Last saved by: Norman Siebrasse

_Part _1
 _Security _Interests _in _Personal _Property: _The _PPSA
 _Section _III
 _Enforcement
_Outline
_•	_SP _rights
_•	_Rights _against _collateral
_•	_Enforcement _options _set _out _in _Part _V _of _PPSA
_•	_Rights _on _the _debt
_•	_Deficiency _action
_•	_Same _rights _as _any _unsecured _creditor _if _SP _so _chooses
_Outline
_•	_Debtor _rights 
_•	_Right _of _redemption
_•	_Right _of _reinstatement
_•	_Right _to _surplus
_•	_Exemptions
_Introduction _– _S.55
_•	_55(1) _This _Part _does _not _apply _to
_•	_(a) _a _transaction _referred _to _in _subsection _3(2), _or
_•	_Deemed _security _interests _– _treated _as _security _interests _only _for _priority _purposes
_Introduction _– _S.55
_•	_55(1) _This _Part _does _not _apply _to
_•	_(b) _a _transaction _between _a _pledgor _and _a _pawnbroker.
_•	_Regulated _by _common _law
_•	_Less _stringent _requirements _than _PPSA
_•	_Less _regulation _thought _to _facilitate _law _value _credit _transactions
_•	_More _‘consumer _protection’ _drives _up _cost _of _debt _proportionately _more _in _low _value _loans
 _Introduction _– _S.55
_•	_55(3) _The _rights _and _remedies _in _this _Part _are _cumulative.
_•	_Exercising _one _right _does _not _exclude _the _others
 _Introduction _– _S.55
_•	_55(8) _A _security _interest _does _not _merge _merely _because _a _secured _party _has _reduced _the _claim _to _judgment.
_•	_A _secured _creditor _has _both _a _debt _claim _and _a _security _interest
_•	_The _SP _may _sue _on _the _debt, _as _if _it _were _an _unsecured _creditor, _and _doing _so _does _not _extinguish _its _security _interest
_Secured _Party _Rights– _s.56
_•	_56(2) _Subject _to _subsection _(4), _if _the _debtor _is _in _default _under _a _security _agreement, _the _secured _party _has _against _the _debtor _only
_•	_(a) _the _rights _and _remedies _provided _in _the _security _agreement,
_•	_(b) _the _rights _and _remedies _provided _in _this _Part _and _sections _36, _37 _and _38 _[fixtures, _crops _and _accessions], _and
_•	_(c) _when _in _possession _of _the _collateral, _the _rights _and _remedies _provided _in _section _17 _[rights _of _SP _in _possession].
_•	_No _common _law _remedies
_•	_Only _contract _(2)(a) _and _statutory _(2)(b),(c) _remedies
_Debtor _Rights _– _S.56
_•	_56(3) _Subject _to _subsection _(4), _if _the _debtor _is _in _default _under _a _security _agreement, _the _debtor _has _against _the _secured _party
_•	_(a) _the _rights _and _remedies _provided _in _the _security _agreement,
_•	_(b) _the _rights _and _remedies _provided _by _any _other _Act _or _rule _of _law _not _inconsistent _with _this _Act, _and
_•	_(c) _the _rights _and _remedies _provided _in _this _Part _and _in _section _17.
_•	_Contract _& _statutory _rights
_•	_Plus _rights _given _under _any _other _Act _unless _inconsistent _with _PPSA
_•	_Main _example _– _extended _notice _period _prior _to _enforcement _under _the _BIA
_Waiver _of _Debtor _Rights
_•	_56(4) _Except _as _provided _in _sections _17, _59, _60 _and _62, _no _provision _of _section _17 _or _sections _57 _to _66, _to _the _extent _that _the _provision _gives _rights _and _remedies _to _the _debtor _or _imposes _obligations _on _the _secured _party, _can _be _waived _or _varied _by _agreement _or _otherwise.
_•	_Statutory _debtor _rights _cannot _be _waived
_Waiver _of _SP _Obligations
_•	_66(7) _Except _as _otherwise _provided _in _this _Act, _a _provision _in _a _security _agreement _or _any _other _agreement _is _void _if _it _purports _to _exclude _an _obligation _or _an _onus _imposed _by _this _Act _or _purports _to _limit _the _liability _of _or _the _amount _of _damages _recoverable _from _a _person _who _has _failed _to _discharge _an _obligation _imposed _by _this _Act.
