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Bankruptcy Priority

Posted on September 20, 2021 | Posted in Bankruptcy, Collections, Five Liners

Re Marleau 2021 Ont SCJ

Debtor moved from Alberta to Ontario, took her car, and did not tell the financial institution that she had done so. The financial institution, accordingly, did not immediately register its security interest under the Ontario Personal Property Security Act. The debtor then went bankrupt. As soon as the financial institution was notified, it registered a financing statement under the PPSA. The trustee in bankruptcy denied the financial institution’s claim. The motion judge agreed with the trustee. The security interest was not perfected at the time of the bankruptcy and, accordingly, the financial institution had no security. Even if that were wrong, the PPSA states that, when security is moved, the financing statement has to be registered within the earlier of 60 days after the goods are brought to Ontario or 15 days after the secured party receives notice of the goods been brought to Ontario. In this case, through no fault of the financial institution, the registration was too late.


Jonathan Speigel


Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.


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