Fixed charge is attached to specific property, identifiable and creditors consent are to be obtained for disposal of object of fixed charge. Floating charge is attached on company's future and present assets. It changes during the company's ordinary course of business, and company can only dispose the assets after they are crystallized.
According to section 108, charges must be registered in order for subsequent creditor to have knowledge of the previous charges created on the property. It must be registered within 30 days of its creation(Re Esberger & Son Ltd v. Capital and Countries Bank), failure to comply might be found guilty against section 110. It must be registered by interested party, either company or the creditor. If not, charges are invalid, creditors become unsecured. However, creditor can apply to court for late registration but subject to court's approval -section 114.
First in creation prevails- Re Benjamin Cope & Sons Ltd .If fixed charge(FC)1 v FC2, fixed charge 1 prevails provided that it is created and registered first. Unreg1 v. reg2- Reg2 prevails unless creditors of reg2 has actual constructive notice of existence of unreg1. As what is observed in United Malayan Banking Corporation Bhd v. Aluminex (M) Sdn Bhd, fixed charge has higher priority than floating charge unless floating charge is supported by a negative pledge clause(Re Valletort Sanitary Steam Laundry Co Ltd) and it is registered(Re Siebe Gorman Co Ltd v. Barclays Bank)
Summary:
FC1 v FC2= FC1 (First in creation prevails)
FC2 v FLC1= FC1 (Fixed charge has higher priority over floating charge)
Unreg1 v Reg2= Reg2 (Registration prevails, unless reg2 has constructive notice of unreg1)
Registered FLC1 v. Unregistered FC1? =Maybe it's registration FLC1
FLC1 v. FC1=FLC1 if supported by negative pledge clause.
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