22
Mar
Case Comment on Alberta Treasury Branches v. Harder (Trustee Of): Subjectivity and Actual Knowledge Join the Test of what is Seriously Misleading
Prior to the spring of 2004, the accepted practice among bankruptcy trustees in consumer bankruptcies in this jurisdiction was to disallow a secured creditor's claim where there was an error in the serial number of a serial numbered consumer good and a search in the registry using the correct serial number failed to disclose the secured creditor's financing statement as either an exact or inexact match. This was so even where a search using the correct name of the debtor disclosed a registration in favor of that creditor. The rationale was that the error was considered seriously misleading and therefore, in the case of serial numbered consumer goods, that rendered the security interest unperfected and therefore not effective against a trustee in bankruptcy pursuant to s. 20(a)(i) of the Personal Property Security Act, R.S.A. 2000, P-7 as amended (the "PPSA").
This practice followed an objective test along the analysis of Registrar Funduk in Primus Automotive Financial Services Canada Ltd. v. Kirkby (Trustee of) 1998 CarswellAlta 57 ("Primus") which applied the Alberta Court of Appeal decision in Case Power & Equipment v. 366551 Alberta Ltd. (Receiver of) 1994 CarswellAlta 225 ("Case Power").
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