News & Views

Retention of Title claims and Administrators

When a company is placed into administration, it is typical for a creditor of that company to seek to exercise their retention of title (“ROT”) clause.  But to what extent are administrators under a duty to identify an ROT claimant’s property?

Retention of Title claimants must provide detailed information to administrators on their claim

Retention of Title claimants must make sure they clearly present to the administrator detailed evidence to support a claim

The recent case of Blue Monkey Gaming Ltd v Hudson & Others [2014] EWCH (Ch) held that the administrators were not personally obliged to identify the property of an ROT claimant, and were entitled to reject an ROT claimant’s claim if the information given by them, purporting to evidence their entitlement to the property, is incomplete.

The case will come as a relief to administrators, with the court stating that if the administrator were required to identify the retention of title of goods, it would be an unrealistic and unworkable approach.

For ROT claimants the message is clear:  if you wish to exercise your ROT, make sure you clearly present to the administrator detailed evidence to support your claim to the property.  Merely sending the administrator a list of copy invoices which do not clearly set out the property in which title is being claimed (as happened in the above case) is not sufficient.  The property in question should be clearly identified.

If you are in a similar situation please contact Sherrards’ dispute resolution and commercial litigation department or Gemma Newing for further advice.

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