_•	_Statutory _SP _obligations _cannot _be _waived
_Rights _of _the _Secured _Party: _Enforcement
_SP _Enforcement _Options
_•	_Right _to _possession _of _collateral
_•	_Preliminary _to _disposal
_•	_Right _to _dispose _of _collateral _and _apply _proceeds _to _debt
_•	_Right _to _sue _on _deficiency
_•	_Right _to _retain _collateral _in _satisfaction _of _debt
_•	_Excludes _right _to _sue _on _deficiency
_•	_Corresponds _to _traditional _remedy _of _foreclosure
_•	_Right _to _collect _on _intangibles
_•	_Right _appoint _a _receiver
_Possession
_Possession
_•	_58(2) _Subject _to _[exemptions, _notice _periods _and _special _rules _wrt _collateral _which _is _difficult _to _separately _possess, _e.g. _fixtures], _if _the _debtor _is _in _default _under _a _security _agreement,
_•	_(a) _the _secured _party _has, _unless _otherwise _agreed, _the _right _to _take _possession _of _the _collateral _or _otherwise _enforce _the _security _interest _by _any _method _permitted _by _law,
_Possession
_•	_Under _prior _law _the _right _to _possession _depended _on _the _form _of _the _security _device
_•	_Automatic _under _a _mortgage
_•	_Required _express _contractual _provision _under _a _conditional _law
_•	_Substance _over _form _under _the _PPSA
_Method _of _Repossession
_•	_“by _any _method _permitted _by _law”
_•	_Self-help, _but _not _if _it _will _provoke _a _breach _of _the _peace
_•	_Otherwise, _method _used _for _recovery _of _possession _of _one’s _own _property _(e.g. _Rule _44 _in _N.B.)
_Possession _– _Notice _Obligations
_•	_58(2) _Subject _to _. _. _. _any _other _Act _or _rule _of _law _requiring _a _secured _party _to _give _prior _notice _of _the _intention _to _enforce _a _security _interest
_Possession _– _Notice _Obligations
_•	_“...rule _of _law...”
_•	_Possession _by _SP _brings _D’s _business _to _a _halt
_•	_Common _law _developed _a _notice _obligation 
_•	_See _Ronald _Elwyn _Lister _v _Ltd _v _Dunlop _Canada _[1982] _1 _SCR _726
_•	_Notice _obligation _is _preserved _by _s.58(2) _“rule _of _law”
_•	_SP _must _give _reasonable _notice _of _the _intention _to _take _possession
_•	_“Reasonable” _depends _on _circumstances
_Possession _– _Notice _Obligations
_•	_“...other _Act...”
_•	_BIA _S.244 _also _imposes _notice _obligation
_•	_10 _days _notice _before _seizing. _. _. 
_•	_. _. _.substantially _all. _. _.
_•	_. _. _.inventory, _accounts _receivable _or _other _property
_Dispose _(Sell)
_Foreclosure
_•	_Traditional _remedy _– _Not _a _remedy _under _the _PPSA
_•	_Under _the _purely _legal _form _of _mortgage, _collateral _vests _in _mortgagee _automatically _on _default _by _D
_Foreclosure
_•	_Modified _by _equity _to _protect _debtor:  _D _has _right _to _“redeem” _property _even _after _default
_•	_“Equity _of _redemption”
_•	_Mortgagee _has _correlative _right _to _“foreclose” _equity _of _redemption
_•	_Exercise _of _right _of _foreclosure _vests _collateral _in _mortgagee
_•	_Protracted
_•	_Uncertain _(can _be _reopened)
_Foreclosure
_•	_Foreclosure _was _not _satisfactory
_•	_Protracted _and _expensive
_•	_Uncertain _(can _be _reopened)
_•	_Contractual _right _of _sale _was _implemented
_•	_Accepted _by _the _courts _and _legislatures
_Disposal _- _Right
_•	_59(2) _After _seizing _or _repossessing _the _collateral, _a _secured _party _may _dispose _of _it _in _its _existing _condition _or _after _repair, _processing _or _preparation _for _disposition.
_•	_Basic _right _to _sell _collateral _to _satisfy _debt. _. _.
