Charges over Chattels – Issues in the Fixed/Floating Jurisprudence


Much of the recent debate as to the criteria which determine whether a charge is properly characterised as fixed or floating has revolved around charges over book debts or other receivables. Charges over chattels have received somewhat less attention, even though an attempt to create a fixed charge over chattels gives rise to interesting questions, some of which do not arise when the collateral consists simply of receivables. While some of these questions have received judicial attention in recent years, others are only now starting to be considered. In this paper, we provide an overview of some of the most important factors which would have to be taken into account when advice is sought as to whether a charge over chattels is fixed or floating. The paper also brings to bear upon this issue principles from other parts of legal doctrine, the relevance of which has not so far been noticed in this context. Where there is a conflict in the authorities, we present our view as to where lies the balance of arguments. We also explain the method to be employed when a debenture is construed in order to determine the proper characterisation of a charge contained in it, paying particular attention to the relevance of the conduct of the parties subsequent to its execution. The paper concludes by summarising our discussion in the form of nine propositions.


Banking and Finance Law | Bankruptcy Law | Business Organizations Law | Commercial Law | Property Law and Real Estate | Secured Transactions

Date of this Version

May 2006