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The insolvency of Lehman Brothers in September 2008 reignited interest in a principle of English insolvency law that has come to be known as the anti-deprivation principle. This principle, which stretches back to at least the early years of the 19th century, has been best summarised by Cotton LJ as the rule that 'there cannot be a valid contract that man's property shall remain his until his bankruptcy, and on the happening ofthat event shall go over to someone else, and be taken away from his creditors'.1 Its rationale is readily apparent; there would be little point in having a prescribed regime for dealing with the assets of an insolvent company if that company could avoid that scheme simply by entering into contracts whereby its property would be transferred to specific creditors or third parties on the company's insolvency.
In July 2011, the Supreme Court handed down its decision in Belmont Park Investments Pty Limited ? BNY Corporate Trustee Services Ltd} The decision, which was an appeal from the Court of Appeal decision in Perpetual Trustee Co Ltd ? BNY Corporate Trustee Services Ltd,5 was keenly anticipated in legal and structured finance circles. Yet the decision was something of a disappointment. Despite the complexity of the issues involved, the majority in the Supreme Court took a rather simplistic approach to the anti-deprivation principle. In doing so, it effectively robbed the principle of much of its scope, effectively restricting its application to situations where there is an evident intention to avoid the insolvency laws and missing the opportunity to build on the decision of Briggs J in Lomas ? ß^B Firth Rixson, Ine,4 and develop a more nuanced test, which strikes a balance between the competing principles of party autonomy and the need to protect the third party creditors of an insolvent entity.
This case comment will analyse some of the key issues arising from the decision. In doing so, it will focus primarily on the judgment of Lord Collins, with whom Lord Philips, Lord Hope, Lady Hale and Lord Clarke agreed, and whose judgment was also accepted by Lord Walker. The two other judgments, of Lord Walker and Lord Mance, will be referred to where they provide an interesting contrast to Lord Collins' approach.
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