A recent case heard in the High Court has clarified confusion over who is responsible for ensuring goods subject to retention of title are identified and returned to their rightful owner in an insolvency situation.

In the matter of Blue Monkey Gaming v Hudson & Others [2014], fruit machines which were owned by MDM Leisure Limited were supplied to the Agora Group who used them in their arcades.  Subsequently Agora Group went into administration and MDM Leisure Limited asserted title over the machines they claimed had not been paid for.

Blue Monkey Gaming Limited, who had subsequently had title assigned to them from MDM Leisure Limited of the machines, then sought to pursue a claim from the joint administrators, alleging that they had not identified the machines and had used them for the purposes of the administration.  The judge commented that the information used to claim ROT in these situations is very important but that MDM Leisure had not provided sufficient information for the machines to be identified

The judge used his common sense, it was unreasonable to expect an insolvency practitioner, with all the demands upon his time during the early days of an insolvency, to be able to correctly identify all goods subject to ROT claims.  The onus should be placed upon the claimant to identify his goods as he has a vested interest.

The judge did however comment that this issue highlights the importance of good communication between insolvency practitioners and creditors.

It is important for anybody facing financial difficulties, whether personally, directors of limited companies or partnerships, to seek advice from a licensed insolvency practitioner as soon as possible.

To take advantage of our free consultation, please telephone Stella Flemmings on 01377 257788, 01724 230060 or 01904 520116 and she will make you an appointment with one of our insolvency professionals at our Driffield, Scunthorpe or York offices.

Redman Nichols Butler has had a York office for nearly six years now.   John Butler specialises in advising SME businesses in York and North Yorkshire. The Redman Nichols Butler York office address is Westminster Business Centre, Nether Poppleton, York, YO26 6RB.  John is always happy to attend a clients or professional advisors offices for an initial meeting, free of charge.

Redman Nichols Butler has had a Driffield office for 18 years now.  Andrew Nichols specialises in advising SME businesses in East Yorkshire. The Redman Nichols Butler Driffield office address is Maclaren House, Skerne Road, Driffield, East Yorkshire, YO25 6PN.   Andrew is always happy to attend a clients or professional advisors offices for an initial meeting, free of charge.

Redman Nichols Butler has had a Scunthorpe office for nearly 4 years now.   Mark Neumegen specialises in advising SME businesses in Scunthorpe, Grimsby and all over North East Lincolnshire. The Redman Nichols Butler Scunthorpe office address is Suite 8b, Normanby Gateway, Lysaghts Way, Scunthorpe, DN15 9YG.  Mark is always happy to attend a clients or professional advisors offices for an initial meeting free of charge.