Make Up Your Mind!-BLG Banking Law Briefing

In the recent first instance decision of Re Spectrum Plus Ltd., sub nom National Westminster Bank Plc ("NatWest") v Spectrum Plus Ltd ("Spectrum") (In Creditors Voluntary Liquidation) the Vice- Chancellor, Sir Andrew Morritt, dismissed an application by NatWest for a declaration that the debenture granted to it by Spectrum created a fixed charge over Spectrum’s book debts and their proceeds and an order that the liquidators should account to NatWest for the same.

It had been decided that it was possible to create a fixed charge over present and future book debts in another first instance case, that of Siebe Gorman & Co Ltd. v Barclays Bank Ltd [1979]. In that case, it was held that the debenture granted to Barclays Bank Ltd had done so, following which such debenture became more or less standard form for lenders intending to take a fixed charge over book debts. However, doubt was cast on whether such debenture did in fact achieve such an effect by the Privy Council in the subsequent