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Reservation of title in England and New Zealand

Published online by Cambridge University Press:  02 January 2018

Gerard McCormark
Gerard McCormark*
Affiliation:
University of Essex
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Extract

Reservations of title clauses have enjoyed mixed fortunes in recent times at the hands of the courts in Britain. On the one hand, the House of Lords has upheld the validity and effectiveness of an ‘all-liabilities’ reservation of title clause. On the other hand, claims on the part of a supplier to resale proceeds have been rejected in a string offirst instance decisions. Reservation of title has however been viewed more favourably as a phenomenon in New Zealand. In the leading New Zealand case Len Vidgen Ski and Leisure Ltd u Timam Marine Supplies Ltd. a tracing claim succeeded. Moreover in Coleman u Harvey the New Zealand Court of Appeal gave vent to the view that the title of the supplier is not necessarily lost when mixing of goods, which are the subject matter of a reservation of title clause, has occurred. There are now a series of more recent New Zealand decisions, some of them unreported, dealing with many aspects of reservation of title.

Type
Research Article
Information
Legal Studies , Volume 12 , Issue 2 , July 1992 , pp. 195 - 209
Copyright
Copyright © Society of Legal Scholars 1992

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References

1. Armour v Thyssen Edelstahlwerke AG [1990] 3 WLR 810; on which see McCormack [1991] LMCLQ, Bradga te (1991) 54 MLR 726 and Mance [1992] LMCLQ 35.

2. See Re Weldtech Ltd [1991] BCC 16 noted by De Lacy (1991) 54 MLR 736 and Compaq Computer Ltd v Abercorn Group Ltd (English High Court, 10 May 1991) as well as the earlier decisions of Pfeiffer Weinkellerei-Weineinkauf GmbH & Co v Arbuthnot Factors Ltd [1981] 1 WLR 150 and Tatung (UK) Ltd v Galex Telesure Ltd (1989) 5 BCC 16.

3. [1986] 1 NZLR 349.

4. [1989] 1 NZLR 723.

5. For a discussion of post-contractual reservation of title see J. R. Bradgate [1988] JBL 477.

6. New Zealand High Court, Auckland, 23 March 1989, a decision of Master Anne Gambril.

7. Section 21 of the New Zealand Sale of Goods Act 1908 is practically identical to s 19 of the UK Sale of Goods Act 1979.

8. [1980] Ch 228. See also Frigoscandia Contracting Ltd v CIM Ltd [1982] ILRM 396.

9. [1990] 2 WLR 832.

10. [1991] 5 NZCLC 67,085; [1991] 3 NZLR 112 and see also the discussion in the text accompanying footnotes 44–53 infra.

11. [1980] Ch 228.

12. [1981] Ch 25.

13. [1984] Ch 131.

14. [1984] 1 WLR485.

15. [1991] 5 NZCLC 67, 085 at 67, 089.

16. Ibid.

17. [1983] NZLR 140 at 148.

18. [1932] AC 562.

19. Essentially the reasoning of the House of Lords in Amour v Thyssen Edelstahlwerke AG [1990] 3 WLR 810.

20. New Zealand High Court, Auckland, 19 August 1991, unreported.

21. [1984] 1 WLR 485.

22. [1990] 3 WLR 810.

23. New Zealand High Court, Christchurch, 5 July 1990.

24. Reviewing Professor T. B. Smith's book Property Problems in Sale (1978) at (1981) 1 Legal Studies 326, 328.

25. Citing Professor John G. Fleming's book The Low of Torts (7th edn, 1987) at p 49. See pp 9–10 of the judgment.

26. See generally McCormack, Reservation of Title (Sweet & Maxwell, 1990) at pp 192–196 Google Scholar.

27. See generally Lilley v Doubleday (1881) 7 QBD 510; see also Union Transport Finance Ltd u British Car Auctions Ltd [1979] 1 QB 351.

28. See p 10 of the judgment. Reference was made in this connection to Halsbury's Laws of England (4th edn) vol45 at para 1421 and also Friedel v Castlereagh (1877) 11 ICLR 93.

29. [1978] ILRM 240.

30. [1982] ILRM 399.

31. [1990] ILRM 285.

32. See De Lacy ‘The Anglicisation of Irish Retention of Title?’ (1990) 8 Irish Law Times (New Series) 279.

33. [1986] 1 NZLR 349.

34. Ibid at 364.

35. Ibid.

36. [1989] 2 NZBLC 103, 593.

37. Ibid at 103, 599.

38. See Goode, R. M. Proprietary Rights and Insolvency in Sales Transactions (2nd edn 1989) at p 100 Google Scholar. See also McCormack, Reservation of Title (1990) at p 82 Google Scholar.

39. [1985] 2 NZLR 41. See also Fraser-Ramsay (NZ) Ltd u De Renzy [1912] NZLR 553; Re Conway (a bankrupt) [1936] NZLR 334 and Ticki Paaka v MacLarn [1937] NZLR 369.

