Mistake with name invalidates entire financing statement in Canada

Sara Cameron, "PPSA Seriously Misleading Financing Statement", New Zealand Law Journal, April 2005 (page 107-108)

New Zealand courts have not yet considered the effect of a misleading error in a registered financing statement. However, this article discusses a recent Canadian case suggesting that an innocent mistake could render the entire financing statement invalid.

In a recent Canadian case1, part of the debtor's name was entered on a financing statement as "Motorhome" instead of "Motor Home". While the serial number was correct, the Court held that "a right number cannot save a wrong name and conversely a right name cannot save a wrong number". While it is unclear whether New Zealand courts would adopt such a rigid approach, it is certainly a lesson to take all care to ensure that the details entered in financing statements are accurate.

 

1 Stevenson as Trustee of the estate of Moncton Motor Home & Trailer Sales Ltd v GMAC Leaseco Ltd (2003) NBCA 26

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