Neutral Citation Number: [2010] EWHC 1746 (Ch)
Case No:  HC09C03739
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 14/07/2010

Before :

MR JUSTICE VOS
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Between :

	Carl Richard Chapman
(trading as Chapman & Co. Solicitors)	Claimant	
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	(1)	David Frederick Wilson
(2)	Julian Nigel Richard Pitts
(3)	LawFinance Limited	

Defendants	

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Mr Carl Chapman, the Claimant, appeared in person 
Ms Elspeth Talbot Rice Q.C. and Mr Edward Cumming (instructed by Lupton Fawcett) appeared for the Defendants

Hearing dates: 28th to 30th June, and 1st-2nd July 2010
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Judgment

Mr Justice Vos: 

Introduction
1.	LawFinance Limited (“LawFinance”) is an Isle of Man finance company, registered under the Money Lenders Act 1991 of the Isle of Man, providing revolving loan facilities for solicitors’ firms engaged in personal injury litigation subject to conditional fee agreements (“CFAs”).  In the broadest outline, LawFinance enters into funding arrangements with solicitors’ firms, whereby the firm can draw down an amount in respect of each case it acquires to defray disbursements including, for example, referral fees, medical report costs and After the Event insurance premiums.
2.	Mr Carl Richard Chapman (“Mr Chapman”) was the principal of Carl Chapman & Co. Solicitors (“CCC”), which was a firm undertaking personal injury litigation subject to CFAs.  CCC practised from premises at 20/22 Bowker’s Row, Nelson Square, Bolton BL1 1JL (the “Premises”).   In September 2006, Mr Chapman entered into a series of funding arrangements with LawFinance, whereby LawFinance agreed to grant Mr Chapman a facility of up to £1 million, including an initial tranche of £250,000, which was to be used to pay off an existing debt owed to the Yorkshire Bank.  
3.	It is alleged that, as part of this funding arrangement between LawFinance and Mr Chapman, they entered into an initial suite of 7 loan and security documents (the “7 documents”) as follows:-
i)	A Legal Disbursement Funding Agreement (the “Loan Agreement”) dated 8th September 2006.
ii)	A Mortgage of Goodwill and Book Debts and Work in Progress (the “Mortgage”) dated 13th September 2006, granting security over Mr Chapman’s goodwill, book debts and work in progress, to secure his obligations under the Loan Agreement.
iii)	An Assignment in Security (the “September 2006 Assignment”) dated 8th September 2006 whereby Mr Chapman assigned to LawFinance his cases and client contracts further to secure his obligations under the Loan Agreement. 
iv)	A Legal Charge (the “Legal Charge”) dated 8th September 2006 over an account held by Mr Chapman at HSBC Bank plc.
v)	A Declaration of Trust (the “Declaration”) dated 8th September 2006 in relation to an account held by Mr Chapman at the Yorkshire Bank plc.
vi)	A notice of assignment dated 8th September 2006 from Mr Chapman to Yorkshire Bank plc in relation to his account at that bank (the “Yorkshire Bank Notice”).
vii)	A notice of assignment dated 8th September 2006 from Mr Chapman to HSBC Bank plc in relation to his account at that bank (the “HSBC Notice”).
4.	Over the course of the Loan Agreement, Mr Chapman accepts that he executed 4 further Assignments in Security annexing schedules of his current cases dated 4th April 2007, 19th April 2007, 3rd August 2007, and 19th January 2009 (the “January 2009 Assignment”).  Mr Chapman does not accept that he executed the last Assignment in Security relied on by LawFinance dated 6th April 2009 (the “April 2009 Assignment”).
5.	On 22nd June 2009, LawFinance demanded payment from Mr Chapman of £1,343,103.96 under clause 14 of the Loan Agreement, and on 23rd June 2009, LawFinance purported to appoint Messrs David Wilson (“Mr Wilson”) and Julian Pitts (the 2nd and 3rd Defendants, and hereinafter together the “Receivers”) as joint receivers of the income from the charged property under the April 2009 Assignment.  The validity of this appointment was originally challenged by Mr Chapman, but it is no longer disputed, because it is accepted that the appointment was made under section 101 of the Law of Property Act 1925, and because the validity of the Mortgage is not in dispute.
6.	After the appointment of the Receivers, most of Mr Chapman’s personal injury cases, and the files representing them, were physically removed from his premises and handed over to another firm of personal injury litigation lawyers, Messrs Bollin Legal Associates Limited (“Bollin”), chosen by LawFinance.  Bollin held the files pending receipt of instructions from CCC’s clients to allow Bollin to act in those cases and to pursue them to judgment or settlement.
7.	Eventually, on 8th October 2009, Mr Chapman issued an application for an injunction to prevent LawFinance from enforcing its security over payments into his office account.  On 14th October 2009, Mann J heard Mr Chapman’s application, and accepted his undertaking to open a new bank account to receive sums from new cases on which he might in future be instructed, and to provide the Defendants with bank statements for that new account and the original office account. 
8.	On 16th October 2009, the Solicitors’ Regulation Authority (the “SRA”) intervened in Mr Chapman’s practice, and Mr Stuart Farr, a partner in Laytons, was appointed as CCC’s intervening agent.
9.	On 10th November 2009, the Receivers were reappointed by LawFinance under the September 2006 Assignment, after Mr Chapman had challenged the validity of their original appointment. The validity of this later appointment was not challenged by Mr Chapman.
10.	In these proceedings, Mr Chapman has claimed that the Defendants converted his client files to their own use contrary to the Torts (Unlawful Interference with Goods) Act 1977 (the “1977 Act”), when they were removed from the Premises.  LawFinance has counterclaimed for the sums allegedly due under the Loan Agreement, and for declarations that the Receivers were validly appointed, and has claimed that it is entitled to all sums payable to Mr Chapman in respect of fees for his personal injury cases scheduled to the various Assignments in Security.
11.	The issues that arise changed somewhat in the course of the trial, at least in part because Mr Chapman found himself acting in person at the start of the trial due to lack of funds.  Eventually on the 4th day of the trial, 1st July 2010, I granted Mr Chapman permission to amend his Particulars of Claim, and the Defendants permission to amend their Defence and Counterclaim so as to clarify what was really in issue. 
12.	Many of the issues that have ultimately been raised rely on the Bills of Sale Acts 1878-1882.  I shall refer to these acts individually as the “1878 Act” and the “1882 Act”, and together as the “Acts”.
The issues
13.	Several attempts have been made at preparing a definitive list of the issues that arise in this case.  It seems to me that the main issues that now arise from the amended pleadings may be summarised as follows:-
14.	Issue 1: Was the Loan Agreement valid and enforceable?
i)	Was the Loan Agreement validly executed by Mr Chapman?
ii)	Was the Loan Agreement a bill of sale within section 4 of the 1878 Act?
iii)	Are solicitors’ files “personal chattels” within section 4 of the 1878 Act, and if so, who owns them?
iv)	Can future property fall within the definition of “personal chattels”, and can a security over future property be a bill of sale?
v)	What is the effect of non-registration of the Loan Agreement?
vi)	Was the Loan Agreement in the correct form to comply with section 9 of the 1882 Act? 
15.	Issue 2: Was the April 2009 Assignment valid and enforceable?
i)	Was the April 2009 Assignment validly executed by Mr Chapman?
ii)	Was the April 2009 Assignment registrable as a bill of sale?
iii)	Was the April 2009 Assignment validly registered?
iv)	Was the April 2009 Assignment in the correct form so as to be valid under the Acts?
v)	If not, is the April 2009 Assignment severable, so as to be valid in part?
16.	Issue 3:  Did Mr Chapman validly consent to the transfer of the files to LawFinance?
17.	Issue 4: To what sum is LawFinance entitled, and do the Mortgage and/or the Assignments entitle LawFinance to all the sums payable to Mr Chapman in respect of fees for personal injury cases conducted by him or his firm?
18.	Issue 5: Did LawFinance and/or the Receivers unlawfully interfere with Mr Chapman’s files?
19.	Issue 6: Did the Receivers act outside their powers in taking any of the files that they are found to have taken from Mr Chapman’s premises?
20.	Issue 7: If Mr Chapman’s files were unlawfully removed by LawFinance and/or the Receivers, what loss has Mr Chapman sustained as a result, and to what relief is Mr Chapman entitled?
Background chronology
21.	Before turning to deal with the detailed terms of the security documentation, and with the issues, it is useful to set out a little further factual background.
22.	On 17th August 2006, after some negotiations had already taken place, Simon McNally (“Mr McNally”) of Bridgehouse Partners LLP, LawFinance’s solicitors acting on the conclusion of the security documentation, emailed Mr Chapman, enclosing a marked up “further revised” draft of the Loan Agreement for his review, summarising the changes that had been made, and raising some administrative points that needed to be dealt with as completion approached.
23.	On 22nd August 2006, Mr McNally emailed Mr Chapman asking him to give him a call to “go through the remaining changes to the [draft Loan Agreement] to ensure you agree them”.
24.	On 24th August 2006, Mr McNally emailed Mr Simon Cooper (“Mr Cooper”) and Mr James Teare (“Mr Teare”) (also both of Bridgehouse Partners LLP) saying he had spoken to Mr Chapman the day before, and that the “document [was] agreed and good to go from his [Mr Chapman’s] point of view.  He is desperate to get sorted but will not be this week I suspect… Someone needs to break that to him”.
25.	On 4th September 2006, Mr McNally emailed Mr Chapman saying that “[a]s just discussed, we are all systems go and as such we should be looking to get the documents signed up in the next couple of days”.  One of the things that he said needed to be done was: “We need to send you all of the paperwork for signing. As discussed we will send this by email, you need to sign the signature pages and fax/email them back to us, with an undertaking to deliver up all of the original signed papers to us this week.  When we have all of this we can check to make sure we have it all and then we need to confirm all of this to LawFinance, who can then initiate the drawdown sequence”.
26.	On 6th September 2006, Mr Teare emailed Mr Chapman attaching a further version of the Loan Agreement including certain changes that he set out.  He concluded by saying: “As discussed, please sign them and scan/fax the signature pages to me for me to hold pending ironing out the last creases and obtaining any outstanding documents.  Please put the originals in the post or courier them to me”.
27.	On 7th September 2006, Mr Teare emailed Mr Robert Staszkiewicz (“Mr Staszkiewicz”) of LawFinance, and Messrs Cooper and McNally saying that he was expecting the “signed pages for the lending documents today”.
28.	Also on 7th September 2006, Mr Teare emailed Mr Chapman enclosing a further version of the draft Loan Agreement describing the changes.
29.	On 7th September 2006, Mr Chapman wrote to Mr Teare enclosing the “Signature Page of the [Loan Agreement] duly signed and witnessed”.
30.	According to Mr Teare, and this is not disputed by Mr Chapman, Mr Chapman faxed through to him the signature pages to each of the 7 documents (including the Loan Agreement, the original signed signature page for which had been sent the previous day) on 8th September 2006.  Mr Teare’s email of that date to Mr Staszkiewicz at 16.35 indicates he had already received the signature pages for the Loan Agreement, the Declaration and the Legal Charge, and that he was told the remainder “will be here any minute”.  At 16.42 on the same afternoon, Mr Teare emailed Mr Staszkiewicz to say the “rest have just arrived by fax”.
31.	Again, it is not disputed that Mr Teare spoke to Mr Chapman between 15.48 and 16.57 on the 8th September 2006 and they completed the transaction on the telephone in accordance with what Mr Teare describes as common practice. It was Mr Teare’s understanding that Mr Chapman had duly executed and dated complete copies of each of the 7 documents by that time.  I shall return in due course to Mr Chapman’s evidence as to what occurred.