_Disposal _– _Proceeds
_•	_59(3) _The _proceeds _of _the _disposition _of _collateral _shall _be _applied _consecutively _to
_•	_(a) _the _reasonable _expenses _of _seizing, _repossessing, _holding, _repairing, _processing _or _preparing _for _disposition _and _disposing _of _the _collateral _and _any _other _reasonable _expenses _incurred _by _the _secured _party, _and
_•	_(b) _the _satisfaction _of _the _obligations _secured _by _the _security _interest _of _the _party _making _the _disposition.
_•	_. _. _.and _apply _proceeds _to _debt
_Disposal _– _Surplus
_•	_60(2) _If _. _. _. _the _secured _party _has _. _. _.disposed _of _[the _collateral], _the _secured _party _shall. _. _. _pay _any _surplus _in _the _following _order _to 
_•	_(a) _[subordinate _SPs _with _perfected _security _interest]
_•	_(b) _[JC _with _registered _notice _of _judgment]
_•	_(c) _[parties _who _have _given _written _notice _of _their _interest]
_•	_(d) _[the _debtor]
_•	_“...in _the _following _order...” _is _poor _drafting
_•	_Should _read _“...in _order _of _their _priority...”
_Disposal _– _Surplus/Deficiency
_•	_Sale _price/method _of _sale _is _important _to _debtor _and _other _subordinate _interest _holders
_•	_60(6) _Unless _otherwise _agreed, _or _unless _otherwise _provided _in _this _or _any _other _Act, _the _debtor _is _liable _to _pay _any _deficiency _to _the _secured _party.
_Disposal _– _Method: _Notice
_•	_59(8) _Not _less _than _twenty _days _before _disposition _of _the _collateral, _the _secured _party _shall _give _a _notice _to
_•	_(a) _the _debtor _and _any _other _person _who _is _known _by _the _secured _party _to _be _an _owner _of _the _collateral,
_•	_(b) _[subordinate _SPs _with _perfected _security _interest]
_•	_(c) _[JC _with _registered _notice _of _judgment]
_•	_(d) _[parties _who _have _given _written _notice _of _their _interest]
_•	_Must _give _notice _to _known _parties _whose _interests _are _affected: _why?
_•	_Recall _– _Possession _prior _to _disposal, _notice _prior _to _possession
_Disposal _– _Method: _Notice
_•	_Notice _allows _subordinate _parties _to _monitor _sale
_•	_66(5) _In _an _action _for _a _deficiency, _the _debtor _may _raise _as _a _defence _the _failure _of _the _secured _party _to _comply _with _obligations _in _section _17, _18, _59 _or _60, _but _non-compliance _shall _limit _the _right _to _the _deficiency _only _to _the _extent _that _it _has _affected _the _debtor's _ability _to _protect _the _debtor's _interest _in _the _collateral _or _has _made _the _accurate _determination _of _the _deficiency _impracticable.
_•	_Allowing _for _the _exercise _of _the _right _of _redemption _is, _as _a _practical _matter, _secondary
_Disposal _– _Method
_•	_59(5) _Collateral _may _be _disposed _of
_•	_(a) _by _private _sale, 
_•	_(b) _by _public _sale, _including _public _auction _or _closed _tender,
_•	_(c) _as _a _whole _or _in _commercial _units _or _parts, _or
_•	_(d) _if _the _security _agreement _so _provides, _by _lease.
_•	_Flexibility _in _method _of _disposal 
_•	_But _subject _to _requirement _of _commercial _reasonableness: _s.65
_•	_The _statutory _notice _requirement _does _not _exhaust _SP’s _responsibility
_Disposal _– _Method
_•	_Supplementary _law _and _duties _of _good _faith _and _commercial _reasonableness
_•	_65(2) _All _rights _and _obligations _arising _under _a _security _agreement, _under _this _Act _or _under _any _other _applicable _law _shall _be _exercised _and _discharged _in _good _faith _and _in _a _commercially _reasonable _manner
_•	_Action _for _damages _for _breach _of _this _duty: _s.66(2)
_Disposal _– _Method
_•	_Net _effect _– _SP _has _duty _to _take _reasonable _steps _to _secure _fair _market _price
_•	_Method _of _disposal _must _be _appropriate _to _the _goods _and _the _market
_Disposal _– _Method
_•	_Failure _to _comply _with _the _duty _of _commercial _reasonableness _gives _rise _to _an _action _for _damages
_•	_66(2) _If _a _person _fails, _without _reasonable _excuse, _to _discharge _any _obligations _imposed _on _the _person _by _this _Act, _the _person _to _whom _the _obligation _is _owed _has _a _right _to _recover _loss _or _damage _that _was _reasonably _foreseeable _as _liable _to _result _from _the _failure.
