28:
200:
all powers of dealing with the company's assets are exercisable by the liquidator for the benefit of those persons only who are entitled to share in the proceeds of realisation of the assets under the statutory scheme. The company itself can never be entitled to any part of those proceeds, and after
396:
Although the decision has never subsequently been doubted, commentators were quick to point out that "trust" is not used in the strictly technical term, as none of the creditors have any specific interest in the trust property. Other commentators have noted that "t has long been objected that there
165:
The central question in relation to the claim for tax relief was whether trade was "carried on" up until the date of the sale. Accordingly, for the purposes of the relevant analysis the only real question in the appeal was whether a company in liquidation (Mactrac Ltd) remained the beneficial owner
153:
On 18 January 1963 the receiver (with the approval of the liquidator) sold all of the assets and undertaking of
Mactrac Ltd to its wholly owned subsidiary, C&K (Construction) Ltd. On that date the unrelieved tax losses incurred Mactrac Ltd in its trade were £326,486 and it had a further £82,025
145:
was appointed with respect to
Mactrac Ltd by a debenture holder. Accounts would later show that at this time the company had a deficiency of assets against liabilities in the total sum of £389,977. On 21 May 1962 a petition of the
131:
which confirmed that where a company goes into insolvent liquidation it ceases to be the beneficial owner of its assets, and the liquidator holds those assets on a special "statutory trust" for the company's creditors.
397:
is no real trust of the property of a company in liquidation and 'trust' should be used only as a convenient way of describing the status of property in a liquidation, not as a categorisation with legal consequences".
154:
in unrelieved capital allowances. The receiver then sold the entire share capital of C&K (Construction) Ltd. to an outside purchaser. When the appellant company was assessed for tax, it claimed to be able to
140:
Mactrac Ltd was a company carrying on the business of builders and civil engineers. Mactrac Ltd was the beneficial owner of 100% of the issued share capital in C&K (Construction) Ltd. On 3 March 1962 a
228:
His
Lordship then considered arguments by the appellants that Parliament may have intended something different when they used the term "beneficial ownership" in the Finance Act, which he also dismissed.
186:
the effect of the winding-up order is to divest the company of the "beneficial ownership" of its assets within the meaning of that expression as it is used under section 17(6)(a) of the
Finance Act 1954.
400:
Subsequent cases have held that neither the company nor any other person has a beneficial interest in the assets of a company in liquidation. However, the decision has not been followed in
Australia.
205:
The court noted that unlike the bankruptcy of a person, the winding-up of a company does not transfer legal title to the company's property to the liquidator. They referred to the comments of
190:
His
Lordship then reviewed the relief provisions in the Finance Act before turning to the effect of a winding-up order, holding that the principal effects of the statutory regime were that:
336:
324:
300:
83:
221:
that "t appears to me that that does, in strictness, constitute a trust for the benefit of all creditors". Lord
Diplock noted that the editors of
585:
258:
182:
My Lords, the only question that has been argued in your
Lordships' House is whether when a company is ordered to be wound up under the
213:
where he had held that upon winding-up the assets of a company become impressed by a trust, and the decision of the Court of Appeal in
590:
225:
had treated that statement as authoritative from 1897 to the present time, and that Lord
Diplock was content that this was correct.
580:
120:
38:
197:
the duty of the liquidator is to collect all of the assets and apply them in discharge of its liabilities (section 257(1)); and
374:
91:
525:
500:
550:
251:
27:
175:
124:
106:
87:
79:
409:
194:
the custody and control of all the company's property are transferred to the liquidation (under section 243);
128:
244:
312:
288:
8:
274:
183:
278:
521:
496:
386:
546:
541:
348:
159:
150:
of
Mactrac Ltd was presented, and an order to that effect was made on 4 June 1962.
158:
the unrelieved losses and capital allowances of Mactrac under section 17 of the
218:
574:
155:
142:
206:
147:
488:
236:
563:
Federal Commissioner of Taxation v Linter Textiles Australia Ltd
201:
the completion of the winding-up it is dissolved (section 274).
178:. His short judgment started by encapsulating the issue:
49:
Ayerst (Inspector of Taxes) v C&K (Construction) Ltd
428:
Ayerst (Inspector of Taxes) v C&K (Construction) Ltd
362:
Ayerst (Inspector of Taxes) v C&K (Construction) Ltd
116:
Ayerst (Inspector of Taxes) v C&K (Construction) Ltd
21:
Ayerst (Inspector of Taxes) v C&K (Construction) Ltd
452:
In re Albert Life Assurance Co., The Delhi Bank's case
211:
In re Albert Life Assurance Co., The Delhi Bank's case
174:
The sole judgment of the House of Lords was given by
487:
520:(2nd ed.). Oxford University Press. 1.1.4.3.
572:
252:
515:
495:(3rd ed.). Penguin Books. p. 836.
