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UDK 341
Mariana Zhuravel,
Bachelor of Laws, Yaroslav Mudryi National Law University, Ukraine,
LL.M in International Corporate Governance and Financial Regulation,
University of Warwick, United Kingdom

FIXED AND FLOATING CHARGES

AS SECURITY MECHANISMS IN CORPORATE FINANCE
LAW IN THE UNITED KINGDOM
The goal of this article is to consider two types of charges under the English corporate finance
law: fixed and floating. This work aimed to analyze the nature of the floating charge and
provide a clear difference between fixed and floating charge security instruments based on
landmark cases in the field. Classification of the charge has been an issue for the
long-standing debate lasting more than 100 years and yet it remains a central point of
numerous discussions nowadays. The author also illustrated issues related to a floating
charge as opposed to a fixed charge, and provided her own view with regard to possible steps
which could be taken in order to eliminate disadvantages of the floating charge.
Key words: fixed charge, floating charge, debenture, chargor, chargee, lender, borrower,
control over the charged assets.

Introduction mechanisms provided by the English law of

corporate finance. Therefore this article is
Why is this topic of interest to the focused on two types of charge: fixed and
Ukrainian company law? Well, the answer floating, with the emphasis on the floating
to this question is quite straightforward. charge and its disadvantages to a lender.
Because Ukraine has signed the EU-Ukraine Perhaps, these types of security will
Association Agreement in June 2014 which challenge Ukrainian company law in a
heralds a progressive Pro-Western economic number of years.
development, the country is set on the path The first part of the work will be focused
to reforms which will mean a shift to the on the nature of the floating charge and its
European direction by reviewing current distinction from the fixed charge. Landmark
legislation, considering European legal and cases will be considered which established
business practices with a possibility of certain tests to determine the type of charge.
incorporation some of the international The second part will illustrate the
practices into the national arena, and disadvantages of the floating charge as a
harmonizing domestic law with EU level. security for the lender.
London is considered as a global capital of
finance and law due to a high number and The third part of the work will determine
volume of business transactions which are the ways to minimize the disadvantages of
occurring specifically there on the basis of the floating charge and the author’s
various reasons. One of those reasons is the personal view will be expressed.
strong legal system and a variety of Lastly, conclusion will be drawn.
protective legal mechanisms available to 1. What is the floating charge and how
investors. Ukrainian company law remains to differentiate it from a fixed charge
yet underdeveloped and that is why quite 1.1 Essential definitions
frequently parties decide to opt for the Security is a key desired component in
English jurisdiction for more flexibility and every aspect of our lives. It is also an
security while conducting a business essential part of complex, high-volume
transaction in the Ukraine. Because of trend financial transactions, in particular where
in selecting the English jurisdiction and a company is financed through leverage.
also, due to a major turn of the country to Alastair Hudson once said:
the European direction it is important to «taking security» is the process of
understand essential concepts of security seeking to use one or more of a number of

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a legal structures to protect oneself 1.2 Floating charge

against the risk that one’s counterparty There is no statutory definition of the
may go into insolvency or fail to perform floating charge in the Companies Act
its contractual obligation, or that one’s 20067 however, in Smith v Bridgend
contract be unenforceable, or against any County Borough Council Lord Scott
of the other risks.»1 accepted that a floating charge is a present
A common form of security is a charge. security and can be also a security on
A charge is used to secure any future assets.8
transactions when a company raises its The test which established the floating
capital via an issue of a debenture. There charge originates from Re Yorkshire
is no statutory definition of a debenture, Woolcombers Association Ltd [1903].9
however, Chitty J. in Levy v Abercorris Romer L.J. stated that firstly, it must be
Slate and Slab Co2 proposed that a established whether a charge is made over
debenture is: present or over future assets.10 Secondly,
«a document which either creates a debt a class of assets will have to be changing
or acknowledges it, and any of the from time to time and lastly, a company,
document which fulfills either of these as a borrower, can deal with these assets in
conditions is a «debenture».3 the normal way of business.11 A fixed
Therefore, to lend a capital a lender charge is usually granted over tangible
(chargee) will make sure that he is secured property, such as a freehold factory.
through a charge granted over the Although the first two characteristics of
borrower (chargor) company’s assets. If the floating charge can be also applicable
the chargor is unable to perform its to a fixed charge, the third characteristic
financial commitments, the charge will is different: the chargor does not have a
then grant a right to the chargee to seize right to deal with the charged property
the chargor’s property under the charge.4 unless he gets express permission from the
Numerous attempts have been made to chargee.12 This explanation by Romer L.J.
define what a charge actually means. One
in Yorkshire Woolcombers has received a
of the most commonly used definitions
was established by Atkin L.J. in National wide judicial acceptance. Although in
Provincial and Union Bank of England v theory the «floating charge» concept
Charnley.5 There he opined that there is no appears to be clear, in practice it has led to
necessity to have one formal definition of considerable debate and complications.
the charge but in a case where parties have In theory, the main distinction between
agreed that present or future property is fixed and floating charges can be easily
created as a security for a payment of a seen by level of freedom and control over
debt and that the creditor has a present the charged assets by the chargor in the
right to make this security available, there case of the latter, but in practice the issue,
will be a charge.6 is to what extent there is freedom to deal

