1 See Horrigan, B., “Commentary—Intermingling of Common Law and Equity”, in Cope, M., Equity: Issues and Trends (Brisbane 1995), 48Google Scholar. In contrast, W.J. Gough in his text Company Charges, 2nd edn. (London 1996), 569-600, discussed the concept in the context of documents versus substance.

2 W. Goodhart & G. Jones, “The Infiltration of Equitable Doctrine Into English Commercial Law” (1980) 43 M.L.R. 486; Gough, Company Charges, 569-600.

3 See Parkin v. Thorold (1852) 16 Beav. 59, 66; 51 E.R. 698, 701, per Lord Romilly M.R.: “Courts of Equity make a distinction in all cases between that which is a matter of substance and that which is a matter of form; and, if they do find that by insisting on the form, the substance will be defeated, they hold it to be inequitable to allow a person to insist on such form, and thereby defeat the substance”. See also Solomons v. Halloran (1906) 7 S.R. (N.S.W.) 32, 42, per Street J., “… the principle upon which Courts of Equity proceed is to examine the contract not merely as a Court of Law does to ascertain what the parties have in terms expressed to be the contract, but to ascertain what is in truth the real intention of the parties, and to carry that into effect. A distinction is made between that which is a matter of substance and that which is a matter of form, and if there is nothing in the express stipulations between the parties, the nature of the property or the surrounding circumstances which would make it inequitable to interfere with and modify the legal rights, a Court of Equity, though construing the contract as it must in the same way as a Court of Equity would, will interfere with and modify the legal rights arising on the legal construction of the contract”.

4 See Re Danish Bacon Co. Ltd. Staff Pension Fund Trusts [1971] 1 W.L.R. 248, 259, per Megarry J. This expression is loosely used to mean both common law and equity. The doctrine of substance over form is a well-known rule of equity established in late seventeenth century England; see Williams v. Owen (1840) 5 My. & Cr. 303, 306, 41 E.R. 386, 387 per Cottenham L.C.

5 J.N. Pomeroy, Equity Jurisprudence, 5th edn. (New Jersey 1994), s. 382, p 47.

6 A.L. Diamond, “Hire-purchase Agreements As Bills of Sale” (1960) 23 M.L.R. 399, 534-535.

7 See J. Spencer, “The Commercial Realities of Reservation of Title Clauses” [1989] J.B.L. 220.

8 In Borden (UK) Ltd. v. Scottish Timber Products Ltd. [1981] Ch. 25, 42, Templeman L.J. commented, “unsecured creditors rank after preferential creditors, mortgagees and the holders of floating charges, and they receive a raw deal”.

9 (2000) 202 C.L.R. 588.

10 [2002] UKHL 13, [2003] 1 A.C. 368.

11 Note that the Law Commission for England and Wales in its Consultation Paper 164, entitled Registration of Security Interests: Company Charges And Property Other Than Land, (July 2002), para. 6.2, referred to them as “quasi-securities”. It also mentioned that they are also sometimes called “title finance”.

12 For examples in England, see Barrel v. Sabine (1684) 1 Vern. 269, 23 E.R. 462; Williams v. Owen (1840) 5 My. & Cr. 303, 41 E.R. 386; Perry v. Meddowcroft (1841) 4 Beav. 196, 49 E.R. 314; Alderson v. White (1858) 2 De G. & J. 95, 44 E.R. 934. For examples in Australia, see Rowe v. Oades (1906) 3 C.L.R. 73.

13 Common law had always been steadfast on its rule that so long as consideration is real, it need not be adequate; see G.H. Trietel, The Law of Contract, 11th edn. (London 2003), 73.

14 See also the Australian High Court case Rowe v. Oades (1906) 3 C.L.R. 73, 76-77, 81, per Griffith C.J. and O’Connor J. respectively.

