The Russell Cooke Trust Company Ltd. v Elliott [2007] EWHC 1443 (Ch) (09 March 2007)

The Russell Cooke Trust Company Ltd. v Elliott [2007] EWHC 1443 (Ch) (09 March 2007)

The secondary security in the seven loans is a fixed charge because the restrictions imposed on the chargor's ability to deal with the assets are inconsistent with the concept of a floating charge; the true legal nature of the charge is fixed regardless of the parties' labelling.

Citation
[2007] EWHC 1443 (Ch)
Parties
Claimant: The Russell Cooke Trust Company Limited; Defendant: Elliott; Defendant: Fiona J McKenzie
Jurisdiction
England and Wales
Judgment Date
09 March 2007
Procedural Posture
Application / Interlocutory Determination
Outcome
Determination that the secondary security is a fixed charge.
Legal Topics
Fixed Vs Floating Charge, Priority of Claims, Security Interests, Distribution of Realised Assets
Property Law Trusts and Equity Secured Transactions Fixed Vs Floating Charge Priority of Claims Security Interests Distribution of Realised Assets

Case Brief

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Parties

The Russell Cooke Trust Company Limited

Claimant

Elliott

Defendant

Fiona J McKenzie

Defendant

Procedural Posture

Application / Interlocutory Determination

Legal Issues

  1. 1 Whether the secondary security in seven loans is a fixed or floating charge
  2. 2 How the fund of £800,000 should be distributed among lenders under seven discrete charges

Ratio Decidendi

The secondary security in the seven loans is a fixed charge because the restrictions imposed on the chargor's ability to deal with the assets are inconsistent with the concept of a floating charge; the true legal nature of the charge is fixed regardless of the parties' labelling.

Court Disposition

Determination that the secondary security is a fixed charge.

Orders

  • The charges created over the secondary security in this case are fixed and not floating charges.
  • Further submissions to be heard regarding the mathematics of distribution.