Goods Mortgages Bill (HL Bill 148)

Goods Mortgages BillPage 20


Section 6

SCHEDULE 1 Running-account credit: supplementary provisions


1 5This Schedule has effect for the interpretation of—

(a) subsection (4) of section 6 (excluded obligations), and

(b) section 7(3)(a) (the business credit conditions) in its application to
section 6(4)(a).

Running-account credit

2 10Running-account credit is a facility under a credit agreement under which
the debtor is enabled to receive from time to time (whether for the debtor or
for another person) from the creditor or a third party cash, goods and
services (or any of them) to an amount or value such that, taking into
account payments made by or to the credit of the debtor, the credit limit (if
15any) is not at any time exceeded.

3 In relation to running-account credit, “credit limit” means, as respects any
period, the maximum debit balance which, under the credit agreement, is
allowed to stand on the account during that period, disregarding any term
of the agreement allowing that maximum to be exceeded merely

Determining amount of running-account credit

4 (1) Running-account credit is to be taken not to exceed the amount prescribed
for the purposes of section 7(3)(a) (“the specified amount”) if—

(a) the credit limit does not exceed the specified amount, or

(b) 25whether or not there is a credit limit, and if there is, despite the fact
that it exceeds the specified amount—

(i) the debtor is not enabled to draw at any one time an amount
which, so far as (having regard to section 31(4)) it represents
credit, exceeds the specified amount,

(ii) 30the agreement provides that, if the debit balance rises above
a given amount (not exceeding the specified amount), any
condition favouring the creditor or the creditor’s associate
comes into operation, or

(iii) at the time the agreement is made it is probable, having
35regard to the terms of the agreement and any other relevant
considerations, that the debit balance will not at any time rise
above the specified amount.

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(2) In sub-paragraph (1)(b)(ii) “associate” is to be read in accordance with
section 184 of the Consumer Credit Act 1974.

Section 34

SCHEDULE 2 Consequential amendments

5Stamp Act 1891 (c. 39)

1 In the Stamp Act 1891, omit section 41 (bills of sale).

Perjury Act 1911 (c. 6)

2 In section 2 of the Perjury Act 1911 (false statements on oath made otherwise
than in a judicial proceeding), omit—

(a) 10the “or” at the end of paragraph (1), and

(b) paragraph (2).

Law of Property Act 1925 (c. 20)

3 In section 114 of the Law of Property Act 1925 (transfers of mortgages), in
subsection (5) for “bill of sale of chattels by way of security” substitute
15“goods mortgage as defined by section 2 of the Goods Mortgages Act 2018”.

Agricultural Credits Act 1928 (c. 43)

4 The Agricultural Credits Act 1928 is amended as follows.

5 (1) Section 8 (supplemental provisions as to agricultural charges) is amended as

(2) 20Omit subsection (1).

(3) In subsection (3), for “a bill of sale” substitute “a goods mortgage (as defined
by section 2 of the Goods Mortgages Act 2018)”.

6 In section 14 (provisions as to agricultural societies), in subsection (1), omit
the words from “, and the charge if so registered” to “those Acts”.

25Agricultural Marketing Act 1958 (c. 47)

7 In section 15 of the Agricultural Marketing Act 1958 (borrowing powers of
boards and provisions as to loans and grants made to boards), in subsection
(5), omit the words from “, and the charge, if so registered” to “those Acts”.

Consumer Credit Act 1974 (c. 39)

8 30In section 189(1) of the Consumer Credit Act 1974 (definitions), omit the
definition of “bill of sale”.

Sale of Goods Act 1979 (c. 54)

9 In section 62 of the Sale of Goods Act 1979 (savings, rules of law etc), in
subsection (3), omit “the enactments relating to bills of sale, or”.

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Insolvency Act 1986 (c. 45)

10 (1) Section 344 of the Insolvency Act 1986 (avoidance of general assignment of
book debts) is amended as follows.

(2) In subsection (2), for “the Bills of Sale Act 1878” substitute “section 9 of the
5Goods Mortgages Act 2018”.

(3) For subsection (4) substitute—

(4) For the purposes of the registration mentioned in subsection (2) of
this section, subsections (1) to (3) and (5) and (6) of section 9 of the
Goods Mortgages Act 2018 (which relate to the registration of goods
10mortgages) apply with any necessary modifications.”

Co-operative and Community Benefit Societies Act 2014 (c. 14)

11 In section 59 of the Co-operative and Community Benefit Societies Act 2014
(charges on assets of English and Welsh societies), omit subsection (2).