1 Alastair Hudson, The Law of Finance (first edition, Sweet & Maxwell, published in 2009, reprinted
in 2012) 1428, 547.
2 Levy v Abercorris Slate and Slab Co (1837) 37 Ch. D. cited in Gerard McCormack, Registration of
Company Charges (3rd edn., Jordan Ltd 2009) p. 321, 76.
3 Ibid.
4 Hudson, op. cit., p. 567.
5 National Provincial and Union Bank of England v Charnley [1924] 1 KB 431 p. 449 cited in Hudson,
ibid., p. 568.
6 Hudson, ibid., p. 568.
7 Companies Act 2006.
8 Smith v Bridgend County Borough Council [2002] 1 AC 336 p. 357.
9 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284 p. 295.
10 Ibid., p. 295.
11 Ibid., p. 295.
12 Lang Thai, ‘Charges over Book Debts in the United Kingdom and Australia: the Way Forward’,
MqJBL (2007) Vol 4, 267—294, p. 267.

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with the assets.1 This issue has often analysis of the charge instrument and
surrounded book debts under the charge, conduct of the parties.6
and this has been illustrated in a landmark The case of the book debts to be
case: National Westminster Bank plc v admitted as a floating charge remained
Spectrum Plus Limited and Others until Siebe Gorman & Co v Barclays Bank7
(Spectrum Plus).2 which added more fuel to the fire. Here, a
There was a debenture between borrower issued a debenture to Barclays
Spectrum Plus and NatWest secured by a over all its present and future book debts.
charge, which was intended to be fixed Under the charge instrument, the
over the present and future book debts of borrower had to pay the proceeds of the
Spectrum. The contract between the debts into an account of the bank.8 The
parties prohibited the borrower from company was also prohibited from
charging or assigning the debts. There was assigning book debts as a charge to a third
also an obligation on the borrower to pay party. On this basis, the Court of Appeal
the proceeds into an account of the bank. decided that the charge was fixed and held
Although this would appear to be more that the book debts can be granted under a
like a fixed charge, the debenture did not fixed charge. This became a landmark case
prohibit the borrower from dealing with because for the first time, it was decided
the bank account. The issue in the case was that a charge over book debts could be
whether the charge over the book debts fixed!
amounted to a fixed charge as intended by Re Brightlife Ltd9 confirmed that labels
the parties, or whether it was a floating should not play a significant role in
charge.3 The case reached the House of deciding the nature of the charge as
Lords and discussed other significant opposed to the characteristics and degree
cases which are considered below. of control over the proceeds. As a result of
According to Re Yorkshire Woolcombers this case, lenders attempted to create a
Association Ltd4 book debts fall in the hybrid type of charge dividing debts into
category of fluctuating assets and there- receivables and its proceeds.
fore they are security under a floating Receivables ought to be covered by a
charge. In that case, the debtor granted fixed charge whilst proceeds are more
book debts as a security by deed to trustees appropriate to be covered by a floating
who were able to appoint a receiver charge. This innovation was considered by
provided they give sufficient notice to the the Court of Appeal in Re New Bullas
company.5 It was also implied that the Trading.10 In this case, a compromise
borrower could receive the debts and deal between the borrower and lender was
with its proceeds. The House of Lords held achieved by giving the right to the
that there was a floating charge, since the borrower to deal with the book debts in the
borrower had freedom to operate with the ordinary course of business whilst
charged property in the ordinary course of granting a fixed charge to the lender.
business dealings. It is not the label which However, this was not commercially
the parties may put on the charge which is satisfactory. The Court of Appeal held
the most important, but the characteristic that book debts are indivisible because
of the charge determined through detailed one cannot exist without another and

1 Wen Yie Tang, ‘The elusive floating charge’, The Student Journal of Law, p.5, available at
<http://www.sjol.co.uk/issue-6/the-elusive-floating-charge>.
2 National Westminster Bank plc v Spectrum Plus Limited and Others [2005] UKHL 41.
3 Sara Worthington, ‘An ‘Unsatisfactory Area of the Law’ — Fixed and Floating Charges Yet Again’
International Corporate Rescue, Special Issue, Chase Cumbria Company (Publishing) Ltd 2010, 1–10 p. 1.
4 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.
5 Ibid.
6 Ibid.
7 Siebe Gorman & Co v Barclays Bank [1979] 2 Lloyd’s Rep 142.
8 Ibid.
9 Re Brightlife Ltd [1986] 3 All ER 673.
10 Re New Bullas Trading Ltd [1994] 1 BCLC 485.

