National Westminster Bank Ltd v Halesowen

National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd [1972] AC is a decision of the House of Lords in relation to a banker's right to combine accounts under English law. It is the leading English case and a banker's right to combine accounts, and also an important decision relating to insolvency set-off.

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The case concerned the Bankruptcy Act 1914 which has since been replaced by the Insolvency Act 1986, but the decision is still treated as authoritative.

The majority view that the insolvency set-off provisions were mandatory and that a party could not waive them or contract out of them is regarded as the settled law. This position has now been affirmed by the subsequent (unanimous) House of Lords decisions in Stein v Blake [1996] AC 243 and Re Bank of Credit and Commerce International SA (No 8) [1998] AC 214

Quoth Lord Justice Buckley, as he then was:

“Nor is [the Banker’s right to combine accounts] a set-off situation, which postulates mutual but independent obligations between the two parties. It is an accounting situation, in which the existence and amount of one party’s liability to the other can only be ascertained by discovering the ultimate balance of their mutual dealing.”

See also

• Insolvency set-off
• General set-off
• Stein v Blake