Retention of Title

Question 1

Basis of ROT in law?

Answer 1

Section 19 SOGA 1979

Question 2

What do ROT clauses do?

Answer 2

Clough Mill Ltd v Martin
Doesn’t create a charge (which would need to be registered)
A just remains owner of goods until (whatever)
Until then, may have bailment relationship.
If this is what parties have agreed, no reason not to give effect (Goff LJ)
Sir John Donaldson MR, the agreement involved the pliantiff retaining property, did not involve buyer conferring a charge

Question 3

Clough Mill v Martin

ROT clauses in new products?

Answer 3

Oliver J: NO reason in principle why original legal title in new article comoposed of materials belonging to A and B should not lie where A and B have agreed
But there is difficulty in construing as ROT in new goods as S would get windfall:
Robert Goff LJ explains that on determination of the contract this would leave S will gain full value of the new products, deriving from labour and materials of B, but w no duty to account to him for proceeds of sale above outstanding balance of price due. Must instead create either a trust or charge
Sir John Donaldson MR: If incorporation leaves yarn in separate adn dietifiable state, S can ROT, but if it ceased to be identifiable and a new product was created, it would be necessary to determine who owned that products, and there would be a charge

Question 4

Borden (UK) Ltd v Scottish Timber Products Ltd [1981] (CA):

Answer 4

Sale of resin which B uses in manufacture of chipboard (CB)
Buckley LJ: S could not reserve any property in the CB bc they never had any prop in it. The prop in the product originates in B when the CB is manufactured
Any interest S might have had in CB would have arised by transfer of ownership or some constructive trust, and I find it impossibel to find in the ROT condition anything of that nature

Question 5

Aluminium Industrie Vaassen v Romalpa Aluminium (1976)

Answer 5

AIV supplies aluminium to RA. Clause 13 says S ROT until B pays all owed to S. until then B must store material in way that its clearly S’ prop, and until full payment B keeps object for S in capacity as fiduciary owner
S held to own both the unprocessed foil and proceeds of subsales may by RA
But note w caution:
In Romalpa, B held goods as bailees or S, so were fiduciaries for S
But fiduciary relationship generally doesnt arise in bailment (and so the duty to account for proceeds) and also in ROT (Re Andrabell and Hendy Lennox v Grahame Puttck)
The agency construction of ROT clause gives rise to some uncommercial consequences such as windfall to S
Generally courts consider if duty to account for proceeds by B to S can eb implied by construing the agrement, they do not usually find it

Question 6

Pfeiffer GmbH v Arbuthnot Factors (1988)

Answer 6

S’s claim realtes to proceeds of sale gf goods received by B after sub-sales
Claim was only to the sums necessary to satsify B’s duty to pay the price
It was an attempt to give S a security right (a charge)
Registration was required as debtor =company
Bc not registered, void against liquidator, adminstrator, o creditors of the company

Question 7

Caterpillar v John Holt (2013)

Answer 7

Con clause stated that until title passes, B shall hold products as S’ fiduciary agent and keep separate from B’s other goods. Prior to title passing B shall be entitled to resell and shall account to S for proceeds of sale. Nothing herein shall be deemed to create an agency or fiduciary relationship between the parties hereto
Under con B cannto set off claims for BOC against purchase price, so claied price not payable under s49 SGA on basis that they were agents only ad s49 did not apply
Majority construed the con as creating an agency (agency construction of ROT, not the commercial construction
Unanimously held that s4 SGA was an exclusive code covering hen S can sue B for price

Question 8

PST Energy v OWB (2016)

Answer 8

Q (a) Con = con for SOG w/in meaning of s2(1) SGA?
(b) If yes, can OWB sue for price despite not fallign w/in s49
Lord Mance
Re a: Rejects that con can be analysed as COS to extent it provided for transfer of prop in any part of the bunkers remaining at time of payment. Is closely analagous to sale, and contains similar implied terms as to description, quality etc as implied in any oconventional sale. But isn’t one
Re b: Even if it were a SOG con it might be paybale anyway because s49 is not actually exhaustive