Agnew et al. v. New Zealand (Commissioner of Inland Revenue) et al., (2001) 277 N.R. 360 (PC)

• Jurisdiction: Federal Jurisdiction (Canada)
• Citation: (2001), 277 N.R. 360 (PC)
• Date: 05 June 2001

Agnew v. N.Z. (2001), 277 N.R. 360 (PC)

MLB headnote and full text

Richard Dale Agnew and Kevin James Bearsley (appellants) v. The Commissioner of Inland Revenue and Official Assignee for the estate in bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle (respondents)

(Privy Council Appeal No. 35 of 2000)

Indexed As: Agnew et al. v. New Zealand (Commissioner of Inland Revenue) et al.

Judicial Committee of the Privy Council

Lord Bingham of Cornhill, Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hobhouse of Woodborough and Lord Millett

June 5, 2001.

Summary:

The issue in this case was whether a charge over the uncollected book debts of a company which left the company free to collect the debts and use the proceeds in the ordinary course of its business was a fixed charge or a floating charge.

The Judicial Committee of the Privy Council held that the charge created by the debenture in this case was a floating charge.

Company Law - Topic 5431

Borrowing - Debentures - Fixed vs. float­ing charge - The Judicial Committee of the Privy Council traced the history of the concept of a floating charge with particular attention to charges over book debts - See paragraphs 4 to 50 - The court discussed the two-step process it used to determine whether a charge was floating or fixed - See paragraph 32.

Company Law - Topic 5431

Borrowing - Debentures - Fixed vs. float­ing charge - The issue in this case was whether a charge over the uncollected book debts of a company which left the company free to collect the debts and use the proceeds in the ordinary course of its business was a fixed charge or a floating charge - The Judicial Committee of the Privy Council held that the charge created by the debenture in this case was a float­ing charge - See paragraphs 1 to 50.

Cases Noticed:

New Bullas Trading Ltd., Re, [1994] 1 B.C.L.C. 449 (C.A.), not folld. [para. 3].

Panama, New Zealand and Australian Royal Mail Co., Re (1870), 5 Ch. App. 318, refd to. [para. 5].

Florence Land and Public Works Co, Re; Ex parte Moor (1878), 10 Ch. D. 530, refd to. [para. 5].

Hamilton's Windsor Ironworks Co., Re; Ex parte Pitman & Edwards (1879), 12 Ch. D. 707, refd to. [para. 5].

Colonial Trusts Corp., Re; Ex parte Bradshaw (1879), 15 Ch. D. 465, refd to. [para. 5].

Holroyd v. Marshall (1862), 10 H.L. Cas. 191, refd to. [para. 5].

Tailby v. Offical Receiver (1888), 13 App. Cas. 523, refd to. [para. 5].

Biggerstaff v. Rowatt's Wharf Ltd., [1896] 2 Ch. 93, refd to. [para. 7].

General South American Co., Re (1876), 2 Ch. D. 337, refd to. [para. 10].

Salomon v. Salomon, [1897] A.C. 22, refd to. [para. 10].

London Pressed Hinge Co., Re, [1905] 1 Ch. 576, refd to. [para. 10].

Governments Stock and Other Securities Investment Co. v. Manila Railway Co., [1897] A.C. 81, refd to. [para. 11].

Yorkshire Woolcombers Association Ltd., Re, [1903] 2 Ch. 284, refd to. [para. 12].

Illingworth v. Houldsworth, [1904] A.C. 355, refd to. [para. 15].

Evans v. Rival Granite Quarries Ltd., [1910] 2 K.B. 979, refd to. [para. 16].

Siebe Gorman & Co. v. Barclays Bank Ltd., [1979] 2 Lloyd's Rep. 142, refd to. [para. 19].

Keenan Brothers Ltd., Re, [1986] B.C.L.C. 242 (Ire. S.C.), refd to. [para. 22].

Hart v. Barnes (1982), 7 A.C.L.R. 310, refd to. [para. 23].

Brightlife Ltd., Re, [1987] Ch. 200, refd to. [para. 24].

Supercool Refrigeration and Air Conditioning v. Hoverd Industries Ltd., [1994] 3 N.Z.L.R. 300, refd to. [para. 25].

Cosslett (Contractors) Ltd., Re, [1998] Ch. 495, refd to. [para. 26].

Street v. Mountford, [1985] A.C. 809, refd to. [para. 32].

Welsh Irish Ferries Ltd., Re, [1986] Ch. 471, refd to. [para. 39].

Itex Itagrani Export SA v. Care Shipping Corp.; Ship Cebu (No. 2), [1990] 2 Lloyd's Rep. 316, refd to. [para. 39].

Annangel Glory Compania Naviera SA v. Golodetz (M.) Middle East Marketing Corp. (U.K.) and Hammond (C.R.); Ship Annangel Glory, Re, [1988] 1 Lloyd's Rep. 45, refd to. [para. 39].

Tagart, Beaton & Co. v. Fisher (James) & Sons, [1903] 1 K.B. 391, refd to. [para. 40].

Ship Nanfri, Re, [1979] A.C. 757, refd to. [para. 41].

Authors and Works Noticed:

Berg, Charges over Book Debts: A Reply, [1995] J.B.L. 443, generally [para. 35].

Goode, Charges over Book Debts: A Missed Opportunity (1994), 110 L.Q.R. 592, generally [para. 35].

Goode, Legal Problems of Credit and Security (1988), pp. 48 to 51 [para. 11].

Lightman and Moss, The Law of Receivers of Companies (2nd Ed. 1994), p. 36 [para. 44].

Oditah, The Juridical Nature of a Lien on Subfreights (1989), L.M.C.L.Q. 191, generally [para. 39].

Worthington, Sarah, Fixed Charges over Book Debts and other Receivables (1997), 113 L.Q.R. 562, generally [para. 35].

Counsel:

Not disclosed.

Agents:

Not disclosed.

This appeal was heard before Lord Bingham of Cornhill, Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Hobhouse of Woodborough and Lord Millett of the Judicial Committe of the Privy Council.

On June 5, 2001, Lord Millett delivered the following judgment for the court.