CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
1 Bridge Street West Manchester M60 9DJ |
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B e f o r e :
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Re: PROPERTY EDGE LETTINGS LIMITED (1) SAW (SW) 2010 LIMITED (2) NEIL WILSON ACCOUNTANCY LIMITED |
Applicants |
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(1) SIMON WILSON, ANNE 0’'KEEFE & FRASER GREY (Joint Administrators of Property Edge Lettings Limited) (2) NATIONWIDE BUILDING SOCIETY |
Respondents |
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Telephone: 01642 232324
Facsimile: 01642 244001
Denmark House
169-173 Stockton Street
Middlehaven
Middlesbrough
TS2 1BY
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Mr Wilson Horne for the Respondents
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Crown Copyright ©
i. A declaration that the Nationwide, as successor to Derbyshire Building Society, did not hold an enforceable and/or qualifying floating charge over the property of PEL for the purposes of paragraph 14 of Schedule B1 to the Insolvency Act 1986 on the 27th January 2012 so that it had no power, at that time, to appoint Mr Wilson, Miss O’'Keefe and Mr Gray as the joint administrators of PEL;ii. A declaration that at all times the purported administration of PEL had been a nullity and that the purported joint administrators were trespassers on PEL’'s property;
iii. An order against the purported joint administrators requiring them to surrender possession of, and withdraw from, all of PEL’'s property forthwith;
iv. An order joining PEL to these proceedings for the purposes of determining what damages it might be due; and
v. General damages for trespass claimed on behalf of PEL, and special damages arising from PEL’'s loss of a chance.
“"By way of a floating charge the undertaking and all other property assets and rights of the borrower not effectively charged above, both present and future.”"
“"… by way of floating charge the undertaking and all other property assets and rights of the company not effectively charged by the provisions referred to above, both present and future.”"
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"If, without the prior written consent of the lender, the borrower encumbers howsoever the property subject to the floating charge or if any person levies or attempts to levy any distress, sequestration or other process against the said property the said floating charge shall, automatically without notice, operate and have effect as a fixed charge instantly such event occurs.”"
“"The permissible conceptual limits of automatic crystallisation were tested in the Australian case of Fire Nymph Products. The clause in question sought to produce the effect that a floating charge automatically crystallised and became fixed ‘'at the moment immediately prior to’' any dealing with the charged property other than in the ordinary course of the company’'s business. The clear intent was to produce the consequence that the extraordinary dealing which resulted in crystallisation would not itself escape the consequences of that crystallisation
It was held that the clause could not operate so as to bring about a retrospective crystallisation but that it was possible for automatic crystallisation to occur contemporaneously with the crystallising event; such that the assets passed to the disponee, subject to a fixed charge. How the third party disponee was affected by this state of affairs would depend upon the nature of the title which he acquired and whether he was aware of the crystallisation of the charge.”"
“"A floating charge was given by a retailer of heating units in favour of its supplier. The charge provided to the effect that the chargor was not at liberty to create any other charge in priority to the floating charge and that, if the chargor dealt with the charged property other than in the ordinary course of its business, the floating charge would ipso facto become fixed to the charged property ‘'at the moment immediately prior to such dealing’'.”"
i. A first ranking mortgage debenture over PEL…iii. …First fixed charge by way of legal mortgage in Derbyshire’'s favour over the property and all fixtures and fittings, such legal mortgage to be in the society’'s standard form; and
iv. A personal guarantee given by Shaun Kelly limited to £1 million.
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"13.1 The execution of this agreement and the security documents are or will be apparently authorised constituting legally binding obligations on your part.”"“"13.2 Neither the execution of this agreement nor the security documents will result in your being in breach of any law, statute, regulation, mortgage or debenture”"; and
“"13.7 You are not in default in respect of any other existing financial facility nor will the entering into this agreement or the making of the advance constitute an event of default under such facility.”"
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"Good and marketable title to the charged assets (which are defined as meaning “"all the property rights and assets of the company subject to, or expressed to be subject to, the security interest created by this debenture”") and has full power and authority to grant to the lender the security interest in the charged assets pursuant to this debenture and to execute deliver and perform its obligations hereunder without the consent or approval of any other person other than any consent or approval which has been obtained.”"