£42,000 Paid To Lovetts’ Client After The Debtor Entered Administration
Lovetts’ client had supplied sleeves for covering water bottles to a drinks company. The drinks company then went into administration without paying their supplier’s debt. Administrators were appointed. After the drinks company went into administration, Lovetts’ client went to inspect its stock – under the control of the Administrator – in exercise of a retention of title (RoT) clause in its terms and conditions. Our client asserted its right to the goods under the RoT clause, as it had good records to support the claim. The administrators disputed the fact that the retention of title clause applied. Furthermore, it appeared that not all of the stock identified by the client at the inspection remained in the administrators possession – the administrator had clearly used some of our client’s stock.
First of all, Lovetts argued successfully that the RoT clause did apply. Secondly, Lovetts’ identified a potential claim for conversion. If proven, this would include damages for the wrongful interference with the client’s goods, as the administrators had not obtained an order from the court giving it permission to sell the clients good. In any event, the administrators would have had to remit payment to the client for any of the clients goods sold even if the Administrators were given permission to sell them. So both arguments succeeded.
Although the debt was disputed, the administrators eventually conceded and the client received payment of around £42,000 when it appeared initially they would receive nothing