учебный год 2023 / Worthington, Floating Charges. An Alternative Theory

84

The

Cambridge

Law

Journal

[1994]

charge

only

because

it is defeasible:

it is partly

extinguished

whenever

and

to

the

extent

that

the chargor

alienates

any

charged

asset,

or

any

interest

in

a

charged

asset,

in

accordance

with

the

licence

to

deal

which

is given

to the

chargor

by

the charging

agreement.

None

of

this

conflicts

with

the

classic

descriptions

of

floating

charges

given

by

Romer

L.J.

in Re

Yorkshire

Woolcombers'

Association

Ltd.H or

Lord

Macnaghten

in Illingworth

v. Houldsworth.9

This

view

of

a floating

charge

is

derived

directly

from

an analysis

of

the

similarities

and

differences

between

fixed

and

floating

charges.

With

both

fixed

and

floating

charges

there

is an element

of

potentiality

in

the

security:

the

chargee

cannot

intervene

to

enforce

the

security

until

there

has

been

a

default

in

the

agreed

conditions;10

until

then

the

chargee's

rights

are

partly

suspended.

Secondly,

with

both

fixed

and

floating

charges,

future

assets

may

be

included

within

the

ambit

of

the

charge:

in

other

words,

it is possible

to

add more

assets

to

the

security."

Finally,

with

both

fixed

and

floating

charges

the

chargor

may

deal with the assets

only

with

the

consent

of

the

chargee:

the

difference

is

that

with

fixed

charges

no

dealing

is

permitted

unless

and

until

otherwise

provided,

while

with

floating

charges

all

dealing

is

permitted

unless

and

until

otherwise

provided.

The

limitation

on

dealing

may

be

imposed

from

the

inception

of

the

floating

charge

or

later,

on

crystallisation.

Similarly,

with

fixed

charges,

the

permission

to

deal

may

be

granted

at

any

time.

In

many

ways,

then,

fixed

and

floating

charges

are

similar.

As

far

as

possible,

the

law

should

recognise

these

similarities

in

describing

the

fundamental

attributes

of

both

types

of

security.

Where

fixed

and

floating

charges

differ

is

that,

in

general,

the

chargee

does

not

give

permission

to

deal

when

the

charge

is fixed

but

does

when

the

charge

is

floating.

"Floating

charge"

is

thus

a

general

term

used

to

describe

those

securities

where

assets

may

be

"lost"

from

the

security

by

permitted

dealings;

"fixed

charge"

describes

those

securities

where

assets

remain

forever

within

the

ambit

of

the

security.

Put

this

way,

the terms

are

really

only

crude

generalisations:

given

the

appropriate

consent,

assets

may

be

"lost"

from

a

fixed

charge

security;

with

the

appropriate

restrictions,

assets

must

be

retained

in

"floating

charge"

securities.

This

analysis

highlights

the

crucial

role

played

by

the

agreement

between

the

parties:

fixed

and

floating

charges

are

not

terms

of

art.

In

fact,

distinguishing

between

the

two

forms

can be

very

difficult.12

2 Ch.

284,295.

11903]

Manila

Co. Ltd.

A.C. 81, 86

per

Lord

" Or the

Railway

J1897J

Macnaghten.

of aneventsuchas

of the termsof the instrument:this

happening

liquidation,regardless

1

mightbc vicwedas an impliedtermof the agreement.

Holroydx.

Marshall

10H.L.C.

191;

II E.R. 999.

2

(1862)

B.C.C. 36.

ReNewBullas

Ltd.

j1993|

B.C.C. 251;on

Trading

appeal11994]

88

The

Cambridge

Law

Journal

[1994]

the

execution

creditor

takes

subject

to

the

interests

of

the

chargee,

As

the

noted,

parties

to

a floating

charge

security

may

agree

that

the

charged

assets

are not

to

be

subject

to

execution.

Such

a

clause

will

be

effective

if

it

is

associated

with

a

clause

providing

for

automatic

crystallisation

on

its

breach:26

the

situation

then

resembles

the

fixed

charge

example.

It

is

more

difficult

when

the

parties

do

not provide

for

automatic

crystallisation,

but

either

remain

silent

or

provide

only

that

the

security

will

become

enforceable

on

breach.27

In

effect,

the

parties

have

agreed

that

the

chargor

can

trade

with

the

assets

without

their

being

subject

to

the

normal

incidents

of

the

legal

process.

This

may

conflict

with

public

policy

considerations,

which

might

suggest

that

the

risk

of

execution

against

an

asset

is

a

necessary

and

essential

incident

of

the

right

to

deal

with

the

asset.

If

so,

then

perhaps

execution

can

be

avoided

only

if

there

is

no

licence

to

deal

with

the

asset. It follows

that

an

agreement

between

the parties

that

assets

are

not

to

be

subject

to

execution

would

have

to

be

construed

as

containing

an implied

term

for

automatic

crystallisation,

if there

is

no

express

term.28

the

In summary,

the

first

step

in solving

any

priority

dispute

between

chargee

and

third

parties

is to

determine

the limits

ofthe

chargor's

licence

to

deal.

This

is

done

by

examining

the

charge

agreement,

considering

both

its express

and

implied

terms.

The

next

step

is

to

solve

the

priority

dispute,

and

is

discussed

in

the

next

section.

This

step

requires

an

examination

of

the

nature

of

the

competing

interests.

The

chargee's

interest

depends

upon

whether

the

licence

to

deal

has

been

terminated

or

breached

or,

alternatively,

whether

the

fixed

charge

has

defeased

to

the

extent

of

some

permitted

dealing.

The

third

party's

interest

depends

upon

the

type

of

dealing

and

whether

IV. Priorities

Now that

floating charges

have

been

examined

in more detail,

the

"defeasible

charge" theory

can

be

applied

to the resolution

of

Manurewa

Ltd,

[1971]

N.Z.L.R. 909; Re

Brightlife(1987]

1 Ch. 200

(obiter);

Re

Transport