32.	Between the 8th September 2006 and the 8th August 2008, Mr Chapman sent a series of 17 drawdown requests to LawFinance (the “Drawdown Requests”), each referring to the Loan Agreement, and confirming that LawFinance could “disburse the Loan in accordance with the conditions of the [Loan Agreement]” and deduct fees due under the Loan Agreement and the fees of LawFinance’s solicitors.  The sums requested in those Drawdown Requests were duly advanced to Mr Chapman.
33.	Between the 8th September 2006 and the 8th August 2008, Mr Chapman sent LawFinance a series of 10 confirmation notices (the “Confirmation Notices”), each referring to the Loan Agreement, and confirming that the Confirmations in Schedule 1 to the Loan Agreement were true.
34.	On 12th September 2006, Mr Chapman sent Mr Teare the “enclosed documents as discussed containing original signatures”.  Mr Teare acknowledged receipt of them by email to Mr Chapman on 13th September 2006 saying that he had received the original signatures to the Declaration, Legal Charge, the HSBC Notice, and the Yorkshire Bank Notice, but he had not received them for the Mortgage or the September 2006 Assignment.  He had already received the signature page of the Loan Agreement under cover of Mr Chapman’s 7th September 2006 letter referred to above.
35.	On 14th September 2006, Mr Cooper emailed Mr Chapman saying that funds would be transferred to his account that day, but that it was essential that “we have the originals of the outstanding documents.  If you have not sent them yet, I need your professional undertaking to do so”.  Mr Cooper then spoke to Mr Chapman who assured him he had sent all the outstanding documents to Mr Teare, as appears from Mr Cooper’s email of that date.
36.	On 21st September 2006, Mr Teare emailed Mr Chapman confirming receipt of the September 2006 Assignment document and the Mortgage document.
37.	On 10th October 2006, Ms Judith Williams, who worked for Mr Chapman, emailed Mr Teare a copy of the letter that CCC was intending to send to new clients with their client care letter, saying “Where we use this funding provided by LawFinance to pay for your disbursements, they reserve the right, in the event of dispute with ourselves or in the unlikely event that they are unhappy with the way we are conducting your claim, to take your file of papers, documents, money or other property and place it with another firm of solicitors who will then conclude your claim”.
38.	During 2008, LawFinance became concerned at Mr Chapman’s financial position, and it asked Mr Ian A Ross (“Mr Ross”) to go to work at CCC’s Premises, and to try to introduce improved methods of working and financial control.  Mr Ross worked at CCC’s Premises between January and June 2009.  
39.	On 27th February 2009, Mr Michael Corner, the managing director of LawFinance Services Limited, a subsidiary of LawFinance (“Mr Corner”), emailed Mr Chapman agreeing to make a further advance of £25,000 (to pay staff wages) on certain conditions including Mr Chapman’s agreement to provide whatever additional security documentation was requested by LawFinance.   Mr Chapman responded on the same day agreeing to do so, and wrote a letter to Mr Corner also on the same day giving an irrevocable undertaking to “execute or procure the execution of further additional or replacement security over the business and assets of [CCC]”.
40.	On 8th March 2009, the amount allegedly due from Mr Chapman under the Agreement was £1,311,287,22.
41.	On 14th March 2009, Mr Ross emailed Mr Corner saying that “[Mr Chapman] is being chased and threatened by angry creditors and has (almost) lost the will to fight on. … I believe you need to have a contingency plan for insolvency practitioners ready for activation at short notice”.
42.	On 20th March 2009, Mr Corner and a solicitor working for LawFinance, Ms Ayesha Khaliq (“Ms Khaliq”), together with Mr Wilson and Mr Ian Royle (“Mr Royle”) from Mr Wilson’s firm Begbies Traynor (Central) LLP (“BTC”), and Mr David Smyllie (“Mr Smyllie”) and Ms Lisa Walker from LawFinance’s solicitors, Lupton Fawcett LLP (“LF”) attended at Mr Chapman’s offices, to discuss his financial position.  Mr Corner expressed concern, and asked for a clear plan from Mr Chapman to stabilise his financial position.  Mr Wilson suggested that Mr Chapman should give serious consideration to entering into an Individual Voluntary Arrangement with his creditors under the Insolvency Act 1986 (an “IVA”), but Mr Chapman was not keen to do so.
43.	On 25th March 2009, Mr Ross emailed Mr Corner saying that he had spoken to Mr Chapman and that he was very keen to avoid an IVA, and suggesting that, before the new security documentation was signed, he thought it would be beneficial for there to be a meeting with Mr Chapman and Mr Corner to discuss face-to-face the options that were available.  Mr Corner responded the same day saying that he was happy to meet, but that the execution of the security documentation was a requirement that “must be attended to at once”.
44.	On 26th March 2009 at 11.24 a.m., Mr Ross emailed Ms Khaliq a list of all cases recorded as at 20th March 2009.  Ms Khaliq had asked Mr Ross to provide such a schedule so that it could be attached to the draft Assignment in Security that LawFinance was asking Mr Chapman to sign. On the same day at 14.55, Ms Khaliq emailed Mr Ross the draft Assignment in Security asking him to print it off.  Ms Khaliq says that she had previously asked Mr Ross to get Mr Chapman to sign it as he had refused to sign it in her presence.  Mr Chapman told Mr Ross that he was reluctant to sign it but took it with him to the meeting with Mr Corner that was arranged to take place at a hotel at Manchester Airport on 31st March 2009.
45.	At that 31st March 2009 meeting, Mr Chapman attended with Mr Ross, and Mr Corner attended with Ms Khaliq.  The April 2009 Assignment was not signed at that meeting, but Mr Chapman accepts that it was discussed.  Mr Corner said, in effect, that he expected Mr Chapman to execute that Assignment in Security, and Mr Chapman accepted in evidence that he was obliged to do so.
46.	Following that meeting, Ms Khaliq printed out the draft Assignment in Security and the schedule of cases that was to be attached to it from her home computer.  Her clear evidence was that she attached the schedule of cases to the undated draft assignment, and that she handed the document to Mr Ross, assuming that he might say that he did not have the previous document.  Sometime between Wednesday 1st April and Friday 3rd April 2009, Ms Khaliq said that an undated executed version of the April 2009 Assignment was handed to her by Mr Ross, signed by Mr Chapman and witnessed by Mr Ross.  I accept that evidence, though it conflicts with the evidence of both Mr Chapman and Mr Ross.  Ms Khaliq then says that she arranged for the document to be signed also by Mr Staszkiewicz and a Mr Fletcher on behalf of LawFinance, receiving it back at her home address by Monday 6th April at the latest.  On that date or on 7th April 2009, she printed out copies of the April 2009 Assignment dated the 6th April 2009 (with Mr Ross’s assistance) and made up two complete copies for the purpose of registering the completed April 2009 Assignment at the Bills of Sale Office at the High Court.  She posted those two copies together with a sworn witness statement of due execution to the High Court.  Again, I accept Ms Khaliq’s evidence in this regard.
47.	On 15th April 2009, the April 2009 Assignment was registered at the Bills of Sale Office in the Queen’s Bench Division of the High Court.
48.	On 16th June 2009, Mr Corner emailed Mr Chapman and Mr Ross saying that he intended to visit Mr Chapman’s Premises at 9.30 a.m. on Tuesday 23rd June 2009.  He did not say that he intended to bring Mr Wilson and others with him. 
49.	As I have already said, LawFinance demanded payment from Mr Chapman of £1,343,103.96 on 22nd June 2009.  Mr Chapman called Mr Corner after receiving the demand and said he had a proposal to make.  Mr Corner said he would listen to it the following morning, and, as a result of the call, LawFinance did not appoint the Receivers before Mr Corner’s visit to Mr Chapman’s Premises.  Instead, on 23rd June 2009 at about 9.30 a.m., as arranged, Mr Corner, Ms Khaliq, Mr Wilson and Mr Royle attended the Premises.  Mr Chapman was somewhat overwhelmed.  On the evidence I have heard, the order of events that day seems to have been as follows:-
i)	Mr Corner listened to Mr Chapman’s proposal, which was simply to produce a plan for repayment.  Mr Corner said he had been waiting 6 months for such a plan.
ii)	Mr Corner signed and dated the Notice of Appointment of the Receivers, and Mr Wilson handed Mr Corner a signed Notice of Acceptance of Appointment, signed by himself and Mr Pitts.
iii)	Mr Corner said that he would be taking possession of CCC’s files for the cases that the firm was working on, and that each of them would be held in safekeeping pending receipt of consent from the individual clients to allow the new solicitor to work on them.  Mr Corner explained that the new solicitor in question, Bollin, had agreed to see the cases through to their conclusion and remit sums in respect of costs to the Receivers.
iv)	Mr Corner presented a draft of a letter (that had been prepared by LF) that he wanted Mr Chapman to write to each of his clients explaining what was happening.  Mr Chapman was co-operative, but said that he did not have the resources to prepare such a letter in house.  Accordingly, it was agreed that LF would do so, and that Mr Chapman would provide LF with his letter-head that they could use to send out such letters, and with an authority to LF to sign such letters on his behalf.  Mr Chapman agreed to that course.  
v)	Mr Wilson explained the role of an LPA receiver, saying that he would be collecting in the income from the files that was due to Mr Chapman, and that was charged to LawFinance under the Mortgage.
vi)	Mr Corner suggested that Mr Chapman might want an opportunity to explain what was happening to his staff, before the process of the removal of the files got under way.  Accordingly, Mr Corner, Ms Khaliq, Mr Wilson and Mr Royle left the Premises for about an hour, whilst Mr Chapman spoke to his staff.  When they returned, they ascertained that Mr Chapman had dismissed some staff, and there was considerable dismay amongst the remainder of the staff.
vii)	Ms Khaliq then began the process of collecting together the files for removal, with the help of 2 or 3 members of Mr Chapman’s staff.  They boxed up the files and a Mr Safraz Matak (“Mr Matak”) brought the boxes down from the second floor to the ground floor.  It quickly became apparent that the files would not fit into the large car that Mr Corner had rented from Manchester Airport that morning, and Mr Dempsey, Mr Chapman’s van driver and odd job man (“Mr Dempsey”), offered to drive the files in his van.  Ms Khaliq asked him to make sure that Mr Chapman had no objection, which Mr Dempsey did, and the boxes of files were duly loaded into Mr Dempsey’s van.  In the course of loading up the files, the ones that required urgent action were identified and kept separately.
viii)	The main bulk of the files were taken to Bollin by Mr Dempsey, in return for a modest cash payment made to him by Mr Corner.  The remaining ‘urgent’ files were to be taken to LF.  Since Mr Wilson’s office was in Leeds (as was LF’s office), he agreed to take those files over to LF in his car, which he duly did at the end of the day.
ix)	Finally, Mr Chapman signed two further documents:-
a)	First, an authorisation (the form of which had been faxed over during the course of the day by LF) addressed to Mr David Smyllie at LF saying: “I, Carl Chapman, authorise Lupton Fawcett Solicitors to sign on my behalf and in my name and on my firm’s letter head letters to clients notifying them of the proposed transfer of their clients to Bollin Legal”.
b)	Secondly, a letter requested to be signed by Mr Corner saying that Mr Chapman irrevocably acknowledged and undertook as follows:- “All personal injury cases which my practice is currently dealing with (the “Cases”) are caught by and subject to the [April 2009 Assignment].  [LawFinance] have made a formal demand under the [Loan Agreement] and have appointed [the Receivers] as receivers.  To facilitate the transfer of the Cases to [Bollin] and at [LawFinance’s] request, to … forward to Bollins without delay and without charge all or any correspondence … in connection with the Cases; and … to forward to the Receivers without delay … all or any payments received … in connection with the Cases”.
50.	On 26th June 2009, Mr Chapman emailed Mr Smyllie of LF saying, amongst other things, that “my Receptionist has advised the clients [who have telephoned] that … under the agreement between the parties it has been agreed that the files in which they have a financial interest have been removed to [Bollin]”.