_Disposal _– _Method
_•	_Failure _to _comply _with _the _notice:
_•	_Does _not _disentitle _the _SP _from _seeking _a _deficiency
_•	_Does _not _give _any _proprietary _remedy _against _the _property
_Disposal _– _Method
_•	_The _harm _from _failure _to _give _notice _may _include _inability _to _assess _the _value _of _the _collateral _or _monitor _the _sale
_•	_But _the _deficiency _action _is _still _not _prohibited
_Disposal _– _Method
_•	_66(5) _In _an _action _for _a _deficiency, _the _debtor _may _raise _as _a _defence _the _failure _of _the _secured _party _to _comply _with _obligations _in _section _17, _18, _59 _or _60, _but _non-compliance _shall _limit _the _right _to _the _deficiency _only _to _the _extent _that _it _has _affected _the _debtor's _ability _to _protect _the _debtor's _interest _in _the _collateral _or _has _made _the _accurate _determination _of _the _deficiency _impracticable.
_Disposal _– _Method
_•	_In _the _case _of _consumer _goods, _deemed _damages _apply
_•	_66(3) _If _a _secured _party _fails, _without _reasonable _excuse, _to _comply _with _obligations
_•	_(b) _in _section _17, _18, _59, _60 _or _61 _and _the _collateral _is _consumer _goods,
_•	_the _debtor _. _. _.shall _be _deemed _to _have _suffered _damages _not _less _than _the _amount _prescribed.
_•	_But _the _SP _can _still _pursue _a _deficiency
_Disposal _– _Method
_•	_Compare _the _PPSA _with _New _Brunswick _land _law 
_•	_In _NB _land _law _the _statutory _notice _requirement _does _exhaust _the _seller’s _responsibility
_•	_There _is _no _duty _(except _on _banks) _to _exercise _reasonable _care _to _secure _a _fair _market _price
_•	_Is _there _any _justification _for _the _NB _land _law _rule?
_Disposal _– _SP _can _buy
_•	_59(14) _The _secured _party _may _purchase _the _collateral _or _any _part _of _it _but _only _at _public _sale, _including _public _auction _or _closed _tender, _and _only _for _a _price _that _bears _a _reasonable _relationship _to _the _market _value _of _the _collateral.
_Disposal _– _SP _can _buy
_•	_In _real _estate _law _in _most _jurisdictions, _SP _is _prohibited _at _common _law _from _buying _in _for _their _own _benefit
_•	_Why?
_•	_Why _should _personal _property _be _different?
_Disposal _– _Effect
_•	_59(15) _If _a _secured _party _disposes _of _collateral _to _a _purchaser _for _value _and _in _good _faith _who _takes _possession _of _it, _the _purchaser _acquires _the _collateral, _whether _or _not _the _requirements _of _this _section _have _been _complied _with _by _the _secured _party, _free _from
_•	_(a) _the _interest _of _the _debtor,
_•	_(b) _an _interest _subordinate _to _that _of _the _debtor,
_•	_(c) _an _interest _subordinate _to _that _of _the _secured _party,
_•	_and _all _obligations _secured _by _the _subordinate _interests _shall _be _deemed _to _be _performed _for _the _purposes _of _sections _49 _and _50.
_•	_Purchaser _take _clear _of _all _subordinate _interests
_Disposal _– _Effect
_•	_59(15). _. _.whether _or _not _the _requirements _of _this _section _have _been _complied _with _by _the _secured _party. _. _.
_•	_Purchaser _take _clear _of _all _subordinate _interests _even _if _sale _was _improper
_•	_Why?
_Retain _in _Satisfaction
_Retain _in _Satisfaction
_•	_61(1) _After _default, _the _secured _party _may _propose _to _take _the _collateral _in _satisfaction _of _the _obligation _secured _by _it _. _. _.