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therefore, this hybrid type of charge was To conclude, a charge must be examined
found to be invalid.1 on the two-fold test established in
The same type of conundrum was later Agnew10:
considered in the case of Agnew v 1) the charge instrument must be
Commissioner of Inland Revenue2(Agnew) analyzed through parties’ intention,
before the Privy Council, which held that rights and duties; and
separating debts into two categories did 2) the charge will be considered with
not make commercial sense. Lord Millet regard to the established rights and
emphasised the importance of the third obligations of the parties.
fold of the test created in Re Yorkshire The main difference between fixed and
Woolcombers,3 and he created a new floating charges is the freedom and
two-fold test.4 Firstly, the court must control exercisable upon the charge: in the
examine the charge instrument and the fixed charge, the lender has control over
parties intention through the language the charged assets, whereas in the floating
used in order to determine the parties’ charge, the borrower has freedom to deal
rights and obligations; and secondly, to with the assets in their normal course of
base the type of charge on the established dealings.
rights and obligations.5 2. The disadvantages of the floating
Returning to the issue in Spectrum charge to a lender
Plus, the Court held that the charge was It is very important to consider the
floating on the basis that where a borrower distinction between fixed and floating
can deal with the proceeds of the debts in charges before examining the
the ordinary course of business, the disadvantages of the floating charge.
charge will be held as floating, unless the A floating charge is attractive for a
chargee intervenes.6 Spectrum Plus borrower as it allows a company to be
follows principles established in Agnew.7 leveraged without even having a specific
The House of Lords held that despite the
fact that the charge was expressed to be asset, such as freehold factory. As can be
fixed, the borrower was free to deal with seen, book debts or stock can be granted
the proceeds of the charge, which is the for security under a floating charge. Not
main characteristic of the floating charge. only does a floating charge allow
Therefore, The House of Lords held the borrowers such freedom, it also entitles
charge to be floating, overturning the them to deal with the charged assets in its
decision in New Bullas. Also, the decision ordinary course of business. This is crucial
in Siebe Gorman was overruled based on to the chargor from a commercial point of
the Agnew principles.8 view, but it less attractive to the chargee
Spectrum Plus has become a very as its money can be at much more risk than
significant case already because it has under a more certain fixed charge.
attempted to stabilize the law in the area Another disadvantage is when
of fixed/floating charges and also it has liquidation procedures of a company
considered the test of control.9 The control commence — the floating charge can be
over the book debts was in the hands of the more easily set aside compared to a fixed
borrower resulting in the charge being charge (S. 245 of Insolvency Act 1986)11.
held to be floating. The Act states that a charge created 12

1 Ibid.
2 Agnew v Commissioner of Inland Revenue [2001] UKPC 28 (Re Brumark Investments Ltd).
3 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.
4 Agnew v Commissioner of Inland Revenue [2001] UKPC 28.
5 Ibid.
6 National Westminster Bank Plc v Spectrum Plus Limited and Others [2005] UKHL 41.
7 Agnew v Commissioner of Inland Revenue [2001] UKPC 28.
8 Ibid.
9 Tang., op. cit., p. 11.
10 Agnew v Commissioner of Inland Revenue [2001] UKPC 28.
11 S. 245 Insolvency Act 1986.

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months before the insolvency procedures «The liquidator, administrator or receiver