51.	On 30th June 2009, Mr Corner and Ms Khaliq returned to Mr Chapman’s Premises, because they were concerned that some 90 of the files that should have been delivered to Bollin had not arrived.  Ms Khaliq told Mr Chapman that some of the files were missing and he invited her to go and look for them, which she did.  She did not, however, find them, and I find that she and Mr Corner removed no files from the Premises that day.  I do not accept Mr Chapman’s evidence that they removed a couple of files from CCC’s reception on that occasion.
52.	On 3rd July 2009, Mr Chapman called Mr Royle, who later returned his call.  On that occasion, Mr Chapman told him that he had located 24 files, which Mr Royle said he would come and collect.  Mr Royle emailed Mr Chapman to confirm the conversation, and eventually collected the files on Monday 6th July 2009, before arranging to have them delivered to Bollin shortly thereafter. 
53.	On 20th July 2009, Mr Chapman wrote to LF saying that “I think it is fair to say that I have done everything within my power to facilitate an amicable and smooth transition of the files removed by [LawFinance] and placed with [Bollin]”.
The terms of the Loan Agreement
54.	The Loan Agreement included the following provisions:- 
“2. AMOUNT AND TYPE OF LOAN
2.1. The Facility shall be for a maximum of £1,000,000 only (one million pounds only), and shall be made available in the Initial Tranche.  After the drawdown of the Initial Tranche, additional tranches of not less that £250,000 (two hundred and fifty thousand pounds sterling) each (or such lesser sum as will bring the amount made available up to the Maximum Amount if an additional tranche would exceed the Maximum Amount) will be available in the absolute discretion of [LawFinance] and subject to the continuing performance of the Borrower of all the terms and conditions of this Facility.
2.2 The Facility shall be a revolving facility, such that when the Borrower repays any funds advanced to it under the Facility during the Facility Period, those repaid funds shall continue to be available to the Borrower against which it may make further Drawdown Requests during the Facility Period.
3. PURPOSE OF LOAN
3.1. The purpose of the Facility is to exclusively assist the Borrowers in funding Clients Legal Disbursements in respect of the Qualifying Claims.
5. FEES
5.1. The Borrower shall pay to [LawFinance] the Committee Fee upon execution of this Agreement.
5.2. The Borrower shall pay to [LawFinance] the Administration Fee upon each Individual Drawdown.
5.3. The Borrower shall pay to [LawFinance], or as [LawFinance] directs, the Monitoring Fee upon each Individual Drawdown.
5.4. The Borrower shall pay to [LawFinance] a fee of £25 per Qualifying Claim as a Monitoring Fee and a fee of £25 per Qualifying Claim as an Administration Fee upon a replacement case being added under clause 4.6 above.
5.5. For the period in which the Initial Tranche is outstanding, the Borrower shall pay an additional fee of £1,000 per month, relating to the ongoing monitoring requirements of the cases secured against the Initial Tranche.  The requirement to pay this additional fee shall cease upon the payment in full of the Initial Tranche.
6. INTEREST
6.1. On each Interest Date (being, as appropriate, (a) the end of the relevant Interest Period, and (b) the date of repayment of the Loan), [LawFinance] shall calculate the amount of Interest due on the Loan that the Borrower is obligated to pay in accordance with the terms of the Facility.  Interest shall accrue from day to day and be computed on the basis of a 365-day year, compounded monthly.  For the avoidance of doubt, the first Interest Period shall commence on the date of the first Drawdown of the Loan.
6.2. Save as provided in this paragraph:
6.2.1		each Interest Period shall be a calendar month (or such other period as may be agreed between [LawFinance] and the Borrower);
6.2.2		no Interest Period may expire later than the last day of the Facility Period; and 
6.2.3		if an Event of Default (as set out in Clause 14) (which is continuing) has occurred, [LawFinance] shall have the right to amend each subsequent Interest Period from time to time as [LawFinance] in its absolute discretion sees fit.
6.3. If the Borrower fails to pay any amount payable be it under the Facility on its due date, Interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at the Default Interest Rate.  Any Interest accruing under this Clause 6.3 shall be immediately payable by the Borrower on demand by [LawFinance].
6.4 Default Interest (if unpaid) arising on an overdue amount will be compounded on a monthly basis with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
6.5. In the event that the Base Rate changes during the period that sums are due to [LawFinance] by the Borrower, the Interest Rate shall be adjusted to reflect such change, such that the Interest Rate shall never be below 15%.
7. PERIOD AND REPAYMENT
7.1. The Loan will be available for the Facility Period during which time repayments of the Loan and payments of Interest will be made at the end of each Interest Period in cleared funds calculated in accordance with the provisions of Clause 6 above, and payable in accordance with Clauses 7.4 and 7.10 below.  If the Loan has not been extended at the end of the Facility Period in accordance with Clause 7.2 below, notwithstanding the Repayment Date being reached and payment being due and payable, the Borrower shall have until the Drop Dead Date to repay the Loan (and all accrued Interest, Default Interest and other monies due under this Agreement).
10. POSITIVE COVENANTS
10.1. The Borrower shall provide to [LawFinance], in a form and substance satisfactory to it, the following information and/or documents in accordance with the specific timescales set out below:
10.1.1 the Bordereau certified by the Borrower on or before the 10th day of each month accurate and complete as of the last day of the preceding month;
10.1.2 such other reports as to the status of the Qualifying Claims as [LawFinance] may from time to time, in its absolute discretion, request; …
10.2. The Borrower further covenants to ensure that the following actions are undertaken and that he will:
10.2.1 conduct the Business in accordance with the Business Plan; …
10.2.7 on each Interest Date, enter into the Assignment in relation to all Qualifying Claims and all other legal work being conducted by the Borrower for all Clients on such Interest Date…;
10.3. The Borrower hereby acknowledges and agrees with [LawFinance]:-
10.3.1 that [LawFinance] shall have a lien over all papers and items in relation to a Qualifying Claim in respect of which the Borrower itself has a lien in respect of all and any sums due to [LawFinance] in relation to that claim and for this purpose the Borrower shall be deemed to be in possession of all such papers and items as an agent of [LawFinance] as well as for itself and PROVIDED that [LawFinance’s] lien shall be discharged if the Borrower’s lien is discharged in accordance with the terms of the Conditional Fee Agreement entered into in relation to the relevant Qualifying Claim;
10.3.2 that it will deliver up to [LawFinance] all papers and items in relation to a Qualifying Claim in respect of which any sums are due to [LawFinance] as and when required to do so by [LawFinance] but without prejudice to the maintenance of the Borrower’s lien; and 
10.3.3 that such Lien shall rank in priority to that of any professional or other lien which the Borrower may have in relation to each Qualifying Claim it is conducting for each and every Client; and 
10.4. The Borrower covenants to procure that all of their Clients enter into a Waiver in the agreed form.
13. SECURITY DOCUMENTS
13.1. As security for payment, repayment and discharge of the Liabilities due, owing or incurred from the Borrower to [LawFinance] under the Security Documents whether actually or contingently and whether solely or jointly with any other person and in whatever style or name and whether as principal or surety on any current or other account whatever including interest, discount, commission and other costs, charges and expenses, [LawFinance] will require in a form and substance which is acceptable in every way:
13.1.1 Legal charge over a deposit account to be held with HSBC plc to which the drawn down funds will be advanced to the Borrower pending payment of the Disbursements;
13.1.2 a Lien over each and every file relating to each Qualifying Claim on which [LawFinance] has advanced monies;
13.1.3 an assignment of the Borrower’s right, title and interest in and to all fees payable to him now or in the future in respect of the Qualifying Claims and all other legal work being conducted by the Borrower for all Clients.
14. EVENTS OF DEFAULT
14.1. [LawFinance] shall be entitled, by giving written notice to the Borrowers, to cancel the Loan or any part of it and to demand immediate repayment and/or payment of the Liabilities on or after the occurrence of any Event of Default.
14.2. An Event of Default means any of the following specified events (whether or not declared):
14.2.1 The Borrower fails to pay any sum due under the Finance Documents on the due date.
16. AUTHORISATION TO [LawFinance]
16.1. The Borrower irrevocably authorises [LawFinance] to take any and all appropriate action and to execute any and all documents, agreements and instruments, in the name of the Borrower, that may be necessary or desirable to ensure compliance and operation of this Agreement including the filing on behalf of the Borrower such governmental and other relevant authorities as are appropriate of such documents (including without limitation, applications, certificates and tax returns) as may be required in order to ensure that the Borrower is properly authorised to carry on its business.
19 FURTHER ASSURANCE
19.1. The Borrower shall (at its own expense) promptly execute and deliver all such documents, and do all such things, as [LawFinance] may from time to time require for the purpose of giving full effect to the provision of this Agreement and any documents referred to herein.”
SCHEDULE 1
CONFIRMATION TO BE PROVIDED UPON INDIVIDUAL DRAWDOWN
(E) The Borrower holds a completed waiver of confidentiality and privilege from the Client.
(F) The Borrower holds a completed Waiver from the Client pursuant to clause 10.4 of the Agreement”
The terms of the Mortgage
55.	The Mortgage included the following provisions:-
“1.1 Where the following words and expressions are used in this Mortgage they are set out in italics and have the following meanings:
“Books Debts”	all the debts which are now or at anytime in the future owed to the Business by clients or customers of the Business.
“Work-in-Progress” all the work-in-progress now or at any time the future of the Business and the benefit of all contracts and engagements of the Business with its clients and customers.
3. Assignment of the Goodwill, the Book Debts and Work-in-Progress
3.1. As security for the payment and discharge of the Secured Obligations and all other sums of money and liabilities owed under this Mortgage, with full title guarantee, you assign the Goodwill, the Book Debts and Work-in-Progress to us together with the benefit of all security for the same and all interest (if any) which may become due on the same.
3.2. All Costs and Interest on Costs from the date they are incurred until they are paid will be secured by this Mortgage.
7. Power of attorney
As security for your obligations under this Mortgage, you irrevocably appoint us to be your attorney in your name and on your behalf to execute and deliver any deed or document, to exercise any rights or powers which you have in respect of the Goodwill, Book Debts or Work-in-Progress and to do anything else which we think necessary or desirable to perfect this Mortgage or to exercise any powers contained in this Mortgage or to preserve the Goodwill or it’s value”.
The terms of the April 2009 Assignment
56.	The April 2009 Assignment provided as follows:-
“Assigned rights: the assets and rights assigned or to be assigned in security by or pursuant to this Assignment.
Cases: all personal injury or other cases listed in Schedule 1 being conducted by the Borrower for his Clients from time to time pursuant to a Client Contract, as the same are stated and updated in accordance with the provisions of Clause 3.
Client Contracts: together (a) all letters of engagement or other similar contracts made between the Borrower and each Client under which a Client has appointed the Borrower to act as the Client’s legal representative to pursue the relevant Client’s Case and (b) all Handling Agreements in relation to the Cases.
Secured Liabilities: all sums due and to become due to the Lender by the Borrower under or pursuant to the Loan Agreement (including all present, future or contingent obligations owed to the Lender by the Borrower, whether such obligations exist now or arise in the future) together with interest and charges thereon; and all sums due and to become due to the Lender by the Borrower under or pursuant to the Loan Agreement (including all present, future or contingent obligations exist now or arise in the future) together with interest and charges thereon; and …
2.	OBLIGATION TO PAY
The Borrower undertakes to the Lender to pay or discharge the Secured Liabilities on the due date therefore in accordance with the terms of the Loan Agreement.
3.		ASSIGNMENT IN SECURITY
3.1 In security of the due and punctual payment and performance by the Borrower of the Secured Liabilities, the Borrower with full title guarantee hereby assigns to the Lender the Borrower’s whole right, title, interest and benefit in and to the Cases, and the Borrower’s Rights associated with the Client Contracts and the Cases.
