Canada: ABCs vs Vins: Which Governs Security Registration Errors?

Last Updated: October 3 2014
Article by Brett Kenworthy

The underlying purpose of each provincial Personal Property Security Registration System is to provide notice to subsequent creditors of existing security interests. Financing statements that are registered by creditors should provide accurate information in the required format. However, what happens when a creditor registers against a motor vehicle and provides an incorrect debtor name, but the proper vehicle identification number ("VIN")? Can this registration serve to perfect a security interest? The Newfoundland Supreme Court Trial Division's (the "Court") decision in Hoskins, Re1 ("Re Hoskins") underlines the challenge to strictly apply registration requirements, while also sustaining the spirit of the law and purpose of the notification process.

Re Hoskins

Edgar Thomas Geoffrey Hoskins, as indicated on his birth certificate, signed a conditional sales agreement (the "Agreement") to buy a Honda Civic in 2010. The Agreement showed his name to be Thomas Edgar Hoskins, as provided by Mr. Hoskins' inaccurate government-issued driver's licence. The Agreement was assigned from an undisclosed dealership to Honda Canada Finance Inc. ("Honda"), the financing corporation associated with the dealership, which registered a financing statement using this incorrect name, along with Mr. Hoskins' date of birth and the VIN.

Three years later, Mr. Hoskins filed an assignment in bankruptcy, pursuant to which the court-appointed trustee-in-bankruptcy (the "Trustee") performed a search of the Newfoundland and Labrador Personal Property Registry in Mr. Hoskins' true name. The Trustee's search did not reveal Honda's registration made against the inaccurate name provided by Mr. Hoskins' driver's licence; however, the Trustee also performed a search against the VIN of Mr. Hoskins' Honda Civic and it located the registration against the incorrect name of "Thomas E. Hoskins." The Trustee nevertheless disallowed Honda's security interest claim in the Honda Civic, instead allowing Honda's claim as an unsecured claim.

At paragraph 12 of its decision, the Court noted the Trustee's position that, while it was aware of the security interest, the security in the immediate case was "unperfected according to the legislation, and...therefore ineffective as against the trustee." 2 The Court agreed, holding at paragraph 32, that "...the personal property security regime promotes clarity and certainty and moves away from concepts such as constructive notice and unfairness. The rules are precise. Accuracy is expected. Those relying on the registration system to search for prior security interests are entitled to expect that those filing financing statements will respect the prescribed rules." 3

Ontario requirements for VIN Registrations

This case would have likely had a different result in Ontario, as its Personal Property Security Act4 (the "PPSA") differs from its counterpart in Newfoundland and Labrador. Pursuant to subsection 46(1) of the PPSA, "[a] financing statement or financing change statement that is to be registered shall contain the required information presented in a required format." 5 However, flexibility is provided through a cure provision at subsection 46(4) of the PPSA, as "[a] financing statement or financing change statement is not invalidated nor is its effect impaired by reason only of an error or omission therein or in its execution or registration unless a reasonable person is likely to be misled materially by the error or omission." As will be described below, the Ontario courts have found that a reasonable person is not likely to be materially misled by an error in the debtor's name if the VIN is accurately set out in that same financing statement.

Re Lambert

A leading Ontario case on the application of subsection 46(4) of the PPSA with respect to a security registration made against an incorrect debtor name, but containing an accurate VIN, is the decision of the Ontario Court of Appeal (the "Court of Appeal") in Lambert, Re6 ("Re Lambert"). In this matter, a registration of a security interest in a motor vehicle contained inaccuracies with a debtor's first given name and the initial of the second given name, but included the correct VIN. In this case, the trustee did not have actual knowledge of the security interest and the search of the debtor's name did not disclose the security interest. A VIN search was not performed, but had a VIN search been conducted, it would have revealed the security interest. The court at first instance held that subsection 46(4) of the PPSA did not serve to cure the error in the debtor's name. However, the Court of Appeal allowed the appeal and inferred that the legislature intended an objective test, pursuant to its inclusion of a reasonable person standard. 7 In the case of motor vehicle registrations, the Court of Appeal held:

"...where motor vehicles are involved, the integrity of the registration system does not depend only on accurately recording the debtor's name in the financing statement. Indeed, the V.I.N. search function exists specifically because a name-dependent system for motor vehicles would be inadequate and would leave potential purchasers and lenders vulnerable to encumbrances placed on the motor vehicle by prior owners of the motor vehicle. In the case of motor vehicles, the registration system is not name-dependent. Rather, it provides for identification of prior registrations by the combined access to the system afforded by name and V.I.N. searches." 8

The Court of Appeal concluded that where the property is a motor vehicle, the reasonable person will conduct both a specific debtor name search and a VIN search. 9 Accordingly, a reasonable person would not likely be misled materially by an error in a financing statement relating to the debtor's name if that same financing statement accurately provided the VIN. 10


As can be seen, provincial Personal Property Security Registration Systems can vary with respect to the latitude provided for inadvertent errors. Adhering to the letter of the law is of paramount importance to ensure that the intended security registration is properly perfected. Clearly, the best practice is to register accurate information in the required format. Accordingly, before registering, creditors should double-check that all information included in the registration is accurate and should both conduct and review post-registration searches to confirm that registrations contain accurate information.


1 2014 NLTD(G) 12, 8 C.B.R. (6th) 98, [2014] N.J. No. 21 [Re Hoskins].

2 Ibid. at para. 12.

3 Ibid. at 32.

4 R.S.O. 1990, c. P.10.

5 Ibid. at subs. 46(1).

6 (1991), 2 P.P.S.A.C. 160, 11 C.B.R. (3d) 165 (Ont. Bktcy.), rev'd (1994), 7 P.P.S.A.C. (2d) 240, 28 C.B.R. (3d) 1 (Ont. C.A.), add'l reasons at 1995 CarswellOnt 4269, 22 O.R. (3d) 480 (Ont. C. A.), leave to appeal ref'd [1994] S.C.C.A. No. 555, 23 O.R. (3d) xvi (note) (S.C.C.).

7 Ibid. at para. 30.

8 Ibid. at para. 42.

9 Ibid. at para. 45.

10 Ibid. at para. 47.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Brett Kenworthy
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions