MISTAKE, SHARP PRACTICE, EQUITY AND THE PPSA

Abstract

Personal property security legislation in force in most provinces is designed to create certain priority rules in the belief that this certainty will enhance the efficiency of the credit market to the benefit of the economy as a whole. Not unexpectedly, litigants who are disappointed in the apparent application of the statutory priority rules have sought to supplement, if not reverse, such rules by invoking a variety of fairness driven doctrines . Although the case law is still mixed, more recent decisions have exhibited a strong view that the court should not allow equitable concepts to alter statutory priorities. In the author's view this approach is wise. To give scope to the application of equitable concepts would be to require the courts to balance a whole series of costs to the credit market against the possible benefits of enhanced judicial discretion. In the author's view it is questionable whether the court has the statutory mandate or the institutional competence to engage in this task.