3.2 On the first day of each month following execution of this Assignment throughout the currency of the Loan Agreement, the Borrower shall confirm in writing to the Lender that all of the Cases in existence as at that date are and continue to be (as the case may be) the subject of the assignment set out in Clause 3.1 above, by serving the Notice.
4.		PERFECTION OF SECURITY
4.1 The Borrower binds and obliges itself to take all steps as are within its power as the Lender may request to perfect under any appropriate law the security hereby intended to be granted or any security interest constituted pursuant to this Assignment in respect of all or any of the Assigned Rights or for the purposes of protecting such security or facilitating the realisation of the Assigned Rights or the exercise of the Lender’s rights hereunder, including in particular the refreshment and restating of the security in accordance with Clause 3.2.
7. 		ENFORCEMENT OF SECURITY
7.1 The security hereby granted and any security interest created pursuant hereto shall, immediately become enforceable upon the occurrence of an Event of Default.  At any time thereafter (and whether or not the same is then continuing) the Lender shall be entitled (but shall not be obliged), without any notice to the Borrower or otherwise and whenever the Lender thinks fit, to exercise all rights and powers in relation to the Assigned Rights which could have been exercised by the Borrower prior to the security hereby granted or created pursuant hereto becoming enforceable including all powers to take possession of or sell or otherwise dispose of the Assigned Rights or any part thereof as if the Lender was the absolute owner of the same and pending any such sale or other disposal to receive and to apply in or towards satisfaction of the Secured Liabilities any profits or benefits or property of any kind derived from the Assigned Rights or accruing by virtue of the exercise of such rights or powers.
11.	FURTHER ASSURANCE
11.1 The Borrower shall execute and do all such assurances, acts and things as the Lender may require for perfecting or protecting (by registration or in any other way) the security created or intended to be created by or pursuant to this Assignment over the Assigned Rights or for facilitating the realisation of all or any part of the Assigned Rights and the exercise of all powers, authorities and discretions conferred on the Lender pursuant to this Assignment or by law and shall, in particular, execute all fixed securities, floating charges, Assignments, securities, transfers, dispositions and assurances of the Assigned Rights whether to the Lender or to its nominee(s) or otherwise and give all notices, orders and directions which the Lender may acting reasonably think expedient.
12. MANDATE AND ATTORNEY
12.1. The Borrower, subject to the provisions of Clause 12.2, hereby irrevocably appoints the Lender to be its mandatory and attorney for an on behalf the Borrower and in its name or otherwise and as its act or deed to create or constitute, or to make any alteration or addition or deletion in or to, any documents which the Lender may require for perfecting or protecting the title of the Lender to the Assigned Rights or for vesting any of the Assigned Rights in the Lender or its nominees or any purchaser and to re-deliver the same thereafter and otherwise generally to sign, seal and deliver and otherwise perfect any fixed security, floating charge, transfer, disposition, Assignment, security and/or assurance or any writing, assurance, document or act which may be required or may be deemed proper by the Lender on or in connection with any sale, lease, disposition, realisation, getting in or other enforcement by the Lender of all or any of the Assigned Rights”.
57.	The January 2009 Assignment was in materially identical form to the April 2009 Assignment, and the earlier assignments were also in very similar and materially indistinguishable form. 
Claimant’s witnesses
58.	Mr Ross gave evidence first for Mr Chapman.  Mr Ross is a chartered accountant.  LawFinance insisted that Mr Ross worked with Mr Chapman to try to sort out his financial position from January to June 2009.  The burden of Mr Ross’s evidence was that he did not recall witnessing Mr Chapman’s signature on the April 2009 Assignment, and that he thought the document that he had witnessed at that time in early April 2009 was a shorter document of 2 or 3 pages starting with the words “In the High Court of Justice”.
59.	I think Mr Ross was doing his best to help the Court, but had no reliable memory of what had occurred.  When asking him for his recollection on 30th July 2009, Mr Chapman had emailed Mr Ross saying that his (that is Mr Chapman’s) recollection was that the document he had signed was “the standard High Court document allowing [LawFinance] to register a schedule of files consisting of approximately 1½ pages”.   In fact, however, there was no reason for Mr Chapman to have signed a “High Court” document, and Mr Ross acknowledged that he had printed out the April 2009 Assignment for Ms Khaliq, and that Ms Khaliq had asked Mr Ross to get Mr Chapman to sign it.  Whilst Mr Chapman was reluctant to sign, I cannot see how he could have avoided doing so.  Having heard the other witnesses, it seems to me that Mr Corner would have applied much more pressure in the ensuing weeks if he had declined to do so.   It is inconceivable, in my judgment, that Mr Ross can have witnessed any document other than the April 2009 Assignment. The body of that document is 11 pages, and the schedule is 20 pages, so that, even if the schedule had been detached, it could not have been confused for a 3 page document.  I think that Mr Ross was misremembering, having been led to do so by Mr Chapman’s enquiry. 
60.	Mr Chapman gave evidence next.  His evidence was a strange mixture of genial acceptance of some obvious points that were put to him, and stubborn resistance to other points that were equally obvious.  For example, he resisted the suggestion that he had agreed to the terms of the Loan Agreement when he signed the signature sheet as requested by LawFinance, having asked a secretary to print it off.  His thesis was that, since the secretary may have had more than one version of the draft Loan Agreement on her computer, he did not know which signature sheet she had printed off and, therefore, which version of the Loan Agreement he had agreed to.  It was too obvious for words that, as an experienced and practical solicitor, he knew full well that he had been agreeing to the latest version of the Loan Agreement that he had been sent by LawFinance’s solicitors.  Indeed he said as much in his own statement and in earlier emails and letters of various kinds.  The method of execution that he had adopted at the request of LawFinance was entirely orthodox and admitted of no doubt as to the terms to which he was agreeing.  Yet, much time was taken up in cross-examination because of Mr Chapman’s tenacious refusal to accept the point.  Mr Chapman was obviously aggrieved by LawFinance’s actions on 23rd June 2009.  But the idea that, by signing only the signature page of the Loan Agreement, he could later say that he had not agreed to the whole of it was, in my view, rather an unmeritorious point for a solicitor to have been taking.  Moreover, at the end of his evidence, he told me that he had no actual recollection of signing the 7 documents at all.
61.	Generally, it seems to me that Mr Chapman found the process of losing his practice so traumatic that his recollection was poor.  I do not think he deliberately told the court untruths, but I am sure that his obstinacy and his refusal to accept anything that was not proved beyond peradventure, led him to reconstruct events that he did not properly recall in ways that were simply not accurate. 
62.	Mr Chapman told me that he had indeed signed an authorisation to Mr Smyllie at LF authorising him to sign on his [CCC’s] letterhead letters to clients notifying them of the proposed transfer to Bollin.  But when it came to his authorisation to LawFinance, the Receivers and Bollin to transfer the cases and case files to Bollin, he said that the document had been handed to him by Mr Corner late on 23rd June 2009 “at the death”, after the files had gone.  He said that he had signed under a “fairly significant misapprehension”, because it was not clear what he was letting himself in for.  He was “not a happy camper to put it mildly”, and that he had signed after a “heavyweight 3 hour meeting”, when he was a “shot man”, and when he was under duress.  He accepted he could have said “no”, but that was not the environment in which it was presented.
63.	This part of Mr Chapman’s evidence demonstrated, in my judgment, that he had persuaded himself that LawFinance and the Receivers had been heavy handed with him.  The allegation was, in effect, that they had papered the file with his concurrences after the files had been removed.  The reality was, in my judgment, different.  Mr Chapman was, at the time, as the contemporaneous documentation shows, compliant.  He raised no complaint at the removal of the files, nor at being asked to sign the consent to the transfer of the files to Bollin, and he co-operated with both LawFinance and the Receivers. 
LawFinance’s witnesses
64.	Mr Wilson was interposed in the course of Mr Chapman’s evidence.  He was one of BTC’s joint regional managing partners, and one of the Receivers of the income due to LawFinance under the Mortgage.  He has been a full time insolvency practitioner since 1979.  He was cross-examined about his account of the events of 23rd June 2009, but I found his evidence reliable.  He confirmed Mr Corner’s evidence as to the events of that day in paragraphs 31-36 of his (Mr Corner’s) statement.  In particular, Mr Wilson was clear that he had told Mr Chapman on the morning of 23rd June 2009 that BTC would not become involved in any clients’ files as they were not solicitors.  But he could say that the process of file removal proceeded after he had been appointed, and though he did not know precisely how it had occurred, he assumed that Ms Khaliq was doing what had been discussed in the meeting, namely taking the files for transfer to Bollin.  He said, and I accept, that the Receivers were not involved in the file removal process, save in two minor ways, namely:-
i)	On 23rd June 2009, Mr Wilson took the urgent files that needed to go to LF, rather than Bollin, to LF since he was travelling to Leeds in any event.  In doing so, he was acting as a courier for LawFinance, and was not dealing with the files on the Receivers’ own account.
ii)	On 6th July 2009, BTC’s van driver, Mr Philip Strong, was despatched by Mr Royle to collect some 24 files from Mr Chapman and deliver them to Bollin.  Again, I accept that Mr Strong’s contact with the files did not involve any more than their transportation.
65.	Mr Corner gave evidence for LawFinance immediately after Mr Chapman’s evidence.  He was called to the Bar some years ago, but never practised. I found his evidence clear and reliable.  It seemed to me that he behaved firmly but fairly with Mr Chapman throughout.  It was he, who accepted, in cross-examination that he had been impolite in not having told Mr Chapman that he was bringing Mr Wilson and others to the meeting on 20th March 2009, but that he had not done so.
66.	Ms Khaliq also gave evidence for LawFinance.  Her evidence was also clear and reliable.  She was obviously an efficient solicitor who went about her tasks in a businesslike manner.  She described what had happened when the files were removed from Mr Chapman’s premises, and I accept her recollection as accurate.
67.	Mr Staszkiewicz, another director of LawFinance, gave evidence as to the calculation of the sums owed by Mr Chapman. His evidence was not seriously challenged.  Indeed, Mr Chapman seemed to accept that his figures were likely to be reliable.
68.	Mr Royle is an insolvency manager with BCT.  He gave his evidence clearly and concisely, and I found his evidence also reliable.
69.	Mr Teare was, as I have said, a partner in Bridgehouse Partners LLP, the solicitors that drafted the loan documentation.  He completed the original 7 documents on behalf of LawFinance.  His evidence was careful.  He explained, however, in examination-in-chief what he had meant in his statement by saying “I had a telephone conversation with the Claimant in which he confirmed that he was holding the final versions of the documents executed by him. We then completed the documents over the telephone in accordance with common practice”. He said: “Confirmation that we had all the documents in front of us, that they were there in full, that the documents were dated as of that date, which is 8th September, they were fully executed and that they would be put in the post”.  That was undoubtedly what Mr Teare understood, but, equally, he knew that the majority of the documents were not in fact dated, because the dates on the front of the Loan Agreement, the Legal Charge, the September 2006 Assignment, the Declaration and the Mortgage are all in his own manuscript.  Moreover, in fact, only 4 of the 7 documents were ever returned to him in their entirety, namely the Mortgage, the September 2006 Assignment, the HSBC Notice and the Yorkshire Bank Notice.  Of those, only the last two were dated in Mr Chapman’s manuscript.
The Bills of Sale Acts 1878-1882
70.	One of Mr Chapman’s primary submissions was that the Loan Agreement was wholly void as an unregistered Bill of Sale, and that the Assignments were invalid for a number of reasons under the Bills of Sale Acts 1878-1882.  Accordingly, it is important to set out the material provisions of the Acts.
71.	The Bills of Sale Act 1878 provided as follows:-
“3 Application
This Act shall apply to every bill of sale executed on or after the first day of January one thousand eight hundred and seventy-nine (whether the same be absolute, or subject or not subject to any trust) whereby the holder or grantee has power, either with or without notice, and either immediately or at any future time, to seize or take possession of any personal chattels comprised in or made subject to such bill of sale.
