ABSTRACT
The floating charge has been the mainstay of bank finance in England for over a century – so much so that it has been described as the workhorse of the banking industry.1 It permits the entirety of a company’s business operations to be charged by the use of a simple formula and, moreover, the security can extend to later advances made by the creditor as well as covering property subsequently acquired by the debtor. Not all common law jurisdictions, however, are still under the embrace of the floating charge. The Canadian common law provinces, including Ontario, the most populous and economically the most important, have adopted a personal property security regime along the lines of Art 9 of the US Uniform Commercial Code.2 The same applies with respect to New Zealand though, at the time of writing, the New Zealand legislation is not in force.3 An Art 9-type security regime is based around two fundamental principles; namely, a comprehensive register of security interests with a statutory definition of ‘security interest’ and secondly, a principle of ‘notice’ rather than ‘transaction’ filing with priorities between competing security interests generally determined by the application of a ‘first-to-file’ priority rule. Given that these leading common law jurisdictions have abandoned their English law roots in this area, this chapter addresses the question whether there is a continued place for an English-style floating charge in a security regime based on Art 9?4
