Document ID: chunk:federal_register_of_legislation:C2024C00719:section:45:p1
Version: federal_register_of_legislation:C2024C00719
Segment Type: section
Provision Reference: s 45 (pt 1/2)
Character Range: 132459–134966

45  Taking motor vehicles free of security interest

Incorrect or missing serial number
 (1) A buyer or lessee, for new value, of a motor vehicle of a kind prescribed by the regulations for the purpose of this section, takes the motor vehicle free of a security interest in the motor vehicle if:
 (a) the regulations provide that motor vehicles of that kind may, or must, be described by serial number; and
 (b) there is a time during the period between the start of the previous day and the time of the sale or lease by reference to which a search of the register (by reference otherwise only to the serial number of the motor vehicle) would not disclose a registration that perfected the security interest; and
 (c) the seller or lessor is:
 (i) the person who granted the security interest; or
 (ii) if the person who granted the security interest has lost the right to possess the motor vehicle, or is estopped from asserting an interest in the motor vehicle—another person who is in possession of the motor vehicle.
 (2) Subsection (1) does not apply if:
 (a) the secured party is in possession of the motor vehicle immediately before the time of the sale or lease; or
 (b) the motor vehicle is bought at a sale held by or on behalf of an execution creditor; or
 (c) the buyer or lessee holds the motor vehicle:
 (i) as inventory; or
 (ii) on behalf of a person who would hold the motor vehicle as inventory; or
 (d) the buyer or lessee buys or leases the motor vehicle with actual or constructive knowledge of the security interest.

Taking from prescribed persons
 (3) A buyer or lessee, for new value, of a motor vehicle of a kind prescribed by the regulations for the purpose of this section takes the motor vehicle free of a security interest in the motor vehicle if:
 (a) the regulations provide that motor vehicles of that kind may, or must, be described by serial number; and
 (b) the seller or lessor is in a class of persons prescribed by the regulations for the purposes of this subsection.
 (4) Subsection (3) does not apply if:
 (a) the secured party is in possession of the motor vehicle immediately before the time of the sale or lease; or
 (b) the motor vehicle is bought at a sale held by or on behalf of an execution creditor; or
 (c) the buyer or lessee holds the motor vehicle:
 (i) as inventory; or
 (ii) on behalf of a person who would hold the motor vehicle as inventory; or
 (d) the buyer or lessee buys or leases the motor vehicle with actual or constructive knowledge that the