The Gazette 1986

JULY/AUGUST

19

GAZETTE

BOOK REVIEWS Bank Security Documents

to keep the machinery in good repair. It is interesting to note that Ireland could be considered a step ahead of England in at least one aspect as the author remarks in his preface that "Banks have recovered large sums from fixed charges over book debts, but preferential creditors (even the Inland Revenue) have made no serious challenge." There are numerous words of advice and warning to practitioners, for example, in chapter 1 a point which can be overlooked easily — "some poorly drafted memoranda do not give adequate power to charge in support of a guarantee," or in chapter 3 where reference is made to the case of Esberger & Sons Limited -v- Capital & Counties Bank [1913] 2 Ch. in which a company deposited with a bank an undated charge which was dated some months later and registered by the bank; the security was held to be void as it had not been registered within 21 days of execution and delivery to the bank. The author has drawn on his experience to write a really practical and worthwhile book, without burdening the reader with a mass of case law. Cases though are used to illustrate in a most lucid fashion particular points of current interest, such as commercial benefit for a guarantor and automatic crystallisation clauses. Although the author deals with the law applicable only to England, the differences in the application of the laws of England and Ireland for debentures and charges are minimal (even though the legislation itself is different). This book is not only recommended, if not essential, reading for practitioners who prepare and advise on facility letters, debentures, charges and guarantees, but it should prove very beneficial to practitioners called upon to advise persons giving such security. Although this publication may not contain all the answers to security problems, practitioners who purchase it will not be disappointed either by its content or style. William Johnston • Irish Law Reports Monthly 1980. Round Hall Press, 1986. £75.00. The Round Hall Press (with its editor, Bart D. Daly and its Editorial Advisors and Board) are to be complimented on producing this selection of previously unreported cases for 1980 (to be cited as "[1980] I.L.R.M."). Among the thirty-five cases included are:— - Colgan -v- Connolly Construction Company (extent of the liability in negligence of a builder of a house to an ultimate subsequent purchaser). - Portland Estates -v- Limerick Corporation (the date of valuation of land for the purpose of compensation for compulsory acquisition). - Wall -v- Hegarty (the duty of care owed by a solicitor to a prospective beneficiary under a Will).

by J.R.

Lingard.

Butterworths, 1985. 367pp. Stg.£30.00 In recent years, when preparing security documents for a creditor the practitioner has had to have at the forefront of his mind the very distinct possibility that the security will be enforced by the creditor, or will be used by the creditor to recover monies following the appointment of a liquidator to the debtor. A mistake in a security document, whether through an oversight or insufficient knowledge can indeed be extremely costly to a practitioner. The text of Bank Security Documents under the authorship of James Lingard, a leading London practitioner, is admirably set out allowing easy and pleasant reading. The book is divided into four parts, the first of which deals with searches, Memorandum and Articles of Association, minutes, registration formalities, facility letters, guarantees and commercial benefit to guarantors as well as pitfalls such as fraudulent preference and retention of title. The second part covers in detail the covenant to pay and other covenants, fixed and floating charges, enforcement provisions and syndication clauses. In the third part there is a detailed chapter on guarantees as well as ample treatment of land, shares, life policies and deposits; pledges and trust receipts are covered particularly well. The fourth part, which amounts to nearly 100 pages, sets out ten precedent security documents. Apart from the legal charge of freeholds and leaseholds, very little amendment is required to the remaining nine security documents to make them suitable to this jurisdiction. Specialised securities relating to agriculture, ships and aircraft are not dealt with. The author, being the practitioner that he is, has not except in a few instances mentioned case law from other common law jurisdictions — perhaps a reflection on how a matter would be dealt with by an English Court. It does mean though that the Irish reader must bear in mind among others the decisions in Industrial Development Authority -v- Moran [1978] IR 159, Lombard & Ulster Banking (Ireland) Limited -v- Amurec Limited (In Liquidation) [1978] 112 ILTR 1, Northern Bank Finance Corporation Limited-v- Quinn (8 Nov. 1979 unrep.), Welch -v- Bowmaker (Ireland) Limited [1980] IR 251, Crowley -v- Northern Bank Finance Corporation Limited [1981] IR 353, Ulster Investment Bank Limited -v- Euro Estates Limited and Drumkill Limited [1982] ILRM 641 and the numerous Irish decisions on retention of title. In his preface the author points out that many important issues in security remain undecided partly due to the reluctance of parties to incur the cost of going to Court. This might include, for example, fixed charges over machinery. On this the author suggests that a fixed charge over machinery that would be regarded as a fixed asset rather than a current one can be created if the security contains a covenant precluding the mortgagor from disposing of the machinery without the mortgagee's prior written consent as well as a covenant

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