The case against the equitable lien

Recent analyses of proprietary remedies have overwhelmingly focused on the constructive trust. This article investigates a less prominent proprietary remedy: the equitable lien. Though the lien is not as intrusive a remedy as the trust, because it insulates a creditor from the consequences of his/he...

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Bibliographic Details
Published inMelbourne University law review Vol. 42; no. 3; pp. 813 - 857
Main Author Crawford, Michael JR
Format Journal Article
LanguageEnglish
Published Melbourne Melbourne University Law Review Association Inc 01.01.2019
Subjects
Bankruptcy
Bankruptcy trustees
Debt
Debtor and creditor
Equity
Insolvency
Law and legislation
Liens
Liquidation
Profits
Proprietary
State court decisions
Trusts
Trusts and trustees
Valuation
AUSTRALIA
New Zealand
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Summary:Recent analyses of proprietary remedies have overwhelmingly focused on the constructive trust. This article investigates a less prominent proprietary remedy: the equitable lien. Though the lien is not as intrusive a remedy as the trust, because it insulates a creditor from the consequences of his/her debtor's insolvency, it raises many of the same questions. If a lien is to be justified, there must be some compelling reason for preferring the claims of some general creditors at the expense of others. This article argues that it is very difficult to demonstrate why some creditors are more deserving than others. Excepting a small number of anomalous instances in which the lien can be justified on instrumental grounds, the effect of the equitable lien is to discriminate between creditors whose claims are, in all material respects, indistinguishable.
Bibliography:MELBOURNE UNIVERSITY LAW REVIEW, Vol. 42, No. 3, 2019, 813-857
Informit, Melbourne (Vic)
ISSN:0025-8938
1839-3810