The question deal with the issue of retention of title.

As per the general rule under section

17 SOGA 1979, the property in the goods is passed to the buyer when the parties of the
contract intended it to be passed. However, as noted in section 19(1) SOGA, the property in
the goods does not pass to the buyer until the condition imposed by the seller is fulfilled.
Hence, Westland may want to retain the property rights by imposing the retention of title
clause. The purpose of the retention of title clause is not meant to restrict or interfere with
the ordinary conduct of a buyer’s business, but so as to be able to raise the capital in order
to satisfy the contractual debt due and the debt owing to the seller. It is noted also if the
goods supplied are sold off to a sub-buyer, they cannot be subjected to the ROT clause as
the sub-buyer will be able to trigger the passing of the title under section 25 SOGA 1979.
Hence, all the action can only be taken against Accord in this question. Scarlett will be
advised on the issue of whether Wester can claim back the proprietary right will be looked at
by step under this question.
Under the first invoice, two tons out of 10 tons were sold to another manufacturer for 600.
Westland may want to take the property rights because the goods are still unpaid. Hence,
Westland may try to claim back the property right under a simple Romalpa claim as per the
case of AIV. However, it seems that this will fail because the goods are no longer in the
buyer’s possession because it is sold and the sub buyer will be able to trigger the passing of
title under section 25 SOGA 1979. Hence, the only way for him is to trigger the extended
Romalpa claim. As per the case of Re Peachdart, the judicial treatment towards ROT
clauses for manufactured goods, proceeds of sale or book debts is that the parties can only
claim an interest in the form of a registrable charge. The court held that if the party want to
claim interest, he must satisfy two requirements. Firstly, there must be the construction of the
ROT clause. This is where the seller must expressly state in the contract that there is an
intention to extend the clause or assert a claim over the manufactured goods or proceeds of
sale or book debts. The court will not imply such interest if not stipulated expressly as per
Borden. Here, Westland must expressly assert the ROT clause over the claim of the
proceeds of sale because the goods are sold. The wording of the clause must be clear
enough to reflect the intention of the party. This is because the clause has to be clear
enough in what it seeks to do for the Westland. It seems that the clause clearly states that
“all proceeds from any such sale will be held by the buyer as trustee for the benefit of the
seller”. This is satisfied. Secondly, there must be a registration of charge under the S860
Companies Act 2006. If Westland did not register, this will render the ROT clause void as
per Clough Mills v Martin. If he did register, the requirement is satisfied. Hence, he is able
to have mere interest in the form of charge rather than property rights. Westland will then
argue that he wants property right rather than mere interest. He will then argue that the
clause does not just signify his right as a creditor but goes on to suggest that they are
dealing with more than a simple debtor-creditor relationship. Hence, he is advised to claim
by relying upon the case of AIV v Romalpa Aluminium. The first requirement that needs to
be satisfied is whether there exists a fiduciary relationship between the parties by looking at
the form and not the substance. Here, the clause states that “all proceeds from any such
sale will be held by the buyer as trustee for the benefit of the seller”, it is clear that this is a
fiduciary relationship because the word is expressed. Hence, the court will allow the doctrine
of tracing as per Re Hallet’s Estate. The seller is allowed to trace proprietary rights into the
proceeds of sale in the buyer’s bank account. However, Scarlett is advised to look at the
case of Re Bondworth as well because this case departed from AIV v Romalpa
Aluminium. This case highlighted that just because the seller uses terms such as trust-
trustee or Baylor-bailey inserted into the ROT clause, it does not mean that there is fiduciary
relationship exists between the parties. Hence, Scarlett needs to see whether there is a
fiduciary relationship by looking at the substance and not the form. To determine whether
there is a fiduciary relationship as per Re Bondowth, the buyer has to open a separate bank
account into which proceeds of sale from original goods are sold. Here, the fact states that
the proceeds of the sale are in Accord’s sole bank account. This requirement is not satisfied.
Thus, Westland can only claim interest under proceeds of sales of these two tons as per Re
Peachdart.
Next, the remaining eight tons were mixed with a small amount of cotton fibre. Six of eight
tons were processed into very large rolls of paper. Westland may want to take the property
right of those manufactured goods. Again, Westland cannot claim a simple Romalpa claim
under AIV v Romalpa Aluminium because the requirement for it is where the goods are
unmixed, unused and identifiable as the original goods supplied or remain in the buyer’s
possession. If there are manufactured goods, it ceases to be identified as the original goods
supplied. This is because it has incorporated other goods supplied by other suppliers goods
into the end of the product. Scarlett needs to move to an extended Romalpa claim. As per
Vinlott J in Re Peachdart, once goods undergo the manufacturing process, the seller is
deemed to have relinquished all rights over goods supplied. This is because there will be an
issue of the competing claim and this is where the seller’s claim cannot exceed his interest
in goods based on that which remains owing to him. Hence, the person who contributes to
the final product will have to compete with one another by arguing they have ownership
rights. Thus, the only way for Westland is to claim interest by fulfilling the requirement under
Re Peachdart. The requirement under Re Peachdart is discussed above. Westland did
express clearly the buyer will hold the goods and products derived from them. Hence, there
will be interest in the manufactured goods as long as it is registered under the company act.
