Retention of Title Clauses

Question 1

Why are they sometimes known as ROMALPA clauses

Answer 1

The case of ROMALPA ALUMINIUM 1976

Question 2

What does a RoT clause do?

Answer 2

Allows S to retain title until condition met, normally price paid

Question 3

when do RoT clauses come up most

Answer 3

RoT clauses often come under ‘unless parties have agreed otherwise’

Question 4

s19(1)

Answer 4

• If contract for sale of specific goods, or oods subsequently appropriated to contract
• S can reserve right of disposal until conditions met
• Property not transferred only delivered
• Normally condition is payment of price

Question 5

Who has to identify and prove a RoT clause

Answer 5

S -> BLUEMONKEY GAMING v HUDSON 2014

Question 6

Uninented consequenes?

Answer 6

JOHN HOLT Co 2014
PST ENERGY SHIPPING v OW BUNKER 2006
THE ROMALPA 1976

Question 7

JOHN HOLT Co 2014

Answer 7

• S can be denied claim for price due to RoT clause
• B may have possession but ownership still hasn’t passed due to RoT
• Action for price under s49(1) unavaliable as only can if property passes
• Ironic but easily avoided under s49(2) - fixed date of payment in RoT clause

Question 8

PST ENERGY SHIPPING v OW BUNKER 2006

Answer 8

• B ordered marine fuel from OW
• Payment for 60 days after delivery but with clause that stated property wont pass until paid for
• Contract also entitled use from moment of delivery
• B’s parent company became insolvent, Bs had used all fuel without payment
• Main company had paid for fuel and demanded payment to them from B
• B argued no title passed to them under s2(1) and s49
  HELD: that was agreed in contract, still liable

Question 9

Why was appeal to decision in OW BUNKERs 2006 dismissed?

Answer 9

1) Not under SGA as all fuel had been used before payment
2) If not under SGA, was it subject to impled term of payment? -> No OWB had legal entitlement to give permission to use fuel prio to payment

Question 10

THE ROMALPA CASE 1976

Answer 10

• Exceptionally broad RoT clauses were S was entitled to goods maufactured from their foil until paid in full
• S reserved ownership until paid in full
• Until full payment S is entitled to profits made by B from thier own customers

Question 11

Why is unlikely that claim for proceeds of sale will succeed again?

Answer 11

• IN Romalpa B’s counsel amditted S was a fiduciary, no one would do that
• If S really was a fiduciary they would be entitled to everything, but S was only entitle to what was owed = a charge

Question 12

Critisims of RoT

Answer 12

1) Goods incorporated into munfactured goods
- > Re PEACHDART 1984: contract stated S retained ownership of anything leather went into until paid in full , NOT ALLOWED - leather had ‘changed identity’
2) RoT void and created registered charge instead, void if not registered
- > Re BOND WORTH 1980

Question 13

Cases that confirm PEACHDART 1984

Answer 13

Re BOND WORTH 1980: man made fibers to carpet
SCOTTISH TIMBER PRODUCTS: resin to chipboard
MODEL BOARD v OUTERBOX: sheets of cardboard to boxes

Question 14

Case that limited how far identity must be changed to prevent RoT clause over it

Answer 14

HENDY LENNOX 1984

Question 15

HENDY LENNOX 1984

Answer 15

• Diesel engine sold with RoT
• Incorporated into a generator, easily reclaimable
• Remained an engine and had indtifiable seriel number and could be easily removed from generator