40. See generally Henry v Hammond [1913] 2 KB 515 particularly at 521 per Channell J.

41. [1976] 1 WLR 676. The concept of reserving title is far older though than the Sale of Goods Acts; see for instance, the Irish case Bateman v Green and King (1868) IR 2 Ch 607.

42. [1991] BCC 16.

43. English High Court, 10 May 1991; judgment available on Lexis.

44. [1984] 3 All ER 407.

45. [1989] 5 BCC 325.

46. See generally McCormack (1990) 10 Legal Studies 293 and McCormack, Reservation of Title (Sweet & Maxwell, 1990) at pp 46–59 Google Scholar.

47. Buckley v Gross (1863)′3 B & S 566; 122 ER 213; Spence v Union Marine Insurance Co (1868) LR 3 CP 427.

48. Akron Tyre Co Pp Ltd v Kittson (1951) 82 CLR 477; Firestone Tyre & Rubber Co v Industrial Acceptance Corpn (1971) 17 DLR (3d) 229 and Thomas v Robinson [1977] 1 NZLR 385.

49. Thorogood v Robinson [1845] 6 QB 769; International Banking Corpn v Ferguson Shaw and Sons 1910 SC 182.

50. [1989] 1 NZLR 723.

51. See for example A. H. Hudson [1991] LMCLQ 23.

52. Thus reached the reaching arrived at in England as a result of statutory intervention: s 10 of the Torts (Interference with Goods) Act 1977.

53. [1985] 1 WLR 1 11 at 119 per Robert Goff LJ and at 124 per Oliver LJ.

54. New Zealand High Court, Auckland, 26 August 1991. See also New Zealand Forest Products v Pongakawa Sawmill Ltd [1991] 3 NZLR 112 which is discussed in the text accompanying footnotes 10–18 supra.

55. At pp 7-8 of the judgment.

56. See, generally, the leading article by Guest and Lever ‘Hire-Purchase Equipment Leases and Fixtures’ (1963) 27 Conv 30 and also McCormack ‘Hire Purchase, Reservation of Title and Fixtures’ (1990) 54 Conv. See too McCormack Reservation of Title (Sweet & Maxwell, 1990) at pp 176–187.

57. (1991) 1 NZ Convc 190, 851.

58. Reference was made to NZ Government Property Corp. v HM & S Ltd [1982] 1 All ER 624; Elliot v Bishop ER 354; Holland v Hodgson [1864–1872] All ER (Rep) 232; Neylon v Dickens [1979] 2 NZLR 71.4; Shattock v Devlin [1990] 2 NZLR 88; Stack v Easton (1902) 4 DLR 335; Hobson v Gorringe [1896] 1 Ch 182; Johnson v International Harvester Co of NZ Ltd [1925] NZLR 529; Pukuweka Sawmills Ltd v Winger [1917] NZLR 81; Berger v Quarterman [1934] NZLR 13; Sanwa Australia Leasing Ltd v National Westminster Finance Australia (1989) NSW Conv R 55, 437 and Gough v Wood [1894] 1 QB 713.

59. (1991) 1 NZ Conv 190,851 at 190, 858.

60. [1876] 1 AC 762.

61. (1991) 1 NZ Conv 190, 851 at 860.

62. In Carter Holt Harvey Merchandising Group Ltd v Southern Cross Building Society New Zealand High Court, Auckland, 18 April 1991, Master Anne Gambril took the view that a supplier's right to remove fixtures to be nothing more than a contractual licence and thus exercisable only against the other contracting parties. This view is certainly at variance with Trust Bank Central Ltd v Southdown Properties Ltd and authorities of long antiquity like Re Samuel Allm & Sons Ltd [1907] 1 Ch 575 and Re Morrison, Joncs & Taylor Ltd [1914] 1 Ch 50.

63. [1894] 1 QB 713, 720.

64. (1991) 1 NZ Conv 190,851 at 860.

65. [1908] 1 KB 388.

66. (1991) 1 NZ Conv 190,851 at 861.

67. One feature that is slightly disquieting is the suggestion that suppliers are at liberty to remove fixtures from mortgaged land where the mortgagee has no present right to possession. It is submitted that even where a mortgagee has no present right to possession, a mortgage should still rank ahead because of the superiority of the legal estate and also because it is first in point of time.

68. New Zealand High Court, Christchurch, 18 March 1991.

69. New Zealand High Court, Auckland, 6 March 1991.

70. Preliminary Paper No 6 May 1988. The paper was prepared for the New Zealand Law Commission by Professor John Farrar and Mr Mark O'Regan.

71. Report No 8 April 1989.

72. See generally HMSO February 1989.

73. For a consideration of the ideas being mooted in New Zealand see Farrar, J. H. ‘New Zealand Considers a Personal Property Security Act’ (1990) 16 Canadian Business Law Journal 328.Google Scholar

74. (1989) 2 NZBLC 103,595.

75. [1991] BCC 16.

76. English High Court, 10 May 1991.

77. Trust Bank Central Ltd v Southdown Properties Ltd (1991) 1 NZ Conv 190, 851.