259:
245:
26:
573:
266:
240:
337:Re Windsor Steam Coal Co (1901) Ltd
217:, and in particular the comment of
13:
586:United Kingdom insolvency case law
375:Stonegate Securities Ltd v Gregory
14:
602:
518:Applications to Wind-up Companies
591:United Kingdom taxation case law
581:1976 in United Kingdom case law
556:
534:
509:
481:
476:In re Oriental Inland Steam Co
469:
464:In re Oriental Inland Steam Co
457:
445:
433:
421:
215:In re Oriental Inland Steam Co
1:
410:United Kingdom insolvency law
232:
223:Buckley on the Companies Acts
119:AC 167 was a decision of the
415:
7:
403:
169:
10:
607:
383:
371:
357:
345:
333:
321:
313:Re Peveril Gold Mines Ltd
309:
297:
285:
272:
102:
97:
75:
70:
62:
54:
44:
34:
25:
20:
454:(1871) 15 SJ 923 at 924.
135:
289:Re Rica Gold Washing Co
188:
547:[2004] UKHL 9
516:Derek French (2007).
180:
148:compulsory winding-up
565:HCA 20, 220 CLR 592.
466:(1874) 9 Ch App 557.
489:Professor Roy Goode
325:Pulsford v Devenish
275:Insolvency Act 1986
209:in the decision of
184:Companies Act 1948
92:Lord Edmund Davies
393:
392:
387:UK insolvency law
292:(1879) 11 Ch D 36
267:Liquidation cases
112:
111:
84:Viscount Dilhorne
598:
566:
560:
554:
542:Buchler v Talbot
538:
532:
531:
513:
507:
506:
485:
479:
473:
467:
461:
455:
449:
443:
437:
431:
430:AC 167, at 175E.
425:
363:
349:Mann v Goldstein
261:
254:
247:
238:
237:
160:Finance Act 1954
71:Court membership
30:
18:
17:
606:
605:
601:
600:
599:
597:
596:
595:
571:
570:
569:
561:
557:
539:
535:
528:
514:
510:
503:
486:
482:
474:
470:
462:
458:
450:
446:
438:
434:
426:
422:
418:
406:
394:
389:
379:
367:
361:
353:
341:
329:
317:
305:
301:Knowles v Scott
293:
281:
268:
265:
235:
172:
166:of its assets.
138:
90:
88:Lord Kilbrandon
86:
82:
12:
11:
5:
604:
594:
593:
588:
583:
568:
567:
555:
533:
526:
508:
501:
493:Commercial Law
480:
468:
456:
444:
432:
419:
417:
414:
413:
412:
405:
402:
391:
390:
384:
381:
380:
372:
369:
368:
358:
355:
354:
346:
343:
342:
334:
331:
330:
322:
319:
318:
310:
307:
306:
298:
295:
294:
286:
283:
282:
273:
270:
269:
264:
263:
256:
249:
241:
234:
231:
203:
202:
198:
195:
171:
168:
137:
134:
129:insolvency law
121:House of Lords
110:
109:
104:
100:
99:
95:
94:
77:
76:Judges sitting
73:
72:
68:
67:
64:
60:
59:
56:
52:
51:
46:
45:Full case name
42:
41:
39:House of Lords
36:
32:
31:
23:
22:
9:
6:
4:
3:
2:
603:
592:
589:
587:
584:
582:
579:
578:
576:
564:
559:
552:
548:
544:
543:
537:
529:
527:9780199206896
523:
519:
512:
504:
502:9780140289633
498:
494:
490:
484:
477:
472:
465:
460:
453:
448:
441:
436:
429:
424:
420:
411:
408:
407:
401:
398:
388:
382:
377:
376:
370:
365:
364:
356:
351:
350:
344:
339:
338:
332:
327:
326:
320:
315:
314:
308:
303:
302:
296:
291:
290:
284:
280:
276:
271:
262:
257:
255:
250:
248:
243:
242:
239:
230:
226:
224:
220:
216:
212:
208:
199:
196:
193:
192:
191:
187:
185:
179:
177:
167:
163:
161:
157:
151:
149:
144:
133:
130:
126:
122:
118:
117:
108:
105:
101:
98:Case opinions
96:
93:
89:
85:
81:
78:
74:
69:
65:
61:
57:
53:
50:
47:
43:
40:
37:
33:
29:
24:
19:
16:
562:
558:
551:Lord Hoffman
540:
536:
517:
511:
492:
483:
475:
471:
463:
459:
451:
447:
442:, at 177A-D.
439:
435:
427:
423:
399:
395:
373:
360:
359:
347:
335:
323:
311:
299:
287:
227:
222:
214:
210:
204:
189:
181:
176:Lord Diplock
173:
164:
152:
139:
123:relating to
115:
114:
113:
107:Lord Diplock
80:Lord Diplock
48:
15:
207:Lord Cairns
125:revenue law
103:Decision by
58:21 May 1975
575:Categories
352:1 WLR 1091
233:Commentary
219:Mellish LJ
478:, at 560.
416:Footnotes
491:(2004).
404:See also
328:2 Ch 625
316:1 Ch 122
304:1 Ch 717
170:Judgment
143:receiver
63:Citation
156:set-off
55:Decided
549:, per
524:
499:
440:Ayerst
378:Ch 576
366:AC 167
340:Ch 609
279:73-174
66:AC 167
545:
136:Facts
35:Court
553:at .
522:ISBN
497:ISBN
385:see
127:and
277:ss
577::
162:.
530:.
505:.
260:e
253:t
246:v
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.