ABSTRACT
I have recently discussed the topic of retention of title at some length, and I do not intend to repeat
that discussion.159 What I attempted to do there was to restate the legitimate role for retention of
title in commercial sales in the light of recent developments in private law. Accordingly I examined
the approach of construing commercial contracts, the law on termination for breach, increasing
certainty as to the appropriate province of the law of restitution and important new judgments on
fiduciary obligations.160 When undertaking that exercise I had envisaged spending time examining
the role played by bailment in the retention of title cases. However, I soon discovered that there
was little to say. The lowest common denominator for the conventional usage of bailment by
English lawyers is that it entails a transfer of possession of tangible personal property short of
outright sale. Accordingly where goods are transferred from a seller to a buyer on retention of title
terms it is axiomatic that the interest of the buyer before an ultimate conveyance takes place is that
of a bailee. The question is what follows from this premise. As is well known in the ground-breaking
Romalpa case161 it was conceded that the recipient of goods on retention of title terms was a
bailee.162 The problem with the Court of Appeal in Romalpa was that it assumed that because the
relationship was one of bailor and bailee (and also one equally akin to principal and agent) it was
bound to apply the principles in Re Hallett’s Estate163 to those facts. Accordingly it allowed the
retention of title supplier to trace and claim the resale proceeds of the goods supplied. As
Professor McCormack has noted in the more recent retention of title authorities there has been
a shift in concern from bailment to consideration of whether a fiduciary relationship has been
created.164 As Robert Goff LJ said in Clough Mill v Martin165 there is nothing inappropriate about the
characterisation of the recipient of goods pro tem as a bailee, as long as it is recognised that he may
not be necessarily a fiduciary bailee.166 In the light of recent authorities on fiduciary obligation it is
highly unlikely that the courts will readily classify the relationship between two commercial parties
in an arms-length supply of goods situation as being a f iduciary one. Accordingly the
characterisation of the relationship in the meantime between retention of title supplier and buyer
as one of bailment should have no normative consequences. The only time it was assumed to have
such consequences was in the Court of Appeal in Romalpa where it is generally accepted that
inappropriate conclusions were drawn. This is an example of bailment doing more harm than good.
The crucial thing in most retention of title cases is the proper interpretation of the rights and
