Lloyd's Maritime and Commercial Law Quarterly
FLOATING CHARGES—A “NO THEORY” THEORY
National Westminster Bank
v. Spectrum Plus
A question much asked in personal property law is: what defines a floating charge? In National Westminster Bank Plc
v. Spectrum Plus Ltd
1
the Court of Appeal said achieving definition is “not easy”.
Before the court was a debenture worded to create a fixed charge over book debts where the chargor could collect the proceeds, deposit them in an account, and use them in the ordinary course of business. The account was to be held with the chargee bank and could be blocked by it, and the book debts were not to be assigned or charged to anyone else. No “charge-back” point was taken. The Vice-Chancellor said2
that the charge was necessarily floating, emphasizing the chargor’s ability to draw on the account, and dissenting from Slade J’s finding on a materially identical debenture that the charge was
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY
320