The anatomy of a company charge : addressing the unresolved challenges to characterisation

Wood, John (2025) The anatomy of a company charge : addressing the unresolved challenges to characterisation. Journal of Business Law. ISSN 0021-9460 (In Press)

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Abstract

The characterisation of a company charge remains an important issue. Not only does the type of charge determine the priority status of a creditor, but it also affects their rights in relation to the debt. Recent case law has however shown that characterisation can be a complex process. This article is concerned with three critical unresolved issues that need to be addressed. First, there needs to be clarity on the correct interpretation of dicta made by judges in Re Spectrum and Agnew. Second, specific concepts that help determine characterisation need to be given due consideration. Concerted efforts need to be given to distinguish control and consent to deal, and a distinction should be applied between ordinary and commercial control. Third, the increasingly complex nature of security documents needs to be placed in context with commercial realties, and this requires a new perspective on how characterisation should be approached. In response to these challenges, this article proposes a tier structure to characterisation where charge attributes can be placed on a scale to determine the proper characterisation of company charges.