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As a general rule a duly registered floating charge ranks after a duly registered fixed charge irrespective of the respective dates of creation of the two charges.¹ A floating charge however has priority over a subsequent fixed charge (assuming due registration in both cases) where the subsequent fixed chargee has actual notice of a restrictive clause in the earlier floating charge.² A restrictive clause (sometimes called a negative pledge clause) is a provision in the debenture containing the floating charge that prohibits the creation of subsequent fixed charges ranking prior to, or pari passu with the earlier floating charge. The authorities suggest that actual rather than just constructive notice of a restrictive clause in a debenture is required before the priority of a subsequent fixed charge holder is displaced in favour of a floating charge holder.³

In recent years, the issue of priorities between fixed and floating charges and more generally has been authoritatively restated in