The Bank of Montreal appealed a decision granting priority to Innovation Credit Union's prior unregistered security interest under the Saskatchewan Personal Property Security Act over the Bank's subsequently acquired and registered Bank Act security interest in the same farm equipment.
The Supreme Court of Canada dismissed the appeal, holding that under the Bank Act, the Bank could acquire no greater interest in the collateral than the debtor had at the time the security was taken.
Because the debtor had already conveyed a statutory interest analogous to a fixed charge to the Credit Union, the Bank took its security interest subject to that prior interest, regardless of the fact that the Credit Union's interest was unperfected.
