Re Bond Worth Ltd
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''Re Bond Worth Ltd''
980 Year 980 ( CMLXXX) was a leap year starting on Thursday of the Julian calendar. Events By place Europe * Peace is concluded between Emperor Otto II (the Red) and King Lothair III (or Lothair IV) at Margut, ending the Franco-Germa ...
Ch 228 is a
UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While Bankruptcy in the United Kingdom, UK bankruptcy law concerns the rules for natural persons, the term ''insolvency'' is generall ...
case, concerning
retention of title A retention of title clause (also called a reservation of title clause or a ''Romalpa'' clause in some jurisdictions) is a provision in a contract for the sale of goods that the title to the goods remains vested in the seller until the buyer fulfil ...
clauses.


Facts

Bond Worth Ltd was a carpet manufacturing company. It bought man-made fibres from
Monsanto The Monsanto Company () was an American agrochemical and agricultural biotechnology corporation founded in 1901 and headquartered in Creve Coeur, Missouri. Monsanto's best-known product is Roundup, a glyphosate-based herbicide, developed ...
Ltd and used them to make carpets. The conditions of sale included a "
retention of title A retention of title clause (also called a reservation of title clause or a ''Romalpa'' clause in some jurisdictions) is a provision in a contract for the sale of goods that the title to the goods remains vested in the seller until the buyer fulfil ...
" clause. Bond Worth Ltd went into receivership when a large sum of money was owing to Monsanto Ltd under various contracts containing the "title" clause. Monsanto Ltd notified the receivers of their claim. The receivers contested whether the retention of title clause was valid. The joint receivers issued summons for determination claiming that (1) although the clause referred to "equitable and beneficial ownership" it did not have the effect of creating a bare trust for the benefit of the sellers, but rather it created a floating equitable charge in favour of the sellers; and (2) such a floating charge created by the buyer company would therefore be registerable, and so was
void Void may refer to: Science, engineering, and technology * Void (astronomy), the spaces between galaxy filaments that contain no galaxies * Void (composites), a pore that remains unoccupied in a composite material * Void, synonym for vacuum, a s ...
if not registered (as was in fact the case).


Trial

The trial lasted a total of 15 days. Notable counsel who appeared included Jeremiah Harman QC and
Elizabeth Gloster Dame Elizabeth Gloster, Lady Popplewell, Dame Commander of the Order of the British Empire, DBE, Her Majesty's Most Honourable Privy Council, PC (born 5 June 1949) is a British lawyer who was a judge of the Court of Appeal of England and Wales ...
.


Judgment

Slade J held the clause, which referred to "equitable and beneficial ownership", did not create a bare trust for Monsanto's benefit, but did create a floating equitable charge. This followed from '' Coburn v Collins'' (1887) 35 ChD 373 and ''
Illingworth v Houldsworth ''Illingworth v Houldsworth'' 904AC 355 (known as or ''Re Yorkshire Woolcombers Association'' in the Court of Appeal) is a UK insolvency law case, concerning the taking of a security interest over a company's assets with a floating charge. In th ...
''
903 __NOTOC__ Year 903 ( CMIII) was a common year starting on Saturday of the Julian calendar. Events By place Europe * King Berengar I of Italy proceeds to issue concessions and privileges to the Lombard nobility and monasteries. He gra ...
2 Ch 284 was applied. ''
Aluminium Industrie Vaassen BV v Romalpa Aluminium ''Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd'' 9761 WLR 676 is a landmark UK insolvency law case, concerning a quasi-security interest in a company's assets and priority of creditors in a company winding up. Facts Aluminium Industri ...
''
976 Year 976 ( CMLXXVI) was a leap year starting on Saturday of the Julian calendar. Events By place Byzantine Empire * January 10 – Emperor John I Tzimiskes dies at Constantinople, after returning from a second campaign against ...
1 WLR 676 was distinguished. Because the floating charge was created by the buyer company and therefore registrable, it was void for non-registration.


Notes

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References

* United Kingdom insolvency case law