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Credit (Repossession) Amendment Act 1999 Public Act Date of assent 1999 No 127 14 October 1999 Contents Title Short Title and commencement Amendment to Title Interpretation Security agreements to which Act applies New Part inserted Part3A Rules that apply in relation to taking possession of accessions Interpretation Creditor must not damage consumer goods when removing accession Person with interest in other goods entitled to reimbursement for damage caused by removal of accession Person entitled to reimbursement may refuse permission to remove accession Secured party may apply to Court for order in respect of removal of accession Secured party must give notice of removal of accession 19A 19B 19C 19D 19E 19F 19G When person with interest in whole may retain accession Page 2 2 2 3 4 4 4 5 5 5 6 6 7 1 Credit (Repossession) Amendment Act 1999 1999 No 127 19H Court may make order concerning removal of accession Notice of sale of consumer goods to other creditors New sections inserted 32A Disposal of consumer goods to purchaser for value and in good faith Extinguishment of subordinate security interests on sale 32B Creditor to give statement of account to debtor, etc New sections substituted 34 34A 34B No contracting out Technical amendments to principal Act Distribution of surplus Surplus may be paid into court Debtor’s, etc, right to recover surplus Schedule Technical Amendments to Principal Act 7 7 8 8 9 9 9 9 10 10 10 10 10 An Act to amend the Credit (Repossession) Act 1997 BE IT ENACTED
 by the Parliament of New Zealand as follows: 1 (1) (2) 2 Short Title and commencement This Act may be cited as the Credit (Repossession) Amend­ ment Act 1999 and is part of the Credit (Repossession) Act 1997 (“the principal Act”).
This Act comes into force on a date to be appointed by the Governor­General by Order in Council.
Amendment to Title The principal Act is amended by repealing the Title, and sub­ stituting the following Title: “An Act to govern the taking of possession of consumer goods by a creditor under a security agreement.” 2 1999 No 127 Credit (Repossession) Amendment Act 1999 s 3 3 (1) Interpretation Section 2 of the principal Act is amended by inserting, after the deﬁnition of the term cash price, the following deﬁnition: “Consumer goods means goods that are used or acquired for use primarily for personal, domestic, or household purposes”.
(2) Section 2 of the principal Act is amended by repealing the deﬁnition of the term credit agreement.

Section 2 of the principal Act is amended by repealing sub­ paragraphs (ii) and (iii) of paragraph (a) of the deﬁnition of the term creditor, and substituting the following subparagraph: In relation to a security interest, the secured party within the meaning of section 16 of the Personal Property Securities Act 1999; and”.
Section 2 of the principal Act is amended by repealing sub­ paragraphs (ii) and (iii) of paragraph (a) of the deﬁnition of the term debtor, and substituting the following subparagraph: In relation to a security interest, the debtor within the meaning of section 16 of the Personal Property Securities Act 1999; and”.
Section 2 of the principal Act is amended by repealing the deﬁnition of the term goods, and substituting the following deﬁnition: (3) “(ii) (4) “(ii) (5) “Goods means any personal chattels (other than money or things in action) comprised in or subject to a security agreement”.

