(28) The definition may have been adopted as a consequence of the New Zealand decision in Commissioner of Inland Revenue v Northshore Taverns Ltd (in liq) (2009) 10 NZCLC 264, 436  (Hole AJ) which limited the New Zealand definition of 'account receivable' to what had been traditionally regarded as a book debt
. Cf the subsequent New Zealand decisions: Burns v Commissioner of Inland Revenue  NZHC 1363  (10 August 2011) (Gendall AsJ); Strategic Finance Ltd (in rec and in liq) v Bridgman  NZCA 357 (27 March 2013)  (White J for Arnold, Stevens and White JJ) which favoured a broad definition.
In legal terms, the defining features of book debt
were that it did not contain an explicit promise by the debtor to pay the amounts listed, and it did not stipulate a time for payment.
at 12 (discussing the somewhat risky nature of book debts
for which the law implied a promise to pay and noting the continued reliance on this system until as late as the 1720s).
whether book debts
for the sum of 2 million declared by Mr Ansar to be owed by him were legitimately owed and if so, whether these funds were recoverable
However, it has also caused nervousness among business people who in the past have considered that their personal guarantees would be relatively safe from the bank in the event of liquidation as the overdraft would be covered by the book debt
Since a House of Lords ruling earlier this year, a lender cannot be considered as having a fixed charge over a book debt
unless they are deemed as having "control".
Mr Gardner said that, in the past, the main security for bank loans, such as overdrafts, had been the book debt
of the company.
The case called into question whether book debt
charges surrounding the receivership of Brumark were fixed or floating.
At FBC Manby Bowdler LLP, Gareth Ruddock acts for a range of SMEs (including construction and software companies), as well as insolvency practitioners, which the firm advises on collecting book debts
The pledge over economic enterprise creates security over all elements of the commercial or professional business including its intangible elements (goodwill and customer database) and its tangible elements including its movable assets, rights (receivables and book debts
) as well as the location where commercial activities are carried out.
Of the total consideration for the acquisition, GBP 3.5m is payable in cash on completion with the balance due on the anniversary of completion subject to the satisfactory collection of book debts
and work in progress.
totalling PS308,978 has been discounted to just over PS245,000 to provide for doubtful debts and collection costs and the site of the business is up for sale at West Chirton Industrial Estate and is being marketed by Sanderson Weatherall.