Goode's Swan Song to Corporate Insolvency Law - a Review of Principles of Corporate Insolvency Law by Professor Sir Roy Goode
35 Pages Posted: 14 Nov 2005
Date Written: November 10, 2005
Professor Sir Roy Goode's published scholarship has immensely enriched our understanding of the law. The legal community ought to be immensely grateful to Professor Sir Roy Goode for so generously deferring his retirement to produce yet another towering exposition of English corporate insolvency law.
With all due deference and in the spirit that academic scholarship is a collaborative enterprise with deep roots in constructive criticism, this reviewer respectfully suggests that some areas call for improvements as follows, namely legal errors, currency of case-law, the effect of a company voluntary arrangement ('CVA'), and doctrinal coherence.
There are a number of clear errors in the book and a number of areas would have benefited from case-law updating. The discussion concerning the position of a creditor not bound by the CVA and the case of Re TBL Realisations is unsatisfactory.
The treatment of the pari passu principle and the House of Lords decision in Buchler v Talbot concerning the nature of security interests suffers from doctrinal incoherence.
Goode repeatedly claims that the principle of pari passu distribution is central, fundamental and all pervasive. However Goode does not cite any convincing evidence. For example, Goode claims that the principle against divestiture is based on the pari passu principle, although the landmark decision in Fraser v Oystertec has disproved this position. Goode does not mention Fraser v Oystertec anywhere in his book.
Goode endorses the decision in Buchler v Talbot as plainly correct, without informing his readers that this endorsement is apparently a reversal of his long-held view stated in no less than 6 books over 2 decades. In making this endorsement, Goode also does not seem to have taken into account the full statutory regime, in particular regulation 14(6) of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 that confirms the validity of Goode's original view.
Goode says that floating charged assets, to the extent of the security interest created by the floating charge, are not the company's assets. However, this view of security interests contradicts Goode's own view in other parts of the book and his other books. The recent decision in Ultraframe (UK) v Fielding, consistent with a long line of authorities, flatly contradicts Goode's claim, and reaffirms that, both in law and in accounting terms, secured assets are beneficially owned by the chargor or mortgagor, as the case may be. Goode does not mention Ultraframe (UK) v Fielding anywhere in his book.
Keywords: Goode, English corporate insolvency law, commercial law, security interests, pari passu principle
JEL Classification: K10, K11, K12, K22, K30
Suggested Citation: Suggested Citation