TMI Blog1965 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... s Lordship continued :] Two issues are raised on the summons: first, it is alleged by the liquidator that the mortgage on the Putson property and the charges on the Shaw and Shrivenham properties created after the meeting of May 29, 1961, represented fraudulent preferences and are void against the liquidator on that ground. Secondly, it is alleged as regards the Shaw and Shrivenham charges, but not as regards the Putson mortgage, that these are void against the liquidator by reason of defective registration.] [His Lordship then read section 320(1) of the Companies Act, 1948, and section 44 of the Bankruptcy Act, 1914, both as set out above, and continued :] I was referred to a number of authorities on the effect of section 44 of the Bankruptcy Act, 1914, in particular Peat v. Gresham Trust Ltd. [1934] AC 252, HL ; In re M. Kushler Ltd. [1943] Ch. 248 ; 59 TLR 328 ; [1943] 2 All ER 22, CA [1943] 13 Comp. Cas. 219 ; and In re Cutts ( A bankrupt ) , Ex parte Bognor Mutual Building Society v. Trustee of T.W. Cutts [1956] 1 WLR 728 ; [1956] 2 All ER 537 CA. I do not propose to quote from these authorities at length. It will be sufficient at this stage to say that it is wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Peat v. Gresham ( Trust ) Ltd. [1934] AC 252, 262. Apart from the burden of proof, the principle is, however, well established and has never, it appears, been questioned in any subsequent decision. Having regard to the later authorities, the principle may perhaps be restated in these terms : Where a creditor making an advance takes from the debtor a promise to execute a charge at the request of the creditor, the court will, in the absence of any other circumstances, readily infer that the purpose of the parties i.e. , the debtor as well as the creditor was to give the creditor the right to be preferred on request. Such an arrangement, although for value, is fraudulent and unenforceable, and when the debtor in performance of his promise in fact creates the charge at the request of the creditor, the court again, in the absence of any other circumstances, will readily infer that the intention of the debtor is to prefer the creditor. Obviously an intention to perform a promise to prefer is no less an intention to prefer than is an intention to prefer without any antecedent promise see the last words which I have quoted from Buckley J.'s judgment in In re Jackson Bassford L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny's promise to Richards. The conclusion then is that the charges created on the three properties as the result of the arrangement made on May 29, having been made with a view to giving Richards a preference over the other creditors, are to be deemed void against the liquidator, the company having gone into liquidation within six months of the creation of the charges. As I have said, there is no doubt that the company was at all relevant times unable to pay its debts as they became due. On this issue there is only one thing to be added : Mr. Slade concedes, and properly it seems to me, that the claim based on fraudulent preference cannot properly be maintained so far as regards the charge on the Shaw property in so far as that charge secures the 100 paid on May 29, and the 300 paid to Messrs. Kemp. As regards that 400 there is no fraudulent preference. Apart from the 400, the conclusion to which I have arrived on the issue of fraudulent preference is sufficient to dispose of this summons, but I ought, I think, to deal, though I will try to do so rather shortly, with the second issue in the case, namely, the alleged defect in the registration as regards the charges on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal to decide what shall be put upon the register, and when it has been put there his certificate to that effect is conclusive evidence that all the requirements of the section have been complied with." Then Scrutton L.J. said [1924] 1 KB 431 447: "Then when the registrar has got the particulars and the instrument creating the charge, he is to enter in the register, not the particulars delivered by the company, but the date of the instrument and its description, the amount secured, short particulars of the property mortgaged or charged, and the names of the mortgagees or persons entitled to the charge. So that there is a possibility, first, of the company making an error in delivering the particulars, and secondly of the registrar making an error either in omitting to enter something specified in the particulars, or in misunderstanding the instrument of charge delivered to him with the particulars; and for that reason one can well understand a clause being put in favour of the grantees of the charge, who are not the persons whose duty it is to deliver the particulars, that if the registrar gives a certificate that all is in order that certificate shall be conclusive evidence tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again I think that I am precluded by authority from attempting to do that. I was referred to Esberger Son Ltd. v. Capital and Counties Bank [1913] 2 Ch. 366 where the course of events was similar to that here ; that is to say, the charge was executed on September 17, 1910 ; it was falsely dated June 14, 1911, that date being inserted by the chargee, and it was registered on July 3, 1911. Sargant J. held that the relevant date for the running of the 21 days' period was the actual date of execution and the charge was void against the liquidator. Unfortunately, however, counsel for the chargee, Mr. Mark Romer K.C., did not take the point on what is now section 98(2) so that case is no authority on the effect of this subsection. It may seem surprising that a counsel of such eminence did not take the point, and that makes one sceptical as to whether the point is a good one ; but I find it impossible to escape from the wording of the subsection and the decision in the Charnley case [1942] 1 KB 431, CA . It is, I think, possible that there is some lacuna in the Act here, inasmuch as the Act gives apparently protection where the certificate is made upon the basis of particula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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