Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676
Citation:Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676
Rule of thumb:If an organisation goes into insolvency, and you have delivered goods to them which they have not paid for, can you get these back? As a general rule, no, however, if you have a ‘Romalpa Clause’ in the contract then it is possible that you could still get them back.
Judgment:
‘The preservation of ownership clause contains unusual and fairly elaborate provisions departing substantially from the debtor/creditor relationship and shows, in my view, the intention to create a fiduciary relationship to which the principle stated in In re Hallett's Estate,[2] applies. A further point made by Mr Pickering was that if the plaintiffs were to succeed in their tracing claim this would, in effect, be a method available against a liquidator to a creditor of avoiding the provisions establishing the need to register charges on book debts: see section 95(1)(2)(e) of the Companies Act 1948[now Companies Act 2006 section 860(7)(g)]. He used this only as an argument against the effect of clause 13 contended for by Mr. Lincoln As to this, I think Mr Lincoln's answer was well founded, namely, that if property in the foil never passed to the defendants with the result that the proceeds of sub-sales belonged in equity to the plaintiffs, section 95(1) [now Companies Act 2006 section 860] had no application’, Mocatta J
Ratio-decidendi:
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.