The court considered the inability to create a floating charge over a company’s assets in Scots law. It was conceded that a company registered in Scotland could not create a valid and effectual floating charge over its assets in Scotland, but it was contended that it had done so over its assets in England. This argument was rejected. Lord President Cooper said that a floating charge was utterly repugnant to the principles of Scots law, which did not recognise it as creating a security at all. The reforms in the law which had been effected because of the many criticisms that had been directed against the injustices capable of being inflicted on the trade creditors by the use of floating charges had been expressly confined to companies registered in England. It was unthinkable that this could have been done except upon the view that companies registered in Scotland and subject to Scots law could not create floating charges.
Lord President Cooper
1951 SC 233,  ScotCS CSIH – 5
Cited – National Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
Cited – Sharp and Others v Woolwich Building Society HL 6-Feb-1997
The House was asked: what is meant by the word property in a floating charge and in section 53(7) of the 1986 Act which provides for the effect of the appointment of a receiver by the holder of such a charge in the following terms: ‘(7) On the . .
These lists may be incomplete.
Updated: 11 March 2021; Ref: scu.228297