Aluminium Industrie Vaassen B.v v Romalpa Aluminium Ltd

JurisdictionEngland & Wales
Judgment Date16 January 1976
Judgment citation (vLex)[1976] EWCA Civ J0116-3
Date16 January 1976
CourtCourt of Appeal (Civil Division)
Aluminium Industrie Vaassen B.V.
Romalpa Aluminium Limited

[1976] EWCA Civ J0116-3


Lord Justice Megaw

Lord Justice Roskill and

Lord Justice Goff

In The Supreme Court of Judicature

Court of Appeal

(Civil Division)

(From: Mr. Justice Mocatta - London)


Mr. LEOLIN PRICE, Q.C. and Mr. MURRAY PICKERING (instructed by Messrs. Theodore Goddard & Co.) appeared on behalf of the Appellants (Defendants).

Mr. ANTHONY LINCOLN, Q.C. and Mr. DAVID DONALDSON (instructed by Messrs Woodham Smith, Greenwood & Holland) appeared on behalf of the Respondents (Plaintiffs).


I shall ask Lord Justice Roskill to deliver the first judgment.


This appeal, from a judgment of Mr. Justice Mocatta dated the 11th February, 1975, arises out of a dispute between the plaintiffs (the respondents to this appeal), a Dutch company who amongst other things manufacture aluminium foil in Holland, and the defendants, the appellants in this appeal, an English limited company, regarding entitlement, first to certain quantities of aluminium foil admitted to be physically in the appellants, possession and secondly to certain proceeds of sale of other aluminium foil delivered to the appellants by the respondents and sold by the appellants to sub-purchasers in this country for which those sub-purchasers had paid the appellants but for which the appellants had not paid the respondents by the time the appellants – whose business has been in the hands of a receiver since the 1st November, 1974 – got into the serious financial difficulties which led to that receiver being so appointed. At that date the appellants were indebted to the respondents for over £122,000.


The value of the foil concerned in the first head claim is said to be just over £50,000. The sum involved in the second head of claim is just over £35,000. The present action is thus an attempt by the respondents to reduce that very substantial loss which they have suffered in their trading operations with the appellants, albeit at the expense of the debenture holders by whom the receiver was appointed and to whom the appellants remain very heavily indebted in respect of two advances of £100,000 each made to the appellants by the debenture holders.


The business which has led to these heavy losses was not always conducted between the appellants and the respondents. Before September, 1973, it had been conducted by the respondents with apartnership called Romalpa Aluminium (for brevity I shall call it "the partnership") the two partners in which became the two principal directors of the appellants, the third director of the appellants being a nominee of the debenture holders who first of all financed the appellants in return initially for the issue of unsecured loan stock and later in return for the debentures which the appellants issued to them.


There is no doubt what the express terms were upon which the respondents did business with the partnership. The respondents did their business upon certain General Conditions of Sale dated February, 1971, which were deposited or registered with all District or County Courts in Holland. The significance of such deposit, in Dutch law, was not the subject of any evidence; nor does it matter, though it would have been interesting to have known what the position was under Dutch law, as indeed it would have been interesting to know how a Dutch lawyer would have construed some of those express terms. Those conditions were in Dutch, but there was what one might describe as an authentic and specially prepared, though not perhaps very well expressed, English translation of the Dutch conditions. On the 4th April, 1972, the respondents obtained from the partnership the signature of the two partners I have mentioned upon a copy of that English translation: (see Bundle 3 pages 16-22). The conditions were expressed to be subject to Dutch law, the Amsterdam Court being given exclusive jurisdiction: (see Condition 30).


