Commentary on Sections Part 2 – Security over Moveable Property Property encumbered by statutory pledge: effect of transfer by provider Section 52 – Extinction of statutory pledge where dealings inconsistent with a fixed security
241.This section is an anti-avoidance provision. A statutory pledge could become tantamount to a floating charge if the secured creditor acquiesces in the provider dealing with property without following the narrow process for express written consent provided for in section 51. If this does happen, the effect of this section is to extinguish the statutory pledge.