Re Bond Worth Ltd

Bond Worth Ltd was a carpet manufacturing company. It bought man-made fibres from Monsanto Ltd and used them to make carpets. The conditions of sale included a "retention of title" 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 for non-registration.

The trial lasted a total of 15 days. Notable counsel who appeared included Jeremiah Harman QC and Elizabeth Gloster.