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This was held by one of the two majority judges. However it is not enough to resolve the case. Under a PPSA/Article 9 regime, any interest in personal property which secures payment or performance of an obligation is subject to the Act and is useless against a trustee in bankruptcy if not registered or otherwise perfected. This includes legal ownership. (There are some exceptions, discussed in the case.) So it is not enough to say Hallmark remained legal owner, you also have to say that the ownership was not retained to secure payment or performance of an obligation.

Lionel

At 11:20 AM 9/29/00 +1000, Joachim Dietrich wrote:

The case noted by Lionel seems reasonable enough in its result, but could the same result not have been reached by a more direct route (not having read the case, these comments are purely speculative). Could it not have been argued that the presumption of the passing of property on delivery was rebutted by the absence of an effective contract under which the property in the goods passed?; ie, since the contract was subject to an unfulfilled condition precedent, the basis on which property was to pass had also not been fulfilled and thus Hallmark still had good (legal) title to the goods. Hence, there would not have been a need to resort to a constructive trust.

Or am I missing something?

 

Joachim Dietrich
Faculty of Law, ANU
Australia