Commonwealth Consolidated Acts Commonwealth Consolidated ActsPerfection of security interest
(1) A security interest that has attached to goods in the possession of a bailee (other than the grantor or the debtor) is perfected if any of the following applies, regardless of when the security interest attached to the goods:
(a) the security interest is perfected by registration, as provided by section 21;
(b) the security interest is perfected by possession, as provided by section 21, because the bailee possesses the property on behalf of the secured party;
(c) the bailee issues a document of title to the goods in the name of the secured party;
(d) the bailee issues a negotiable document of title to the goods, and the secured party has a perfected security interest in the document.
Temporary perfection while negotiable document of title in transit
(2) A security interest in goods in the possession of a bailee (other than the grantor or the debtor) is temporarily perfected for the period:
(a) starting at the time the bailee issues a negotiable document of title to the goods; and
(b) ending at the end of the day the secured party takes possession of the document.
(3) The security interest in the goods becomes unperfected at the end of the period mentioned in subsection (2), unless the security interest is perfected otherwise than under subsection (2) before the end of the period.
(4) However, subsection (2) does not apply, and is taken never to have applied, unless, before the end of the period of 5 business days after the day of issue of the negotiable document of title:
(a) the secured party takes possession of the document; or
(b) the security interest is perfected otherwise than under that subsection.