Accounts, Proceeds and Conversion : Bank of Nova Scotia v. IPS Invoice Payment System Corporations

A secured party who has taken and perfected a security interest in all of the debtor's accounts will sometimes come into competition with a subsequent assignee of some or all of the accounts. This brings into play the usual issue as to priorities. However, there is an additional issue that must be addressed – what remedies are available to the senior secured party if the junior claimant collects on these accounts? The recent Ontario decision in Bank of Nova Scotia v IPS Invoice Payment System Corporations seeks to answer this question, and in doing so opens up a number of important issues concerning the extent of the secured party's claim to proceeds and the nature and availability of the remedies against the junior claimant