учебный год 2023 / Ferran, Floating Charges. The Nature of the Security

214

The Cambridge Law Journal

[1988]

However,

it

has

been

argued

that

the

position

in

relation

to

floating

charges

is

somewhat

different.

(ii):

Floating

Charges

A floating

charge

is

a present

security

and

is

not

an

agreement

to

create

security

in

the

future:3

A

floating

charge

is not

a

future

security;

it

is

a

present

security

which

presently

affects

all

the

assets

of

the

company

expressed

to

be

included

in

it.4

Yet

notwithstanding

the

present

nature

of

the

security,

the

chargor

remains

free

to

deal

with

the

assets

as

if

they were

not

subject

to

a

charge;

the

charge

is

said

to

"hover"

over

the

assets

until

some

supervening

event

occurs

which

causes

it to

attach

specifically.5

In

Dr.

Gough's

view,6

this

"apparent

contradiction"7

can

be

explained

on

the

basis

that

until

crystallisation

the

chargee

obtains

no

proprietary

interest

either

in

property

owned

by

the

chargor

at

the

time

of

the charge

or in property

subsequently

acquired.

Professor

Farrar,8

on

the

other

hand,

argues

that

a

floating

charge

does

give

rise

to

an

interest

amounting

to

an

equitable

interest

even

before

crystallisation.

Since

the creation

of

security

involves

the

creation

of

an

interest

in

property,9

a point

which

even

Dr.

Gough

concedes,10

it

is suggested

that

the

latter

view

is

preferable.11

As

Professor

Farrar

admits,

the

concept

of

an

equitable

interest

is

loose.

The

cases which

he

cites

in

support

of

his

proposition

do

not

offer

an

explanation

of

the

nature

of

the

interest

created

by

a

floating

charge

but

rather,

in so

far

as the

issue

is expressly

considered,

resort

to

the

descriptive

approach

frequently

adopted

in

relation

to

floating

charges:

3Farrar,CompanyLaw,212.

Ltd.

2

K.B. 979at 999

L.J.

4Evansv. RivalGranite

5

Quarries

11910]

Lord

perBuckley

v. Houldsworth

A.C. 355at 358

6

Illingworth

a view

[1904]

per

Macnaughten.

and Commercial

re-asserted

the same authorin

CompanyCharges;

recently

9.

by

Equity

P. D. Finn

relevantthis

is referredto

specifically

Relationships,

(ed.), Chapter

(Where

chapter

reconciliationof these

sincea

is a creationof

he

arguments;

floatingcharge

contract,

suggests

218

The

Cambridge

Law

Journal

[1988]

against

sums

due

to the

administrator

of

that estate

in

his

personal

capacity.35

Also,

joint

debts

cannot

be set

off

against

separate

debts,

because

of the

lack

of

requisite

mutuality.36

Mutuality

does

not,

however,

require

any

connection

between

the

claims

which

it

is

sought

to

set

off.37

Further,

it is

irrelevant

that

the

debts

are

of

a

different

nature;

for

example,

a

secured

debt

can

be

set

off

against

an unsecured

debt.38

and

a debt

arising

from

a deed

can

be set

off

against

a contractual

debt.39

Secondly,

an

equitable

debt

may

be

set

off

where,

if the

debt

had

been

legal,

set-off

would

have

been

available.40

Mutuality

is required

but

this

is determined

by referenee

to

equitable

rights

rather

than

legal

entitlements.41

Set-off

of

equitable

claims

is

also

well

established

in

bankruptcy

jurisdiction.42

Moreover,

in insolvency

cases,

where

there

is mutuality

at law but not in equity,

that

is,

where

a

party

seeking

to

assert

a

right

of

set-off

holds

his

claim

on

trust

for

another,

set-off

will

be

disallowed;

this

amounts

to

equity

restraining

rather

than

merely

following

the

law

in

order

to

do

substantial

justice

between

the

parties.43

In

Re

Whitehouse*4

Jessel

M.R.

accepted

that

this

should

also

apply

to

solvent

set-off,

stating

the

relevent

principle

in

the

following

broad

terms:

The

Court of

Equity,

following

the

spirit

of the

statutes,

would

not

allow

a

man

to

set

off,

even

at

law,

where

there

was

an

equity

to

prevent

his

doing

so.45

Thus,

in summary,

mutual

debts,

whether

legal

or equitable,

may,

in

general,

be

set

off

against

each

other

but

the

right

to

set

off

may

be

disallowed

where

in

the

particular

circumstances

it

would

be

unconscionable

to

allow

it.

However,

equitable

set-off

is

not

limited

to

the

set-off

of

mutual

debts.

There

is,

in addition,

a

right

of

set-off

in

equity

where

the

party

seeking

to

assert

it

can

show

some

equitable

ground

for being

protected

against

his

adversary's

demand.

The

scope

of

this

form

of

set-off

was

considered

by

Lord

Cottenham

L.C.

in

Rawson

v.

Samuel;46

in

his

view

"the

mere

existence

of

cross

claims

is

not

* Reesv. Watts

11Ex. 410;

v. Howell

2 Ch. 773.

* te

(1885)

Phillips

|1901]

A OwenLtd.

Ch. 825.

Pennington

[1925]

17Re Daintrey[1900]1 Q.B. 546.

1 P.Wms.325.

* Lord

v. Jones

(1716)

Laneborough