J. 2002 SKQB 80 Q.B.G. A.D. 2002 No. 331 J.C. S. IN THE QUEEN’S BENCH JUDICIAL CENTRE OF SASKATOON BETWEEN: LANGHAM CREDIT UNION LIMITED and KIMBERLY CLAYTON RESPONDENT B.D. Barilla for the applicant C.M. Richmond for the respondent JUDGMENT KYLE J. March 5, 2002 [1] On September 6, 2000, the applicant Credit Union loaned Keldon McMillan the sum of $37,700.00 upon security of (inter alia) 1999 Chevrolet Blazer. Mr. McMillan was the owner of the Blazer under vehicle registration certificate at the time of the loan transaction. security agreement was registered at the Personal Property Registry on September 11, 2000. It lapsed year later and was re-registered November 14, 2001. Keldon McMillan died in June of 2001, payments on his loan fell into arrears and demand was made for possession of the Blazer. [2] Kimberly Clayton, Mr. McMillan's wife, had apparently been the person who used the Blazer and who had made payments on it under the original purchase agreement. She was shown as co-buyer on that purchase agreement but she was never the registered owner of the vehicle until she acquired it from her husband's estate. [3] Prior to the expiry of the registration the Credit Union had made Ms. Clayton aware of their claim and of their intent to realize upon their security. The vehicle was not sold or charged in favour of third party during the period of September 11, 2001, to November 14, 2001, when the security interest was unperfected. [4] Ms. Clayton, who needs the vehicle as transportation for herself and her children, seeks to defeat the security interest upon the ground that she was at all times the real owner of the vehicle, had made the payments and was always in possession of the vehicle. It appears that her husband's claim was based on his being one of the named purchasers in the original agreement and being the registered owner of the vehicle. All other indicia of ownership were in her favour. [5] The issue presented to this Court by these two motions is:➢ Does the registered owner of a vehicle have the power to grant a security interest enforceable in priority to the interest of a person whose claim, though substantial, is not registered or otherwise of record in any place where the lender has or should have notice of it? [6] take judicial notice of the fact that there is no title registry of vehicles in Saskatchewan other than that presently maintained by Saskatchewan Government Insurance (SGI). Counsel for the applicant asserts that this registration is only for insurance purposes but such is not the historical fact. Long before compulsory auto insurance, licences were issued to vehicle owners under vehicle registry which in addition to identifying the owners allowed police to identify vehicle and its owner for enforcement purposes. There were revenue aspects to this as well. Under The Vehicle Administration Act, S.S. 1986, c. V-2.1 of the licencing function has been assigned to SGI which issues certificates of registration and licence plates upon the application of "the owner of vehicle or the agent of an owner". Other provisions of that Act and of The Highway Traffic Act, 1996, S.S. 1996, c. H-3.2 are clear in that they regard the person named in registration certificate to be the owner of the vehicle. Considerations of insurance are dealt with under The Automobile Accident Insurance Act, R.S.S. 1978, c. A-35 but they are far from being the only reasons for registration of vehicle by the owner. [7] For all practical purposes, the owner of motor vehicle in Saskatchewan is the person who is named in the current registration certificate pertaining to that vehicle. Lenders, police officers and the world at large rely upon that certificate. If such certificate were obtained by fraud or in error it could be corrected but persons relying upon the certificate without actual notice of any title defect are protected, subject, of course, to prior registrations under The Personal Property Security Act, 1993, S.S. 1993, c. P-6.2. [8] Most chattel property is not the subject of any form of registration and in such cases possession is the principal and primary determinant of ownership. Motor vehicles are unique in that their registration creates presumption of ownership and follows declaration of ownership by the registry. Since vehicles, next to real property, constitute the most valuable and probably the most frequently financed property in our society, reliance upon the registration system is an important facet of our commerce. To take away the reliance upon vehicle registration certificates as evidence of ownership would create chaos in the marketplace. [9] The Personal Property Security Act does not establish title as determining fact in questions of priority of conflicting claims. It has been held to be irrelevant (see National Trailer Convoy of Canada Ltd. v. Bank of Montreal (1980), P.P.S.A.C. 87). This does not, however, affect the right of lender to rely upon registration certificate as evidence of an interest in vehicle and to enforce its security interest without regard to unregistered claims. If this seems unfair it may be that as stated in National Trailer, supra, "the legislature was prepared to accept the possibility of some unfairness as price for certainty". [10] In summary then hold that ownership does not depend upon registration. There are many unregistered vehicles. However, once vehicle is registered following declaration of ownership, presumption arises in favour of the holder of the registration certificate and as matter of commercial efficacy lenders, the police, insurers, repairmen, etc. are justified in relying upon the certificate as proof of ownership. [11] The applicant has also argued that at time when the registration of the Credit Union had lapsed, she transferred ownership from her husband's name to her name. Such a transfer would only serve the purpose of defeating the Credit Union's claim if it were undertaken for value and without notice, which was not the case here. [12] I therefore hold that the claim of the Credit Union is enforceable as against the conflicting claim of Ms. Clayton. In the special circumstances of this matter decline to order costs of either motion.
The Credit Union loaned $37,700 upon security, inter alia, of a 1999 Chevrolet Blazer owned by McMillan. A security agreement was registered at the Personal Property Security Registry in September 2000 and re-registered in November 2001. After McMillan died in June 2001, payments fell into arrears and a demand was made for possession of the Blazer. His widow, the respondent, was shown as co-buyer on the purchase agreement but was never the registered owner until she acquired it from her husband's estate. She sought to defeat the security interest on the grounds she was the real owner at all times, made the payments and was always in possession. At issue was whether the registered owner of a vehicle has the power to grant a security interest enforceable in priority to the interest of a person whose claim, though substantial, is not registered or otherwise of record in any place where the lender has or should have notice of it. HELD: The claim of the Credit Union was enforceable. Judicial notice was taken of the fact there is no title registry in Saskatchewan other than that maintained by Saskatchewan Government Insurance. The licensing function was assigned to SGI under the Vehicle Administration Act. That Act and the Highway Traffic Act are clear the person named in a registration certificate is regarded as the owner of the vehicle. Motor vehicles are unique in that their registration creates a presumption of ownership and follows a declaration of ownership by the registry. Reliance upon the registration system is an important facet of our commerce and would create chaos if reliance is taken away. Ownership does not depend upon registration. However, once a vehicle is registered following a declaration of ownership, a presumption arises in favour of the holder of the registration certificate and as a matter of commercial efficacy lenders, the police, insurers, repairmen, etc. are justified in relying upon the certificate as proof of ownership. A transfer of ownership would defeat the Credit Union's claim only if it were undertaken for value and with notice. No costs were awarded on either motion.