_Procedure
_•	_Notice _to _known _subordinate _interest _holders
_•	_Debtor
_•	_Perfected _subordinate _interest _holders
_•	_Otherwise _known _subordinate _interest _holders
_Procedure
_•	_(a)the _debtor _or _any _other _person _who _is _known _by _the _secured _party _to _be _an _owner _of _the _collateral,
_•	_(d) _any _other _person _with _an _interest _in _the _collateral _who _has _given _a _written _notice _to _the _secured _party _of _that _person’s _interest _before _the _notice _of _the _proposal _is _given _to _the _debtor.
_•	_D _or _known _subordinate _interest _holders
_Procedure
_•	_(b) _a _creditor _or _person _with _a _security _interest _in _the _collateral _whose _security _interest _is _subordinate _to _that _of _the _secured _party _and
_•	_(i)who _has _registered, _before _the _notice _of _the _proposal _is _given _to _the _debtor, _a _financing _statement _. _. _. _, _or
_•	_(ii)whose _security _interest _was _perfected _by _possession _. _. _. 
_•	_Perfected _subordinate _interest _holders
_Procedure
_•	_(c) _a _judgment _creditor _whose _interest _in _the _collateral _is _subordinate _to _that _of _the _secured _party _and _who _has _registered, _before _the _notice _of _the _proposal _is _given _to _the _debtor, _a _notice _of _judgment _that _includes _the _name _of _the _debtor _or _that _includes _the _serial _number _of _the _collateral _if _the _collateral _is _goods _of _a _kind _that _are _prescribed _as _serial _numbered _goods,]
_Objections
_•	_Person _who _is _given _notice _may _object _(to _SP): _s.61(2),(3)
_•	_In _which _case _SP _must _sell _collateral
_•	_Except _that _SP _may _object _to _objection _(to _court): _s.61(7), _to _deter _frivolous _objections
_Procedure
_•	_61(4) _If _no _notice _of _objection _is _given _under _subsection _(2), _the _secured _party 
_•	_(a) _shall _be _deemed, _on _the _expiry _of _the _fifteen _day _period _or _periods _referred _to _in _subsection _(2), _to _have _irrevocably _elected _to _take _the _collateral _in _satisfaction _of _the _obligation _secured _by _it, _and 
_Effect
_•	_61(4) _(b) _is _entitled _to _hold _or _dispose _of _the _collateral _free _from _all _rights _and _interests _of _the _debtor, _any _person _entitled _to _receive _a _notice _under _paragraph _(1)(b) _or _(c) _who _has _been _given _the _notice _and _any _person _entitled _to _receive _a _notice _under _paragraph _(1)(d) _whose _interest _is _subordinate _to _that _of _the _secured _party.
_•	_Free _of _all _subordinate _interests
_Procedure
_•	_61(4)If _no _notice _of _objection _is _given _under _subsection _(2), _the _secured _party
_•	_(a)shall _be _deemed, _on _the _expiry _of _the _fifteen _day _period _or _periods _referred _to _in _subsection _(2), _to _have _irrevocably _elected _to _take _the _collateral _in _satisfaction _of _the _obligation _secured _by _it, _and
_•	_and _all _obligations _secured _by _such _interests _shall _be _deemed _to _have _been _performed _for _the _purposes _of _sections _49 _and _50. _[discharge _of _financing _statement]
_•	_Satisfaction _of _the _debt
_Collect _on _Intangibles
_Right _to _Collect _on _Intangibles
_•	_57(2) _If _the _debtor _is _in _default _under _a _security _agreement, _the _secured _party _is _entitled
_•	_(a) _to _notify _a _debtor _on _an _intangible _or _chattel _paper _or _an _obligor _on _an _instrument _or _security _to _make _payment _to _the _secured _party _whether _or _not _the _assignor _was _making _collections _on _the _collateral _before _the _notification,
_•	_(b) _[and _apply _the _money _to _the _debt]...
_•	_Enforcement _by _notification
_Right _to _Collect _on _Intangibles _-Notice
_•	_57(3) _A _secured _party _who _enforces _a _security _by _giving _notice _in _accordance _with _paragraph _(2)(a) _shall _notify _the _debtor _within _fifteen _days _after _doing _so.
