Duncan v Diablo

The concept of registration of charges over a company’s assets exists in many jurisdictions. Non-registration often means that the charge is void as against the liquidator (and creditors) of the company. An issue which has engaged English lawyers for some time is whether a lien on sub-freight (or sub-hire) is registrable. There are competing theories on the nature of a lien on sub-freights, which in turn impact on its registrability as a charge. Not unlike the mythical Hydra, this lien has two heads. One head says it is a sui generis personal contractual right of interception (and, being contractual, is not a registrable charge). The other says it is an equitable assignment by way of a floating charge (and as such registrable). For three decades, these two heads battled in the English courts, and the equitable assignment by way of a floating charge “head” won every battle.1 However, each time the “personal contractual right” head was cut off, it would grow again.