High Court Considers Retention Of Title Claim

Author:Mr Maurice Phelan and Gareth Steen
Profession:Mason Hayes & Curran

Insolvency practitioners are routinely asked to adjudicate on claims to retention of title of goods supplied. This task often involves an analysis of whether the goods in question have become fixed to land, irreversibly mixed with other goods or whether they remain as identifiable items.

In the recent case of Re Moormac Developments Limited (in receivership)1, the High Court gave further clarity to this area of the law.

Gearoid Costello of BDO had been appointed as receiver and manager of Moormac Developments Limited (the "Company") as well as receiver of certain interests of Michael McKenna in May 2010.

Ardfert Quarry Products (the "Supplier") supplied the Company with stones and other materials in April 2008 to be used in the construction of roads by the Company on lands owned by Mr McKenna. These materials were subject to a retention of title clause in favour of the Supplier and had not been paid for by the Company.

The Supplier claimed title to the goods supplied and sought to recover them from the receiver. The receiver rejected the claim on the grounds that the goods in question had been mixed with other materials.

The Supplier then sought the directions of the Court with a view to retrieving the materials supplied. Whilst directions applications are typically brought by receivers, creditors and certain other parties can bring such applications provided they can show that they are being unfairly prejudiced by the acts or omissions of the receiver.

Ultimately, the decision hinged on whether the goods in question had become fixed to the McKenna lands and therefore...

To continue reading