Commentary on Sections Part 2 – Security over Moveable Property Enforcement of pledge Section 76 – Appropriation: unencumbered acquisition
333.This section provides that any other right in security over, or diligence in respect of, the encumbered property is extinguished by an appropriation by virtue of section 73 of the Act. This covers both appropriations with and without prior agreement.
334.Any other secured creditor or a creditor who has executed diligence will have been given notice of the intended appropriation under section 74 or 75 of the Act (unless the creditor did not know – or could not reasonably be expected to know – of the security or diligence). A creditor who is given notice has the right to object and the ability to veto the appropriation. Failure to do so will result in their security or diligence being extinguished.