However, it is to be noted that sometimes the court will hold the seller’s claim as simple
Romalpa clause although the goods have been subjected to usage or undergone a
manufacturing process. The fact also states that the rolls are identifiable as having been
made exclusively from the pulp supplied by Westland. Applying the case of Hendy Lennox v
Grahamme Puttick, the court held that if the goods have undergone the manufacturing
process but it is easily reversed and the original goods could be separated from the end
product, it will be held to be a simple Romalpa claim. However, here it seems that the goods
cannot be reversed since it has become a roll of paper. Scarlett to see the case of
Pongkawa Saw Mills v Nz Forestry Products. In this case, the court held that if the goods
are still somewhat identifiable as the original goods supplied, they can be claimed under the
simple Romalpa claim. Here, the fact suggested that the goods somehow identifiable
exclusively that it having been made exclusively from the pulp. Hence, the identity of original
goods can somehow still can be identifiable. Moreover, the goods has been mixed with 1
cotton fibre which is small amount and would not denied identifiable as original goods.
Hence, the seller can rely on simple Romalpa clause.
Next, two out of eight is stored in a tank and the tank contained two further tons of spruce
pulp derived from at least one other supplier. Westland may want to claim the property right
over those goods. For goods that are mixed, the identity of the goods supplied is still tech. In
a situation where Westland can discern clearly or determine clearly which goods belong to
him and which goods belong to other suppliers by different qualities, he can raise the simple
Romalpa clause to get back the goods belonging to him. Here, although the goods is stored
separately from other stocks but it is to be noted that the pulp had been mixed with small
amount of cotton fibre. Hence, if the goods are not able to be discerned clearly, the case of
Indian Oil v Greenstone will be looked into. Prima facie, if the supplied goods are mixed
with other goods, Westland may want to argue sharing of ownership rights on the premise
that this should have been a simple Romalpa claimed by right, but because it concerns
mixing of goods of other suppliers, there will be an owner in common between the Westland
and the others suppliers and they will be sharing of property rights as per Indian Oil v
Greenstone Shipping. Scarlett then will have to determine in accordance with the
respective creditor’s interest in the proprietary over the mixed goods. This will become
important that the more S contribute, the more interest in ownership in common he will get.
Here, it seems that the cotton fibre mixed is only a small amount which is 1% and the
original goods somehow still can be identified. Moreover, it is stored in a separate tank so
the simple Romalpa clause will be triggered. Hence, he can claim back the property right.
The second invoice is for 18 tons of aspen which it has been cut into one metre and is stored
separately from other stock. The question that arises here is whether the good supplied can
be identified from the general stock. If the goods are not identifiable there will be an owner in
common for the goods that are mixed as per the case of Indian Oil v Greenstone. However,
the question arises also whether this is mixed of manufactured goods since the aspen log
has been cut. If there is a mixing of manufactured goods supplied by other suppliers, the
owner in common between the seller and other suppliers will be a sharing of charge interests
rather than property rights as per Indian Oil v Green Stone. However, it is argued that
although the goods supplied have been cut, it might still be the same because the aspen log
is not emerged to be a new product. Hence, this is purely mixed of supplied goods and there
will be ownership in common. Nonetheless, here it seems that the goods are stored in
separate stock. The goods supplied are also marked by Westland name. As long as the
goods supplied have been demarcated or stocked in a way that enables Westland to discern
goods supplied by him over another, he will be able to rely on the simple Romalpa claim to
claim the property right.

The question deal with the issue of retention of title. Stone Styles(S) wants to know whether
he can claim back the proprietary right of those stone. He also wants to know whether he
can claim the money if the customer resells the goods supplied under this agreement. As per
the general rule under section 17 Sale of Goods Act 1979 (SOGA 1979), the property in
the goods is passed to the buyer when the parties of the contract intended it to be passed.
However, as noted in section 19(1) SOGA 1979, the property in goods does not pass to the
buyer until the condition imposed by the seller is fulfilled. Hence, it seems that S wants to
retain the proprietary rights by imposing the retention of title clause. The purpose of the
retention of title clause (ROT clause) is not meant to restrict or interfere with the ordinary
conduct of a buyer’s business, but so as to be able to raise the capital in order to satisfy the
contractual debt due and the debt owing to the seller. It is to be noted also if the goods
supplied are sold off to a sub buyer, they cannot be subjected to the ROT clause as the sub-
buyer will be able to trigger the passing of the title under section 25 SOGA 1979. Hence, all
the action can only be taken against the buyer in this question. S will be advised whether he
can claim back the proprietary right will be looked at by step under this question.
