Questioning Fundamentals: Leyland Daf and the ‘Ownership’ of Charged Property
| Date | 01 September 2004 |
| Author | Vijay S. V. Selvam |
| DOI | http://doi.org/10.1111/j.1468-2230.2004.514_2.x |
| Published date | 01 September 2004 |
When the Court of Appeal in Hendrix told us that Blake ‘marks a new start in
this area’,
59
it apparently was sanguine in its acceptance that a majority of the
House of Lords had embarked on a legislative programme notsee n since the days
of Mackenzie Chalmers, withthe di¡erence that he did it above board. One can-
not be happy with, but neither can one now convincingly claimto be startled by,
this sort of thing happening in the appeal courts. Even after Blake, however, I did
not predict that authority would be out right abandoned in the lower courts in the
headlongpursuit of restitutionaryjustice. Lane,however,is (fur ther)evide ncethat
the temptation to do justice is now felt throughou t the hierarchy of the courts.
One does not nowadays have to wait until one gets into the appeal cou rts before
taking out the Parliamentary draftsman’s pencil one always had in one’s Barrister
bag. No long apprenticeship need be served even in the High Court before it
becomes possible to dismiss the basic principles of damages because they would
not yield‘a result which would appeal to the court’ [para 11], or say that a line of
authority stretchi ng back to Lord Cairns’Act has not ‘laid down . . . general prin-
ciple’ [para18]when that authority wouldprevent the Court reaching theresult it
does ¢nd appealing.
Of course,parties who rely on those principles and authoritieswill be surprised
and injuredby decisions reached in this way, aswas the defendant in Lane. But this
discomfort of others is, it appears, a cost which those concerned to further the
continued progress of the restitutionary juggernaut are prepared to bear.
60
One
further prediction I made certainly does seem to be right: we are in the midst of
the period of ‘veryexpensive mischief’
61
whichwill have to be endured by parties
while the courts ¢nd out how unwise it is to make restitutionary damages gener-
ally available for breach of contract.
Questioning Fundamentals: Leyland Daf and the
‘Ownership’ of Charged Property
V| j a y S . V. S e l v a m
n
Although the House of Lords decision in Leyland Daf was primarilyconcerned with the order
for distribution of assets in a winding-up, it has several other far-reaching rami¢cations and
repercussions.The reasoning of their Lordships in the case alters our u nderstandingof the very
nature and operationof a charge over a company’s assets.Thi s reasoning strikes at the heart of the
law of security interests, bringing into question the fundamental distinction between a charge
and a mortgage. Furthermore the decision has given a whole new complexion tothe concept of
a £oating charge which will have tremendous consequences for its application in commercial
59 Above n 12, para [16].
60 The steering hand of hallowed wisdom may again be detected in the careerof the restitutionary
juggernaut, for La Rochefoucauld’sn ineteenth Maxim is that ‘‘All of us have su⁄cient strength to
bear the misfortunes of others’’.
61 Campbell above n 11, 377.
n
LL.B (Hons) BCL(Oxon).
‘Ownership’ of Charged Property
832 rThe Modern LawReview Limited 2004
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