Part VI Early Perceptions of Legal Risk, 21 A Case of Conceptual Impossibility

Subject(s):

Debt — Set-off

This chapter discusses the case of Re Charge Card Services Ltd, which concerned the relationship between a company and a finance house that provided funds to it, pursuant to an invoice discounting agreement, by purchasing trade debts of the company. Under certain circumstances the company was obliged to repurchase trade debts, which it guaranteed would be paid. The accounting and payment system operating between the parties gave the finance house various rights to hold on to monies, make deductions from payments, and exercise set-offs. When the company went into liquidation, it was contended that certain rights of the finance house were void as against the liquidator because they constituted charges over book debts and they had not been registered as required under the Companies Act 1948.