National Westminster Bank plc v. Spectrum Plus Ltd. et al., (2005) 338 N.R. 201 (HL)

• Case Date: July 06, 2005
• Jurisdiction: Canada (Federal)
• Citations: (2005), 338 N.R. 201 (HL)

Nat. Westminster Bk. v. Spectrum Plus (2005), 338 N.R. 201 (HL)

MLB headnote and full text

Temp. Cite: [2005] N.R. TBEd. AU.017

National Westminster Bank plc (respon­dents) v. Spectrum Plus Limited and others and others (appellants)

([2005] UKHL 41)

Indexed As: National Westminster Bank plc v. Spectrum Plus Ltd. et al.

House of Lords

London, England

Lord Nicholls of Birkenhead, Lord Steyn, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Baroness Hale of Richmond and Lord Brown of Eaton-under-Heywood

July 6, 2005.

Summary:

At issue on this appeal was whether a case of first instance, Siebe Gorman & Co. v. Bar­clays Bank, respecting the construction of a debenture should be overruled. Also at is­sue was whether the House of Lords had the power, if it overruled the Siebe decision, to make a ruling that applied only to the future (i.e., make the ruling prospective only).

The House of Lords held that the Siebe decision should be overruled. The court stated that it would not rule out the possibil­ity that the court might make a prospective ruling in wholly exceptional circumstances, but this was not such a case.

Company Law - Topic 5431

Borrowing - Debentures - Fixed vs. float­ing charge - The House of Lords examined a debenture and ruled that the charge it granted over book debts, although stated to be a fixed charge, created in law only a floating charge - See paragraphs 1 to 165.

Courts - Topic 11

Stare decisis - Authority of judicial deci­sions - Application of judgments - Pro­spective or retrospective - At issue on this appeal was whether the House of Lords had the power in a decision where it over­ruled a previous case, to make a ruling that applied only to the future (i.e., make the ruling prospective only) - The House of Lords stated that it would not rule out the possibility that the court might make a prospective ruling in wholly exceptional circumstances, but this was not such a case - See paragraphs 1 to 165 - Lord Nicholls of Birkenhead commented that in Canada prospective overruling had not found fa­vour, but noted that in the extreme cir­cumstances of the Manitoba language ref­er­ence, the Supreme Court of Canada de­clined to give retroactive effect to its deci­sion on the constitutional invalidity of all Manitoba statutes and regulations where such a decision would have created a legal vacuum with consequent legal chaos - See paragraph 22.

Cases Noticed:

Siebe Gorman & Co. v. Barclays Bank Ltd., [1979] 2 Lloyd's Rep. 142, refd to. [paras. 1 et seq.].

Donoghue v. Stevenson, [1932] A.C. 562; [1932] All E.R. Rep. 1 (H.L.), refd to. [para. 7].

West Midland Baptist (Trust) Association (Inc.) v. Birmingham Corp., [1970] A.C. 874 (H.L.), refd to. [para. 12].

Launchbury v. Morgans, [1973] A.C. 127, refd to. [para. 13].

Kleinwort Benson Ltd. v. Lincoln (City), [1999] 2 A.C. 349; 233 N.R. 201 (H.L.), refd to. [paras. 13, 71].

R. v. National Insurance Commissioner; Ex parte Hudson, [1972] A.C. 944, refd to. [para. 14].

Miliangos v. Frank (George) Textiles Ltd., [1976] A.C. 443 (H.L.), refd to. [para. 14].

R. v. Brockhill Prison (Governor); Ex parte Evans (No. 2), [1999] Q.B. 1043 (C.A.), refd to. [paras. 14].

Hall (Arthur J.S.) & Co. v. Simons, [2002] 1 A.C. 615; 258 N.R. 1 (H.L.), refd to. [paras. 14, 72].

Barclays Bank plc v. O'Brien et al., [1994] 1 A.C. 180; 160 N.R. 214 (H.L.), refd to. [para. 15].

Royal Bank of Scotland plc v. Etridge et al., [2001] 4 All E.R. 449; 280 N.R. 58; [2002] 2 A.C. 773 (H.L.), refd to. [paras. 15, 124].

Jersey (Attorney General) v. Holley, [2005] UKPC 23, refd to. [para. 16].

Bingham v. Miller (1848), 17 Ohio 45, refd to. [para. 18].

Great Northern Railway Co. v. Sunburst Oil & Refining Co. (1932), 287 U.S. 358 (Sup. Ct.), refd to. [para. 18].

Linkletter v. Walker (1965), 381 U.S. 618 (Sup. Ct.), refd to. [para. 18].

Chevron Oil Co. v. Huson (1971), 404 U.S. 97, refd to. [para. 18].

Griffith v. Kentucky (1987), 107 S. Ct. 708 (Sup. Ct.), refd to. [para. 19].

Beam (James B.) Distilling Co. v. Georgia (1991), 501 U.S. 529, refd to. [para. 19].

Harper v. Virginia Department of Taxation (1992), 509 U.S. 86, refd to. [para. 19].

Glazner v. Glazner (2003), 347 F.3d 1212 (C.A., 11th Cir.), refd to. [para. 19].

