Tony Mitchell
Tony's recent articles
- A Year of Celebration
19th January - Bankruptcy Tourism – Another E.U. Headache
20th October - The Third Sector Under Pressure
14th July
Retention of Title - 34 years Old and Counting
19th August 2010 16:29
Every few years we get further clarification of what is and what is not a valid Retention of Title Clause. Over recent years and ever since the very first case after whom this whole area of law is named, Romalpa Aluminium Ltd, the pendulum has slowly swung in favour of the supplier being able to recover goods that a customer has not paid for.
The big breakthrough for suppliers came in the form of the “all monies clause” which if documented correctly allows a supplier to recover all goods supplied up to the value of an outstanding debt without the need to have to identify which goods have and have not been paid for. This usually means that as the insolvency practitioner, I am often handing back stock that I would otherwise be able to sell for the benefit of all creditors in a particular insolvent case.
You can imagine my level of excitement when I saw a headline the other day that in the case of Bulbinder Singh Sandhu (trading as Isher Fashions UK) v Jet Star Retail Limited (trading as Mark One) (in administration) and others [2010] EWHC B17 (Mercantile), the High Court had held that an “all monies” retention of title clause in a contract was ineffective.
My excitement was however short lived when I discovered that the ruling was in respect of a very special type of supplier/customer contract which contained provisions that allowed the purchaser to on-sell the stock it had purchased (without discharging its balance with the supplier), and to continue to do so even following the purchaser’s insolvency. Although not the defensive weapon I had thought it was going to be in my discussions with suppliers, it is something that needs to be thought about by clients in the retail environment and as always the importance of having the correct paperwork signed and accessible is as vital today as it was 34 years ago.
