That document was not signed by the bankrupt company and indeed there was no place on the application for a signature. On the second page of the agreement, there is a guarantee signed by a principal of the company in his personal capacity. The bankruptcy took place on March 30, 1999. The trustee issued a disallowance of the secured claim on the basis that the security agreement had not been signed by the debtor. A perfected security interest must both be registered and attached to the property.
Attachment occurs when the debtor signs the security agreement.
A security interest is not enforceable against a third party unless it has attached. On the appeal from the trustee's decision, Kozak J. held that the trustee had erred. Where there is a complete absence of execution, the curative provisions would not apply. An interpretation of legislation that is consistent and compatible with other sections of the same legislation is to be preferred to one that is not.