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Retention of Title Claims – Fruitful Outcome for Administrators

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In the recent case of Blue Monkey Gaming v Hudson & Others [2014] EWHC (Ch), the High Court have helpfully provided guidance on the role of administrators in relation to retention of title claims.

In Blue Monkey Gaming v Hudson & Others [2014] EWHC (Ch) the High Court have helpfully provided guidance on the role of administrators in relation to retention of title claims and held that during the course of an administration, the responsibility of identifying goods under a retention of title clause is not that of the administrator but that of the person claiming ownership.

In this case, the claim was brought by Blue Monkey Gaming Limited (the “Company”), an assignee of a supplier of fruit machines to the company in administration.  The Company claimed that the fruit machines were subject to retention of title provisions in the supply agreement and that it was the duty of the administrator to identify the relevant fruit machines.

The facts of the case were that the supplier had taken no steps to identify its machines post administration and that the retention of title questionnaire provided by the Company to the administrator was incomplete and some of the information provided, inaccurate.

The Court held that the Company was not able to claim retention of title over the fruit machines as it was their duty, as the person claiming ownership of the goods, to identify their own goods.  The Court held that it would be ‘totally unrealistic’ and ‘practically unworkable’ to place such a burden on the administrator to ‘set about identifying machines owned by individual third parties’.

If you have any questions please contact the Corporate Recovery and Insolvency Team.

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