_Right _to _Collect _on _Intangibles _-Notice
_•	_41(7) _If _collateral _which _is _either _an _intangible _or _chattel _paper _is _assigned, _the _account _debtor _may _make _payments _to _the _assignor 
_•	_(a) _before _the _account _debtor _receives _notice _of _the _assignment _in _accordance _with _subsection _(8), _or
_•	_(b) _after _the _account _debtor _receives _notice _of _the _assignment _if _the _account _debtor _requests _the _assignee _to _furnish _proof _of _the _assignment _and _the _assignee _fails _to _furnish _proof _within _fifteen _days _after _the _request.
_Right _to _Collect _on _Intangibles
_•	_41(9) _Payment _by _an _account _debtor _to _an _assignee _after _the _account _debtor _receives _notice _of _the _assignment _in _accordance _with _subsection _(8) _discharges _the _obligation _of _the _account _debtor _to _the _extent _of _the _payment.
_Right _to _sue _on _the _Deficiency
_•	_Some _jurisdictions _(e.g. _Alberta, _California) _prohibit _deficiency _actions _against _individual _mortgagors _of _real _property
_•	_Should _SP _have _the _right _to _sue _on _the _deficiency?
_•	_Is _there _any _reason _why _land _and _personal _property _should _be _treated _differently?
_•	_Is _there _any _reason _why _individual _mortgagors _of _real _property _should _be _treated _differently _from _businesses?
_Right _to _Appoint _a _Receiver
_•	_Receiver _operates _the _business _as _a _going _concern
_•	_Wears _“two _hats”
_•	_Agent _of _the _debtor
_•	_Agent _of _the _SP
_•	_More _detail _in _Part _3.II
_Rights _of _the _Debtor
_Right _of _Redemption
_•	_Any _time _before _final _disposal...
_•	_any _subordinate _interest _holder...
_•	_may _redeem...
_•	_unless _otherwise _agreed _after _default...
_•	_by _paying _the _debt...
_•	_plus _expenses _of _seizing _and _preparing _for _disposition.
_Right _of _Redemption
_•	_62(2) _At _any _time _before _the _secured _party _has _disposed _of _the _collateral _or _contracted _for _its _disposition _under _section _59, _or _before _the _secured _party _is _deemed _to _have _irrevocably _elected _to _retain _the _collateral _under _section _61,..
_•	_The _right _of _redemption _is _exercised _after _default
_•	_Notice _periods _before _SP _disposal _allow _opportunity _to _redeem
_Right _of _Redemption
_•	_62(2) _. _. _.any _person _entitled _to _receive _a _notice _of _disposition _under _subsection _59(8) _or _(11) _may _redeem _the _collateral. _. _.
_•	_Subordinate _interest _holders _may _redeem
_•	_The _same _persons _whose _interests _will _be _extinguished _by _disposition
_•	_Redemption _does _not _extinguish _junior _interests
_•	_It _merely _pays _off _the _senior _secured _party
_Right _of _Redemption
_•	_The _party _redeeming _is _subrogated _to _the _rights _of _the _party _whose _interest _is _redeemed
_•	_The _right _of _subrogation _is _not _express _in _the _PPSA, _but _is _due _to _the _preservation _of _existing _consistent _law: _s.65(1)
_Right _of _Redemption
_•	_Under _prior _law, _a _subordinate _secured _party _could _redeem _a _senior _security _interest _only _if _the _debtor _was _also _in _default _under _its _own _security _agreement
_•	_This _appears _to _be _reversed _by _s.62(2)
_•	_But _the _point _is _usually _moot _as _subordinate _security _interests _almost _invariably _provide _that _a _default _under _the _senior _interest _is _a _default _under _the _junior _interest
_Right _of _Redemption _- _Example
_•	_SP1 _has _first _priority _for _$5,000; _SP2 _has _second _priority _for _$20,000; _value _of _collateral _is _$22,000; _D _default _on _loan _from _SP1; _SP1 _seeks _to _dispose _of _collateral
_•	_To _redeem, _SP2 _must _pay _$5,000 _to _SP1
_•	_SP2 _has _right _to _redeem _even _if _D _did _not _default _on _loan _from _SP2
_•	_SP2 _is _then _subrogated _to _the _rights _of _SP1
_•	_Ie _SP2 _now _has _a _first _security _interest _for _$5,000 _and _has _the _right _to _sue _D _for _the _$5,000 _owing; _and _SP2 _has _a _second _security _interest _for _$20,000
_Right _of _Redemption
_•	_Why _would _SP2 _want _to _redeem _in _the _previous _example?
