1 Clarke v Abbot (1741) Barnardiston Chancery 457, 460.
2 Cory v Eyre (1863) DG J & S 149, 167; Phillips v Phillips (1861) 4 De Gex, Fisher & Jones 208, 215, 45. For an explanation of how successive equitable interests in an asset arise, and a rationalization of priority rules as relativity of title, see D Fox, ‘Relativity of title at law and in equity’ (2006) 65 CLJ 330.
3 Cf the view of Kindersley V-C in Rice v Rice (1853) 2 Drewry 73, 76–8, that priority of time is a rule of last resort, where there is no other sufficient ground of preference. In the context of security interests, this view does not give sufficient certainty.
4 T Jackson and A Kronman, ‘Secured Financing and Priority among Creditors’ (1979) 88 Yale LJ 1143, 1162–4.
5 This strategy is likely to be successful, particularly under the current registration regime, see para 12.16.
7 See para 10.14 in relation to company charges. Unregistered bills of sale are void against everyone including the grantor, and so the priority rules do not apply (see para 11.54), and priority between registered bills of sale is governed by the date of registration, see para 14.32.
9 The pledgor might possibly have actual possession of the goods if it had attorned to the pledgee. See para 5.27.
10 Franklin v Neate (1844) 13 M & W 481.
11 Re Diesels & Components Pty Ltd  2 Qd R 456, 460 SC Queensland; Mercantile Credits Ltd v Jarden Morgan Australia Ltd  1 Qd R 407, 417 SC Queensland.
12 George Barker (Transport) Ltd v Eynon  1 WLR 462, CA; Re Diesels & Components Pty Ltd  2 Qd R 456 SC Queensland.
13  1 Qd R 407 SC Queensland. Note that Australian law changed in 2012 with the bringing into force of the Australian Personal Property Securities Act 2009.
14 Mercantile Credits Ltd v Jarden Morgan Australia Ltd  1 Qd R 407, 416 & 423 SC Queensland.
15 George Barker (Transport) Ltd v Eynon  1 WLR 462, CA; Re Diesels & Components Pty Ltd  2 Qd R 456 SC Queensland. This conclusion also could be said to depend in part on the reasoning discussed in ch 15 based on authorized dispositions.
16 Mercantile Credits Ltd v Jarden Morgan Australia Ltd  1 Qd R 407, 422 SC Queensland. In that case the charge was a fixed charge.
18 The reason liens and pledges are not registrable is that the transfer of possession to the lienholder or pledgee makes them apparent. Re Hall (1884) LR 14 QBD 386, 391 (in relation to the Bills of Sale Acts). Report of the Committee on Consumer Credit (1971) Cmnd 4596, para 5.7.61; A Diamond, A Review of Security Interests in Property (1989), paras 9.5.6–9.5.7 and 11.5.2, Law Commission, Registration of Security Interests: Company Charges and Property other than Land (Consultation Paper No 164, 2002), para 3.24.
23 Cole v North Western Bank (1875) LR 10 CP 354; W Gough, Company Charges (2nd edn, 1996), 837.
24 See para 14.07 and Keene v Thomas  1 KB 136; Green v All Motors Ltd  1 KB 625 CA; Williams v Allsup (1861) 10 CB (NS) 417; Singer Manufacturing Co v London and South Western Railway Co  1 QB 833, DC, Jowitt & Sons v Union Cold Storage Co  3 KB 1; Tappenden v Artus  2 QB 185, CA; Pennington v Reliance Motor Works Ltd  1 KB 127 (where it was held that there was no authority); Jarl Tra AB v Convoys Ltd  2 EWHC 1488,  2 Lloyd’s Rep 459; Lukoil-Kalingradmorneft Plc v Tata Ltd  1 Lloyd’s Rep 365.
27 Companies Act 2006, s 859H. Re Cardiff Workmen’s Cottage Co Ltd  2 Ch 627.
29 N Palmer and A Hudson, ‘Pledge’ in N Palmer and E McKendrick (eds), Interests in Goods (2nd edn, 1998), 631; Franklin v Neate (1844) LR 1 QB 585; Johnson v Stear (1863) 15 CB (NS) 330; Halliday v Holgate (1868) LR 3 Exch 299, 302.