started is invalid.1 shall make a prescribed part of the
Certainly, one of the major company’s net property available for the
disadvantages of the floating charge is its satisfaction of unsecured debts.»10 This
lower ranking compared to the fixed results in claims under floating charge to
charge. This means that if a floating be set aside although this provision applies
charge and a fixed charge are granted over only to floating charges created after
the same asset, the fixed charge will have 15 September 2003.11
a higher priority than the floating charge Expenses of administration/liquidation
and therefore the lender with a fixed are paid in preference before any claims
charge will recover its money first. can be made on property subject to a
Moreover, in the floating charge scenario floating charge.12 This clearly pushes a
in liquidation certain liabilities of the floating charge holder down the pecking
chargor will be met first before any order.
creditor will recover its stake as set out Another potential disadvantage, or at
below. Clearly, this can make a creditor least an administrative burden for a lender
more cautious when lending the money is that he must ensure that by taking a
protected by a floating charge. The security as a floating charge, that the
liabilities which rank before a floating charge is registered according to the rules
charge are: of Companies Act 2006.13 Failure to
— preferential creditors;2 register leads to the charge being
— unsecured claims;3 invalid.14 It can be seen that at the time
— expenses of administration/liquida- when all the floating charged assets must
tion.4 be registered, only certain types of the
Preferential creditors are named in fixed charge are required to be
S. 386 of Insolvency Act 1986.5 These are registered.15 The first registered charge is
contributions to occupational pension ranked higher to the second and so forth.
schemes and remuneration of some certain This places additional burden on the
level of employees.6 Before the Enterprise lender to control the borrower whether he
Act 2002 came into force, levies to the has registered the charge and whether the
Crown, i. e. income tax and VAT were also same asset has been already registered in
preferential.7 After their abolition pur- favour of another lender. Unregistered
suant to the Enterprise Act, these debts charges make the lenders completely
are now in the status of unsecured.8 unsecured and can cost them their
Unsecured claims have received investment. This is because they are the
protection under the so-called «Prescribed last in the queue to recover any money
Part» S. 176A of Insolvency Act 1986.9 under liquidation. Such lenders are

1 Ibid.
2 S. 40, S. 175 (2)(b) and Sch B1, para 65(2) of Insolvency Act 1986; and S. 754 Companies Act 2006.
3 S.176A of Insolvency Act 1986; Insolvency Act 1986 (Prescribed Part) Order 2003, SI 2003/2097.
4 Insolvency Act 1986, Sch B1, paras 70 and 99; Insolvency Act 1986, S. 176 ZA; Insolvency Act 1986,
Sch A1, para 20.
5 S. 386 Insolvency Act 1986.
6 Ibid.
7 Enterprise Act 2002.
8 Claire Martin-Royle, Floating charges — not necessarily what they say on the tin, Jones Day, p. 74,
available at <http://www.jonesday.com/files/Publication/60ba3b1a-58b3-42de-ab3d-c2d628af566c/
Presentation/PublicationAttachment/2f2c219d-6313-4f63-b93f-c70b9d3582a2/IHL157%20p73-75.pdf>.
9 S. 176A of Insolvency Act 1986 (Prescribed Part).
10 Ibid.
11 Claire Martin-Royle, op. cit. p. 74.
12 S. 176 ZA Insolvency Act 1986.
13 Companies Act 2006 Part 25 S. 861.
14 S. 874 Companies Act 2006.
15 S. 860 Companies Act 2006.

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considered to be lucky if they are able to with no need to wait until any of the above
recover anything after the claims of mentioned events happen. Upon crystalli-
secured lenders and other financial zation the contractual right of the chargor
liabilities have been satisfied.1 to deal with the charged property comes to
Furthermore, the floating charge an end and the chargee becomes fully
creates undesired consequences for secured.9
creditors in the control. For example, a To summarize, a fixed charge is
chargee appoints the receiver before or significantly more secured to the lender
after winding up the company. The other than a floating charge and is therefore more
creditor is also entitled to appoint the favourable. A floating charge involves a
receiver but will be overreached by the procedure for its registration and leaves
first receiver. This means that the second control of the charged assets in the hands of
receiver will have to step aside and deliver the borrower. Also, it is difficult to
possession of the assets to the first establish whether a floating charge over the
receiver in priority. Banks are therefore same asset has also been granted to another
more cautious and less keen to lend by way lender and has therefore created a queue of
of a floating charge as it causes creditors. Nevertheless, floating charge still
dependency on other lenders.2 exists and is frequent type of security in
A further disadvantage of floating business.
charges is the inherent uncertainty in 3. Ways to minimize the disadvan-
value of the floating assets compare to the tages
fixed charge property.3 The value of the The floating charge has been a subject
assets can only become certain upon the of considerable debate amongst lawyers,
moment of crystallization, which is the financiers and academics for over a
precise moment when a floating charge century and it is still creating some issues.
becomes fixed. It «crystallizes» in the Heavily criticized for its disadvantages to
following scenarios: the lender on the one hand, and supported
— when a chargee appoints a receiver;4 for its convenience and practicality to the
— in the case of appointment of an borrower on the other hand, it is still
administrator;5 frequently used as a security for debt
— when liquidation has commenced;6 financing. Whilst some have argued that
— upon cessation of chargor’s busi- floating charges should be abolished in
ness;7 favour of fixed charge,10 others argue for
Until quite recently these have been the a change to the law to make them more
only triggers of crystallization. However, transparent and easier to operate with.11
in the case of Re Brightlife,8 it became Over several decades, a number of
possible for the parties to determine the Committees have considered reforms of the
moment/reason for the crystallization floating charge concept and make it more

