Re Hickey (W.J.) Ltd

• Jurisdiction: Ireland
• Judgment Date: 15 May 1987
• Date: 15 May 1987
• Docket Number: [1986 No. 9575P]
• Court: High Court

High Court

[1986 No. 9575P]

In re W.J. Hickey Ltd.

In re W.J. Hickey Limited (In Receivership): Bernard D. Uniacke, Applicant

and

Cassidy Electrical Supply Company Limited trading as "Cesco"

Respondent

Cases mentioned in this report:—

In re Bond Worth Ltd. [1980] Ch. 228; [1979] 3 W.L.R. 629; [1979] 3 All E.R. 919.

In re George Inglefield Ltd. [1933] Ch. 1.

Aluminium Industrie B.V. v. Romalpa Ltd. [1976] 1 W.L.R. 676; [1976] 2 All E.R. 552; [1976] 1 Lloyd's Rep. 443.

Borden (U.K.) Ltd. v. Scottish Timber Products [1981] Ch. 25; [1979] 3 W.L.R. 672; [1979] 3 All E.R. 961; [1979] 2 Lloyd's Rep. 168; [1980] 1 Lloyd's Rep. 160.

In re Nevill; Ex parte White (1871) 6 Ch. App. 397.

Foley v. Hill [1848] 2 H.L. Cas. 28.

South Australian Insurance Co. v. Randell (1869) L.R. 3 P.C. 101.

Henry v. Hammond [1913] 2 K.B. 515; [1913] W.N. 85.

Frigoscandia (Contracting) Ltd. v. Continental Irish Meat Ltd. [1982] I.L.R.M. 396.

McEntire v. Crossley Brothers Ltd. [1895] A.C. 457.

Clough Mill Ltd. v. Martin [1984] 1 W.L.R. 1067; [1984] 1 All E.R. 721; [1985] 1 W.L.R. 111; [1984] 3 All E.R. 982.

In re Interview Ltd. [1975] I.R. 382.

Kruppstahl A.G. v. Quitman Products Ltd. [1982] I.L.R.M. 551.

Re Andrabell Ltd. [1984] 3 All E.R. 407.

Sale of goods - Property - Transfer - Title - Retention - Conditional contract - Terms of contract - Goods sold and delivered but not paid for - Whether passing of property in goods can be postponed - Effect of phrase "in trust" - Whether properly passed coupled with charge in favour of seller - Whether retention of equitable interest creates a charge - Sale of Goods Act, 1893 (56 & 57 Vict, ch. 71), ss. 1, 17 - Companies Act, 1963 (No. 33), s. 316.

Special Summons.

On the 23rd October, 1986, the applicant as receiver of the company issued a special summons in the High Court pursuant to s. 316, sub-s. 1 of the Companies Act, 1963, seeking a determination of certain questions arising in the receivership. Directions were sought, (a) in relation to the validity of paragraph 7 of the seller's conditions of sale as a retention of title clause, and (b) as to whether the seller was entitled to the return of the goods or whether the property in the goods passed to the receiver. The applicant's affidavit was filed on the 23rd October, 1986, and the respondent's affidavit was filed on the 1st December, 1986.

The facts together with the relevant provisions of s. 1 of the Sale of Goods Act, 1893, are set out in the headnote and in the judgment of Barron J., post.

Section 17 of the Sale of Goods Act, 1893, provides:—

"(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case."

The application was heard by the High Court (Barron J.) on the 10th March, 1987.

Section 1, sub-s. 2 of the Sale of Goods Act, 1893, provides for conditional contracts of sale. Sub-section 3 thereof provides inter alia for contracts of sale, called agreements to sell, where the transfer of the property in the goods is to take place at a future time or subject to some condition. Section 17, sub-s. 1 of the Act of 1893 states that in a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

The applicant as receiver of the company applied to the High Court for directions concerning the ownership of goods sold and delivered by the respondent to the company but not paid for. The contract of sale had a reservation of title clause which stated that no property in the goods would pass until full payment had been received. Until then the buyer was obliged to hold the goods in trust for the respondent in a manner which enabled them to be identified and to return the goods to the respondent on demand. The buyer was permitted to sell the goods to a third party but the proceeds of such sale were to be held by the buyer in trust for the respondent in a manner which enabled them to be identified as such.

The applicant argued that the words "in trust" indicated that the legal estate in the goods passed to the buyer and that the respondent retained a beneficial interest by way of charge only.

Held by Barron J., in giving directions, 1, that the creation of a charge would require that all the property in the goods be passed to the buyer so that an assignment back to the respondent of an equitable interest by way of charge could take place.

Clough Mill Ltd. v. Martin [1985] 1...