4 Interpretation of terms
In this Act the following words and expressions shall have the meanings in this section assigned to them respectively, unless there be something in the subject or context repugnant to such constructions; (that is to say),
The expression “bill of sale” shall include bills of sale, assignments, transfers, declarations of trust without transfer, inventories of goods with receipt thereto attached, or receipts for purchase moneys of goods, and other assurances of personal chattels, and also powers of attorney, authorities, or licences to take possession of personal chattels as a security for any debt and also any agreement, whether intended or not to be followed by the execution of any other instrument, by which a right in equity to any personal chattels, or to any charge or security thereon, shall be conferred, but shall not include the following documents; that is to say, assignments for the benefit of the creditors of the person making or giving the same marriage settlements, transfers or assignments of any ship or vessel or any share thereof, transfers of goods in the ordinary course of business of any trade or calling bills of sale of goods in foreign parts or at sea, bills of lading, India warrants, warehouse-keepers’ certificates, warrants or orders for the delivery of goods, or any other documents used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by indorsement or by delivery, the possession of such document to transfer or receive goods thereby represented:
The expression “personal chattels” shall mean goods, furniture, and other articles capable of complete transfer by delivery, and (when separately assigned or charged) fixtures and growing crops, but shall not include chattel interests in real estate, nor fixtures (except trade machinery as herein-after defined), when assigned together with a freehold or leasehold interest in any land or building to which they are affixed, not growing crops when assigned together with any interest in the land on which they grow, nor shares or interests in the stock, funds, or securities of any government, or in the capital or property of incorporated or joint stock companies, nor choses in action, nor any stock or produce upon any farm or lands which by virtue of any covenant or agreement or of the custom of the country ought not to be removed from any farm where the same are at the time of making or giving of such bill of sale:
Personal chattels shall be deemed to be in the “apparent possession” of the person making or giving a bill of sale, so long as they remain or are in or upon any house, mill, warehouse, building, works, yard, land or other premises occupied by him, or are used and enjoyed by him in any place whatsoever, notwithstanding that formal possession thereof may have been taken by or given to any other person. … 
8 Avoidance of unregistered bills of sale in certain cases
Every bill of sale to which this Act applies shall be duly attested and shall be registered under this Act, within seven days after the making or giving thereof, and shall set forth the consideration for which such bill of sale was given, otherwise such bill of sale, as against all trustees or assignees of the estate of the person whose chattels, or any of them, are comprised in such a bill of sale under the law relating to bankruptcy or liquidation, or under any assignment for the benefit of the creditors of such person, and also as against all sheriffs officers and other persons seizing any chattels comprised in such bill of sale, in the execution of any process of any court authorising the seizure of the chattels of the person by whom or of whose chattels such bill has been made, and also as against every person on whose behalf such process shall have been issued, shall be deemed fraudulent and void so far as regards the property in or right to the possession of any chattels comprised in such bill of sale which, at or after the time of filing the petition for bankruptcy or liquidation, or of the execution of such assignment, or of executing such process (as the case may be), and after the expiration of such seven days are in the possession or apparent possession of the person making such bill of sale (or any person against whom the process has issued under or in the execution of which such bill has been made or given, as the case may be).  
10 Mode of registering bills of sale
A bill of sale shall be attested and registered under this Act in the following manner:
(1) The execution of every bill of sale shall be attested by a solicitor of the Supreme Court [Senior Courts], and the attestation shall state that before the execution of the bill of sale the effect thereof has been explained to the grantor by the attesting solicitor”.
72.	The Bills of Sale Act (1878) Amendment Act 1882 provided as follows:-
“4 Bill of sale to have schedule of property attached thereto
Every bill of sale shall have annexed thereto or written thereon a schedule containing an inventory of the personal chattels comprised in the bill of sale; and such bill of sale, save as herein-after mentioned, shall have effect only in respect of the personal chattels specifically described in the said schedule; and shall be void, except as against the grantor, in respect of any personal chattels not so specifically described.
5 Bill of Sale not to affect after acquired property
Save as herein-after mentioned, a bill of sale shall be void, except as against the grantor, in respect of any personal chattels specifically described in the schedule thereto of which the grantor was not the true owner at the time of the execution of the bill of sale.
8 Bill of sale to be void unless attested and registered
Every bill of sale shall be duly attested, and shall be registered under the principal Act within seven clear days after the execution thereof, or if it is executed in any place out of England then within seven clear days after the time at which it would in the ordinary course of post arrive in England if posted immediately after the execution thereof; and shall truly set forth the consideration for which it was given; otherwise such bill of sale shall be void in respect of the personal chattels comprised therein.
		9 Form of bill of sale 
A bill of sale made or given by way of security for the payment of money by the grantor thereof shall be void unless made in accordance with the form in the schedule to this Act annexed. 
10 Attestation
The execution of every bill of sale by the grantor shall be attested by one or more credible witness or witness, not being a party or parties thereto. …
 13 Chattels not to be removed or sold
All personal chattels seized or of which possession is taken … under or by virtue of any bill of sale (whether registered before or after the commencement of this Act), shall remain on the premises where they were so seized or so taken possession of, and shall not be removed or sold until after the expiration of five clear days from the day they were so seized or so taken possession of. …  
15 Repeal of part of Bills of Sale Act 1878
All … enactments contained in the principal Act which are inconsistent with this Act are repealed …”

SCHEDULE
Form of Bill of Sale
This Indenture made the .. day of .. between A.B. of .. of the one part, and C.D. of .. of the other part, witnesseth that in consideration of the sum of £ now paid to A.B. by C.D., the receipt of which the said A.B. hereby acknowledges (or whatever else the consideration may be), he the said A.B. doth hereby assign unto C.D., his executors, administrators, and assigns, all and singular the several chattels and things specifically described in the schedule hereto annexed by way of security for the payment of the sum of £ and interest thereon at the rate of .per cent per annum (or whatever else may be the rate).  And the said A.B. doth further agree and declare that he will duly pay to the said C.D. the principal sum aforesaid, together with the interest then due, by equal payments of £ .. on the .. day of .. (or whatever else may be the stipulated times or time of payment).  And the said A.B. doth also agree with the said C.D. that he will (here insert terms as to insurance, payment of rent, or otherwise, which the parties may agree to for the maintenance or defeasance of the security).
Provided always, that the chattels hereby assigned shall not be liable to seizure or to be taken possession of by the said C.D. for any cause other than those specified in section seven of the Bill of Sale Act (1878) Amendment Act 1882.
In Witness, &c”.
Issue 1:  The validity of the Loan Agreement
	Was the Loan Agreement validly executed by Mr Chapman?
73.	The first question that arises under this issue is as to the execution of the Loan Agreement.  As I have already explained, Mr Chapman argues that, because he only executed the signature page, and never printed out the whole Loan Agreement, he is not bound by it.  As I have also already indicated, I do not regard this as an attractive argument for a solicitor to be advancing.  Mr Chapman negotiated his own funding and security documentation as his own solicitor; he was treated as a solicitor by LawFinance’s solicitors, and was trusted as a solicitor for a counterparty to a transaction would normally have been trusted.  The fact that his office was somewhat chaotic, and that he appears not to have had the facilities to process large documents efficiently was unknown by LawFinance’s lawyers, and could not have been expected by them.
74.	Mr Chapman relied on a number of cases concerning the alteration of formal contracts after they had been executed (e.g. Raiffeisen Zentralbank Osterreich A.G. v. Crossseas Shipping Ltd [2000] 1 WLR 1135, Mercury Tax Group Limited v. HM Commissioners of Revenue and Customs [2008] EWHC 2721 (Admin.), and Koenigsblatt v. Sweet [1923] 2 Ch. 314).  But, in my judgment, none of these cases really assist him.  Mr Chapman knew the terms of the Loan Agreement.  No substantive changes were made after he signed the signature page on 7th September 2006 in preparation for completion, which eventually took place the following day.  Whether or not Mr Chapman printed out the entirety of the Loan Agreement and its schedules and its appendices, he knew precisely what the provisions of all and each of them said.  They remained available to him on his computer system in the form of files attached to the emails that Mr Teare and others at Bridgehouse Partners LLP had sent him.  The only change made after Mr Chapman signed was the addition of the date by Mr Teare in manuscript.   That accords with normal solicitors’ practice as Mr Teare described.  The parties executed the documents in escrow to be held until completion was agreed to take place.  In this case, completion was agreed in the course of the telephone conversation that took place in the afternoon of 8th September 2006 as Mr Teare said.  Mr Teare then duly dated the Loan Agreement to accord with the date on which completion had been agreed.  If this process were to be regarded as invalidating a commercial agreement, it would be impossible for solicitors to do business efficiently.  Commercial life depends on the trust between professionals, and the ability of commercial counterparties to rely on the word of the solicitor on the other side.  
75.	In this case, I have no doubt that Mr Chapman and Mr Teare were entirely of like minds as to the precise content of the Funding Agreement, its schedules and appendices.  I accept that it is unlikely that Mr Chapman actually printed out the whole of the Loan Agreement and its schedules and appendices and put all the pages together in a pile in the correct order before executing the signature page witnessed by Mr Nigel James Parker, another solicitor, who then worked as Mr Chapman’s litigation manager.  But, when Mr Chapman executed the signature page and subsequently agreed to completion on the telephone, he was signifying his unequivocal agreement to be bound by the terms of the Loan Agreement, its schedules and appendices, as those documents had been exchanged in emails between the parties.  There was no doubt, as Mr Chapman suggested there might have been, as to the versions of the documents that were agreed.  They were the last versions passing between the parties that were agreed.  In the case of the appendices D and E (the business plan and the payment protocol), these had been agreed by Mr Staszkiewicz on behalf of LawFinance with Mr Chapman or Ms Natalie Atkinson, acting on his behalf.
76.	For these reasons, therefore, I find that the Loan Agreement was validly executed.
77.	I should mention that I am fortified in my finding that the Loan Agreement was validly executed by the numerous occasions on which Mr Chapman acknowledged its existence and validity, not least in every Drawdown Request, every Confirmation Notice, and in Mr Chapman’s own first witness statement.
Was the Loan Agreement a bill of sale within section 4 of the 1878 Act?
78.	Mr Chapman does not suggest that every provision of the Loan Agreement is a bill of sale.  He does, however, point to clauses 5.5 and 10.3.2 as granting security to LawFinance over chattels, namely files belonging to Mr Chapman, thus rendering the whole agreement a bill of sale.  Ms Talbot Rice raises a number of arguments in answer to this contention, submitting that:-
i)	The Loan Agreement is not a security document at all, and cannot, therefore, be a bill of sale.
ii)	The files are not “personal chattels” within the meaning of the Acts.
iii)	The files do not belong to Mr Chapman, but to his clients, so the Loan Agreement cannot be a bill of sale in respect of them.
iv)	The files are future property and, therefore, not covered by the Acts.
79.	It is true that the Loan Agreement is primarily just that.  But, simply because an agreement constituting a bill of sale effects other transactions as well, that should not, as it seems to me, prevent the document being, or at least including a bill of sale for the purpose of the Acts.  
