The Gazette 1976

JUNE/JULY 1976

GAZETTE

titled to retain the goods until the vendor can prove delay in payment. The vendor may only obtain the goods back by serving a notice of rescission. When the goods are in the custody of the purchaser, though the title to them is in the vendor, the effect of a sale by the purchaser is governed, under Ger- man Law, by the Lex Rei Sitae which in this case is Irish law. In Irish law, the effect was that the two German companies, A.E.G. and Telefunken, remained owners of the goods; accordingly E.I.I, had custody of the goods for the pur- poses of Section 9 of the Factors Act 1889 (which provides that de- livery of goods under any sale to a person receiving them in good faith and without notice of any right of the original seller shall have the same effect as if the person making such sale were the original mercantile agent), and Section 25 (2) of the Sale of Goods Act 1893 which is more or less to the same effect. Accordingly a purchaser in good faith from E.I.I, or Interview of the German goods which they had in their possession acquired the property in them. It is quite clear that there was no sale in March, 1972, by E.I.I, to Interview of the goods valued at £105,935. E.I.I, could not agree to transfer the property in the goods delivered by the German companies because they did not have it. Inter- view cannot rely on the Factors Act 1889 or the Sale of Goods Act 1893 to validate the transaction as a sale, because they did not receive the goods in good faith, and they had notice of the original sellers, the German companies. Accordingly here there was a transfer of posses- sion and custody of the goods, which were always the property of the German companies. Further- more the appointment of a receiver is an equitable assignment of what the company owns; it is not a sale. Accordingly at all times ownership of the goods remain in the German companies. Re Interview Ltd. — Application of Milliken — Kenny J. — unreported 7th March, 1975.

in the Republic by A.E.G. for the import and distribution of "brown goods". The terms of the agree- ment were set out in a letter ot 28th October, 1970, from A.E.G. to E.I.I., whereby E.I.I, were to try their best to promote sales of the electrical goods of A.E.G. Al- though normally A.E.G. deal only in "white goods", the contract re- lated solely to "brown goods" with the trade mark Telefunken. As re- gards the "terms for deliveries abroad", apart from German Law being the law applicable, Clause 15 sets out terms relating to preser- vation of ownership. It stated that normally the product supplied shall remain the property of the supplier until all debts arising have been paid in full by the purchaser. On 10th February, 1972, there were further discussions in Hanover between Interview and Telefunken. The net effect of this agreement is that henceforth Interview, as well as E.I.I. was to be made a party to the agreement of June 1970. In March, 1972, a representative of the German companies visited Ire- land. As a result of discussions E.I.I, transferred to Interview the goods originally sold by E.I.I, to them, and a purchase price of £205,935 was debited to Interview's account. The goods transferred by E.I.I. to Interview had been stored at Dunleer warehouse. In order to give effect to the transfer, it was agreed that the E.I.I, warehouse would be leased to Interview from 1st May, 1972 at a rent of £5,268. The lease was made on 17th May, 1972, for a term of 21 years. On 28th April, 1972, Telefunken wrote to Interview confirming these ar- rangements. It was stressed that Interview would be an active part- ner in importing and distributing Telefunken products within the agreement, and that the German merchandise would be imported and distributed by Interview's sub- sidiary "I.E.A.C." I.E.A.C. were merely considered by the Germans as importing agents for Interview. A German lawyer gave evidence as to the German Law on the sub- ject. Briefly if it is agreed that the passing of the title will take place only on payment of the goods, then the ownership of title of the goods remains in the vendor. The clause about "Reservation of Ownership" is a common; one in German con- tacts and there is known as a "cur- rent accounts clause". The effect of it under German Law is that the supplier rmains the owner, even though the goods have passed to the purchaser. The purchaser is en-

RECENT IRISH CASES

The ownership of the goods remains with German vendors even though they are in the physical possession of two Irish purchasing companies as no sale is deemed to have taken place. Interview Ltd. is an Irish Com- pany carrying on the retail trade of selling refrigerators and similar domestic electrical goods (known technically as "white goods"), and television and radio sets (known technically as "brown goods"). In- terview had an authorised share capital of 1,500,000 shares of £1.00 each of which 1,150,000 had been issued. In September, 1971, Inter- view had given a debenture to Ulster Bank Ltd. as security for its debts. On 29th June, 1972, the Ulster Bank appointed Mr. Milliken as receiver of the undertaking, pro- perty and assets of Interview. On 11th April, 1973, Interview passed a resolution that the company be wound up voluntarily. The next company concerned is Electrical Industries of Ireland Ltd. (hereafter called E.I.I.) which manufactured and imported all sorts of electrical goods in Dunleer, Co. Louth. Interview owned one third of the issued share capital of E.I.I. The third company is Irish Elec- tronic and Appliance Co. Ltd. (I.E.A.C.), incorporated in February 1972, which had an issued share capital of £2.00 This was a wholly owned subsidiary of Interview in order to carry on wholesale business in electrical goods. Interview sold the goods to I.E.A.C. for the pur- poses of resale to outlets and com- panies. The effective management of these companies was carried on by Mr. McCourt. The fourth company is the Ger- man Allgemeine Elecktricitaets Gesellschaft Telefunken (A.E.G/ which manufactures electrical goodi on a very large scale and which sells goods outside Germany on printed terms known as "terms for deliveries abroad". The fifth company is Telefunken Fernsch und Rundfunk G.M.B.H ("Telefunken") which is a wholly owned subsidiary of A.E.G. It carries on the business of manu- facturing and exporting television and radio sets and other electrical goods.

CUSTODY The parents of a child resident in Africa are entitled to its custody, despite the fact that before her mar- riage, the mother had signed an adoption consent form which had transferred the custody of the child 17

In June. 1970, negotiations took place in Hanover between represen- tatives of A.E.G. and E.I.I., as E.I.I, wished to be appointed sole agents