In the contract of sale, it said that ownership of the foil would only be transferred to Romalpa when the purchase price had been paid in full and products made from the foil should be kept by the buyers as bailees (the contract referring to the Dutch expression ‘fiduciary owners’) separately from other stock on AIV’s behalf as ‘surety’ for the rest of the price.

AlV contended that its contract was effective to retain title to the goods, and so it did not need to share them with other creditors in the liquidation.

A further point made by Mr Pickering was that if the plaintiffs were to succeed in their tracing claim this would, in effect, be a method available against a liquidator to a creditor of avoiding the provisions establishing the need to register charges on book debts: see section 95(1)(2)(e) of the Companies Act 1948 [now Companies Act 2006 section 860(7)(g)].

He used this only as an argument against the effect of clause 13 contended for by Mr. Lincoln As to this, I think Mr Lincoln's answer was well founded, namely, that if property in the foil never passed to the defendants with the result that the proceeds of sub-sales belonged in equity to the plaintiffs, section 95(1) [now Companies Act 2006 section 860] had no application.Roskill LJ, Goff LJ and Megaw LJ upheld the decision, and that Aluminium Industrie Vaassen retained title to the unused aluminium foil.

In the commercial law of Commonwealth countries including Australia, clauses in contracts of purchase and sale providing that the seller retains title in the goods sold until the seller receives payment in full from the buyer are known as Romalpa clauses.