_•	_If _it _does _not _exercise _its _right _of _redemption _(and _neither _does _D), _SP1 _will _sell _the _collateral _for _$22,000, _apply _$5,000 _to _its _debt, _and _turn _over _$17,000 _to _SP2, _for _a _deficiency _of _$3,000
_•	_If _SP2 _redeems, _it _will _have _total _debt _of _$25,000.  _SP2 _then _sells _the _collateral _for _$22,000, _for _a _deficiency _of _$3,000
_•	_The _bottom _line _is _the _same _in _either _case, _so _why _would _SP2 _want _to _redeem?
_Right _of _Redemption
_•	_Now _suppose _D _tries _to _exercise _its _right _of _redemption
_•	_62(3) _If _more _than _one _person _elects _to _redeem _under _subsection _(2), _the _priority _of _their _rights _to _redeem _is _the _same _as _the _priority _of _their _respective _interests.
_Right _of _Redemption _– _Not _2008
_•	_If _SP1 _faces _conflicting _requests, _SP2 _has _first _right _to _redeem
_•	_But _what _if _D _gets _there _first _and _redeems?
_•	_The _formal _answer _is _not _clear
_•	_(Under _prior _law, _you _could _only _redeem _the _party _immediately _above _you _in _priority, _so _the _problem _did _not _arise)
_•	_But _as _a _practical _matter, _D _gets _no _advantage, _as _SP2's _interest _is _not _extinguished
_Right _of _Redemption
_•	_62(2) _. _. _.unless _that _person _has _otherwise _agreed _in _writing _after _default. _. _.
_•	_Right _of _redemption _cannot _be _waived _before _default: _see _s.56(4)
_•	_In _particular, _it _cannot _be _waived _in _the _security _agreement _itself
_•	_Right _of _redemption _can _be _waived _after _default
_•	_Why?
_Right _of _Redemption
_•	_62(2) _. _. _. _by _tendering _fulfillment _of _the _obligations _secured _by _the _security _interest, _together _with _a _sum _equal _to _the _reasonable _expenses _referred _to _in _paragraph _59(3)(a) _to _the _extent _that _such _expenses _have _actually _been _incurred _by _the _secured _party.
_•	_Redeem _by _payment _of _debt _plus _reasonable _expenses _of _realizing _on _collateral _actually _incurred
_Acceleration
_•	_Security _agreements _which _provide _for _repayment _by _periodic _installments _(e.g. _a _standard _house _mortgage) _inevitably _provide _that _if _any _payment _is _missed _(or _if _there _is _any _other _default _under _the _agreement, _e.g. _failure _to _keep _the _collateral _insured) _the _entire _debt _immediately _becomes _due.
_•	_This _is _known _as _an _“acceleration _clause”
_Reinstatement
_•	_A _right _of _reinstatement _provides _from _relief _against _acceleration
_Reinstatement
_•	_62(4) _At _any _time _before _the _secured _party _has _disposed _of _the _collateral _. _. _. _, _or _before _the _secured _party _is _deemed _to _have _irrevocably _elected _to _retain _the _collateral _under _section _61, _the _debtor. _. _.may _reinstate _the _security _agreement. _. _.by 
_•	_(a) _paying _the _sum _actually _in _arrears, _exclusive _of _the _operation _of _an _acceleration _clause _in _the _security _agreement, _. _. _.
_Reinstatement
_•	_And
_•	_(b) _curing _any _other _default _by _reason _of _which _the _secured _party _intends _to _dispose _of _the _collateral, _and
_•	_(c) _paying _a _sum _equal _to _the _reasonable _expenses _referred _to _in _paragraph _59(3)(a) _to _the _extent _that _such _expenses _have _actually _been _incurred _by _the _secured _party.
_Reinstatement
_•	_“Redemption” _and _“reinstatement” _both _start _with _“re” _but _they _are _completely _separate _rights
_•	_The _right _of _reinstatement _applies _only _to _relieve _againt _an _acceleration _clause
_•	_The _right _of _reinstatement _is _meaningless _if _there _is _no _acceleration _clause _in _the _security _agreement
_Reinstatement
_•	_The _right _of _redemption _is _a _universal _feature _of _secured _lending _law
_•	_The _right _of _reinstatement _is _not
_•	_Generally _a _right _of _reinstatement 
_•	_is _a _feature _of _the _PPSA
_•	_is _not _found _in _land _law
_•	_was _not _found _in _prior _personal _property _law
_Reinstatement
_•	_Except, _Ontario _(& _most _U.S. _states)
_•	_Ontario _does _have _a _right _of _reinstatement _in _land _law
_•	_In _the _Ontario _PPSA _the _right _of _reinstatement _applies _only _to _consumer _goods
_Reinstatement
_•	_62(4) _“. _. _.unless _the _debtor _has _otherwise _agreed _in _writing _after _default. _. _.”
