Update On Bank Act vs. Unregistered PPSA Security Interest

In our newsletter dated December 2010, we reported on two decisions rendered by the Supreme Court of Canada concurrently on November 5, 20101, wherein the Supreme Court concluded that, as between a security interest registered under Section 427 of the Bank Act2 (the "Bank Act") and a prior but unregistered, or unperfected, security interest secured under the Personal Property Security Act (Ontario) ("PPSA"), the latter has priority. The Supreme Court's rationale can be summarized as follows:

Registration, or perfection, is a different concept than the...