30 Where the pledgor obtains possession of the goods from the pledgee by fraud, and then pledges the goods to a bona fide third party without notice of the first pledge, the third party obtains the goods free from the pledge: see Babcock v Lawson (1880) 5 QBD 284, where this result was said to result by analogy to the sale of goods obtained under a voidable contract. The latter situation is now covered by Sale of Goods Act 1979, s 23, but the common law still governs the situation in relation to a pledge.
31 See para 5.29 et seq. See also Beverley Acceptances Ltd v Oakley  RTR 417.
33 See ch 12, for discussion of the scope of constructive notice.
34 The cases in n 29 apply by analogy.
35 Sale of Goods Act 1979, s 12(2)(a). The word ‘encumbrance’ (in the context of a similar express clause) was said possibly to cover a possessory lien (Athens Cape Naviera Sa v Deutsche Dampfschiffahrtsgesellschaft ‘Hansa’ Aktiengesellschaft (The ‘Barenbels’))  1 Lloyd’s Rep 528, 532, CA, per Goff LJ.
36 Sale of Goods Act 1979, s 12(2)(b).
37 Sale of Goods Act 1979, s 12(1). This includes both a right to pass the property in the machines to the buyer and a right to confer on the buyer the undisturbed possession of the goods: Microbeads AG v Vinhurst Road Markings Ltd  1 WLR 218, 223, CA, per Lord Denning MR.
38 In the past, when a charge is created by a deed delivered in escrow, it was not entirely clear whether the date of creation was the date of delivery or the date on which the conditions are fulfilled; see Law Commission, Execution of Deeds and Documents by and on behalf of Bodies Corporate (Consultation Paper 143, 1998), para 6.8 n 17 and Alan Estates Ltd v WG Stores Ltd  Ch 511, 521, CA. The date of creation has now been statutorily defined as the date of delivery into escrow in relation to the requirement of registration, see Companies Act 2006, s 859E. The definition does not, in its terms, apply to the date of creation for the purposes of priority, but it would be sensible if the same rule applied in both cases.
41 W Gough, Company Charges (2nd edn, 1996), 744.
44 The reasons for giving priority to a purchase money security interest have been rehearsed at length in the United States and Canada, where such priority is built into the UCC and PPSA schemes: see paras 23.96–23.97, 23.128.
45 L Gullifer (ed), Goode and Gullifer on Legal Problems of Credit and Security (6th edn, 2017), 5–64; C Walsh, ‘The floating charge is dead; long live the floating charge’ in A Mugasha (ed), Perspectives in Commercial Law (2000), 129 at 134.
47 This term is used in the cases although it is technically inappropriate where the second interest is a charge and not a mortgage.
48 The principle does, however, appear to apply to personal property as well, see State Securities Plc v Liquidity  EWHC 2644 (Ch), see n 80 below.
49 Wilson v Kelland  2 Ch 306; Re Connolly Bros Ltd (No 2)  2 Ch 25, CA.
50 Cf Abbey National Building Society v Cann  1 AC 56, 91, HL, where Lord Oliver says that the mortgagee in Re Connolly had constructive notice of the terms of the first debenture. This cannot be correct in the light of the cases cited at para 12.15 n 45.
52 Security Trust Co v Royal Bank of Canada  AC 503 (PC).
56 Ibid., at 92 (per Lord Oliver) and 101–2 (per Lord Jauncey).
58 Nationwide v Ahmed  70 P&CR 381, Whale v Viasystems Technograph Ltd  EWCA Civ 480, Redstone Mortgages Plc v Welch  3 EGLR 71 and Cook v Mortgage Business Plc  EWCA Civ 17.
59  UKSC 52;  AC 385.
60 On the basis that it was the equivalent of an ‘overriding interest’ in the Land Registration Act 2002, see  UKSC 52 .
61 P Sparkes, ‘Reserving a Slice of Cake’  Conveyancer and Property Lawyer 301; Emmet and Farrand Bulletin 2014; Emmet and Farrand on Title 5.119.01. The decision is inconsistent with well-established cases such as Shaw v Foster (1872) LR 5 HL 321 and Lysaght v Edwards (1876) 2 Ch D 499. Even the academic debate as to whether the vendor holds the property on trust for the purchaser after exchange of contracts does not appear to throw doubt on the proprietary nature of the purchaser’s interest; W Swadling, ‘The Vendor-Purchaser Constructive Trust’, in S Degeling and J Edelman (eds), Equity in Commercial Law 2005), at 475–6 and 487–8; PG Turner, ‘Understanding the constructive trust between vendor and purchaser’ (2012) 128 LQR 582. While the decision that a purchaser of land cannot grant an equitable interest after exchange of contracts but before conveyance could, probably, be confined to the grant of an interest such as a proprietary estoppel rather than any equitable interest (such as a charge arising under an after-acquired property clause) the decision is in general terms and is not limited in this way, see Emmet and Farrand on Title 5.119.01.