1 Gregory Mitchell, Angharad Start, ‘Fixed and Floating Charges after Spectrum’ (9 September
2005) New Law Journal 1309–1310 p. 1309.
2 William James Gough, Company Charges (first edn in 1978, Butterworths, second edn. 1996) 1146
p. 898.
3 Louise Gullifer, Jennifer Payne, Corporate Finance Law (published by Hart Publishing Ltd, 2011)
719 p. 244.
4 Janet Dine & Marios Koutsias, «Company Law», (7th edn, edited by Marise Cremona, published
Palgrave Macmillan, 2009) 340 p. 241.
5 Ibid., p. 241.
6 Ibid., p. 241.
7 Ibid., p. 241.
8 Re Brightlife Ltd [1986] 3 All ER 673.
9 Fire Nymph Products Ltd v Heating Centre Pty LtD (in liquidation) (1992) 7 ACSR 365 p.373 per
Gleeson C.J. See also Cretanor Maritime Co Ltd v Irish Marine Management Ltd [1978] 3 All ER 164
p. 173 per Buckley L.J.
10 David Cabrelli, «Joined up thinking? An analysis of the Scottish and English Law Commissions’
proposals for the reform of rights in security and charges granted by companies», Journal of Corporate
Law Studies, October 2004 Volume 4 Part 2, 385—420, p. 399.
11 Law Commission Consultation Paper, Registration of Security Interests: Company Charges and
Property other than Land: LCCP No. 164 (2002) p. 46.

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practical. Committees such as the Crowther filed and it also admits future charges to
Report on Consumer Credit of 1971,1 the be recorded.11
Halliday Report in 1986,2 the Diamond Despite numerous proposals to replace
Report in 19893 and more recently, the Law the current system of registration by the
Commission Consultation Paper 20024 notice-filing, all attempts have failed and
tackled in particular the problems floating charge registration is still
associated with registration of the floating required at Companies House pursuant to
charge. The proposals have included S. 860 of the Companies Act.12
replacing the registration process which was In its Discussion Paper 2, The City of
found to be out-of-dated and time London Law Society13 covered two key
consuming, with a simple notice-filing.5 policy issues which, in their opinion, must
A notice-filing system have already be tackled in order to reduce the problems
been established in America in 1952, in caused by imperfections of the floating
some provinces in Canada, New Zealand charge system. They are: the need for
and in a few other jurisdictions in the certainty of financial transactions and,
world.6 the funding of administrations.14 It has
Proponents of the notice-filing system been suggested that the distinction
argue that it will improve the efficiency.7 between fixed and floating charges must
They say, when the registration of the be drawn more clearly, the assets from
floating charge is mandatory and requires which the cost to administrators should be
the charge to be registered within 21 paid must be more precisely identified and
days,8 the notice-filing will be voluntary the small percentage of all charged assets
and therefore the creation of the charge should be paid.15
can be filed at any time.9 While the In my opinion, the floating charge
registration system places a burden in the should not be abolished because it is
case of a delay and can even make the clearly vital for the commercial
charge invalid, notice-filing will not transactions because it allows a business
create such consequences at all because it to be carried and at the same time debts to
will be voluntary.10 Also, the other be paid off. It also provides some form of
advantage according to the proponents of the security to a lender. The distinction
the notice-filing system is its flexibility. between fixed and floating charges have
Compared with the registration, where been drawn from the test established in
every single charge must be registered and the Re Yorkshire Woolcombers.16 Although
done so after its creation, a notice-filing a floating charge can be turned into fixed
system will allow multiply charges to be charge, before that it is a subject of

1 Crowther Committee 1971.

2 Halliday Report 1986.
3 Diamond Report 1989.
4 Law Commission Consultation Paper, op. cit.
5 Ibid., p. 80.
6 Ibid., p. 83.
7 Ibid., p. 84.
8 Companies Act S. 870.
9 Law Commission Consultation Paper, op. cit., p. 84.
10 Ibid., p. 82.
11 Ibid., p. 93.
12 Companies Act S. 860.
13 The City of London Law Society ‘Secured Transactions Reform: Discussion Paper 2 Fixed and
Floating Charges on Insolvency’ February 2014, available at <http://www. citysolicitors.org.uk/
attachments/article/121/20140219%20Secured%20Transactions%20Reform%20Discussion%20Paper
%202%20Fixed%20and%20floating%20charges%20v2.pdf>.
14 Ibid., p. 6.
15 Ibid., p. 7.
16 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.

