Key points

  • Care should be taken to ensure that finance documents clearly and specifically set out the intention of the parties.

  • Lenders should ensure that charges created in security documents are not invalidated or altered by provisions of other finance documents.


The administrators of Relentless Software Limited (the “Company”) applied for a determination as to whether (amongst other things) the First Respondent (the “Funder”) had any security over tax credits paid to the Company’s bank account by HMRC shortly before the Company entered administration. The Funder provided funding to the Company for the purpose of developing video games pursuant to various funding agreements (to which both the Company and its subsidiary (“Vision”) were parties) (the “Agreements”). The Company’s liabilities under the Agreements were secured by a Deed of Charge. The Funder (amongst other things) contended that the tax credit was caught under the Deed of Charge as a charged “Book Debt”. Broadly speaking, Book Debts were defined in the Deed of Charge as receivables relating to the funded video games.


In making his determination, the judge construed the Deed of Charge and the Agreements together. Whilst the tax credits could have fallen within the definition of Book Debts as set out in the Deed of Charge, the Agreements contained provisions which clearly treated tax credits as being different to Book Debts. In the Agreements, Book Debts were required to be paid to an account in the name of the Company (which was to be a designated and blocked account and the proceeds were to be used to pay down the Company’s debt), whereas tax credits were required to be paid into an account in the name of Vision and there was no stipulation as to how the funds should be used.


The facts of this case were complicated and are not fully set out here, and the court was also required to determine other issues not covered here. Whilst this case turns on its facts, it is a reminder that finance documents should be drafted consistently as between each other and should specifically set out in the intention of the parties.

Plant & Anor (Administrators of Relentless Software Ltd) v Vision Games 1 Ltd & Ors [2018] EWHC 108 (Ch)