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Further to the November 2014 Insolvency Practitioners Associations guidance paper on Retention of Title Claims and Molly Monks subsequent blog “What is Retention of Title?”, a recent case has examined the scope of what an office holder (Liquidator/Administrator etc) duties are (or not as the case may be) in relation to Retention of Title Claims.

Here, Molly Monks, the Corporate Insolvency Manager at The Business Debt Advisor, provides a synopsis of the case and what this means for suppliers who use this clause.

The case ‘Blue Monkey Gaming Limited V Hudson & Others’ is a recent (2014) case where a £4M claim was brought personally against the joint administrators of a chain of amusements arcades by the supplier of the gaming machines who claimed “ROT”.

The supplier claimed that the administrators had wrongfully denied or interfered with their title rights. The claim ultimately failed as the supplier had failed to take adequate steps to identify or locate its machines. The Judge (HHJ McCahill QC) found that simply requesting the return of the goods was not good enough and it failed to identify the goods.

The Judge confirmed that the office holder (in this case the joint administrators) have a duty to “permit and supervise access to an alleged owner to enable it to identify it own goods and then adjudicate on any claim arising on the basis of all the evidence supplied.”

What can be learnt from this case?

  • The onus will be on the supplier to locate and identify goods claimed under ROT.
  • It reiterated that the office holder must grant the supplier access to identify goods.
  • The supplier must make a clear and explicit demand for the return of goods.

What does The Business Debt Advisor recommend to suppliers relying on ROT?

ü  Act Quickly!

ü Claim ROT in writing

ü  Attend the premises

ü Stickers  – make sure the equipment is easily identified

ü Use unique reference numbers

If you missed the blog on “What is Retention of Title?” please follow this link “What is Retention of Title?”

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