80.	In Davies v Rees (1886) 17 QBD 408, the Court of Appeal held that a covenant to pay contained in a bill of sale that was void under section 9 of the 1882 Act, was also void on the basis that the bill of sale was void “in toto”.  But two other cases show that, if part of a bill of sale concerns “personal chattels” outside the scope of the Acts, that part is valid, even if the part concerning chattels included within the Acts is void: see In Re Burdett (1888) 20 QBD 310 at pages 315-6, and In re North Wales Produce and Supply Society Limited [1922] 2 Ch 340.  And in Burdett, Fry LJ, giving the judgment of a strong Court of Appeal, said that Davies did not establish the broad proposition that every part of an instrument including a void bill of sale was necessarily void.  He said the following at pages 315-6:
“But that decision [the decision appealed from] proceeds, not on principle, but upon the authority of Davies v. Rees (1), which was binding on the Divisional Court, and is binding on this Court. In that case this Court decided that, where a bill of sale contained a covenant to pay, and an assignment of chattels personal, and of no other property, and was bad under the statute as an assignment, the covenant to pay was also avoided by the 9th section of the statute. The Court decided that the whole of the instrument there in question was void; not that the whole of every instrument in which a void bill of sale may be embodied is also necessarily void. The principle of that decision we take to be this, that the 9th section made the whole of a "bill of sale," as those words were used in the section, and not merely the assignment contained in it, void, as was shewn by a comparison of language of the 8th and 9th sections; that the same 9th section shewed, by its reference to the schedule, what it meant by a "bill of sale;" and that, on reference to the schedule, it appeared that a covenant to pay was an integral part of the scheduled form, and, therefore, of a "bill of sale" within that section.  There were three possible areas over which the avoidance might operate, viz. (1) the assignment of chattels only; or (2), everything which appeared as part of a "bill of sale" in the scheduled form; or (3), every part of every instrument in which a "bill of sale" might be contained. The Court rejected the first as too narrow, but did not accept the third, which we think would have been too wide” (emphasis added). 
81.	Accordingly, it seems to me that, just because the Loan Agreement contains provisions that go beyond the normal provisions of a bill of sale does not mean that it is not a bill of sale.  Conversely, even if it is a bill of sale that falls foul of the Acts, that does not automatically mean that it is wholly void.  With that introduction, it is necessary to look at those terms of the Loan Agreement that are said to make it a bill of sale.
82.	The Loan Agreement refers in clause 13 to other documents creating security for the obligations arising from it.   Clauses 5.5, 10.3.2 and 19.1 (taken together or separately) are said by Mr Chapman to make the Loan Agreement into a bill of sale within the definition in section 4 of the 1878 Act.    Clause 10.3.2 is an agreement by Mr Chapman to deliver up “all papers and items” to LawFinance “in relation to a Qualifying Claim in respect of which any sums are due to LawFinance as and when required to do so by LawFinance”.  But, as it seem to me, that agreement is not itself:-
i)	An assignment or a transfer;
ii)	Another assurance of personal chattels; or 
iii)	A licence to take possession of personal chattels as a security for any debt; or
iv)	An agreement by which a right in equity to any personal chattels is conferred.
83.	The closest that the obligation in clause 10.3.2 comes to the definition of a bill of sale in section 4 is a licence to take possession of personal chattels as a security for a debt.  But the obligation is not framed as a security, and it seems to me that Ms Talbot Rice is correct to say that the Loan Agreement grants no security at all.  The obligation in clause 10.3.2 is framed as a personal future obligation.  The reference in clause 10.3.2 to the debt is simply to identify the cases to which the papers and items relate, namely those “in relation to a Qualifying Claim in respect of which any sums are due to LawFinance”.  Nor is this a present right in equity over the chattels.  It is a future personal right to require delivery up of possession.  It seems to me that the clause grants no right to the title or property in the papers to LawFinance at all.  I do not need to decide how long LawFinance would be entitled to retain possession of the papers if this were the only clause it could rely on.
84.	Furthermore, whilst clause 19.1 obliges Mr Chapman to do everything that LawFinance requires to give effect to clause 10.3.2, that is not enough to turn a personal obligation to hand over the papers relating to a claim in respect of which LawFinance has advanced money into an assignment or charge or other like security.  As Ms Talbot-Rice submitted, the security for this Loan Agreement is to be found in the other documents.  
85.	Moreover, clauses 10.3.2 and 19.1 of the Loan Agreement are not clauses by which LawFinance: “has power, either with or without notice, and either immediately or at any future time, to … take possession of any personal chattels …”, within section 3 of the 1878 Act (even if the files are “personal chattels”, to which point I shall return).   There is no power of ‘taking’ granted to Law Finance, simply a personal obligation of delivery up or ‘giving’ by Mr Chapman.
86.	Clause 5.5 does not actually grant security, but does seem to acknowledge that security will be granted over some existing files at the date of the initial advance of £250,000.  The grant of that security is, however, effected outside the Loan Agreement as I have already described.  For these reasons, therefore, it seems to me that the Loan Agreement does not constitute a bill of sale within the definition in section 4 of the 1878 Act.  
87.	I could, therefore, conclude my treatment of issue 1 at this stage.  But since the matter has been argued, I will go on to explain my conclusions as briefly as possible on the other points arising. 
Are solicitors’ files “personal chattels” within section 4 of the 1878 Act, and if so, who owns them?
88.	The next question, therefore, is whether solicitors’ files are personal chattels.  Leaving aside the actual ownership of solicitors’ files, to which I shall turn in a moment, it seems to me that the paper and documents making up a solicitors’ file are capable of constituting “personal chattels” within the meaning of section 4 of the 1878 Act.  Papers are ‘goods’, but even if that were wrong, papers are certainly “other articles capable of complete transfer by delivery”.  Again, no authority to the contrary has been cited to me, and the argument that used paper is valueless and, therefore, not a chattel, simply cannot be right.  It is true that the value in a solicitors’ file lies in the contents of the documents and, even perhaps, in the intellectual property in the contents, not the paper on which those contents are recorded.  But value is not the issue here.  The question is simply whether the physical documents themselves are covered by the Acts, and it seems to me that they must be in the absence of an appropriate exclusion in the legislation.
89.	The far more difficult question is as to who owns the physical documents in a solicitors’ file.  That question is made even more complex by the fact that the files in question were for personal injury cases, in which the client had entered into a CFA, so had never paid a penny to Mr Chapman for his services.  Ms Talbot Rice argued that Mr Chapman had adduced no evidence of what was in his files, and since the point was ultimately relevant both to Mr Chapman’s defence under the Acts and to whether or not there had been an unlawful interference with the files, Mr Chapman had to prove they were his property.  I think that point is unduly technical.  As Mr Chapman submitted, all personal injury files must contain a note of the advice that was given under what used to be regulation 4 of the Conditional Fee Agreements Regulations 2000 (CPR Volume 2 at page 2021).  That regulation was repealed on 1st November 2005, but its effect survives in professional conduct rules.  Mr Chapman says that this basic funding advice must be given by the solicitor in a CFA case, or he risks not being paid.  I cannot resolve the question of whether such advice was given in these cases, but it seems to me that it is inevitable that on many, if not most of Mr Chapman’s files, there will have been some documents, however unimportant, that belonged to him rather than his client.  I was shown a number of (somewhat contradictory) authorities and texts that sought to explain how one can decide whether a particular document on a solicitors’ file belongs to the client or the solicitor (see Cordery on Solicitors (February 1999 revision) at pages 4/661-2, Wentworth v. De Montfort (1988) 15 NSWLR 348, and Thomas Braithwaite’s article at (2006) SJ 182).  This would not be an appropriate case for me to comment on these materials, since it is obvious to me that some of the documents concerning disbursements made for a client on a CFA would be likely to belong to the solicitor.  And even if that were wrong, I propose to assume that some of the documents on the solicitors’ files in question may have belonged to Mr Chapman, as one would normally expect to be the case.
90.	To recap, therefore, it seems to me that clauses 10.3.2 and 19.1 of the Loan Agreement cannot constitute a bill of sale over the parts of Mr Chapman’s files that he owned, because the Loan Agreement, in effect, grants no security over those papers, and is not, therefore, within the definition of a ‘bill of sale’.  I note in passing that section 5 of the 1882 Act seems to contemplate the existence of a bill of sale in respect of personal chattels of which the grantor was not the true owner at the time of its execution, since it makes such bills void, except as against the grantor.  I shall return to the significance of section 5 in the next section of this judgment.
Can future property fall within the definition of “personal chattels”, and can a security over future property be a bill of sale?
91.	Ms Talbot Rice’s next point relies on a series of authorities that she submits show that a security cannot be a bill of sale insofar as it affects future property:  i.e. property that is not in existence at the date of the transaction.
92.	In Reeves v. Barlow (1884) 12 QBD 436, the Court of Appeal considered whether a clause in a building contract that provided that materials brought on site should become the property of the landowner was a bill of sale.  It held that it was not, on the primary ground that the right granted was a right in law, not in equity, so that the bill could not fall within the definition in section 4 of the 1878 Act: “any other instrument by which a right in equity to any personal chattels … shall be conferred”.  Bowen LJ said at page 441 that “On the part of the respondent it was urged that a right to after-acquired property was not a right to personal chattels within the meaning of the Act of 1878.  It is not necessary to pronounce an authoritative decision on this very grave point (as to which, see per Lord Chelmsford, Holroyd v. Marshall 33 L.J. (ch.) 198) …”.
93.	In Thomas v. Kelly and Baker (1888) 13 HL 506, a bill of sale assigned by way of security existing chattels together with future chattels of the mortgagor.  The House of Lords held that the bill was void as not being in “accordance with the form of the schedule” as required by section 9 of the 1882 Act.  It appears from the report that, unusually, only 3 of their Lordships sat on the hearing of the appeal, namely Lord Halsbury LC, Lord FitzGerald and Lord Macnaghten.  Lord Halsbury said at page 512 that:-
“Applying the principles I have suggested, there can be no difficulty in the decision of this case. An essential condition of the deed appears to me to be a present assignment of goods capable of specific description and present assignment (see definition in the Act of 1878). It is obvious that a bill of sale which purports to assign after-acquired property, whether in the form of a covenant (its true legal effect) or as stated specifically in words as part of the security is not in accordance with the “form”, and, therefore, void. I doubt whether the reason why it is void is adequately given when it is said that such property is incapable of specific description. I think it also introduces a covenant not in accordance with the form; and the form is here, in my judgment, intended to be exhaustive of what may or may not be included in such a deed”.
94.	Lord FitzGerald concurred with Lord Halsbury (see page 516), but Lord Macnaghten said the following at pages 518-9:-
“Notwithstanding a remark made by Lord Chelmsford in Holroyd v Marshall (3) which obviously was not required for the decision of the case, I am disposed to think that the expression “capable of complete transfer by delivery” means capable of such transfer at the time when the bill of sale is executed. That was the view of the Divisional Court consisting of Brett and Archibald JJ in Brantom v Griffits (4).  Brett J there said (1 CPD at p 354): “The Act [of 1854] only applies to things which at the moment when the bill of sale is given, and the provisions of the Act are to be applied to it, might be delivered to the assignee and are not, but are left in the enjoyment of the assignor.” Archibald J concurred. He said (ibid at p 357): “The application of the statute must be limited to articles of which possession could have been given to the vendee, and which are capable of removal.” I am the more inclined to adopt this view of the meaning of the expression “capable of complete transfer by delivery”, because the decision in Brantom v Griffits (4) was standing unchallenged when the Act of 1878 was passed, and must have engaged the attention of the framers of that Act. The Act repeats with some few alterations the definition of “personal chattels” contained in the Act of 1854. The only alterations are consequent upon the decision in Meux v Jacobs (5) and the decision in this very case of Brantom v Griffits (4).
If this view be correct, the definition of “personal chattels” excludes future or after-acquired chattels, for the simple reason that they are not capable of transfer by delivery”. 
95.	It seems to me that the ratio decidendi of Thomas v. Kelly was that the bill of sale was not in the required form, because the after-acquired property was not scheduled to the bill contrary to section 9 of the 1882 Act, not that a security over after-acquired property cannot in any circumstances be a bill of sale.
