Failure to register a security interest does not affect the liability of a guarantor

In this case1, a guarantor failed in his attempt to escape liability under a personal guarantee on the basis that the financier had failed to register its security interest on the Personal Property Securities Register.

The Court rejected the guarantor's arguments that, among other things:

• the financier had misrepresented that it would register its security interests, and that he would not have given the guarantee without such representations;
  
  
• the financier had acted negligently; and
  
  
• the guarantor was discharged from his obligations under the guarantee because the financier had acted so as to prejudice the guarantor's rights.

 

1 Canterbury Finance Limited v Sergel [2005] 10 DCR 875 (DC)

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