James Buist, a farmer in Saskatchewan, borrowed money from the Innovation Credit Union in October 1991.

After this loan was provided, Buist also borrowed money from the Bank of Montreal, and several security agreements were executed between 1998 and January 2004.

The credit union applied to the Court of Queen's Bench for Saskatchewan for a declaration that it had a priority claim over the proceeds of the disposition of that property.

noted, [52] In the present case the issue of perfection by registration and therefore notice to all of the security interest claimed by the Credit Union is central to the determination of this priority dispute.

It would raise, for example, the question as to what types of prior interests would have such effect, which was the conundrum faced by the Chambers judge in the approach that he took.

[53] A conclusion that the Bank Act relies on provincial law to determine the consequences of holding a warehouse receipt or bill of lading avoids this problem.

It enhances credit, but not at the expense of prior interests duly taken and valid under the provincial system of secured transactions.

... [66] There are clear incentives for lending institutions to register under the PPSA, not the least of which are the consequences of holding an unperfected security interest.

427(2) and 435 of the Bank Act and provincial law, does not depend on whether the prior security interest is perfected.The appellate decision was upheld unanimously by the Supreme Court.

While it generally agreed with that decision, the court detailed what it felt to be the correct reasoning in arriving at the result.

The Saskatchewan CA had relied on its previous decision in Royal Bank of Canada v. Agricultural Credit Corp. of Saskatchewan,[2] which had laid down some basic rules for resolving priority issues: The SCC stated that, while this approach did not lead the Court of Appeal into error in deciding this case, this formulation does not accurately reflect the applicable constitutional principles at play.

However, the PPSA retains importance in resolving the priority dispute at issue: As noted by the Court: [48] In my view, it is not open to the Bank in this appeal to now argue that the statutory interest conveyed to the Credit Union is not analogous to a proprietary right.