BHP v Robertson

The case before the court involved a dispute between BHP and Robertson regarding the sale of goods, specifically the transfer of title and the passage of risk. The Federal Court of Australia was tasked with determining the legal issues arising from the sub-sale of goods by Robertson, who was not the original owner, and the applicability of a title retention clause in the contract. The court was required to ascertain whether Robertson could validly sub-sell the goods as the agent of the owner, and if the title retention clause effectively prevented the transfer of property to the buyer.

The central legal issues that the court had to address were whether Robertson, having purchased the goods from BHP, could sub-sell them to a third party while still retaining a title retention clause, and whether this clause was effective in preventing the transfer of property and risk to the sub-buyer. Additionally, the court needed to determine if BHP's title retention clause could override the apparent transfer of ownership under the sale agreement, and whether the clause was enforceable given the subsequent sub-sale by Robertson.

The court meticulously examined the terms of the sale contract, including the title retention clause, and the circumstances under which Robertson sub-sold the goods. The court held that despite the title retention clause, the passage of property and risk to Robertson occurred upon the original sale by BHP. Consequently, Robertson, as the buyer, had the ability to sub-sell the goods as if they were the owner, and the title retention clause did not prevent the transfer of property to the sub-buyer. The court found that the clause was not enforceable in the context of the sub-sale, as the original sale had already transferred ownership to Robertson. The court's reasoning underscored the principle that once property has passed to a buyer, subsequent sub-sales by that buyer generally do not affect the original transfer of ownership.

In conclusion, the court ruled in favour of Robertson and the sub-buyer, affirming that the title retention clause did not prevent the transfer of property and risk from BHP to Robertson. The court's decision clarified that the original sale by BHP to Robertson effectively transferred ownership, enabling Robertson to sub-sell the goods as the agent of the owner. The final orders of the court reinforced that the title retention clause was ineffective in the context of the sub-sale and that the sub-buyer had acquired good title to the goods.