Marginal note:Loans on hydrocarbons and minerals
(a) hydrocarbons or minerals in, under or on the ground, in place or in storage,
(b) the rights, licences or permits of any person to obtain and remove any such hydrocarbons or minerals and to enter on, occupy and use lands from or on which any of such hydrocarbons or minerals are or may be extracted, mined or produced,
(c) the estate or interest of any person in or to any such hydrocarbons or minerals, rights, licences, permits and lands whether the estate or interest is entire or partial, and
(d) the equipment and casing used or to be used in extracting, mining or producing or seeking to extract, mine or produce, and storing any such, hydrocarbons or minerals,
or of any rights or interests in or to any of the foregoing whether the security be taken from the borrower or from a guarantor of the liability of the borrower or from any other person.
(2) Security under this section may be given by signature and delivery to the bank, by or on behalf of the person giving the security, of an instrument in the prescribed form or in a form to the like effect, and shall affect the property described in the instrument giving the security
(a) of which the person giving the security is the owner at the time of the delivery of the instrument, or
(b) of which that person becomes the owner at any time thereafter before the release of the security by the bank, whether or not the property is in existence at the time of the delivery,
all of which property is for the purposes of this Act property covered by the security.
Marginal note:Rights under security
(3) Any security given under this section vests in the bank, in addition to and without limitation of any other rights or powers vested in or conferred on it, full power, right and authority, through its officers, employees or agents, in the event of
(a) non-payment of any loan or advance as security for the payment of which the bank has taken the security, or
(b) failure to care for, maintain, protect or preserve the property covered by the security,
to do all or any of the following, namely, take possession of, seize, care for, maintain, use, operate and, subject to the provisions of any other Act and any regulations made under any other Act governing the ownership and disposition of the property that is the subject of the security, sell the property covered by the security or part thereof as it sees fit.
Marginal note:Liability to account for surplus
(4) Where a bank exercises any right conferred on it by subsection (3) in relation to property given to it as security, the bank shall provide to the person entitled thereto any surplus proceeds resulting from the exercise of the right that remain after payment of all loans and advances, together with interest and expenses, in relation to which the property was given as security.
Marginal note:Effect of sale
(5) A sale pursuant to subsection (3) of any property given to a bank as security vests in the purchaser all the right and title in and to such property that the person giving the security had when the security was given and that that person thereafter acquired.
Marginal note:Sale to be by public auction
(6) Unless a person by whom property was given to a bank as security has agreed otherwise, a sale pursuant to subsection (3) shall be made by public auction after
(a) notice of the time and place of the sale has been sent by registered mail to the recorded address of the person by whom the property was given as security at least ten days prior to the sale; and
(b) publication of an advertisement of the sale, at least two days prior to the sale, in at least two newspapers published in or nearest to the place where the sale is to be made.
Marginal note:Priority of bank’s rights
(7) Subject to subsections (8), (9) and (10), all the rights and powers of a bank in respect of the property covered by security given under this section have priority over all rights subsequently acquired in, on or in respect of such property and also over the claim of any mechanics’ lien holder or of any unpaid vendor of equipment or casing but this priority does not extend over the claim of any unpaid vendor who had a lien on the equipment or casing at the time of the acquisition by the bank of the security, unless the security was acquired without knowledge on the part of the bank of that lien.
(8) The rights and powers of a bank in respect of the property covered by security given under this section do not have priority over an interest or a right acquired in, on or in respect of the property unless, prior to
(a) the registration of such interest or right, or
(b) the registration or filing of the deed or other instrument evidencing such interest or right, or of a caution, caveat or memorial in respect thereof,
there has been registered or filed in the proper land registry or land titles office or office in which are recorded the rights, licences or permits referred to in this section,
Marginal note:Procedure for registering
(9) Every registrar or officer in charge of the proper land registry or land titles or other office to whom a document mentioned in paragraph (8)(c), (d) or (e) is tendered shall register or file the document according to the ordinary procedure for registering or filing within that office documents that evidence liens or charges against, or cautions, caveats or memorials in respect of claims to, interests in or rights in respect of any such property and subject to payment of the like fees.
(10) Subsections (8) and (9) do not apply if the law of the appropriate province does not permit the registration or filing of the tendered document or if any law enacted by or under the authority of Parliament, governing the ownership and disposal of the property that is the subject of security given under this section, does not provide by specific reference to this section for the registration or filing of the tendered document.
Marginal note:Further security
(11) When making a loan or an advance on the security provided for by this section, a bank may take, on any property covered by the security, any further security it sees fit.
Marginal note:Substitution of security
(12) Notwithstanding anything in this Act, where the bank holds any security covering hydrocarbons or minerals, it may take in lieu of that security, to the extent of the quantity covered by the security taken, any security covering or entitling it to the delivery of the same hydrocarbons or minerals or hydrocarbons or minerals of the same or a similar grade or kind.
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