Civil Section Minutes 2007

Changes to the Personal Property Security Acts

Presenter: Clark W. Dalton, Q.C. National Coordinator, Commercial Law Strategy, ULCC, on behalf of Professor Ronald Cuming, Q.C.

In the early 1980’s, the ULCC promulgated a Uniform Personal Property Security Act. While features of this Act were later included in the provincial Acts, it never served as a model, primarily as events overtook it.

The Report provides a historical overview that concludes:

  • personal property security legislation (PPSAs) of all jurisdictions other than Ontario, Yukon and Quebec are largely uniform;
  • recent amendments to the Ontario Act have brought it closer to the Canadian Conference on Personal Property Security Law model (formerly known as the Western Canada model) in a few important respects;
  • any efforts to improve the existing CCPPSL model should not threaten this uniformity;
  • apart from changes designed to accommodate the Uniform Securities Transfer Act, recent ULCC efforts to secure uniform, modernized secured transactions law have been unsuccessful.

The Report describes the new approach being taken to law reform in this area by ULCC, which essentially involves identifying discrete areas of law that require amendment through consultation, and consulting on proposals for change widely. Aspects of this new approach have been implemented in developing the proposed changes to the PPSA conflict of laws provisions discussed in the Report.

The Report notes that revised conflict of laws rules were developed and enacted in Ontario (Ministry of Government Services Consumer Protection and Service Modernization Act; 2006, Chapter 34, Schedule E) but remain unproclaimed. A ‘generic version’ of the recommended provisions for jurisdictions with a CCPPSL Model Act is attached as an appendix to the Report. Work is ongoing to facilitate contemporaneous implementation of these provisions in all common law jurisdictions (other than Ontario).

The Report concludes that, as the Uniform Personal Property Security Act is no longer of significance in the development of this area of the law in Canada, there is little point in recommending amendments to it. However, it is recommended that the Conference recommend to the common law provinces and territories (other than Ontario) that they amend their PPSAs to incorporate the proposed conflict of laws provisions in the Appendix to the Report.

Discussion:

It was noted that the US has revised Article 9, and that this should be looked at as it will be very relevant for Canadian businesses. Perhaps this could be a new, discrete project? It was also noted that the proposed amendments respecting conflict of interest have not gone through the ULCC drafting process. Another individual commented that, as this is a complex area, a drafter would need a good deal of drafting direction and that the ULCC should adopt “principles” first and then refer it to the drafting section. It was also suggested that the proposal not be adopted immediately, but that there be some opportunity to consider it and to also consider the proposals made last year by the UN Convention on the Assignment of Receivables in International Trade Working Group. The need to ensure uniformity in drafting in this area is a concern.

RESOLVED:

THAT the Conference approve the implementation of a new approach to law reform in relation to the review of the Personal Property Security Act, taking into account the discussions of the Conference;

THAT the Civil Section Steering Committee continue to have under consideration the reforms to secured transactions legislation contemplated in the Report of the Working Group on the UN Convention on the Assignment of Receivables in International Trade presented to the Conference at its August 2006 meeting and that they be addressed in connection with any project undertaken respecting secured transactions legislation.

Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018