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uncertainty. Surely, the issue can be 3) To be valid, the floating charge must
reduced at the moment of crystallization be registered. Failure to register within
but there is no need for the lender to take specified time limits can cause the charge to
high risk and wait until such moment be invalid and place a creditor in the status
arises. I believe, the parties should draft of insecurity.
a special clause in the charge instrument 4) Floating charges rank lower in
between the borrower and the lender and priority to the fixed charge creditors.
clearly specify the event/s which will 5) It can easier be set aside compared to
trigger the crystallization. According to a fixed charge.
Gullifer and Payne,1 such events which Particular attention has been devoted to a
could be specified in the clause are: company’s book debts and whether they can
creating a new charge over the same be considered falling under a fix charge or a
asset, cross-default, breach of prescribed floating charge. This question has been the
financial ratios, i.e. financial covenants. topic of significant debate for well over a
The power is within the parties own century until the decision in Spectrum Plus
control. Instead of spending too much which held that book debts fell under the
time, costs and energy on defining the floating charge and not the fixed charge.4
charge which is likely to be disapproved This case established that the courts should
by a Judge, the parties are able to reduce look at the parties’ rights, obligations and
the uncertainties of the charge their conduct with regard to the charged
themselves when drafting the contract by assets to decide whether there is a fixed or a
inserting such a clause. This will give floating charge.
certainty to both parties and security to To minimize the disadvantages of a
the lender today. floating charge, several school of thoughts
Conclusion
When a company raises its capital by academics and legal practitioners have
through the issue of a debenture it grants been put forward. These have included the
a charge as a form of security to the radical proposal to abolish the floating
lender. There are two types of charge: charge once and for all, which, I do not
fixed and floating. The test to agree with. In addition, it has also been
differentiate both of them had been proposed to replace the registration system
established in Re Yorkshire Woolcombers2 by the notice-filing and to improve the law
and later confirmed by Spectrum Plus.3 A so as to clarify the distinction between fixed
floating charge is less favourable to the and floating charges. In my view, parties
lender because: should use the opportunity given by Re
1) The borrower has freedom to deal Brightlife5 to draft a clause in the charge
with the charged assets in the ordinary instrument which would specify when and in
course of business and has control over what circumstances a floating charge
them. becomes a fixed charge. This will enable the
2) The value of the charged assets is parties to not have to wait until the events
uncertain until the moment of of default but will help to ensure that the
crystallization which can be too late for lender is secured and protected prior to the
the lender to seize the assets and recover possible hardship.
its outstanding debt.

1 Gullifer and Payne, op. cit., p. 244.

2 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.
3 National Westminster Bank plc v Spectrum Plus Limited and Others [2005] UKHL 41.
4 Ibid.
5 Re Brightlife Ltd [1986] 3 All ER 673.