96.	In Welsh Development Agency v. Export Finance Co Ltd. [1991] BCLC 936, Sir Nicholas Browne-Wilkinson V-C held that a funding transaction that purported to be a sale on behalf of an undisclosed principal was registrable under section 396 of the Companies Act 1985 as a charge over goods, because if it had been entered into by an individual it would have been registrable as a bill of sale. The Vice-Chancellor said this at pages 956-7:-
“Mr Crystal's submission that the master agreement is not a bill of sale is wholly based on a dictum of Lord Macnaghten in Thomas v Kelly (1888) 13 App Cas 506, [1886–90] All ER Rep 431. In that case it was held that there had been a failure to comply with the statutory requirements of a bill of sale by including an assignment of after acquired property in the body, rather than the schedule, of the deed. Lord Macnaghten, whilst protesting that he must not be understood as expressing an opinion on any matter not directly in question, in fact expressed the view that the definition of 'personal chattels' in the 1878 Act (articles 'capable of complete transfer by delivery') had the same meaning as in the Bills of Sale Act 1854, ie only such chattels as were capable of complete transfer by delivery at the time the bill of sale was entered into (see (1888) 13 App Cas 506 at 518–519, 521, [1886–90] All ER Rep 431 at 437–438). Therefore, in Lord Macnaghten's view, a bill of sale of future or after acquired property did not fall within the Act. Lord Macnaghten's view has been criticised, and not followed, in Australia in King v Greig [1931] VLR 413 at 439 (where the legislation was different in an important respect) and in 4 Halsbury's Laws (4th edn) para 610.
In my judgment, Lord Macnaghten's dictum is not correct and, given the firm warning of the weight which he attached to it, I feel no hesitation in not following it. Lord Macnaghten founded himself on the view that since after acquired properties were not 'personal chattels' under the 1854 Act they were not included in the 1878 Act. In so doing, he failed to refer to two crucial differences between the two Acts. First, the definition of 'personal chattels' in the 1854 Act did not include growing crops whereas the 1878 definition does. That change was directed to counteracting the decision in Brantom v Griffits (1876) 1 CPD 349 which decided that growing crops were not personal chattels because they were incapable of delivery at the date of the bill of sale. The legislature, by including growing crops in the definition of personal chattels in the 1878 Act, showed that personal chattels incapable of delivery at the date of the bill of sale could be within the definition. Second, the definition of 'bill of sale' was drastically changed in 1878. Only the two sections which I have numbered 1 and 2 were included in the 1854 Act; by including the section which I have numbered 3 (directed exclusively to cases where equitable rights over chattels are created) the legislature must, in the absence of any other contra indication, have been contemplating equitable rights over future property.
Section 5 of the Bills of Sale Act (1878) Amendment Act 1882, is headed 'Bill of Sale not to affect after acquired property' and provides that, save as thereafter provided, a bill of sale is to be void (save as against the grantor) in respect of 'personal chattels' of which the grantor was not the true owner at the time of the execution of the bill of sale. The implication is, to my mind, clear. As between the grantor and the grantee a sale of future chattels is a bill of sale of future chattels within the meaning of the Acts. For these reasons, notwithstanding that the master agreement only applied to future goods, in my judgment it would, if made between private individuals, have been a bill of sale and was therefore registrable under s 395. …
Therefore, in my judgment, the charge created by the master agreement would have been registrable as a bill of sale if made by an individual and was accordingly registrable under s 395 of the Companies Act 1985”.
97.	The Court of Appeal allowed an appeal against Sir Nicholas Browne-Wilkinson V-C’s decision, holding that the transaction was a sale, not a loan secured on the goods.  Dillon LJ said the following about the bill of sale point:-
“It follows that it is not necessary for this court to decide whether, if the master agreement was not an agreement for sale but an agreement for secured loans, the security ought to have been registered under the Companies Act. This territory is bedevilled by law that is now very out-of-date, involving consideration whether a charge would, if created by an individual, have been registrable as a bill of sale under the Bills of Sale Act (1878) Amendment Act 1882. The Vice-Chancellor considered that the master agreement would itself have been registrable under the Companies Act as a charge, notwithstanding a dictum of Lord Macnaghten in Thomas v Kelly (1888) 13 App Cas 506 at 519, [1886–90] All ER Rep 431 at 438 (supported, so far as I can see, by Lord Halsbury LC: see (1888) 13 App Cas 506 at 512, [1886–90] All ER Rep 431 at 437) that the definition of 'personal chattels' in the Bills of Sales Act seemed to exclude future or after-acquired chattels. But the Vice-Chancellor also held that each acceptance by Parrot, under cl 3 of the standing offer created a separate registrable charge on presently ascertained goods, and I have not heard any effective answer to that from Mr Crystal QC”.
98.	These authorities, as it seems to me, have created a confusion between the question of (a) whether a particular document is a bill of sale at all, and (b) whether that bill of sale is valid or void under the Acts.  Mr Crystal QC submitted that the agreement in Welsh Development was not a bill of sale at all, based on the House of Lords in Thomas v. Kelly.  That was a misunderstanding of the House of Lords’ decision, which did not say that the agreement in that case was not a bill of sale because it charged after-acquired property, but simply that it was void as failing to comply with the Acts.  As Lord Halsbury said in the passage cited above: “It is obvious that a bill of sale which purports to assign after-acquired property …is not in accordance with the “form”, and, therefore, void”.  He was not doubting that such an instrument was a bill of sale.   Lord FitzGerald concurred with Lord Halsbury’s view on this at page 516, where he said: “I concur in the opinion expressed by [Lord Halsbury] … that this bill of sale is not in conformity with the statute and varies from the “form” in material and substantial particulars”.  It was only Lord Macnaghten that was expressing the view that the Acts did not apply at all to after-acquired property, because an assignment of such property was not a bill of sale, since it was not an assignment of “personal chattels”, because after-acquired property was not an article “capable of complete transfer by delivery”.
99.	Sir Nicholas Browne-Wilkinson V-C was, therefore, correct to think that he was only disagreeing with Lord Macnaghten, and not with Lord Halsbury (or indeed Lord Fitzgerald), as was suggested in argument before me.  Dillon LJ in the Court of Appeal was, however, wrong in my judgment to think that Lord Halsbury had supported Lord Macnaghten’s reasoning.
100.	In the result, it seems to me that both the House of Lords and Sir Nicholas Browne-Wilkinson V-C were right to suppose – for the reasons that they gave - that (a) an assignment of after-acquired property can be a bill of sale (whether as a licence to take possession of personal chattels or as an instrument creating a right in equity to any personal chattels) within the meaning of the Acts, but (b) may well be void for non-compliance with one or more of sections 4, 5, 8 or 9 of the 1882 Act. 
101.	In effect, therefore, section 5 of the 1882 Act does not say that a bill of sale cannot exist in respect of after-acquired property.  It obviously can.  All section 5 says is that such a bill of sale is void “except as against the grantor”.  Section 4 of the 1882 Act requires a bill of sale to have a schedule of the personal chattels comprised in it, and, again, makes the bill void “except as against the grantor” in respect of any chattels not so specifically described.  Sections 4 and 5 demonstrate that a bill of sale could list chattels to be later acquired and be valid against the grantor, even if it would be void against his trustee in bankruptcy.  Section 8 of the 1882 Act makes a bill of sale “void in respect of the personal chattels comprised therein”, if it is not duly attested and registered within 7 clear days.  Section 8 does not, again, make the instrument wholly void, but only void in respect of the personal chattels comprised in it.  The other parts of such an instrument would be unaffected.  Section 9 of the 1882 Act is, however, of the most swingeing effect, providing that a bill of sale is void unless made in accordance with the form in the schedule to the 1882 Act.

What is the effect of non-registration of the Loan Agreement?
102.	I shall consider next the effect of non-compliance with section 8 of the 1882 Act, had the Loan Agreement been a bill of sale.
103.	Since the Loan Agreement was not registered it would, as I have said, have been “void in respect of the personal chattels comprised therein” under section 8 of the 1882 Act.   That section would not have made the loan void, since section 8 says expressly that the unregistered bill of sale shall be “void in respect of the personal chattels comprised therein”. The two parts of the agreement would thus have been severable.   This conclusion is consistent with both Burdett supra and Davies v. Rees supra (as to which, see Lord Esher MR at page 411).
Was the Loan Agreement in the correct form to comply with section 9 of the 1882 Act? 
104.	Mr Chapman also argued that the Loan Agreement was void under section 9 of the 1882 Act as not having been “made in accordance with the form in the schedule to this Act annexed”.  In Thomas v. Kelly, the House made it clear that these words did not require absolute adherence to the words in the schedule to the 1882 Act.  Instead what was required (as Lord FitzGerald made clear at page 516) was the inclusion of certain essential elements as follows:-
i)	A statement of the consideration in money “now paid” to the grantor, the receipt of which the grantor thereby acknowledges;
ii)	The assignment is confined to the chattels and things specifically described in the annexed schedule;
iii)	The assignment shall be by way of security for the same sum then advanced with interest at a specified rate to be repaid to the grantee, with the interest then due, by equal payments on fixed days;
iv)	The terms which the parties have agreed to for the maintenance of the security or its defeasance; 
v)	The incorporation by reference of the provisions of section 7 of the 1882 Act, which restrict the right of the grantee to take possession.
105.	Whilst item (i) might be said to be satisfied, the remainder of the requirements were not satisfied wholly or at all.   Items (iv) and (v) were completely absent. Thus, if it had been a bill of sale, section 9 would have, at least, rendered the bill of sale element of the Loan Agreement completely void and of no effect (see Davies v. Rees supra).  I do not need to consider whether the entirety of the Loan Agreement would have been void, or which parts might have survived, since I have already decided that, in fact, the Loan Agreement is not a bill of sale at all. 
Issue 2: Was the April 2009 Assignment valid and enforceable?
106.	I come then to the second main issue concerning the validity of the April 2009 Assignment.  Ms Talbot Rice submitted that it was not necessary to decide whether the April 2009 Assignment was valid, since the earlier assignments and, in particular, the January 2009 Assignment was acknowledged to have been validly executed and registered as a bill of sale.  I do not accept that submission.  The schedule attached to the April 2009 Assignment was more up to date than any earlier assignment and the specific files assigned may be relevant to the extent of LawFinance’s security.  Despite Ms Talbot Rice’s emphasis on the provisions of the Loan Agreement, it is notable that the letter that LawFinance asked Mr Chapman to sign on 23rd June 2009 confirmed that Mr Chapman’s current cases were caught by the provisions of the April 2009 Assignment, not the Loan Agreement.
Was the April 2009 Assignment validly executed?
107.	I have already dealt with my findings on this issue above.  I am satisfied that Mr Chapman did sign a complete copy of the April 2009 Assignment with the schedule attached between the 1st and 3rd April 2009.  It was duly witnessed by Mr Ross, and returned to Ms Khaliq as she has said.  Ms Khaliq was fully entitled to date the document using the 6th April 2009 (the date on which she received the document back from LawFinance’s signatories) in the way she did.   The April 2009 Assignment was, therefore, duly and validly executed.
Was the April 2009 Assignment registrable as a bill of sale?
108.	Ms Talbot Rice argued that none of the Assignments was registrable, since they did not grant any security over Mr Chapman’s files, despite that fact that LawFinance went to much trouble to register them as bills of sale.   I shall deal with the matter by reference to the terms of the April 2009 Assignment that I have set out above.
109.	It is true that the main security granted under the April 2009 Assignment is the income flow from the Cases scheduled.  Under clause 3.1 of the April 2009 Assignment, Mr Chapman assigned to LawFinance his “whole right, title, interest and benefit in and to the Cases, and [his] Rights associated with the Client Contracts and the Cases”.  The Cases are defined as those listed in the schedule “being conducted by [Mr Chapman] for his Clients from time to time pursuant to a Client Contract”.  “Client Contracts” are defined as contracts made with a Client to “pursue the relevant Client’s Case”.  Thus, that definition only encompasses “Cases”, which are all scheduled to the April 2009 Assignment.