62  UKSC 52 –.
64  UKSC 52 –.
65  UKSC 52 –.
66 See J Jeremie, ‘Gone in an Instant—The Death of “Scintilla Temporis” and the Growth of a Purchase-Money Security Interest in Real Property Law’  JBL 363.
67 See para 6.13. Holroyd v Marshall (1862) 10 HLC 191. Where there is an equitable mortgage or charge over future assets, the transfer of the equitable interest to the mortgagee or chargee takes place immediately, so that there is never a moment on acquisition of the asset when the mortgagor or chargor is the complete equitable owner of the property (Hadlee v Commissioner of Inland Revenue  3 NZLR 517).
68 See J de Lacy, ‘The purchase money security interest: a company charge conundrum?’  LMCLQ 531, 535.
69 In both Wilson v Kelland and Re Connolly the debenture predated the agreement for the mortgage; in the Security Trust case the date when the contract became effective was not entirely clear, and the Privy Council did not feel it necessary to decide that point (at 518). This reasoning also begs the question of whether a charge over future property is presently valid when none of the property charged is owned by the chargor. There is support for the proposition that such a charge is valid in Holroyd v Marshall (1861–62) 10 HLC 191; Re Lind  2 Ch 345; Peer International Corporation v Termidor Music Publishers Ltd  EWHC 2675 (Ch),  and Saw (SW) 2010 Ltd v Wilson  EWCA Civ 1001 especially at – (see paras 6.15 and 6.22).
70  1 AC 56, 92, 102, HL.
71  UKSC 52 –.
72 L Gullifer (ed), Goode and Gullifer on Legal Problems of Credit and Security (6th edn, 2017), 5–71.
74 The interest was equitable only as it had not been registered.
75  EWCA Civ 480 –.
77 The broad reasoning of Jonathan Parker LJ in Whale was used in Redstone Mortgages plc v Welch  3 EGLR 71 to support a decision that the equitable interest of a vendor (the right to a tenancy) was so closely connected with the sale of a house that the purchaser acquired it subject to that interest and could only grant a charge to a lender subject to that interest. This application of the doctrine must be taken to be overruled by the decision in Southern Pacific Mortgages Ltd v Scott  UKSC 52 and was in fact rejected in the lower courts (see Re North East Property Buyers Litigation  EWHC 2991 (Ch)).
78 In Re Connolly the vendor was a third party and in Wilson v Kelland and Security Trust the vendor was the purchase money lender.
79 W Gough, Company Charges (2nd edn, 1996), 486.
80 J de Lacy, ‘The purchase money security interest: a company charge conundrum?’  LMCLQ 531, 533. The point appears to have been raised in a battle between a floating chargee and a receivables financier in State Securities plc v Liquidity Ltd  EWHC 2644 (Ch), although the decision, as it concerned an application for an interlocutory injunction, was inconclusive, cf R Boadle, ‘A Purchase Money Security Interest In UK Law?’ (2015) LMCLQ 76, 85–9. See also Stroud Architectural Systems Ltd v John Laing Construction Ltd  2 BCLC 276, where the application of the Cann case to a retention of title clause is assumed.
81 Capital Finance Co Ltd v Stokes  1 Ch 261; W Gough, Company Charges (2nd edn, 1996), 486–9.
83 Companies Act 2006, s 859H.
84 Re Monolithic Building Company  1 Ch 643.
85 E McKendrick (ed), Goode on Commercial Law (5th edn, 2016), 24.53.
87 United States v New Orleans Railroad (1870) 79 US 362, 20 L Ed 434, 12 Wall 362 US Supreme Court.
88 Companies Act 2006, s 859F.
90 For example, Re Monolithic Building Company  1 Ch 643 (action to enforce security interests); Re Ehrmann Brothers Ltd  2 Ch 697 CA, 708, where Romer LJ envisages that a chargee could intervene in an action to enforce brought by the holder of an unregistered interest; Re Curtain Dream plc  BCLC 925 (application by receivers for a declaration that a reservation of title agreement was void as an unregistered charge); Bank of Scotland v T A Neilson & Co  SLT 8 (negligence action against solicitors who failed to register the charge, where it was assumed that the time of enforcement was when the priority issue arose).
