Commonwealth Consolidated Acts Commonwealth Consolidated ActsSecurity interest held by account transferee
(1) A perfected security interest in goods that has reattached to the property under subsection 37(1) has priority over a security interest in the goods that is granted by the operation of subsection 38(1) to a transferee of an account.
Note: Section 37 deals with security interests that reattach when goods are returned. Section 38 provides for a security interest in an account or chattel paper to arise automatically when goods are returned.
(2) A security interest in goods that is granted by the operation of subsection 38(2) to a transferee of chattel paper has priority over the following perfected security interests:
(a) a perfected security interest in the goods that is granted by the operation of subsection 38(2) to a transferee of an account;
(b) if the transferee takes possession of the chattel paper in the ordinary course of business of acquiring chattel paper of that kind and for new value:
(i) a perfected security interest in the goods that has reattached under subsection 37(1); or
(ii) a perfected security interest in the goods as after - acquired property that attaches when the goods come into the possession of the grantor or transferee in the circumstances mentioned in paragraph 37(1)(d).
Security interest granted by buyer or lessee
(3) A security interest (the priority interest ) in goods that is granted by a person who acquires an interest in the property has priority over a security interest in the goods that reattaches under section 37, or is granted by the operation of section 38, if:
(a) the priority interest attaches while the goods are in the possession of the person; and
(b) immediately before the repossession time (referred to in paragraph 37(1)(d) or 38(1)(d)), the priority interest is perfected.