Golak Nath v. Punjab (State) (1967), 2 S.C.J. 762 (India Sup. Ct.), refd to. [para. 20].

India Cement Ltd. v. Tamil Nadu (State) (1990), 1 S.C.C. 12 (India Sup. Ct.), refd to. [para. 20].

Orissa Cement Ltd. v. Orissa (State) 1991 Supp (1) S.C.C. 430 (India Sup. Ct.), refd to. [para. 20].

Murphy v. Attorney General, [1982] I.R. 241 (Ire. Sup. Ct.), refd to. [para. 21].

Edward v. Edward Estate and Skolrood (1987), 57 Sask.R. 67; 39 D.L.R.(4th) 654 (C.A.), refd to. [para. 22].

Manitoba Language Rights Reference, [1985] 1 S.C.R. 721; 59 N.R. 321; 35 Man.R.(2d) 83; 19 D.L.R.(4th) 1; [1985] 4 W.W.R. 385, refd to. [para. 22].

Defrenne v. Sabena, [1976] E.C.R. 455 (E.C.J.), refd to. [para. 23].

R. (Bidar) v. Ealing London Borough Council, [2005] 2 W.L.R. 1078 (E.C.J.), refd to. [paras. 23, 68].

Marckx v. Belgium (1979), 2 E.H.R.R. 330 (E.C.H.R.), refd to. [para. 24].

Goodwin v. United Kingdom (2002), 35 E.H.R.R. 18 (E.C.H.R.), refd to. [para. 25].

Wilson v. First County Trust Ltd. (No. 2), [2004] 1 A.C. 816, refd to. [para. 31].

Fitzpatrick v. Sterling Housing Association Ltd., [2001] 1 A.C. 27 (H.L.), refd to. [para. 36].

Ha v. State of New South Wales (1997), 189 C.L.R. 465 (Aust. H.C.), refd to. [paras. 38, 67].

Morris et al. v. Rayners Enterprises Inc. et al. (1997), 222 N.R. 352; [1998] A.C. 214 (H.L.), refd to. [para. 49].

Bank of Credit and Commerce Interna­tional SA (No. 8), In Re - see Morris et al. v. Rayners Enterprises Inc. et al.

Carse v. Coppen, 1951 SC 233 (Scot.), refd to. [para. 49].

Sharpe v. Thomson, 1997 SC (HL) 66, refd to. [para. 50].

Tailby v. Official Receiver (1888), 13 App. Cas. 523 (H.L.), refd to. [paras. 52, 102, 130].

Keenan Brothers Ltd., Re, [1986] B.C.L.C. 242 (Ire. S.C.), refd to. [paras. 55, 105, 140].

Commissioner of Income Tax v. Agnew - see Agnew et al. v. New Zealand (Com­missioner of Inland Revenue) et al.

Agnew et al. v. New Zealand (Commis­sion­er of Inland Revenue) et al., [2001] N.Z.L.R. 223 (C.A.), affd. [2001] 2 A.C. 710; 277 N.R. 360 (P.C.), refd to. [paras. 56, 89, 130].

Lipkin Gorman v. Karpnale Ltd., [1989] 1 W.L.R. 1340 (C.A.), refd to. [para. 59].

Westminster Bank Ltd. v. Hilton (1926), 43 T.L.R. 124 (H.L.), refd to. [para. 59].

National Westminster Bank Ltd. v. Hale­sowen Presswork & Assemblies Ltd., [1971] 1 Q.B. 1 (C.A.), revd. [1972] A.C. 785 (H.L.), refd to. [para. 60].

Hindcastle Ltd. v. Attenborough (Barbara) Associates Ltd. et al., [1997] A.C. 70; 194 N.R. 297 (H.L.), refd to. [para. 66].

R. v. Bow Street Stipendiary Magistrate; Ex parte Pinochet Ugarte (No. 2) - see Pinochet, Re.

Pinochet, Re, [1998] 2 W.L.R. 272; 237 N.R. 201; [1999] 1 All E.R. 577; [2000] 1 A.C. 119 (H.L.), refd to. [para. 70].

Pinochet, Re, [2000] 1 A.C. 61 (H.L.), refd to. [para. 70].

R. v. Brockhill Prison (Governor); Ex parte Evans, [2001] 2 A.C. 19; 258 N.R. 201 (H.L.), refd to. [para. 71].

Rondel v. Worsley, [1969] 1 A.C. 191 (H.L.), refd to. [para. 72].

A Company (No. 005009), Re; Ex parte Copp, [1989] B.C.L.C. 13, refd to. [paras. 86, 148].

Portbase (Clothing); Mond v. Taylor, Re, [1993] Ch. 388, refd to. [paras. 86, 148].

New Bullas Trading Ltd., Re, [1994] 1 B.C.L.C. 485 (C.A.), refd to. [para. 86].

Brightlife Ltd., Re, [1987] Ch. 200, refd to. [paras. 87, 135].

New Bullas Trading Ltd., Re, [1993] B.C.L.C. 1389, refd to. [para. 87].