15 See Williams v. Owen (1840) 5 My. & Cr. 303, 41 E.R. 389. See also the earlier case of Barrel v. Sabine [1684] 1 Vern. 269, 23 E.R. 462, where the court refused to treat a conditional sale as a mortgage on the grounds that the property was sold at an undervalue, given that the seller had the advice of a lawyer and had fully understood the effect of the transaction.

16 Note that motive became increasing apparent in hire-purchase, finance leasing and conditional sale; see Financings Ltd. v. Baldock [1963] 2 Q.B. 104, 116, where Diplock L.J. commented that the finance companies entered into hire-purchase contracts to avoid statutory requirements relating to money-lenders and to bills of sale.

17 (1862) 4 De G. F. & J. 18, 23-24, 45 E.R. 1089, 1091.

18 Emphasis added.

19 Diamond, “Hire-purchase Agreements As Bills of Sale” (1960) 23 M.L.R. 399, particularly at pp. 520-521. See also Gough, Company Charges, 88; R. Tomasic and S. Bottomley, Corporations Law in Australia (Sydney 1995), 531; and P. Lipton and A. Herzberg, Understanding Company Law, 6th edn. (Sydney 1995), 227.

20 [2001] UKPC 28, [2001] 2 A.C. 710.

21 [2001] UKHL 58, [2002] 1 A.C. 336.

22 This paper will not discuss the impact of these cases further, as they are already adequately discussed elsewhere; see D.W. McLauchlan, “Fixed Charges Over Book Debts: New Bullas in New Zealand” (1999) 115 L.Q.R. 365; D.W. McLauchlan, “New Bullas in New Zealand: Round Two” (2000) 116 L.Q.R. 211; J. Tribe, “The Privy Council and Brumark: a lingering shadow over book debts?” (2001) 22 Co. Lawyer 318; and G. McCormack, “The nature of security over receivables” (2002) 23 Co. Lawyer 84.

23 [2001] 2 A.C. 710, at [32].

24 [2002] 1 A.C. 336, at [53].

25 See Snell's Equity, 30th edn., by John McGhee (London 2000) para. 3-15, p. 31.

26 Ibid.

27 Loughran v. Loughran (1934) 292 U.S. 216, 229, per Brandeis J.

28 (1890) 15 App. Cas. 379.

29 Ibid., pp. 380-381.

30 (1906) 3 C.L.R. 73.

31 Ibid., p. 81.

32 For an excellent discussion of parallel legislation see an earlier edition of E.I. Sykes, The Law of Securities, 3rd edn. (Sydney 1973), pp. 439-494, 569-589.

33 See R.M. Goode, Hire-purchase, Law and Practice, 2nd edn. (London 1970), p. 2.

34 See Financings Ltd. v. Baldock [1963] 2 Q.B. 104, 117, per Diplock L.J.

35 These are sufficiently discussed by the English Law Commission Consultation Paper No. 164, Registration of Security Interests: Company Charges and Property Other Than Land, (July 2002) (hereafter “Consultation Paper No. 164”), para. 6.3.

36 Ibid.

37 For example, the legal and equitable mortgage stricto sensu and the charge.

38 For an explanation of the essential differences between a hire-purchase agreement and a bill of sale under the Bills of Sale Acts; see Diamond, “Hire-purchase Agreements as Bills of Sale” (1960) 23 M.L.R. 399, 516.

39 See Spencer, “The Commercial Realities of Reservation of Title Clauses” [1989] J.B.L. 220.

40 See Re Bond Worth Ltd. [1980] Ch. 228, which illustrates a hiving down operation.

41 See Armour and Another v. Thyssesen Edelstahlwerker [1991] 2 A.C. 339, 353, per Lord Keith of Kinkel.

42 [1933] 1 Ch. 1.

43 Ibid., at pp. 27-28.

44 “Hire-purchase Agreements as Bills of Sale” (1960) 23 M.L.R. 399, 518.

