At the Intersection of Property and Insolvency: The Insolvent Company's Encumbered Assets
![handle is hein.journals/saclj20 and id is 503 raw text is: Insolvent Company's Encumbered Assets
AT THE INTERSECTION OF PROPERTY AND INSOLVENCY:
THE INSOLVENT COMPANY'S ENCUMBERED ASSETS
When a company becomes subject to winding-up
proceedings, it is widely thought to lose beneficial ownership
of its property. The property is held, instead, on a statutory
trust to discharge the company's liabilities. The attribution
of this proprietary effect to the commencement of winding
up has, however, created significant confusion. Faring
particularly poorly is our understanding of the status of those
of the company's assets in which others held proprietary
rights prior to this point, notably, assets the company's title to
which is encumbered by security interests. The confusion
takes many forms and infects several areas of analysis. This
article undertakes a fresh analysis of these complicated issues
at the intersection of the laws governing property and
insolvency.
Rizwaan Jameel MOKAL'
BSc (Pb), LLB (University College London), BCL (Oxon),
PhD (University College London); Barrister (Gray's Inn);
Reader in Laws, University College London;
Barrister, 3-4 South Square, Gray's Inn, London.
I. Introduction
1 Dramatic things happen when a company becomes subject to
winding-up proceedings. On a view widely (though not universally3)
accepted in the common law world, the commencement of its winding
1 I am grateful to Gerard McCormack for inviting me to contribute to this special
issue of the Singapore Academy of Law Journal. Much in this paper is owed to
Look Chan Ho, to whom also I acknowledge my gratitude. Many thanks to Ian
Fletcher, Joshua Getzler, Gerard McCormack and Sandy Shandro for very
insightful comments; to Richard Nolan for a helpful conversation; and to Tracey
Evans Chan for invaluable advice on Singapore law. Given my great debt to these
colleagues, it is particularly important to stress that neither the views expressed in
this article nor its mistakes should be attributed to anyone other than me.
2 In Commissioner of Taxation v Linter Textiles Australia Ltd [2005] HCA 20 at [184],
Kirby J noted that the jurisdictions where this view is taken include England
(Ayerst v C & K (Construction) Ltd [1976] AC 167); Ireland (In re Frederick Inns Ltd
[1994] 1 ILRM 387); New Zealand (Shaw Savill and Albion Company Ltdv
Commissioner of Inland Revenue [1956] NZLR 211 at 232, 234); and Hong Kong
(Re Yaohan Hong Kong Corp Ltd [2001] 1 HKLRD 363 at 370).
3 See the majority opinion in Commissioner of Taxation v Linter Textiles Australia Ltd
[2005] HCA 20 (Australia).
(2008) 20 SAcLJ](ViewImageLocal?handle=hein.journals/saclj20&div=26&collection=journals&method=preview&ext=.png&size=3)
What Is HeinOnline?
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most
At the Intersection of Property and Insolvency: The Insolvent Company's Encumbered Assets
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most