Cosslett (Contractors) Ltd., Re, [1998] Ch. 495, refd to. [para. 87].

Supercool Refrigeration and Air Condition­ing v. Hoverd Industries Ltd., [1994] 3 N.Z.L.R. 300 (N.Z.H.C.), refd to. [para. 88].

Holroyd v. Marshall (1862), 10 H.L.C. 191; 11 E.R. 999, refd to. [para. 95].

Panama, New Zealand and Australian Royal Mail Co., Re (1870), 5 Ch. App. 318, refd to. [para. 96].

Florence Land and Public Works Co, Re; Ex parte Moor (1878), 10 Ch. D. 530, refd to. [paras. 96, 159].

Colonial Trusts Corp., Re; Ex parte Bradshaw (1879), 15 Ch. D. 465, refd to. [para. 96].

Moor v. Anglo-Italian Bank (1879), 10 Ch. D. 681, refd to. [para. 96].

Salomon v. Salomon & Co. (1897), 10 A.C. 22, refd to. [paras. 97, 131].

Yorkshire Woolcombers Association Ltd., Re, [1903] 2 Ch. 284 (C.A.), refd to. [paras. 99, 134].

Illingworth v. Houldsworth, [1904] A.C. 355 (H.L.), refd to. [paras. 99, 134].

Evans v. Rival Granite Quarries Ltd., [1910] 2 K.B. 979, refd to. [para. 100].

Cosslett (Contractors) Ltd., Re, [2002] 1 A.C. 336, refd to. [paras. 107, 151].

Smith (Administrator of Cosslett (Contractors) Ltd.) v. Bridgend County Borough Council - see Cosslett (Con­trac­tors) Ltd., Re.

Wallace Benedict, Receiver v. Ratner (1925), 268 U.S. 353, refd to. [para. 133].

Gaskell (William) Group Ltd. v. Highley, [1994] 1 B.C.L.C. 197, refd to. [para. 140].

Street v. Mountford, [1985] A.C. 809; 61 N.R. 202 (H.L.), refd to. [para. 141].

Supercool Refrigeration and Air Condition­ing v. Hoverd Industries Ltd., [1995] 3 N.Z.L.R. 577 (N.Z.C.A.), refd to. [para. 149].

Holidair Ltd., Re, [1994] I.L.R.M. 481 (Ire. S.C.), refd to. [para. 150].

Hart v. Barnes (1982), 7 A.C.L.R. 310 (Aust.), refd to. [para. 158].

Welsh Development Agency v. Export Finance Co., [1992] B.C.L.C. 148 (C.A.), refd to. [para. 160].

Worcester Works Finance Ltd. v. Cooden Engineering Co., [1972] 1 Q.B. 210 (C.A.), refd to. [para. 163].

Davis v. Johnson, [1979] A.C. 264 (H.L.), refd to. [para. 163].

Young v. Bristol Aeroplane Co., [1944] K.B. 718 (C.A.), refd to. [para. 163].

Authors and Works Noticed:

Fletcher and Roxburgh, The Law and Practice of Receivership in Scotland (3rd Ed. 2005), para. 2.10 [para. 51].

Goode, Roy, Charges Over Book Debts: A Missed Opportunity (1994), 10 L.Q.R. 592, generally [para. 92].

Goode, Roy, Legal Problems of Credit and Security (3rd Ed. 2003), pp. 121, 122, 123 [para. 135].

House of Lords, Practice Statement (Judi­cial Precedent), [1966] 1 W.L.R. 1234, generally [para. 63].

Lloyd, Introduction to Jurisprudence (4th Ed. 1979), pp. 858, 859 [para. 22].

Rodger, A Time for Everything under the Law: Some Reflections on Retro­spectiv­ity (2005), 121 L.Q.R. 57, p. 77 [para. 42].

Tur, Richard H.S., Time and Law (2002), Oxford Journal of Legal Studies 463, p. 473, 474 [para. 71].

Wilson, W.A., Floating Charges, 1961 SLT (News) 53, generally [para. 50].

Worthington, Sarah, An Unsatisfactory Area of the Law - Fixed and Floating Charges Yet Again (2004), 1 Int. Corp. Rescue 175, generally [para. 139]; p. 182 [para. 54].

Worthington, Sarah, Proprietary Interests in Commercial Transactions (1996), pp. 74, 75, 76, 77 [para. 139].

Counsel:

Not disclosed.

Agents:

Not disclosed.

This appeal was heard before Lord Nicholls of Birkenhead, Lord Steyn, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Baroness Hale of Richmond and Lord Brown of Eaton-under-Heywood.

The decision of the House was delivered on July 6, 2005, when the following opin­ions were filed:

Lord Nicholls of Birkenhead - see para­graphs 1 to 43;

Lord Steyn - see paragraphs 44 to 46;

Lord Hope of Craighead - see paragraphs 47 to 75;

Lord Scott of Foscote - see paragraphs 76 to 128;

Lord Walker of Gestingthorpe - see paragraphs 129 to 161;

Baroness Hale of Richmond - see para­graphs 162 to 164;

Lord Brown of Eaton-under-Heywood - see paragraph 165.