30 March 2007
Russell-Cooke Trust Co v Elliott [2007] All ER (D) 166 (Mar)
One of the essential characteristics of a floating charge, distinguishing it from a fixed charge, is the ability of the chargor to dispose of and deal with the charged asset, and, if necessary, to remove it from the security without first requiring the permission or consent of the chargee.
The nature of the agreement, rather than the labels assigned by the parties, falls to be considered. It is possible, in appropriate circumstances, that a legal charge, labelled and described as ‘floating’, is in reality a fixed charge, having regard to the totality of the documentation creating the charge and the rights and obligations arising from that documentation.
