Section 38 – Liability of certain other persons
179.This section provides for certain persons to be liable, on fault being shown, for losses suffered by another person in consequence of a matter specified in subsection (1).
180.Subsection (1)(a) applies where a person suffers loss as a result of an inaccuracy in an entry in the assignations record. It applies where the person who made the application which led to the entry did not exercise reasonable care, or where the person notified the Keeper of an apparent inaccuracy without taking reasonable care.
Example
Bruce maliciously registers a forged assignation bearing to be granted by Claire in an effort to affect her credit rating. Claire has a claim against Bruce if she suffers loss.
181.Subsection (1)(b) applies where, as a result of a failure to take reasonable care, there is an inaccuracy in responding to an information request under section 36 of the Act.
Example
Information is supplied by Brian that a certain claim is not carried by an assignation from Andrew to Brian. But Brian does not take reasonable care, and the information is wrong. The person who receives the information then takes an assignation of the claim from Andrew, which will be invalid because it has already been transferred to Brian. That person will have a claim against Brian.
182.Subsection (1)(c) applies where a person has failed, without reasonable cause, to provide information under section 36 of the Act.
Example
Alan has granted an assignation document of certain claims to Bob. The Selkirk Bank is considering whether or not to lend money to Alan, and seeks information from Bob (with the consent of Alan) about which claims are assigned. Bob does not comply with the request, and the bank obtains a court order. Bob still does not comply, and the bank decides not to make the loan. Alan has a claim against Bob for loss suffered due to being unable to obtain a loan from the bank.
183.Subsection (2) imposes the same restrictions on liability as those set out in section 37(2) of the Act.
