Late delivery of particulars

HC Deb 26 October 1989 vol 158 cc1160-1

400.—(1) Where prescribed particulars of a charge created by a company, in the prescribed form, are delivered for registration more than 21 days after the date of the charge's creation, section 399(1) does not apply in relation to relevant events occurring after the particulars are delivered.

(2) However, where in such a case—

1. (a) the company is at the date of delivery of the particulars unable to pay its debts, or subsequently becomes unable to pay its debts in consequence of the transaction under which the charge is created, and
2. (b) insolvency proceedings begin before the end of the relevant period beginning with the date of delivery of the particulars, the charge is void as against the administrator or liquidator.

(3) For this purpose—

1. (a) the company is "unable to pay its debts" in the circumstances specified in section 123 of the Insolvency Act 1986; and
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2. (b) the "relevant period" is—
1. (i) two years in the case of a floating charge created in favour of a person connected with the company (within the meaning of section 249 of that Act),
2. (ii) one year in the case of a floating charge created in favour of a person not so connected, and
3. (iii) six months in any other case.

(4) Where a relevant event occurs on the same day as the particulars are delivered, it shall be presumed to have occurred before the particulars are delivered unless the contrary is proved.".'.—[Mr. Forth.]

Brought up, and read the First time.

Mr. Forth

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Paul Dean)

With this it will be convenient to consider Government new clauses 23, 24 and 25.

Mr. Forth

The new clauses contain various amendments to existing provisions of part IV that relate primarily to the delivery of particulars for registration. New clause 22 would replace clause 91 of the Bill. It amends new sections 398, 399 and 400. The amendments are largely improvements to the drafting of the new sections. The principal amendment is that in new section 399(1). This makes it clear that an unregistered charge will not be void in respect of those acquiring an interest in property subject to the charge before the charge's creation.

New clause 23 would replace clause 92 of the Bill. It amends new section 401. Although the new clause contains a number of drafting changes, the only substantive amendment is in new section 401(1). This would allow further particulars of a variation to a charge to be delivered before the variation has become effective.

New clause 24 would replace clause 93 of the Bill. It contains a number of drafting amendments to new section 402. There are no substantive amendments.

New clause 25 would replace clause 94 of the Bill. It contains amendments to new section 403. We have widened the circumstances in which a memorandum may be delivered to the registrar. We have also amended new section 403 to ensure that a charge cannot become void if a memorandum is fraudulently delivered by the company while the charge still affects its property.

Question put and agreed to.

Clause read a Second time, and added to the Bill.