Dissertation Creation - The UK's original provider of custom dissertations, dissertation writers and dissertation help...
Free Dissertations - Law Dissertations
We Have ly Mentioned Above The Early Cases That Contrasted Fixed And ...
We have briefly mentioned above the early cases that contrasted fixed and floating securities. The House of Lords Appeal of the Woolcombers Association case was Illingworth v Houldsworth where the court discussed the distinction between fixed or floating charges:
‘A specific charge is one that without more fastens on ascertained and definite property or property capable of being ascertained and defined; a floating charge, on the other hand, is ambulatory and shifting in its nature'
This overall approach hasn't really changed and we find similar language in modern courts over 90 years later, for example Millett LJ in Re Cosslett (Contractors) Limited :
‘The essence of a floating charge is that it is a charge, not on any particular
asset, but on a fluctuating body of assets which remain under the management
and control of the chargor, and which the chargor has the right to withdraw
from the security despite the existence of the charge. The essence of a fixed
charge is that the charge is on a particular asset or class of assets which the
chargor cannot deal with free from the charge without the consent of the
chargee. The question is not whether the chargor has complete freedom to
carry on his business as he chooses, but whether the chargee is in control of
the charged assets.'
Thus by and large the central concept of a floating charge was forged in the early-twentieth century and from the start its raison d'etre was to be more flexible and distinct from a mortgage, or fixed charge in the corporate world. In it's essentials it remains unchanged, with the central tenet being that ‘where under the terms of the relevant security the chargor has the freedomto deal and dispose of the assets in the ordinary course of business, the charge will be construed as a floating charge as opposed to a fixed charge'.
However, in recent years there have been more particularistic debates about whether charges over certain property can properly be called fixed or floating. It is to these debates that we now turn because they represent the modern mutation and controversy of the floating charge. In particular they have focused in upon receivables such as book debts. As Millet LJ pointed out in Cossett, above, what is essential to the designation as a fixed security is the degree of control that the chargee has over the property, in particular it is the purpose and quality of that control which is essential. Thus focus becomes on the nature of the item charged i.e. whether it can be usefully the subject of a fixed charge, that being more favourable to the encumbered floating charge.
In Tailby v The Official Receiver the court made it clear there could be a fixed charge over ascertained book debt.
Please note: The above dissertation snippet was written by a student and then submitted to us to display and help others. Thanks to all the students who have submitted their work to us.
Dissertation Creation Feed
