Searching liens under the Personal Property Security Act in New Brunswick

In New Brunswick, the Personal Property Registry records notices of security interests in personal property, and Service New Brunswick is the body the Personal Property Security Act names in its provision on actions for registry errors. A buyer of a business’s assets searches it to find out what a lender or supplier has registered against the seller. What makes the New Brunswick Act worth reading closely is how it links the registry to its own search results: a registration can turn on whether a search finds it, and a person who relies on a printed result has a stated route to recover for a registry error. This guide covers how to get access, what Lien Check covers, and what those provisions mean when you plan a search.

Ways to get a search done

Service New Brunswick states that anyone can search the registry for security interests against personal property in the province. Users who need to register notices must apply for an account. Access is through an account with Atlantic Canada On-line, known as ACOL, and kiosks are available for existing ACOL clients at registry offices in the province. Service providers also search and register on behalf of clients for a fee. The Nunavut registry page notes that an ACOL account works across the other ACOL jurisdictions, which matters if the seller operates beyond New Brunswick.

Lien Check for serial-numbered goods

Service New Brunswick links to a Lien Check service. ACOL describes it as a way to identify interests, such as liens, on serial numbered goods as defined in the jurisdiction’s Act and regulations, and its list of searchable serial numbers includes motor vehicles, boats and outboard motors. You must provide the complete serial number. Lien Check answers a question about one item. It is not a search of a business’s whole record, so for a purchase that includes a fleet, ask for a search by the seller’s name as well as checks of individual vehicles.

How the Act treats searches

Section 48 allows a person to search the records of the Registry and obtain a printed search result, and it lists the criteria a search may use, including a registration number and the serial number of goods prescribed as serial numbered goods. Section 43 goes further. Subsection 43(8) provides that a registration is invalid if a search of the records using the debtor’s name, as prescribed, of any debtor required to be included in the financing statement, other than a debtor who does not own or have rights in the collateral, does not disclose it. Subsection 43(8.1) makes a similar rule, subject to subsections 43(10) and (10.1), for consumer goods of a prescribed serial-numbered kind searched by serial number. Under subsection 43(8.2), a registration disclosed other than as an exact match is not, by that fact alone, valid.

What a printed result proves and who answers for errors

Under section 48, a printed search result that purports to be issued by the Registry is receivable as evidence and is, absent evidence to the contrary, proof of the registration of any financing statement it relates to, including the order of registration shown by number, date and time. Section 52 allows a person to bring an action against Service New Brunswick to recover loss or damage from an error or omission in the operation of the Registry, if the loss resulted from reliance on a printed search result. The Act sets limits on that remedy, including a time limit for bringing the action. Keep every printed result and note the date it was issued.

Planning the search around the deal

Because the Act ties validity to what a name search discloses, the name you search matters. Confirm the exact legal names of the seller entities with your lawyer, and ask whether a search should also cover the owner personally. Work out which assets need their own serial-number check. Then agree when the final search will be run before closing, and who will arrange discharges for any registration that should not survive the sale. If a registration turns up that the seller did not mention, ask what it secures and whether the debt is still owing before the deal goes further. That conversation is easier to have early than on the day of closing. Ask your lawyer to record the answer in writing, so the closing checklist shows how each registration was dealt with. Keep a list of every name and serial number searched.

• Whether you will use your own ACOL account, a lawyer’s account or a service provider.
• Which assets are serial numbered and need an item-level check as well as a name search.
• Whether the name used in the search matches the seller’s legal name exactly.
• Whether the search printout is dated close enough to closing to be useful.
• Who will deal with any registration that appears, and how you will confirm it was dealt with.

See also how to check for liens on business assets for the purchase-wide view.