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ARTICLE · 15 DECEMBER 2025

The Great Collateral Debate: Consumer Goods, Inventory, Or Equipment?

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The British Columbia Supreme Court recently released its decision in Summit Leasing v Rutledge, 2025 BCSC 2142. This case provides helpful guidance on the characterization of collateral...

CanadaFinance and Banking
Lauren Grossman
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Brittany Bottan
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The British Columbia Supreme Court recently released its decision in Summit Leasing v Rutledge, 2025 BCSC 2142. This case provides helpful guidance on the characterization of collateral under the British Columbia Personal Property Security Act, RSBC 1996, C-369 (the "BC PPSA") as either consumer goods, inventory, or equipment and the treatment of such collateral thereunder.

In this case, a loan agreement was entered into between Summit Leasing Corporation, as the lender (the "Lender") and Donald Rutledge, as the borrower (the "Borrower") (the "Loan Agreement"). In connection with the Loan Agreement, the Borrower's wife and her company (collectively, the "Obligors") provided a security agreement in favour of the Lender, which granted the Lender a security interest in specific collateral owned by the Obligors: a motor vehicle, two motorcycles, a boat hull with motor, and a boat trailer (collectively, the "Collateral"). The security interest in the Collateral was

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