Effect of collateral legislation on existing laws

The Security Interests in Personal Property Bill applies to every transaction that in substance creates a security interest in personal property. Therefore, it applies to security given by both natural persons and legal persons such as companies.

The definition of personal property in the bill is worded as a non-exhaustive list of examples to include "goods, documents, financial instruments, accounts receivable, and intellectual property and other kinds of intangibles".

Security Interest is defined as an interest created contractually over one or more items of personal property, and securing the fulfilment of one or more present or future obligation.

Security contract is defined in the bill as a contract which creates a security interest in personal property which must be a written contract in the case of a non-possessory security interest whereby the creditor does not hold physical possession of the asset in question. However, in the case of a possessory security interest the contract need not be in writing.

The relevant definition states that "possessory security interest" means a security interest which, under the terms of the security contract, requires the debtor to give possession or control of the secured property to the secured creditor in order to secure the performance of the obligation concerned.

The Security Interests in Personal Property Bill repeals the Bills of Sale Act, the Debenture Registration Act, and the Agricultural Loans Act in their entirety.

It make changes to sections, repeals sections or parts of the Agricultural Credit Board Act, the Companies Act, the Farm Loans Act, the Hire Purchase Act, and amends a section of the Workmen's Compensation Act.

The effect of the various statutory amendments means the bills of sale over personal chattel - as defined in the Bills of Sale Act - will no longer need to be recorded at the Island Records Office.

LIMITED TO A CHARGE ON LAND

The requirement for a company registered in Jamaica to register a charge over its property under the Companies Act is now limited only to "a charge on land (wherever situated) or any interest therein, but not to a charge for any rent or other periodical sum issuing out of land."

Registration of a charge under the Companies Act no longer constitutes "notice to the world" of the charge's existence.

The ability to charge crops, produce and movable property using the forms and procedures prescribed by the Agricultural Loans Act, Agricultural Credit Board Act and Farm Loans Act has been removed.

It will no longer be possible to recover possession under a hire purchase agreement or conditional sale agreement using the procedure in the Hire Purchase Act.

The Bill provides for the creation of an electronic register that will contain registration, amendment and termination notices in respect of security interests in personal property, be open to free inspection by the public, and be searchable by debtor's name, registration number, serial number (where the secured property is a motor vehicle), and register book volume and folio (where the secured property is a fixture to real property).

When a debtor defaults under a security contract, the secured creditor will acquire certain rights, including the right to possess, seize, dispose of or retain the secured property.

(Next week, some criticisms and unresolved issues).