FAIRFAX GERRARD HOLDINGS LTD V CAPITAL BANK PLC

[2007] EWCA Civ 1226, CA (Waller, Dyson, Hughes LJJ), 27 November 2007

Sale of goods – CIF sale – Retention of title clause – Finance agreement – Claimant purchasing goods for customers and passing title on payment – Customer resold goods to third party – Whether obligation on customer to include reservation of title clause in sub-sale – Whether third party obtained title – Conversion

This was the appeal of the judgment of Mackie QC ([2006] EWHC 3439), reported at [2007] 1 Lloyd’s Rep 171. The appellants argued that they had in fact had express or implied authority to pass on title in the goods or alternatively that the judge had erred in his assessment of damages. According to the Court of Appeal, there was no inconsistency between a retention of title clause and a n implied or even express right to sell. As a result, there had been authority to pass on title in the goods.