collateral is also the time of registration, possession or perfection of a security interest in its proceeds.

(4) A security interest in goods that are equipment and are of a kind that are prescribed as serial numbered goods is not registered or perfected by registration for the purpose of subsection (1), (7) or (8) or 35(1) unless a financing statement relating to the security interest that includes a description of the goods by serial number is registered.

(5) Subject to subsection (6), the priority that a security interest has under subsection (1) applies to all advances, including future advances.

(6) A perfected security interest has priority over the interest of a judgment creditor referred to in clause 21(1)(a) only to the extent of

(a) advances made before the judgment creditor registers the notice of judgment referred to in clause 21(1)(a);

(b) advances made before the secured party has knowledge of the registration of the notice of judgment referred to in clause 21(1)(a);

(c) advances made in accordance with a statutory requirement, or a legally binding obligation owing to a person other than the debtor entered into by the secured party before acquiring the knowledge referred to in clause (b); and

(d) reasonable costs and expenses incurred by the secured party for the protection, preservation, maintenance or repair of the collateral.

(7) Where a registration lapses as a result of a failure to renew it or if a registration is discharged without authorization or in error, and the secured party re-registers in accordance with the regulations within thirty days after the lapse or discharge, the lapse or discharge does not affect the priority ranking of the security interest to which the lapsed or discharged registration relates as against a competing perfected security interest that immediately before the lapse or discharge had a subordinate priority ranking, except to the extent that the competing security interest secures advances made or contracted for after the lapse or discharge and before the re-registration.

(8) Where a debtor transfers an interest in collateral that, at the time of the transfer, is subject to a perfected security interest, that security interest has priority over any other security interest granted by the transferee before the transfer except to the extent that the security interest granted by the transferee secures advances made or contracted for

(a) after the expiry of fifteen days from when the secured party who holds the security interest in the transferred collateral has knowledge of the information required to register a financing change statement in accordance with Section 52 disclosing the transferee as the new debtor; and

(b) before the secured party referred to in clause (a) takes possession of the collateral or registers a financing change statement in accordance with Section 52 disclosing the transferee as the new debtor.

(9) Subsection (8) does not apply if the transferee acquires the debtors interest free of the security interest granted by the debtor. 1995-96, c. 13, s. 36.

Security interest in fixtures

37 (1) In this Section, "secured party" includes a receiver.

(2) Except as provided in Section 31 and subsections (3), (4) and (9), a security interest in goods that attaches before or when the goods become fixtures has priority with respect to the goods over a claim to the goods made by a person with an interest in the land.

(3) A security interest referred to in subsection (2) is subordinate to the interest of a person who acquires for value an interest in the land after the goods become fixtures, including an assignee for value of the interest of a person with an interest in the land at the time the goods become fixtures, if the interest is acquired without fraud and before notice of the security interest is registered pursuant to Section 50.

(4) A security interest referred to in subsection (2) is subordinate to the interest of a person with a registered mortgage of the land who, after the goods become fixtures,

(a) makes an advance under the mortgage, but only with respect to that advance, or

(b) obtains an order for sale, foreclosure or foreclosure and sale,

without fraud and before notice of the security interest in the fixtures is registered pursuant to Section 50.

(5) Where a notice of a security interest in fixtures has not been registered pursuant to Section 50 when a search is made of the records of the registry of deeds by or on behalf of a person with a registered mortgage of the land, any advance under the mortgage made on the same day that the search was made is deemed to have been made before registration of a notice pursuant to Section 50, notwithstanding that the notice was registered on the same day that the search was made.

(6) The priority under this Section of a person with an interest in the land referred to in subsection (3) or of a person with a registered mortgage of land referred to in subsection (4) is not affected by priority rights in the land under the Registry Act.

(7) A security interest in goods that attaches after the goods become fixtures is subordinate to the interest of a person who has an interest in the land when the goods become fixtures and who

(a) has not consented to the security interest;

(b) has not disclaimed an interest in the goods or fixtures;

(c) has not entered into an agreement entitling the person to remove the goods; or

(d) is not otherwise precluded from preventing the debtor from removing the goods.

(8) A security interest in goods that attaches after the goods become fixtures is subordinate to the interest of a person who acquires an interest in the land after the goods become fixtures if the interest is acquired without fraud and before notice of the security interest in the fixtures is registered pursuant to Section 50.

(9) A security interest in goods that attaches before, when or after the goods become fixtures is subordinate to the interest of a creditor of the debtor who causes a certificate of judgment affecting the land to be registered pursuant to the Registry Act before notice of the security interest in the fixtures is registered pursuant to Section 50.

(10) The interest of a creditor of the debtor referred to in subsection (9) does not take priority over a purchase money security interest in goods that become fixtures if a notice of the security interest in the fixtures is registered pursuant to Section 50 not later than fifteen days after the goods are affixed to the land.

(11) A secured party who has the right, under this Act, to remove goods from land shall exercise the right of removal in a manner that causes no unnecessary damage or injury to the land and to other property situated on it or that puts the occupier of the land to any greater inconvenience than is necessarily incidental to the removal of the goods.

(12) A person, other than the debtor, who has an interest in the land when the goods subject to the security interest are affixed to the land is entitled to reimbursement for any damage to the interest of the person in the land caused during the removal of the goods, but is not entitled to reimbursement for diminution in the value of the land caused by the absence of the goods removed or by the necessity to replace them.

(13) A person entitled to reimbursement under subsection (12) may refuse permission to remove the goods until the secured party has given adequate security for the reimbursement.

(14) The secured party may apply to the Court for an order