Ferrier v Bottomer

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies, Windeyer and Owen JJ.

FERRIER v. BOTTOMER

(1972) 126 CLR 597

25 February 1972

Companies

Companies—Debentures—Property charged and chargeable—After-acquired property—Default—Conversion of floating charge into fixed charge.

Decisions

February 25
The following written judgments were delivered : -
BARWICK C.J. The relevant parts of a trust deed by which assets of Australian Factors (Queensland) Pty. Ltd. were charged to secure moneys provided by stockholders and the facts which have given rise to this litigation are fully set out in the reasons for judgment prepared by my brother Menzies which I have had the advantage of reading. The question is whether two sums of money, the proceeds of debts due to the company, which have come to the hands of the receiver and manager of the company in Queensland are assets of the company in Queensland charged with the payment of money to the stockholders. (at p603)

2. The charge was a floating charge which became a fixed charge before these moneys came to hand in Queensland. The appellant's submission has been that the charge was limited to those assets which before it became a fixed charge were in Queensland and employed by the company in its business activities in that State. (at p603)

3. The question, however, which the litigation raises must be answered by construction of the language of the trust deed by which the charge was created. It is the description of the property charged, rather than the nature of the charge created, which will supply the answer. After consideration I have come to the conclusion that the sums of money in question do fall within the description of the property charged. That description included present and future assets of whatsoever kind in the State of Queensland. The only limitation on the generality of that description was the location of the asset. That description, in my opinion, was just as applicable and operative when the charge became a fixed charge as it was when the charge remained a floating charge. The language of the description cannot be construed in my opinion as limited to those assets in Queensland which were at any time subject to the floating charge. Upon the charge becoming a fixed charge it spoke for the future according to its terms. Thus after-acquired property became charged as it came into existence in Queensland, or came within Queensland. It cannot matter, in my opinion, whence such property was derived. The description merely requires it to be an asset of the company situate in Queensland. (at p603)

4. I therefore agree with the conclusions which my brother Menzies has reached and I agree generally with the reasons he gives. However, while I agree that much of the reasoning of Russell and Sellers L.JJ. in N. W. Robbie &Co. Ltd. v. Witney Warehouse Co. Ltd. (1963) 1 WLR 1324 ; (1963) 3 All ER 613 supports the above-mentioned conclusion, I would not wish to be taken as accepting the decision…