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BIBLIOGRAPHY
Cases
Agnew v Commissioner of Inland Revenue [2001] UKPC 28 (re Brumark Investments Ltd).
Cretanor Maritime Co Ltd v Irish Marine Management Ltd [1978] 3 All ER 164.
Fire Nymph Products Ltd v Heating Centre Pty LtD (in liquidation) (1992) 7 ACSR 365.
Levy v Abercorris Slate and Slab Co (1837) 37 Ch. D.
National Provincial and Union Bank of England v Charnley [1924] 1 KB 431.
National Westminster Bank plc v Spectrum Plus Limited and Others [2005] UKHL 41.
Re New Bullas Trading Ltd [1994] 1 BCLC 485.
Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.
Siebe Gorman & Co v Barclays Bank [1979] 2 Lloyd’s Rep 142.
Re Brightlife Ltd [1986] 3 All ER 673.
Smith v Bridgend County Borough Council [2002] 1 AC 336.
Legislation
Companies Act 2006.
Enterprises Act 2002.
Insolvency Act 1986.
Books
Dine, J., Koutsias, M., Company Law (7th edn, edited by Marise Cremona, published Palgrave
Macmillan, 2009) 340.
French, D., Mayson, S., Ryan, C., Company Law (29th edn., Oxford University Press,
2012—2013) 747.
Gullifer, L., Payne, J., Corporate Finance Law (published by Hart Publishing Ltd, 2011) 719.
Gough W. J., Company Charges (first edn. 1978, Butterworths, second edn.1996) 1146.
Hudson, A., The Law of Finance (first edition, Sweet & Maxwell, published in 2009, reprinted
in 2012) 1428.
McCormack, G., Registration of Company Charges (3rd edn., Jordans Publishing Limited,
2009) 321.
Wood, P., Law and Practice of International Finance (University edn., 2008, Sweet &
Maxwell, reprinted in 2011) 600.
Journal Articles
Addy, C., ‘Fixed and Floating Charges over Book Debts — the Implications of the House of
Lords’ Decision in Re Spectrum Plus Limited [2005] KHL 41, Part I’ (2010) Special Issue,
International Corporate Rescue 11—18.
Addy, C., ‘Fixed and Floating Charges over Book Debts — the Implications of the House of
Lords’ Decision in Re Spectrum Plus Limited [2005] KHL 41, Part II’ (2010) Special Issue,
International Corporate Rescue 19—22.
Armour, J.,‘The Chequered History of the Floating Charge’, (2004) 13 Griffith Law Review, 25
Armour, J., ‘Should We Redistribute in Insolvency?’ (March 2006), available at SSRN:
<http://ssrn.com/abstract=901451 or http://dx.doi.org/10.2139/ssrn.901451>.
Atherton, S., Mokal, R., ‘Charges over Chattels — Issues in the Fixed/Floating Jurisprudence’
(September 2004), available at SSRN: <http://ssrn.com/abstract=593448 or http://dx.doi.org/
10.2139/ssrn.593448>.
Cabrelli D., ‘Joined up thinking? An analysis of the Scottish and English Law Commissions’
proposals for the reform of rights in security and charges granted by companies’ (October, 2004)
4 Part 2 Journal of Corporate Law Studies October 385—420, p. 399.
Lowe, R., West, I., Smith, A., Wiltshire, P., ‘Update on Fixed and Floating Charges —
Spectrum Plus Ltd’ (2004) 25 (2) Credit Control 14.
McCormack, G., ‘The Floating charge and the Law Commission consultation paper on
registration of security interests’ (2003) 3 May Insolvency Lawyer 92—100.
Mitchell, G., Start, A., ‘Fixed and Floating Charges after Spectrum’ (9 September 2005) New
Law Journal 1309—1310.
Thai, L., ‘Charges over Book Debts in the United Kingdom and Australia: the Way Forward’
(2007) (4) MqJBL 267—294, 267.
Tang, W.Y., ‘The elusive floating charge’, The Student Journal of Law, available at
<http://www.sjol.co.uk/issue-6/the-elusive-floating-charge>.

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̲ÆÍÀÐÎÄÍÅ ÏÐÀÂÎ

Walker, P., ‘Floating Charges that sink’ (February 2002) Credit Management, 28—29.
Walker, P., ‘Floating Charges — A change of priorities’ (March 2006) Credit Management,
38—39.
Worthington, S., ‘An ‘Unsatisfactory Area of the Law’ — Fixed and Floating Charges Yet
Again’ (2010) Special Issue, International Corporate Rescue, 1—10.
Other
Company Law Steering Group: Modern Company Law for a Competitive Economy Registration
of Company Charges (2000).
Claire Martin-Royle, Floating charges — not necessarily what they say on the tin, Jones Day,
available at <http://www.jonesday.com/files/Publication/60ba3b1a-58b3-42de-ab3d-c 2d628af566c/
Presentation/PublicationAttachment/2f2c219d-6313-4f63-b93f-c70b9d3582a2/IHL157%20p73-
75.pdf>.
Field Fisher Waterhouse, Fixed and Floating Security, June 2011, can be found at <http://
www.ffw.com/pdf/Fixed and Floating Security.pdf>.
Law Commission Consultation Paper, Registration of Security Interests: Company Charges and
Property other than Land: LCCP No. 164 (2002).
The City of London Law Society ‘Secured Transactions Reform: Discussion Paper 2 Fixed and
Floating Charges on Insolvency’ February 2014, available at <http://www.citysolicitors.org.uk/
attachments/article/121/20140219%20Secured%20Transactions%20Reform%20Discussion%2
0Paper%202%20Fixed%20and%20floating%20charges%20v2.pdf>.
Reports
Crowther Report on Consumer Credit of 1971.
Diamond Report 1989.
Halliday Report 1986.

