Section 530B(1) of the Corporations Law (now s 530B(1) of the Corporations Act 2001) does not destroy a possessory lien over company books when those books are surrendered to a liquidator. The proviso 'but such a lien is not otherwise prejudiced' preserves the lien as a security for the debt, and a liquidator who pays the lienholder's claim in exchange for release of the documents acts properly and is not subject to reversal under s 1321. A solicitor holding a possessory lien over certificates of title remains a secured creditor in the insolvency administration.
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