Carse v Coppen [1950] ScotCS CSIH_5 (08 December 1950)

Carse v Coppen [1950] ScotCS CSIH_5 (08 December 1950)

A Scottish company cannot create a valid floating charge over its assets, whether in Scotland or England, because Scots law does not recognise floating charges and does not empower Scottish companies to create them. The law of the company's domicile governs its powers, and registration in England does not cure the incapacity under Scots law.

Citation
[1950] ScotCS CSIH_5
Parties
Petitioner: Carse; Respondent: Coppen
Jurisdiction
Scotland
Judgment Date
08 December 1950
Procedural Posture
Petition Under Companies Act 1948 S.307 / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, Court of Session
Outcome
reclaiming motion refused; Lord Ordinary's decision affirmed
Legal Topics
Floating Charges, Cross Border Security Interests, Winding Up of Companies, Conflict of Laws, Registration of Charges, Corporate Powers
Company Law Private International Law Insolvency Law Floating Charges Cross Border Security Interests Winding Up of Companies Conflict of Laws Registration of Charges +1 more

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Parties

Carse

Petitioner

Coppen

Respondent

Procedural Posture

Petition Under Companies Act 1948 S.307 / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, Court of Session

Legal Issues

  1. 1 Whether a Scottish company can create a valid floating charge over its assets situated in England by debenture executed in Scotland in English form and registered in England.
  2. 2 Whether the law of the company's domicile (Scotland) or the law of the situs of the assets (England) governs the validity of the floating charge.

Ratio Decidendi

A Scottish company cannot create a valid floating charge over its assets, whether in Scotland or England, because Scots law does not recognise floating charges and does not empower Scottish companies to create them. The law of the company's domicile governs its powers, and registration in England does not cure the incapacity under Scots law.

Court Disposition

reclaiming motion refused; Lord Ordinary's decision affirmed

Orders

  • plea in law for respondents repelled
  • finding made in accordance with the prayer of the petition (i.e., debentures did not create a valid floating charge over English assets)