Æóðàâåëü Ìàð’ÿíà. Ìåõàí³çìè çàáåçïå÷åííÿ áîðãîâîãî çîáîâ’ÿçàííÿ äëÿ êðåäèòîðà

â êîðïîðàòèâíîìó ô³íàíñîâîìó ïðàâ³ Âåëèêîáðèòàí³¿.
Îá’ºêòîì äîñë³äæåííÿ äàíî¿ ñòàòò³ º äâà âèäè çàáåçïå÷åííÿ áîðãîâîãî çîáîâ’ÿçàííÿ â
êîðïîðàòèâíîìó ô³íàíñîâîìó ïðàâ³ Âåëèêîáðèòàí³¿, — öå òàê çâàí³ «ô³êñîâàíå» çàáåç-
ïå÷åííÿ òà «ïëàâàþ÷å» çàáåçïå÷åííÿ. Àâòîðîì ðîçãëÿíóòî ïðèðîäó «ïëàâàþ÷îãî» çàáåç-
ïå÷åííÿ òà ïðîâåäåíèé äåòàëüíèé àíàë³ç â³äìåæóâàíü «ô³êñîâàíîãî» â³ä «ïëàâàþ÷îãî»
çàáåçïå÷åíü, — ïèòàííÿ, ùî ñëóãóâàëî òåìîþ äåáàò³â ïðîòÿãîì á³ëüøå ñîòí³ ðîê³â, òà,
ïðîòå, çàëèøàºòüñÿ öåíòðàëüíîþ òåìîþ áàãàòüîõ äèñêóñ³é íà ñüîãîäí³. Àíàë³ç âèêëà-
äåíèé íà îñíîâ³ ³ëþñòðàö³é íàéá³ëüø çíàêîâèõ ïðåöåäåíò³â â äàí³é ã³ëö³ ïðàâà. Òàêîæ
ïðîàíàë³çîâàí³ íåäîë³êè «ïëàâàþ÷îãî» çàáåçïå÷åííÿ äëÿ êðåäèòîðà òà ðîçãëÿíóò³ øëÿ-
õè ùîäî ¿õ ì³í³ì³çàö³¿ ç ïîäàëüøèì âèêëàäåííÿì àâòîðñüêî¿ òî÷êè çîðó.
Êëþ÷îâ³ ñëîâà: «ô³êñîâàíå» çàáåçïå÷åííÿ, «ïëàâàþ÷å» çàáåçïå÷åííÿ, áîðãîâå çîáîâ’ÿ-
çàííÿ, çàñòàâîäàâåöü, çàñòàâîäåðæàòåëü, êðåäèòîð, áîðæíèê, êîíòðîëü íàä çàñòàâ-
íèì ìàéíîì.
Æóðàâåëü Ìàðüÿíà. Ìåõàíèçìû îáåñïå÷åíèÿ äîëãîâîãî îáÿçàòåëüñòâà äëÿ êðåäèòî-
ðà â êîðïîðàòèâíîì ôèíàíñîâîì ïðàâå Âåëèêîáðèòàíèè.
Îáúåêòîì èññëåäîâàíèÿ äàííîé ñòàòüè ÿâëÿþòñÿ äâà âèäà îáåñïå÷åíèÿ äîëãîâîãî îáÿçà-
òåëüñòâà â êîðïîðàòèâíîì ôèíàíñîâîì ïðàâå Âåëèêîáðèòàíèè, — ýòî òàê íàçûâàåìûå
«ôèêñèðîâàííîå» è «ïëàâàþùåå» îáåñïå÷åíèå. Àâòîðîì ðàññìîòðåíà ïðèðîäà «ïëàâàþùå-
ãî» îáåñïå÷åíèÿ è ïðîâåäåí äåòàëüíûé àíàëèç ðàçëè÷èé ìåæäó «ïëàâàþùèì» è «ôèêñè-
ðîâàííûì» îáåñïå÷åíèÿìè, — âîïðîñ, êîòîðûé ñëóæèë òåìîé äåáàòîâ íà ïðîòÿæåíèè
áîëåå ñîòíè ëåò è êîòîðûé äî ñèõ ïîð ÿâëÿåòñÿ öåíòðàëüíîé òåìîé ìíîæåñòâåííûõ
äèñêóññèé. Àíàëèç ïðîèçâåäåí íà îñíîâàíèè èëëþñòðàöèé íàèáîëåå çíàêîâûõ ïðåöåäåí-
òîâ â äàííîé îòðàñëè ïðàâà. Òàêæå ïðîàíàëèçèðîâàíû íåäîñòàòêè «ïëàâàþùåãî» îáåñ-
ïå÷åíèÿ äëÿ êðåäèòîðà è ðàññìîòðåíû ïóòè êàñàòåëüíî èõ ìèíèìèçàöèè ñ äàëüíåéøèì
èçëîæåíèåì àâòîðñêîé òî÷êè çðåíèÿ.
Êëþ÷åâûå ñëîâà: «ôèêñèðîâàííîå» îáåñïå÷åíèå, «ïëàâàþùåå» îáåñïå÷åíèå, äîëãîâîå îáÿ-
çàòåëüñòâî, çàëîãîäàòåëü, çàëîãîäåðæàòåëü, êðåäèòîð, äîëæíèê, êîíòðîëü íàä çàëî-
æåííûì èìóùåñòâîì.

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