Part 2Security over Moveable Property
Chapter 2Register of Statutory Pledges
Effective registration
93Supervening inaccuracies: protection of third parties
1
Subsection (5) applies where, at some time after a statutory pledge is registered effectively—
a
a person acquires, for value, in good faith and exercising reasonable care—
i
property which is encumbered under the pledge, or
ii
a right in such property, and
b
at the time the person acquires that property or right (“the acquired property”), any one of condition A, condition B or condition C is met.
2
Condition A is that the entry for the pledge in the statutory pledges record has been incorrectly removed from the statutory pledges record (whether or not on transfer of that entry to the archive record) and remains incorrectly absent from the record.
3
Condition B is that—
a
the acquired property does not have an identifying number which, by virtue of RSP Rules, must be used in identifying it, and
b
the entry for the pledge in the statutory pledges record is seriously misleading in respect of the acquired property.
4
Condition C is that—
a
the acquired property has an identifying number which, by virtue of RSP Rules, must be used in identifying it, and
b
if a search of the statutory pledges record were to be carried out for that number using the search facility provided under section 104, it would not disclose the entry.
5
On the acquisition, the statutory pledge is extinguished in relation to the acquired property.
6
For the purposes of subsection (1)(a), the circumstances in which a person will not be taken to be in good faith and exercising reasonable care include where the person fails to carry out a search of the statutory pledges record in respect of the acquisition.