The relevant conditions for present purposes were 13, 22, 25 and 26. I shall read parts of those later. Thereafter, and until the appellants took over the business with the respondents previously done by the respondents with the partnership, there can be no doubt that that business was done ( inter alia) upon those express conditions. Individual invoices covering specific transactions incorporated both in Dutch and in English what was described as an"epitome" of the respondents' General Conditions to which I have just referred. One hesitates to criticise such a document, for one knows the difficulties of translation of this type of document from one language to another; hut it cannot be said that the English translation (see Bundle 2 page 33 - more legible on a later invoice to the appellants at Bundle 2 pages 48 and 49 and even more legible on a special specimen supplied to each member of the Court) is happy. Clause 13 is not referred to in the epitome at all - an omission upon which the appellants placed considerable reliance in connection with their submission that though the General Conditions had governed the relationship of the respondents with the partnership, they never governed the respondents' relationship with the appellants, notwithstanding that exactly the same printed form of invoice was used for business both with the partnership and with the appellants.


It was argued by Mr. Price for the appellants that since the same procedure had not been gone through with the appellants as with the partnership, that is to say by obtaining the signatures of the appellants' directors upon a copy of the Conditions, those General Conditions did not apply to the transactions between the appellants and the respondents; and he went on to argue that the knowledge of the partnership was not the knowledge of the appellants even though those two partners were the appellants' two principal directors.


The avowed purpose of this argument was to enable the appellants, if they could, to escape, in particular, from the bonds of clause 13 of the General Conditions. For, if the appellants were not bound by those conditions, and in particular by clause 13, the whole of the respondents' claim must fail and Mr. Justice Mocatta's judgment would be manifestly wrong. If, however, the appellants were bound by clause 13, it was admitted that, as indeed Mr. Justice Mocatta held, the respondents must succeed upon their first head of claim, though it was strenuously contended on their behalf that, even so, clause 13did not enable the respondents to succeed upon their second head of claim. Indeed before us the major part of the argument was directed to this latter question, which the judge also decided in the respondents' favour. Indeed Mr. Price, if he will forgive my saying so, for reasons which I can well understand and indeed sympathise with, argued the second point first.


The opening sentences of clause 13 read thus (and I take it from the copy on page 18): "The ownership of the material to be delivered by A. I. V." – those initials, I should interpose, stand for the respondents – "will only be transferred to purchaser when he has met all that is owing to A. I. V., no matter on what grounds. Until the date of payment, purchaser, if A. I. V. so desires, is required to store this material in such a way that it is clearly the property of A. I. V."


In argument those first two sentences in clause 13 were referred to for convenience as the first part of that clause. Following those first two sentences, which only occupy just over four lines of typescript, there are some twenty further lines of small print dealing with, and as I think only with, what were called in argument mixed or manufactured goods, that is to say goods manufactured from the material supplied by the respondents, so that that material thus lost its original identity.


At one stage in his argument Mr. Price submitted that the second part of clause 13 also applied to unmanufactured goods – by which I mean goods which remained in the state in which they were delivered to the appellants; but ultimately he did not press this part of his argument - rightly, as I think; for it seems to me plain that the two parts of this clause are dealing with separate subject-matters, the first part with unmanufactured goods and the second with mixed or manufactured goods. The second part is, however, relevant, especially in light of the argument which Mr. Price sought andobtained leave yesterday to advance by virtue of his amendment to the notice of appeal which we allowed, for in determining what implication is to be made in the first part of the clause – which is the all-important issue in this appeal – it is clearly right to look at clause 13 as a whole and not merely at one part of it. The second part reads thus: "A. I. V. and purchaser agree that, if purchaser should make (a) new object(s) from the material, mixes this material with (an) other object(s) or if this material in any way whatsoever becomes a constituent of (an) other object(s) A. I. V. will be given the ownership of this (these) new object(s) as surety of the full payment of what purchaser owes A. I. V. To this end A. I. V. and purchaser now agree that the ownership of the article(s) in question, whether finished or not, are to be transferred to A. I. V. and that this transfer of ownership will be considered to have taken place through and at the moment of the single operation or event by which the material is converted into (a) new object(s), or is mixed with or becomes a constituent of (an) other object(s). Until the moment of full payment of what purchaser owes A. I. V., purchaser shall keep the object(s) in question for A. I. V. in his capacity of fiduciary owner and, if required, shall store this(these) object(s) in such a way that it (they) can be recognised as such. Nevertheless, purchaser will be entitled to sell...

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