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===Choice snippets=== | ===Choice snippets=== | ||
Lord Hope of Craighead: <br> | '''Lord Hope of Craighead''': <br> | ||
:“An account from which the customer is entitled to withdraw funds whenever it wishes within the agreed limits of any overdraft is not a blocked account. In ''Agnew v Commissioners of Inland Revenue'' [2001] 2 AC 710, 722, para 22 Lord Millett said that the critical feature which led the Irish Supreme Court in ''In re Keenan | :“An account from which the customer is entitled to withdraw funds whenever it wishes within the agreed limits of any overdraft is not a blocked account. In ''Agnew v Commissioners of Inland Revenue'' [2001] 2 AC 710, 722, para 22 Lord Millett said that the critical feature which led the Irish Supreme Court in ''In re Keenan | ||
Bros Ltd'' [1986] BCLC 242 to characterise the charge on book debts as a fixed charge was that their proceeds were to be segregated in a blocked account where they would be frozen and ''unusable by the company without the bank’s written consent''<ref>Emphasis added.</ref>. I respectfully agree.” | Bros Ltd'' [1986] BCLC 242 to characterise the charge on book debts as a fixed charge was that their proceeds were to be segregated in a blocked account where they would be frozen and ''unusable by the company without the bank’s written consent''<ref>Emphasis added.</ref>. I respectfully agree.” | ||
Did Barclays in Siebe Gorman have a lien over a current account balance? No. <br> | Did Barclays in Siebe Gorman have a lien over a current account balance? No. <br> | ||
:“{{casenote|Lipkin Gorman|Karpnale}} Ltd [1989] 1 WLR 1340, 1353, the money which a customer deposits with a [[bank]] ecomes the bank’s money, but the bank is [[prima facie]] bound to meet its debt when called upon to do so by the customer.” | :“{{casenote|Lipkin Gorman|Karpnale}} Ltd [1989] 1 WLR 1340, 1353, the money which a customer deposits with a [[bank]] ecomes the bank’s money, but the bank is [[prima facie]] bound to meet its debt when called upon to do so by the customer.” [...] | ||
:“A banker has a general [[lien]] over all bills, notes and [[negotiable instrument|negotiable instruments]] belonging to the customer which his customer may have deposited with him in security of the customer’s indebtedness to the bank. But a [[lien]] is a right to retain possession of property that belongs to someone else, and ''the banker has no lien over funds which, when deposited in its account by the customer, become his own property''<ref>Emphasis added.</ref>. Moreover the relationship is one where, if the account is in credit, the banker is indebted to his customer. So it was a misuse of the word lien to say that the bank could assert a right of that kind over the | :“A banker has a general [[lien]] over all bills, notes and [[negotiable instrument|negotiable instruments]] belonging to the customer which his customer may have deposited with him in security of the customer’s indebtedness to the bank. But a [[lien]] is a right to retain possession of property that belongs to someone else, and ''the banker has no lien over funds which, when deposited in its account by the customer, become his own property''<ref>Emphasis added.</ref>. Moreover the relationship is one where, if the account is in credit, the banker is indebted to his customer. So it was a misuse of the word lien to say that the bank could assert a right of that kind over the proceeds” [...] | ||
:“This is not to say that it is impossible to conceive of the creation of an [[equitable charge]] over the proceeds of [[book debts]] paid into an account in the name the [[chargor]]. But the ordinary relationship of banker and customer does not permit the banker, without notice, to refuse to allow his customer to operate a current account as and whenever he wishes while it is credit or is within the limits of any agreed overdraft. ''The debenture in the {{casenote1|Siebe Gorman}} case, which provided for the payment of the proceeds into an account of that kind, lacked any provision which qualified that relationship''<ref>Emphasis added.</ref>.” | :“This is not to say that it is impossible to conceive of the creation of an [[equitable charge]] over the proceeds of [[book debts]] paid into an account in the name the [[chargor]]. But the ordinary relationship of banker and customer does not permit the banker, without notice, to refuse to allow his customer to operate a current account as and whenever he wishes while it is credit or is within the limits of any agreed overdraft. ''The debenture in the {{casenote1|Siebe Gorman}} case, which provided for the payment of the proceeds into an account of that kind, lacked any provision which qualified that relationship''<ref>Emphasis added.</ref>.” [...] | ||
:“In my opinion the company’s ''continuing contractual right'' to draw out sums equivalent to the amounts paid in is wholly destructive of the argument that there was a fixed charge over the uncollected proceeds because the account into which the proceeds were to be paid was blocked.” | :“In my opinion the company’s ''continuing contractual right'' to draw out sums equivalent to the amounts paid in is wholly destructive of the argument that there was a fixed charge over the uncollected proceeds because the account into which the proceeds were to be paid was blocked.” | ||
'''Lord Scott of Foscote''': <br> | |||
:“But the intention of the parties that the charge over [[book debts]] created and fortified in this way would be a fixed charge has to take account also of Romer LJ’s third characteristic of a [[floating charge]], namely, that ''until some further step by way of intervention is taken by the chargee the chargor company can use the assets in question for its normal business purposes and, in using them, remove them from the security''.” | |||
===Ruling=== | ===Ruling=== | ||