Plant & Anor (Administrators of Relentless Software Ltd) v Vision Games 1 Ltd & Ors

A contractual security document must be construed with related agreements as a whole. Tax credits directed into an account controlled by a separate group company, with no provision giving the funder ownership or control, were not secured book debts under a charge aimed at sales-revenue receipts. A charge described as fixed may be floating in law where the arrangements leave effective control of the charged money elsewhere. A contractual promise to pay from anticipated receipts does not itself create an immediate proprietary interest, and proprietary estoppel requires an adequate assurance and established reliance.

The administrators of Relentless Software Ltd sought a determination of whether Vision Games 1 Ltd, the funder, or Relentless Vision 1 Ltd had any security or proprietary interest in approximately £155,000 of traceable tax-credit proceeds received into the company's bank account shortly before administration.

The funder relied on a fixed charge over book debts and related trust provisions. Alternatively, it was argued that the development agreements gave Relentless Vision 1 Ltd an immediate beneficial interest, or that correspondence created a proprietary estoppel. The court determined the tax-credit issue as a preliminary issue. Questions concerning sales revenue were left for a later hearing if unresolved.

1. Disposition. Neither the funder nor Relentless Vision 1 Ltd had any security or other interest in the company's bank accounts in relation to monies derived from the tax credits. The issue concerning PA Sales Revenue was reserved.
2. Construction. The development agreements and deed of charge had to be read together. Tax credits were to be paid into an account in Relentless Vision 1 Ltd's name, not into a designated company account. They were treated differently from book debts arising from product sales, so the charge did not apply.
3. The absence of any designated account independently prevented the tax credits from being caught as monies paid into such an account. The related trust obligation therefore did not apply.
4. Alternative charge analysis. Even if the tax credits were book debts, payment into an account over which Relentless Vision 1 Ltd had effective freedom of operation meant that any charge was floating rather than fixed. The court applied Re Spectrum Plus Ltd [2005] 2 AC 680 and referred to Agnew v CIR [2001] UKPC 28.
5. Beneficial ownership and estoppel. The obligation to pay into the Production Account was not for Relentless Vision 1 Ltd's benefit, and the agreements did not transfer beneficial ownership. The recipient would have held the money on resulting trust for the company. Later correspondence amounted at most to a promise to repay investment earlier than otherwise due. It created no immediate proprietary interest, and reliance was not established.