Registrability of book-debt charges and liquidator standing to challenge unregistered security under company law

An unregistered charge is void only as against the liquidator and creditors, not against the company itself, so the liquidator is the proper party to challenge it; the company could not sue to enforce the non-registration defect, though joinder of the liquidator was permitted. A deposit of hire-purchase agreements can create a registrable charge on book-debts under section 95 of the Companies Act 1948, including present or future book-debts where the obligation is capable of ordinary book entry. Non-registration therefore renders the charge void as against the liquidator.

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Issues: (i) Whether the company was a proper plaintiff to seek a declaration that an unregistered charge was void, or whether proceedings had to be brought by the liquidator. (ii) Whether the deposit of the hire-purchase agreements created a registrable charge on book-debts within section 95 of the Companies Act, 1948, so that non-registration rendered the charge void as against the liquidator.

Issue (i): Whether the company was a proper plaintiff to seek a declaration that an unregistered charge was void, or whether proceedings had to be brought by the liquidator.

Analysis: The statutory language made the unregistered charge void only as against the liquidator and creditors, not as against the company itself. The company's rights were not directly affected by the non-registration provision, and the company could not properly sue to assert a default in registration when it had itself failed to comply with the statutory duty to register the charge. The appropriate claimant was therefore the liquidator, though amendment to add the liquidator was permitted.

Conclusion: The company was not a proper plaintiff for that relief, and the liquidator was the proper party to bring the proceedings.

Issue (ii): Whether the deposit of the hire-purchase agreements created a registrable charge on book-debts within section 95 of the Companies Act, 1948, so that non-registration rendered the charge void as against the liquidator.

Analysis: The charge created by depositing the agreements extended to the benefits under each agreement, including rights properly describable as book-debts. A debt need not be immediately payable to be a book-debt if it is an existing obligation capable of ordinary book entry. In any event, a charge on future book-debts was also capable of registration under section 95, because the statute did not confine registration to present debts alone. The charge therefore fell within the registrable category contemplated by the section.

Conclusion: The charge was registrable under section 95, and, not having been registered, it was void as against the liquidator.

Final Conclusion: The decision affirmed the liquidator's right to attack the unregistered charge and held that the deposited hire-purchase agreements created a registrable charge on book-debts, making the unregistered security ineffective against the liquidator.

Ratio Decidendi: A charge on present or future book-debts is registrable where the transaction creates an enforceable obligation within the statutory security category, and non-registration renders such a charge void only against those persons specified by the statute, including the liquidator.

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