Goods were cut down to the size required for a particular job are laid using strong cement-
based adhesives. 10% more tiling than is required to account for this. The question arises
here is whether S can claim back stone proprietary right. Here, it seems that the stone are
mixed with the other things. For goods that are mixed, the identity of the goods supplied is
still tech. In a situation where S can discern clearly or determine clearly which goods belong
to him and which goods belong to other suppliers by different qualities, he can raise the
simple Romalpa clause to get back the goods belonging to him. S is advised here he is not
be able to claim a simple Romalpa claim under AIV v Romalpa Aluminium because the
requirement for it is where the goods are unmixed, unused and identifiable as the original
goods supplied or remain the buyer’s possession. Prima facie, if the supplied goods are
mixed with other goods supplied from other suppliers, the seller may want to argue sharing
of ownership rights on the premises that this should have been a simple Romalpa claimed
by right, but because it contains mixing of goods of other suppliers, there will be an owner in
common between S and the others suppliers and they will be sharing of proprietary right s as
per Indian Oil v Greenstone Shipping. They then have to determine in accordance with the
respective creditor’s interest over the mixed goods. Here, it seems that the stone has been
mixed with cement which then are completely solid. S also did supply 10% more tiling to
these. This will become important that the more S contribute, the more interest in ownership
in common he will get. Hence, it is concluded that he is only can claim the ownership in
common as per Indian Oil.
Next, it seems that there is unused left-over tiles and any off cuts are left with the customer.
As discussed above, if the identity of the goods supplied is still can discern clearly which are
belong to S, he is able to rely on the simple Romalpa clause although here the stone had
been cut off. Simple Romalpa claim can be triggered where if the goods are unmixed and
unused and identifiable as the original goods supplied or remain in the buyer possession.
Hence, it is submitted that S can claim back the proprietary right for the stone as per AIV v
Romalpa Aluminium.
Furthermore, S wants to know whether he can trace proprietary rights into the proceeds of
sale or book debts in the event where its customer resells the goods. Applying the case of
Four Point Garage v Carter, the ROT clause cannot prevenet the buyer from selling the
goods supplied by the seller or put it into manufacturing process although the payment
haven’t being made by the buyer. If the goods supplied by S is resell, this mean that the
goods are not longer in its customer possession and the buyer will be able to trigger the
extended Romalpa claim. As per the case of Re Peachdart, the court held that if the party
want to claim back the proprietary right, he must satisfy two requirements. Firstly, there must
be construction of the ROT clause. This is where the seller must expressly state in the
contract that there is an intention to extend the clause or asser a claim over the
manufactured goods or proceeds of sale or book debt. The court will not imply such interest
if not stipulated expressly as per Borden. Here, S must expressly assert the ROT clause
over the claim of the proceeds of sale because the goods are sold. The wording of the
clause must be clear enough to reflect the intention of the party. This is because the clause
has to be clear enough in what it seeks to do for S. It seems that the clause clearly states
that “it does so as fiduciary agent of stone styles and that all proceeds shall be the property
of Stone styles and stored in a separate bank account”. This is satisfied as it clear enough.
Secondly, there must be a registration of charge under S860 Companies Act 2006. This is
because some buyer may have already added some value to the goods bough from S so it
would be unfair for the seller to take back entire of the goods. If S did not register, this will
render the ROT clause void as per Clough Mills v Martin. If he did register, the requirement
is satisfied. Hence, he is able to have mere interest in the form of charge rather than
proprietary rights as per Clough Mills v Martin. If S wants to claim proprietary right, he
needs to argue that the clause does not just signify his right as a creditor but goes on to
suggest that they are dealing with more than a simple debtor-creditor relationship. Hence, S
is advised to claim by relating upon the case of AIV v Romalpa Aluminium. The first
requirement that needs to be satisfied is whether there exists a fiduciary relationship
between the parties by looking at the form and not the substance. Here, the clause states
that it does so as fiduciary agent of stone styles and that all proceeds shall be the property of
Stone styles and stored in a separate bank account” , it is clear that this is a fiduciary
relationship because the word is expressed. Hence, the court will allow the dotrine of tracing
as per Re Hallet’s Estate. The seller is allowed to trace proprietary rights into the proceeds
of sale in the buyer’s bank account. However, S is advised to look at the case of Re
Bondworth as well because this case departed from AIV v Romalpa Aluminium. This case
highlighted that just because the seller uses term such as fiduciary inserted into the ROT
clause, it does not mean that there is fiduciary relationship exists between the parties.
Hence, S needs to see whether there is a fiduciary relationship by looking at the substance
and not the form. To determine whether there is a fiduciary relationship as per Re Bondowth,
the buyer has to open a separate bank ccount into which proceeds of sale from original
goods are sold as per Compaq Computers v Abercon. Here, we are unclear whether in
fact the buyer did open separate bank account into which proceeds of sale from original
goods sold. If the buyer did, we need to look at the second requirements. Buyer has to
obtain seller prior consent before dealing with the proceeds deposited into the separate bank
account. Here, it means that the buyer must have no freedom in dealing with the goods
supplied. Lastly, buyer must agree to relinquish all residuary rights over the proceeds of sale
in that separate bank account. If these three requirements are satisfied, a fiduciary
relationship was held exist between the parties and not merely debtor-creditor relationship.
Hence, S is allowed to trigger the doctrine of tracing to trace the proprietary rights into the
proceeds of sale or book debts. If the requirement is not met, it was held no fiduciary
relationship between the party. Hence, S is only have interest in the form of a charge over
the manufactured goods or proceeds of sale or book debts.