Re Peachdart Ltd
A seller's claim to ownership of handbags made from its leather was a charge, which was void because it was not registered.
Facts
A seller of leather supplied it to Peachdart, a manufacturer of handbags, under a contract that provided that ownership of the leather would remain with the seller until it was paid for, and that, if the leather was made into handbags, the seller would have ownership of the handbags. Peachdart went into receivership. The seller claimed the handbags made from its leather.
Legal principle
Vinelott J held that the seller had no claim to the handbags, because the provision giving it rights in them was a charge, which was void for want of registration under the Companies Act. He said that the parties must have intended that, once Peachdart began to work on the leather, its property in the leather would cease and it would become the property of Peachdart, subject only to a charge in favour of the seller. The seller could not have intended to become the owner of the handbags, which included Peachdart's labour and other materials.
Related cases on retention of title clauses
- Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676
- Re Andrabell Ltd [1984] 3 All ER 407
- 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
Studying commercial law? Our tutors help you understand and apply cases like this in essays, problem questions and exams. Request a quote or browse our law notes.
This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