_•	_Like _the _right _or _redemption, _the _right _of _reinstatement _can _be _waived _after _default, _but _not _before
_Reinstatement
_•	_62(1) _In _subsection _(2) _[but _not _subsection _(4)]
_•	_"secured _party" _includes _a _receiver.
_•	_62(4) _At _any _time _before _the _secured _party _has _disposed _of _the _collateral _or _contracted _for _its _disposition _under _section _59, _or _before _the _secured _party _is _deemed _to _have _irrevocably _elected _to _retain _the _collateral _under _section _61...
_•	_The _right _of _reinstatement _cannot _be _exercised _after _the _appointment _of _a _receiver.
_Reinstatement
_•	_62(5) _Unless _otherwise _agreed, _the _debtor _is _not _entitled _to _reinstate _a _security _agreement
_•	_(a) _more _than _twice, _[if _agreement _is _<1 _year], _or
_•	_(b) _more _than _twice _each _year, _if _the _security _agreement _provides _for _payment _by _the _debtor _during _a _period _of _time _of _more _than _one _year _after _value _was _given _by _the _secured _party.
_•	_Protections _against _the _abuse _of _the _right _of _reinstatement
_Reinstatement
_•	_Is _the _right _of _reinstatement _a _good _idea _from _the _debtor’s _perspective?
_•	_Conversely, _is _an _acceleration _clause _a _bad _idea, _from _the _debtor’s _perspective
_•	_Ask _the _question _at _the _time _the _security _agreement _is _entered _into
_•	_“Ex _ante” _as _opposed _to _“ex _post”
_Exemptions
_•	_58(3) _Subject _to _subsection _(7), _a _debtor _may _claim _the _following _items _of _collateral _to _be _exempt _from _seizure _by _a _secured _party:
_•	_(a) _furniture, _household _furnishings _and _appliances _used _by _the _debtor _or _a _dependent _to _a _realizable _value _of _five _thousand _dollars _or _to _any _greater _amount _that _may _be _prescribed;
_Exemptions
_•	_(b) _one _motor _vehicle _having _a _realizable _value _of _not _more _than _six _thousand _five _hundred _dollars _at _the _time _the _claim _for _exemption _is _made, _or _not _more _than _any _greater _amount _that _may _be _prescribed, _if _the _motor _vehicle _is _required _by _the _debtor _in _the _course _of _or _to _retain _employment _or _in _the _course _of _and _necessary _to _the _debtor's _trade, _profession _or _occupation _or _for _transportation _to _a _place _of _employment _where _public _transportation _facilities _are _not _reasonably _available;
_Exemptions
_•	_(c) _medical _or _health _aids _necessary _to _enable _the _debtor _or _a _dependent _to _work _or _to _sustain _health; _and
_•	_(d) _consumer _goods _in _the _possession _and _use _of _the _debtor _or _a _dependent _if, _on _application, _the _Court _determines _that
_•	_(i) _the _loss _of _the _consumer _goods _would _cause _serious _hardship _to _the _debtor _or _dependent, _or
_•	_(ii) _the _costs _of _seizing _and _selling _the _goods _would _be _disproportionate _to _the _value _that _would _be _realized.
_Exemptions
_•	_Exception _to _the _exemptions
_•	_58(7) _Paragraphs _(3)(a) _to _(c) _and _subsections _(4), _(5) _and _(6) _do _not _apply _in _relation _to _goods _that _are _subject _to _a _purchase _money _security _interest _held _by _the _secured _party _against _whom _the _claim _to _exemption _is _made.
_•	_Exemption _cannot _be _claimed _when _the _money _lent _was _used _to _purchase _the _collateral _itself.
_Exemptions
_•	_Exemptions _are _unique _to _Atlantic _PPSAs
_•	_Are _exemptions _a _good _idea?