(6) Section 2 of the principal Act is amended by repealing the deﬁnition of the term instrument by way of security.
Section 2 of the principal Act is amended by inserting, after the deﬁnition of the term residential premises, the following deﬁnition: (7) “Security agreement or agreement has the same meaning as in sec­ tion 16 of the Personal Property Securities Act 1999”.
(8) Section 2 of the principal Act is amended by repealing the deﬁnition of the term security interest, and substituting the following deﬁnition: 3 s 4 Credit (Repossession) Amendment Act 1999 1999 No 127 “Security interest has the same meaning as in section 17 of the Per­ sonal Property Securities Act 1999; but excludes— “(a) An interest in personal property created or provided for by a transfer of an account receivable or chattel paper, a lease for a term of more than 1 year, or a commercial consignment: “(b) Any security interest created by a company within the meaning of section 2(1) of the Companies Act 1993 or by a society reg­ istered under the Industrial and Provident Societies Act 1908.” Section 2 of the principal Act is amended by adding, as sub­ section (2), the following subsection: (9) “(2) For the purposes of this Act, the determination of whether goods are consumer goods is to be made by the debtor as at the time when the security interest in the goods attached within the meaning of the Personal Property Securities Act 1999.” 4 “5 Security agreements to which Act applies The principal Act is amended by repealing section 5, and sub­ stituting the following section: (1) This Act applies to a security agreement— “(a) That creates or provides for a security interest in consumer goods; and “(b) That is entered into on or after the date of com­ mencement of the Credit (Repossession) Amend­ ment Act 1999.
“(2) This Act applies whether or not a ﬁnancing statement has been registered under the Personal Property Secur­ ities Act 1999 in respect of the security interest.
“(3) This Act also applies as provided in section 51.” 5 New Part inserted The principal Act is amended by inserting, after Part 3, the following Part: “Part3A “Rules that apply in relation to taking possession of accessions “19A Interpretation In this Part, unless the context otherwise requires,— 4 1999 No 127 Credit (Repossession) Amendment Act 1999 s 5 “Accession means consumer goods that are installed in, or af­ ﬁxed to, other consumer goods “Other goods means consumer goods in which an accession is installed or to which the accession is afﬁxed “Whole means an accession and the consumer goods in which the accession is installed or to which the accession is afﬁxed.
“19B Creditor must not damage consumer goods when removing accession A creditor who is entitled to take possession of an accession under this Act must remove the accession from the whole in a manner that causes no greater damage to the other goods or that puts the person in possession of the whole to no greater inconvenience than is necessarily incidental to the removal of the accession.
“Compare: Personal Property Security Act 1993, s 38(7) (Saskatchewan) “19C Person with interest in other goods entitled to reimbursement for damage caused by removal of accession “(1) A person, other than the debtor, who has an interest in the other goods at the time the goods become an accession is entitled to reimbursement for any damage to that person’s interest in the other goods caused by the removal of the accession.
“(2) Any reimbursement payable under subsection (1) does not in­ clude reimbursement for a reduction in the value of the prop­ erty caused by the absence of the accession or by the necessity of the replacement of the accession.
“Compare: Personal Property Security Act 1993, s 38(8) (Saskatchewan) “19D Person entitled to reimbursement may refuse permission to remove accession A person entitled to reimbursement under section 19C may refuse permission to remove the accession until the creditor has given adequate security for the reimbursement.
“Compare: Personal Property Security Act 1993, s 38(9) (Saskatchewan) 5 s 5 Credit (Repossession) Amendment Act 1999 1999 No 127 “19E Secured party may apply to Court for order in respect of removal of accession The Court may, on an application made by a creditor, make an order— “(a) Determining who is entitled to reimbursement under section 19C: “(b) Determining the amount and kind of security to be pro­ vided by the creditor: “(c) Prescribing the amount and kind of security to be pro­ vided by the creditor: “(d) Prescribing the depository for the security: “(e) Dispensing with the need for the permission of any or all persons entitled to reimbursement under section 19C.
“Compare: Personal Property Security Act 1993, s 38(10) (Saskatchewan) “19F Secured party must give notice of removal of accession “(1) The creditor who is entitled to remove the accession from the whole must give notice of the creditor’s intention to remove the accession to each of the following persons: “(a) A person who is known by the creditor to have an inter­ est in the other goods or in the whole: “(b) A person who has registered a ﬁnancing statement in the name of the debtor and referring to the other goods: “(c) A person who has registered a ﬁnancing statement con­ taining the serial number of the other goods as required or authorised by regulations made under the Personal Property Securities Act 1999, if any.
“(2) The notice referred to in subsection (1) must be given not less than 10 working days before the removal of the accession and must contain— “(a) The name and address of the creditor; and “(b) A description of the goods to be removed; and “(c) A description of the other goods; and “(d) The amount due to the creditor and the value of the accession if the accession were removed from the other goods; and “(e) A statement of intention to remove the accession, un­ less the lesser of the amount secured or the value of the 6 1999 No 127 Credit (Repossession) Amendment Act 1999 s 6 accession is paid on or before a speciﬁed date that is not less than 10 working days after the notice is given.
“(3) This section does not apply if— “(a) The creditor believes on reasonable grounds that the consumer goods will decline substantially in value if they are not disposed of immediately after default; or “(b) The cost of care and storage of the consumer goods is disproportionately large in relation to their value; or “(c) For any other reason, a court on an ex parte application is satisﬁed that a notice is not required.
“Compare: Personal Property Security Act 1993, s 38(12), (13) (Saskatchewan) “19G When person with interest in whole may retain accession A person, other than the debtor, who has an interest in the whole that under this Act is subordinate to a security interest in the accession may retain the accession on payment to the creditor with a security interest that has priority over all other security interests in the accession of the lesser of— “(a) The amount due to the creditor; or “(b) The value of the accession if the accession were re­ moved from the other goods.
“19H Court may make order concerning removal of accession The Court may, on the application of a person entitled to re­ ceive a notice under section 19F, make an order— “(a) Postponing the removal of the accession: “(b) Determining the amount payable to the creditor under section 19G for the retention of the accession.” Compare: Personal Property Security Act 1993, s 38(15) (Saskatchewan) Notice of sale of consumer goods to other creditors The principal Act is amended by inserting, after section 21, the following section: 6 “21A (1) A creditor who intends to sell consumer goods must, in addition to any other notices that the creditor must give under this Act, give notice to the following persons, within 21 days of taking possession of consumer goods: 7 s 7 Credit (Repossession) Amendment Act 1999 1999 No 127 “(a) Any person who has registered a ﬁnancing state­ ment in respect of the consumer goods that is ef­ fective at the time the creditor took possession of the consumer goods: “(b) Any other person that has given the creditor no­ tice that that person claims an interest in the con­ sumer goods.
“(2) Subsection (1) does not apply if— “(a) The consumer goods may perish within 21 days of the creditor taking possession; or “(b) The creditor believes on reasonable grounds that the consumer goods will decline substantially in value if they are not disposed of immediately af­ ter default; or “(c) The cost of care and storage of the consumer goods is disproportionately large in relation to their value; or “(d) For any other reason, a court on an ex parte ap­ plication is satisﬁed that a notice is not required.
“Compare: Personal Property Security Act 1993, s 59(6), (16) (Saskatchewan)” 7 New sections inserted The principal Act is amended by inserting, after section 32, the following sections: “32A Disposal of consumer goods to purchaser for value and in good faith “(1) A purchaser for value and in good faith who takes possession of consumer goods sold by a creditor takes the consumer goods free from the following interests: “(a) The interest of the debtor: “(b) Any interest subordinate to that of the debtor: “(c) Any interest subordinate to that of the creditor.
“(2) Subsection (1) applies whether or not registrations relating to security interests that are subordinate to the security interest of the creditor selling the consumer goods have been removed from the register.
“Compare: Personal Property Security Act 1993, s 61(7) (Saskatchewan) 8 1999 No 127 Credit (Repossession) Amendment Act 1999 s 9 “32B Extinguishment of subordinate security interests on sale If consumer goods have been sold under section 26 or section 32, all security interests in the consumer goods and their pro­ ceeds that are subordinate to the security interest of the creditor who sold the consumer goods are extinguished on the sale of the consumer goods.” 8 9 Creditor to give statement of account to debtor, etc Section 33 of the principal Act is amended by inserting, after the word “debtor” in the ﬁrst place where it appears, the words “and the persons referred to in section 21A(1)”.
New sections substituted The principal Act is amended by repealing section 34, and substituting the following sections: “34 Distribution of surplus “(1) If a creditor has sold consumer goods under section 26 or sec­ tion 32, the creditor must pay the following persons the amount of any surplus by satisfying the claims of those persons in the following order: “(a) Any person who has registered a ﬁnancing statement in the name of the debtor over the consumer goods that are sold where— “(i) The registration was effective immediately be­ fore the consumer goods were sold; and “(ii) The security interest relating to that registration was subordinate to the security interest of the creditor who sold the consumer goods: “(b) Any other person who has given the creditor notice that that person claims an interest in the consumer goods that are sold and in respect of which the creditor is satisﬁed that that person has a legally enforceable interest in the consumer goods: “(c) The debtor.
“(2) The security interests to which subsection (1)(a) applies must be paid in the order of their priority as determined by Part 7 or Part 8 of the Personal Property Securities Act 1999.