110.	The question for these purposes is, therefore, whether, in addition to the rights to the income stream from the Cases, LawFinance is entitled under the April 2009 Assignment to security over the documents in the client’s files.  This question turns on the meaning of “whole right, title, interest, and benefit in and to the Cases”.  No authority was cited to me, but I incline to the view that these words must include every document that Mr Chapman owns in connection with his cases.  Otherwise, it would imply a limitation which is obviously not intended.  A “Case” cannot be conducted without a file, and Mr Chapman’s right, title and interest in a case must include any papers that he owns that allow him to conduct that “Case”.  Clause 3.1 effects an assignment. Since the chattels comprising the documents in the scheduled case files belonging to Mr Chapman are part of the property assigned, the Assignments were indeed registrable as bills of sale.  The schedule obviously identified the cases, but not the precise documents concerned.

Was the April 2009 Assignment validly registered?
111.	Ms Khaliq sent two copies of the April 2009 Assignment, together with her statement of due execution for registration as a bill of sale at the High Court.  The registration was validly effected within the period of 7 clear days laid down by section 8 of the 1882 Act.  Moreover, I do not regard the criticisms made of her witness statement of due execution as carrying any weight. There was indeed a minor inaccuracy in the statement in that Ms Khaliq said in paragraph 6 that “Before [Mr Chapman] executed the assignment I fully explained to [Mr Chapman] the nature and effect of it”.  Whilst she had tried on previous occasions to explain the nature and effect of the Assignment, she had not tried to do so on this occasion, having been rebuffed by Mr Chapman before.  Mr Chapman had previously told her that he was a solicitor and did not require her explanations.  This inaccuracy cannot vitiate due attestation under sections 8 and 10 of the 1882 Act.  It is perhaps remarkable that the standard form used still seems to be drafted so as to comply with section 10(1) of the 1878 Act, 128 years after the repeal of that section. 
Was the April 2009 Assignment  in the correct form so as to be valid under the Acts?
112.	I have set out above the requirements of section 9 and the Schedule to the 1882 Act.    Again, I do not think the form requirements were satisfied:-
i)	Nothing in the Assignments actually sets out in clear terms a statement of the consideration in money “now paid” to Mr Chapman, the receipt of which Mr Chapman acknowledged.
ii)	The documents concerned are not, as I have said, specifically mentioned in the schedule.  Only the case names are listed.  
iii)	The assignment is not specifically stated to be by way of security for the same sum then advanced with interest at a specified rate to be repaid to the grantee, with the interest then due, by equal payments on fixed days.
iv)	The terms which the parties have agreed to for the maintenance of the security or its defeasance are probably set out. 
v)	There is no reference to the provisions of section 7 of the 1882 Act, which restrict the right of the grantee to take possession.
113.	The effect of the non-compliance with section 9 of the 1882 Act is, as I have said, to make the bill of sale void.
If not, is the April 2009 Assignment severable, so as to be valid in part?
114.	The question here is similar to the one I have dealt with above, namely whether the security over the income stream can be severed from the security over the case files, so as to allow the security over the income stream to survive.  In my judgment, the April 2009 Assignment can be severed, so that all that is void is the assignment of the case files belonging to Mr Chapman, leaving the remainder of the security over the choses in action comprising the income stream from the cases intact.  This is because, as in Burdett, the assignment of the income stream is not a bill of sale at all, having nothing to do with any “personal chattels” as defined in the Acts.
Issue 3:  Did Mr Chapman validly consent to the transfer of the files to LawFinance?
115.	Ms Talbot Rice submits that it does not matter whether LawFinance has valid security over the case files, because Mr Chapman consented to the transfer of his files to Bollin, and ratified their removal.  This question is relevant to the allegation that the Defendants unlawfully interfered with Mr Chapman’s property.  LawFinance relies on the following indicia of Mr Chapman’s consent and ratification:-
i)	His authorisation dated 23rd June 2009 to Mr Smyllie of LF to write to his clients on his behalf notifying them of the proposed transfer to Bollin.
ii)	His acknowledgment and undertaking dated 23rd June 2009 to LawFinance, the Receivers, and Bollin that his Cases were caught by the April 2009 Assignment and that he would facilitate their transfer to Bollin.
iii)	His email to Mr Smyllie dated 26th June 2009 referring to his agreement that the files be removed to Bollin.
116.	Mr Chapman’s consent to the removal of his files seems to me to have been premised on his understanding that LawFinance was entitled to enforce its security over them.  If its security was ineffective, and if he had known that to be the case, then his consent would, one might speculate, not have been given.  The legal question of whether Mr Chapman’s consent can be vitiated is more complex, and whilst Ms Talbot Rice acknowledged that it was possible, she did not place any authority before me on the question.  I do not, however, think I need to decide this point.
117.	On the basis of the conclusions that I have already reached, Mr Chapman had a contractual obligation under the Loan Agreement to deliver up “all papers and items in relation to a Qualifying Claim in respect of which any sums are due to LawFinance as and when required to do so by LawFinance”.  The security over the case files granted by the Assignments was void under section 9 of the 1882 Act.   So far as I can see, nothing LawFinance (or indeed the Receivers) did on 23rd June 2009, misrepresented the position to Mr Chapman.  Mr Chapman knew that he had signed the April 2009 Assignment scheduling the current case files, so that LawFinance could have security over the income stream from those files.  He knew that the Receivers had been appointed over that income stream.  The question of whether there was valid security over the files (as opposed to the income stream) was an extremely recherché one.  Mr Chapman consented to the handover of his files, because he knew that LawFinance were entitled to the income from those files, and because he knew he was obliged to hand them over under the Loan Agreement.  The property rights in the files were only of concern because of the need to obtain individual clients’ consent to the future conduct of the cases.  It was in that process that Mr Chapman was co-operating.  He was doing so for the benefit of his clients, and entirely properly.  
118.	Whilst Mr Chapman suggested that he handed over his files under ‘duress’, he did not seek to establish that any improper pressure had been applied, and I find that no pressure of any kind was applied.  All that happened was that LawFinance appointed the Receivers to collect the income and asked for possession of the case files - effectively under the Loan Agreement –so they could go to Bollin to be managed so as to produce the income stream that was indeed charged to LawFinance.  Mr Chapman complied with LawFinance’s request under clause 10.3.2 and 19.1 of the Loan Agreement, not under the Assignments, and his consent was not vitiated by any misunderstanding.  The invalidity of the assignment of Mr Chapman’s property in the files was simply irrelevant to what LawFinance was doing on 23rd June 2009.
119.	I should not leave this aspect of the case without commenting on Ms Talbot Rice’s submission that LawFinance was also entitled to secure delivery up of the files under clause 12.1 of the April 2009 Assignment.  That clause provides for LawFinance to be appointed as Mr Chapman’s attorney to do “any act which may be required or may be deemed proper by [LawFinance] on or in connection with any … disposition, realisation, getting in or other enforcement by [LawFinance] of all or any of the Assigned Rights”.  Bearing in mind what I have decided about the invalidity of the assignment of Mr Chapman’s property in the case files under clause 3.1 of the Assignments, I think it would be unsafe to place any reliance on a power of attorney granted to enforce that assignment.  I do not, however, think that Mr Chapman’s consent to the delivery up of his files can be said to have been vitiated by any invalidity of that clause 12.1.
Issue 4: To what sums is LawFinance entitled, and do the Mortgage and/or the Assignments entitle LawFinance to all the sums payable to Mr Chapman in respect of fees for personal injury cases conducted by him or his firm?
120.	Since the Loan Agreement is valid, LawFinance is entitled to all the sums due under that Loan Agreement, including costs, fees and interest.  That sum was £1,315,765.21 as at 22nd June 2009.  I will hear submissions after I have delivered this judgment as to whether the sum of £27,338.75 claimed at paragraph 21 of the Amended Counterclaim is due, bearing in mind the conclusions I have reached as to the Assignments.
121.	For the reasons I have already given, the Assignments are valid insofar as they assign the income stream from the scheduled files, and LawFinance is entitled to that income.  The validity of the Mortgage was not disputed, so that the appointment of the Receivers thereunder to collect the income stream is also not disputed.
122.	LawFinance is accordingly entitled to the declaration that it seeks at paragraph 25 of its Amended Counterclaim, namely that “Lawfinance was and is entitled, by way of security, to any sum payable to Mr Chapman or CCC in respect of fees or disbursements for any personal injury case conducted by Mr Chapman or CCC”.  Though the April 2009 Assignment only assigned income from the scheduled cases, the Mortgage seems to me to have been wider and to have covered all Mr Chapman’s cases.  The form I have set out above seems to be all that LawFinance has claimed, but I will hear any further argument that the parties wish to address as to the precise form of this declaration.
Issue 5: Did LawFinance and/or the Receivers unlawfully interfere with Mr Chapman’s files?
123.	As I have already indicated, Mr Chapman submits that all the files removed from his premises were removed without the legal right to do so, so that the Defendants converted those files or committed trespass in relation to them.  Accordingly, he claims damages under the 1977 Act.
124.	In this first place, as I have already indicated, I find that the Receivers did not take possession of any of Mr Chapman’s files.  It was LawFinance that requested them and received them, and took them into their possession for onward transmission to Bollin or LF.  Even the urgent files that Mr Wilson transported to LF on 23rd June 2009 were only held by him as agent for Law Finance, and the 24 files collected by Mr Royle on 6th July 2009 were likewise collected by him as agent for LawFinance.  Moreover under section 109(2) of the Law of Property Act 1925, a receiver appointed under section 101 is deemed to act as the agent of the mortgagor.  So, even if I had held that the Receivers were acting as Receivers in collecting the files (which they were not), they would have been acting as agent for Mr Chapman.
125.	Secondly, as I have also already held, LawFinance was entitled to request the case files from Mr Chapman under clause 10.3.2 and 19.1 of the Loan Agreement, and Mr Chapman duly consented to deliver up those case files.  LawFinance, therefore committed no tort in removing the files in the way that I have found they did, either on 23rd June 2009 when they took possession of the bulk of the files, or on 6th July 2009, when 24 further files were removed.  As I have found, no files were removed by Mr Corner and Ms Khaliq on 30th June 2009.  
126.	Accordingly, Mr Chapman’s claim for damages under the 1977 Act fails and will be dismissed.
Issue 6: Did the Receivers act outside their powers in taking any of the files that they are found to have taken from Mr Chapman’s premises?
127.	For the reasons I have given, the Receivers did not act on their own behalf when Mr Wilson and Mr Royle transported files from the Premises.  They did not act outside their powers, and Mr Chapman’s claim in this regard will, therefore, be dismissed.
Issue 7: If Mr Chapman’s files were unlawfully removed by LawFinance and/or the Receivers, what loss has Mr Chapman sustained as a result, and to what relief is Mr Chapman entitled?
128.	This issue does not arise.  The parties addressed significant argument to whether or not Mr Chapman could have shown that he had sustained any loss as a result of the unlawful removal of the files, even had he succeeded.  I accept that proof of loss might have been extremely problematic, bearing in mind that Mr Chapman could at best only have shown that he owned a limited number of categories of documents in the files.  But had Mr Chapman succeeded, my inclination would have been to award an enquiry as to damages so that the complex points that arose could have been properly rehearsed.
Conclusions
129.	The twists and turns of the Bills of Sale Acts have already been the subject of much judicial and academic comment (including a recent Law Commission report of July 2005 (number 296) on Company Security Interests).  The issues raised in these proceedings have been complicated by their outdated provisions.  One cannot help but think that the introduction of a modern system of registration offering protection and clarity to creditors, consumers and chattel-owners alike, is long overdue.
130.	In the result, I have found that the Loan Agreement under which Mr Chapman borrowed large sums from LawFinance was valid and enforceable, but that the form of the Assignments prepared by LawFinance fell foul of the form requirements in section 9 of the 1882 Act.
131.	Mr Chapman’s claim that the Defendants unlawfully removed his case files has, for the reasons I have given, failed.
132.	I will hear the parties on the precise form of the order to be made and on costs.