ARTICLE REVIEW

FIXED AND FLOATING CHARGE OVER BOOK DEBTS – THE IMPLICATIONS PF THE HOUSE OF LORDS’
DECISION IN RE SPECTRUM PLUS LIMITED [2005] UKHL, 41, PART 1

SUMMARY

This article explores the in depth history and the rationale as well as the implication of the decisions
that was reached in the case of Re Spectrum Plus Limited [2005] UKHL, 41, Part 1. In this said case, it
can be identified that the main issues are with regards to the question of determining the elements
to establish the fixed and floating charges. It was further discussed in this case that a fixed charge
can take over book debts. However, for it to it to be enforceable, a practical control of the item, and
a legal right to stop the chargor walking off with it should be set. Previously, before this case was
taken to b the landmark case for issues with regards to fixed and floating charges, the House of Lords
also went through several other landmark cases. Namely, the case of Re Yorkshire Woolcombers’
Association Ltd [1903] Ch 284 whereby Romer LJ, laid down 3 characteristics if fulfil then its floating
charge. Furthermore, in Illingworth v Houldsworth [1904] AC 355, Lord MacNaghten defined, fixed
charge as a specific charge which fastens on ascertain and definite property capable of being
ascertained and defined. A floating charge is ambulatory and shifting in nature hoovering over an
floating with the property which it is intended to effect until some event occur or some act is done
which causes it to settle or fastened on the subject of the charge. This case had also overruled the
earlier decisions that was made in the case of Siebe Gorman & Co Ltd v Barclays Bank Ltd [1979] 2.
This article review will further elaborate on the specific historical development to which led us to
obtain the decision that we ought to refer to when discussing issues with regards to fixed and
floating charges.