Charges over book debts in the United Kingdom and Australia : the way forward

Is it possible to create a fixed charge over book debts? This question was recently decided by the House of Lords in National Westminster Bank plc v. Spectrum Plus Limited & Ors [2005] UKHL 41 where the full House was against the idea of a fixed charge on book debts and insisted that only a<br />floating charge had been created. The law in this area is still vague and uncertain in Australia. This article argues that the financiers and the companies should be given the freedom to decide how they wish to structure their charge documents. The article sets out to argue that it is possible to create a sustained workable fixed charge or even a multiple combination of fixed and floating charge over book debts and argues that this would be the only way for both the financiers and the companies to do business together, in respect to the use of book debts as security for a loan. The author explains how this could be possible and how the proposed model would not deny the statutory priority rights of the preferential creditors.<br />