Re Andrabell Ltd
A seller under a simple retention of title clause could not trace into the proceeds of resale, because there was no fiduciary relationship between the seller and the buyer.
Facts
Airborne Accessories sold travel bags to Andrabell, under a contract that retained title until payment. There was no provision about the proceeds of resale, and the buyer was allowed 45 days' credit. Andrabell resold the bags and paid the proceeds into its general bank account, and then went into liquidation. The seller claimed to trace into the proceeds of resale.
Legal principle
Peter Gibson J held that the seller could not trace into the proceeds. The contract did not require Andrabell to store the goods separately or to keep the proceeds of resale in a separate account, and the period of credit showed that the seller had agreed to give Andrabell credit, rather than holding the proceeds for the seller. There was therefore no fiduciary relationship, so there was no basis for tracing. The case was distinguished from Romalpa, where the clause provided for separate storage.
Related cases on retention of title clauses
- Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676
- Armour v Thyssen Edelstahlwerke AG [1991] 2 AC 339
- Re Bond Worth Ltd [1980] Ch 228
- Borden (UK) Ltd v Scottish Timber Products Ltd [1981] Ch 25
- Clough Mill Ltd v Martin [1985] 1 WLR 111
- Compaq Computer Ltd v Abercorn Group Ltd [1991] BCC 484
- E Pfeiffer Weinkellerei-Weineinkauf GmbH & Co v Arbuthnot Factors Ltd [1988] 1 WLR 150
- FG Wilson (Engineering) Ltd v John Holt & Co (Liverpool) Ltd [2013] EWCA Civ 1232, [2014] 1 WLR 2365
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