91 This uncertainty was raised by the Company Law Review Steering Group in ‘Registration of Company Charges’ (2000) URN 00/1213 para 3.4 and by the Law Commission in Consultation Paper No 164, 2002, para 3.25, n 30.
92 Re Monolithic Building Company  1 Ch 643, 667.
93 Palmer’s Company Law (1989) 13.326 (5) n 2, relying on Mercantile Bank of India v Chartered Bank of India, Australia and China and Strauss & Co  1 All ER 231, although whether this is a true explanation of this particular case is doubted, see W Gough, Company Charges (2nd edn, 1996), 737 and n 2; see paras 10.32–10.33.
94 W Gough, Company Charges (2nd edn, 1996), 745 suggests that this is the case in relation to repayment, but that enforcement gives rise to a competition and thus a priority point.
95 The liability to account is analogous to that of a junior creditor who enforces, and has to account to the senior: see para 18.58.
98 London and Cheshire Insurance Co Ltd v Laplagrene Co Ltd  Ch 499, Swainston v Clay (1863) 3 De G J & Sm 558. An equitable lien created by contract may be registrable under the Bills of Sale Act Coburn v Collins (1887) 35 Ch D 373. See ch 6, n 739.
99 This comes from the basic rule of first in time, confirmed in the context of equitable liens in Rice v Rice (1853) 2 Drew 73, 61 ER 646, although in that case, where a lien arose followed by an equitable mortgage, the mortgagee won as the fact that the deeds were deposited with him was said to give him the better equity. See also Mackreth v Symmons (1808) 15 Ves Jun 329.
100 Companies Act 2006, s 859H(3).
101 W Gough, Company Charges (2nd edn, 1996), 744; L Gullifer (ed), Goode and Gullifer on Legal Problems of Credit and Security (6th edn, 2017), 5–27.
102  1 Ch 643, 662: ‘I confess my inability to see that it means anything else than exactly what it says, namely, that it is void against any creditor who has a registered charge on the company’s property.’
103 E McKendrick (ed), Goode on Commercial Law (5th edn, 2016), 24.53.
104 R Pennington, Company Law (8th edn, 2001), 635.
105 Under s 859F, Companies Act 2006. See para 13.21. The court will normally make an order subject to the rights of parties acquired before the time of registration. However, this would not seem to include the rights of the holders of unregistered interests.
108 This is Gough’s view, Company Charges (2nd edn, 1996), 744. See also Law Commission, Company Security Interests (Law Com No 296, 2005), 3–152.
109 See para 14.01, for a discussion of this exception to the nemo dat principle.
110 Subject to a condition that the title be transferred back on payment of the secured obligation.
111 That section provides: ‘The provisions of this Act about contracts of sale do not apply to a transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge or other security.’
112 M Bridge, The Sale of Goods (3rd edn, 2014), 5.125–5.126; Diamond Report, para 13.2.9.
113 E McKendrick (ed), Goode on Commercial Law (5th edn, 2016), para 24.52; W Gough, Company Charges (2nd edn, 1996), 733; Re Overseas Aviation Engineering (GB) Ltd  Ch 24, 38 CA; Stroud Architectural Services Ltd v John Laing Construction Ltd  2 BCLC 276,  BCC 18. Despite an initial proposal to deal with this anomaly (Government Response—Consultation on Registration of Charges created by Companies and Limited Liability Partnerships (December 2010) (proposal F)), the 2013 regime contained no such provision.
115 Obviously if there is a provision in the retention of title or hire purchase or lease agreement for any surplus to be paid to the debtor on enforcement, then the true security interest could attach to that money once it is paid, if it falls within the scope of the security agreement.
117 L Gullifer (ed), Goode and Gullifer on Legal Problems of Credit and Security (6th edn, 2017), 5–64. This is justifiable on policy grounds: see para 13.12.