9 s 10 Credit (Repossession) Amendment Act 1999 1999 No 127 “(3) Subsection (1) applies despite the extinguishment of a security interest under section 32B.
“Compare: Personal Property Security Act 1993, s 60(2) (Saskatchewan) “34A Surplus may be paid into court “(1) The creditor may pay the surplus into court if there is a ques­ tion as to who is entitled to receive payment under section 34.

“(2) The surplus may be paid out only on an application by a person claiming an entitlement to the surplus.
“Compare: Personal Property Security Act 1993, s 60(4) (Saskatchewan) “34B Debtor’s, etc, right to recover surplus The persons referred to in section 34 are entitled to recover the amount of any surplus from the creditor.” 10 “42 No contracting out The principal Act is amended by repealing section 42, and substituting the following section: (1) The provisions of this Act have effect despite any pro­ vision to the contrary in any security agreement.
“(2) Section 56 of the Sale of Goods Act 1908 is to be read subject to the provisions of this section.

“(3) Every creditor commits an offence against section 13(i) of the Fair Trading Act 1986 who purports to contract out of any provision of this Act.” 11 Technical amendments to principal Act The principal Act is amended in the manner indicated in the Schedule.
Schedule Technical Amendments to Principal Act Section 11 10 1999 No 127 Credit (Repossession) Amendment Act 1999 Schedule Provision Amendment Section 2 By omitting from paragraphs (a), (b), and (d) of the deﬁnition of the term amount of credit the words “credit agreement”, and substitut­ ing in each case the words “security agreement”.

