Victorian Consolidated Legislation

Chattel Securities Act 1987 - SECT 25

Compensation for extinguishment of security interest

25. Compensation for extinguishment of security interest



(1) A person who suffers loss or damage by reason that a security interest in
registrable goods of which the person is the holder is extinguished by the
operation of section 7(1), being a security interest-

   (a)  for the registration of which application had been made under section
        16; and

   (b)  which at the time the loss or damage was suffered-

   (i)  had not been entered in the register; or

   (ii) was entered in the register but not correctly entered; or

   (iii) having been entered in the register after the application was made,
        was no longer entered by reason of the deletion of the entry other
        than by way of cancellation in accordance with section 23- may apply
        to the Tribunal for an order for the payment of compensation to the
        applicant.

(1A) A person who suffers loss or damage by reason that a security interest in
interstate registrable goods of which the person is the holder is extinguished
by the operation of section 7(1), being a security interest-

   (a)  for the registration of which application had been made under a
        corresponding law; and

   (b)  which at the time the loss or damage was suffered-

   (i)  had not been entered in the register under a corresponding law; or

   (ii) was entered in the register under a corresponding law and had been so
        registered for a continuous period of at least 24 hours but had not
        been registered under section 16A; or

   (iii) was entered in the register under a corresponding law and had been so
        registered for a continuous period of at least 24 hours but had not
        been correctly registered under section 16A; or

   (iv) was entered in the register under a corresponding law and had been so
        registered for a continuous period of at least 24 hours but was no
        longer registered under section 16A by reason of the deletion of the
        entry other than by way of cancellation in accordance with the
        provision of a corresponding law which corresponds to section 23- may
        apply to the Tribunal for an order for the payment of compensation to
        the applicant.

(1B) If-

   (a)  a person suffers loss or damage because a registered security interest
        of which the person is the holder is extinguished by the operation of
        section 7(1A); and

   (b)  the security interest was registered before the certificate referred
        to in section 7(1A)(c) was issued in respect of the goods the subject
        of the security interest-

the person may apply to the Tribunal for an order for the payment of
compensation to the person.

(2) If an application is made under subsection (1), (1A) or (1B), the Tribunal
must determine whether or not compensation should be paid to the applicant
and, if it determines that compensation should be paid, must make an order for
the payment to the applicant of such amount as the Tribunal determines.

(3) The Tribunal must not make an order under this section in relation to an
application arising by reason of loss or damage suffered after the
cancellation under section 23 of an entry in the register if the applicant did
not show cause in accordance with that section unless the Tribunal is
satisfied that the applicant did not show cause in accordance with that
section why the registration should not be cancelled-

   (a)  because of circumstances beyond the applicant's control; or

   (b)  for reasons that ought to be reasonably to be excused.

(4) Compensation paid in respect of a claim under this section must not
exceed-

   (a)  the amount of the debt or other pecuniary obligation or the value of
        any other obligation secured by the security interest; or

   (b)  the value of the registrable goods or interstate registrable goods in
        respect of which the application is made-

at the time the loss or damage is suffered, whichever is the lesser.

(5) Compensation payable under an order of the Tribunal under this section
must be paid by the Corporation.





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