By inserting in paragraph (c) of the deﬁnition of the term amount of credit before the word “goods” in each place where it appears, the word “consumer”.
By inserting in the deﬁnition of the term cash price, before the word “goods” in each place where it ap­ pears, the word “consumer”.

By inserting in the deﬁnition of the term creditor’s agent, before the word “goods”, the word “con­ sumer”.

By omitting from the deﬁnition of the term default the words “credit agreement”, and substituting the words “security agreement”.

By inserting in the deﬁnition of the term default, before the word “goods”, the word “consumer”.
By omitting from paragraph (b) of the deﬁnition of the term guaran­ tor the words “credit agreement” in each place where they appear, and substituting in each case the words “security agreement”.

By inserting in paragraph (b)(ii) of the deﬁnition of the term guaran­ tor, before the word “goods”, the word “consumer”.
11 Schedule Credit (Repossession) Amendment Act 1999 1999 No 127 Provision Amendment By omitting from the deﬁnition of the term net balance due the and words “credit agreement”, substituting the words “security agreement”.

By inserting in the deﬁnition of the term net balance due, before the word “goods”, the word “con­ sumer”.

By omitting the words “credit agreement”, and substituting the words “security agreement”.

By inserting, before the word “goods”, the word “consumer”.
By omitting from subsection (1) the words “credit agreement”, and sub­ stituting the words “security agree­ ment”.
By inserting in subsections (1) and (2), before the word “goods” in each place where it appears, the word “consumer” Section 4 Section 6 12 1999 No 127 Credit (Repossession) Amendment Act 1999 Schedule Provision Amendment Section 7 Section 8(1), (2) Section 10 Section 12(b) Section 13 Section 15(3)(b) Section 16(2), (3) Section 17(b) Section 18(1), (2)(b) omitting from subsection By (1)(a) the words “credit agree­ ment”, and substituting the words “security agreement”.
By inserting, before the word “goods” in each place where it appears, the word “consumer”.

By inserting, before the word “goods” in each place, where it appears, the word “consumer” By inserting, before the word “goods”, the word “consumer”.

By inserting, before the word “goods”, the word “consumer”.

By omitting from subsection (1) the words “credit agreement”, and substituting the words “security agreement”.

By inserting, before the word “goods”, the word “consumer”.
By inserting, before the word “goods” in each place where it appears, the word “consumer”.

By inserting, before the word “goods”, the word “consumer”.

By inserting, before the word “goods” in each place where it appears, the word “consumer”.

13 Schedule Credit (Repossession) Amendment Act 1999 1999 No 127 Provision Amendment Section 19 Section 20 Section 22(a) Section 23(1) Section 24 Section 25(1), (2)(b) By inserting, before the word “goods”, the word “consumer”.


By inserting, before the word “goods”, the word “consumer”.

By inserting, before the word “goods” in each place, where it appears, the word “consumer”.

By omitting from paragraph (a)(i) the words “credit agreement”, and substituting the words “security agreement”.

By inserting, before the word “goods”, the word “consumer”.

Section 26(2), (3), (4), (5)(a) By inserting, before the word “goods” in each place where it appears, the word “consumer”.


By inserting in subsections (1) and (2), before the word “goods” in each place where it appears, the word “consumer”.

from subsection omitting By (2)(a) and (b) the words “credit agreement”, and substituting the words “security agreement”.
Section 27(1), (2) Section 28 14 1999 No 127 Credit (Repossession) Amendment Act 1999 Schedule Provision Amendment Section 29 Section 30(1) Section 31 Section 32(1), (2) Section 33 omitting from subsection By (1)(b) the words “credit agree­ ment”, and substituting the words “security agreement”.

By inserting, before the word “goods” in each place where it appears, the word “consumer”.

By inserting, before the word “goods” in each place where it appears, the word “consumer”.
By omitting from subsection (1) the words “credit agreement”, and sub­ stituting the words “security agree­ ment”.

By inserting in subsections (1), (2)(c), and (3)(a), before the word “goods” in each place where it ap­ pears, the word “consumer”.

By inserting, before the word “goods” in each place where it appears, the word “consumer”.

By inserting, before the word “goods” in both places where it appears, the word “consumer”.
15 Schedule Credit (Repossession) Amendment Act 1999 1999 No 127 Provision Amendment Section 36 Section 40(2)(c), (d) Schedule 1 Schedule 2 By omitting the words “credit agreement”, and substituting the words “security agreement”.

By inserting, before the word “goods”, the word “consumer”.

By inserting, before the word “goods”, the word “consumer”.
By omitting from the pre­possession notice the words “credit agreement” in each place where they appear, and substituting in each case the words “security agreement”.

By omitting from the post­possession notice the words “credit agreement” in each place where they appear, and substituting in each case the words “security agreement”.

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