45 Note that Fisher & Lightwood's Law of Mortgage, 11th edn. (London 2002), pp. 11-12 notes 15 and 21, cites some detailed rules for ascertaining the true nature of the transaction. Again, the concepts are not discussed. The issue as to whether there is fraud or sharp dealing by the buyer is however identified as an important factor. It is however uncertain whether this would include the broad expression of “unconscionability”.

46 [1895] A.C. 471.

47 Ibid., at p. 482.

48 For a detailed discussion on the subject, see R.M. Goode, Consumer Credit Law (London 1989), chap. 24.

49 For example, see Bridge v. Campbell Discount Co. Ltd. [1962] A.C. 600, 627, quoted below note 52.

50 [1980] Ch. 228.

51 Ibid., at p. 248.

52 [1962] A.C. 600, 627.

53 (1989) 84 A.L.R. 99.

54 [1989] B.C.C. 325.

55 [1992] B.C.C. 945.

56 See also the case of Compaq Computer Ltd. v. Abercorn Group Ltd. [1991] B.C.C. 484, where Mummery J. held that a clause which required the buyer to keep the proceeds in a separate account created a registrable charge. In contrast in the New Zealand case of Peerless Carpets Ltd. v. Moorhouse Carpet Ltd. (1992) 4 N.Z.B.L.C. 102 held that that the buyer not only held the carpet as “bailee and agent” but also held the proceeds on trust for the seller.

57 [1991] 2 A.C. 339.

58 Ibid., at p. 353.

59 Ibid., at p. 353.

60 (1979) [1992] B.C.L.C. 609.

61 [1992] B.C.L.C. 609, at 614, per Lord Wilberforce.

62 Ibid., at p. 615, per Lord Wilberforce.

63 Ibid, at p. 617.

64 See Cope, Equity: Issues and Trends, 46-61, where Professor Bryan Horrigan discusses the impact of equity's doctrine of substance over form on commercial uncertainty. He concluded that the fear was overstated. He thought that enforcement of the doctrine would improve the standards of conduct of commercial persons. For discussion of equity's infiltration of English commercial law against common law's demand for commercial certainty; see Goodhart and Jones, “The Infiltration of Equitable Doctrine Into English Commercial Law” (1980) 43 M.L.R 489.

65 See Shiloh Ltd. v. Harding [1973] A.C. 691, at p. 722.

66 See, R. Evershed, “Equity is not presumed to be past the Age of Child Bearing” (1953) 1 Sydney Law Review 1.

67 [1984] 3 All E.R. 982.

68 This appears to be the position at law: see A.G. Guest, “Accession and Confusion in the Law of Hire-Purchase” (1964) 27 M.L.R. 505, particularly at pp. 518-519.

69 [1984] 3 All E.R. 982, at 992.

70 Especially in view of the House of Lords’ decision in Armour and Another v. Thyssen Edelstahlwerke AG [1991] 2 A.C. 339, that an effective retention of title clause does not create a security interest.

71 See M.L. Mclnnes, The Structure and Challenges of Unjust Enrichment (Sydney 1996), chap. 2, where the author proposed that in certain contracts it might be possible to infer such an obligation and that there was also the possibility of relief under the principle of unjust enrichment.

72 J. De Lacy, “Romalpa Theory And Practice Under Retention of Title in The Sale of Goods” (1995) 24 Anglo-American Law Rev 327, 360.

73 (1989) 84 A.L.R. 99.

74 Ibid., at pp. 111-112.

75 In the nineteenth century the court would not relieve the hirer against forfeiture caused by default in punctual payments unless the proviso was a penalty; see Halsbury's Laws of England (London 1907) vol. 14, para. 1125; and see also E.J. Prince, “Equitable Relief in the Law of Hire-purchase” (1957) 20 M.L.R. 620, supporting this view. Relief against forfeiture was thought to be available to real property but not to chattels. However, since the beginning of the 20th century the courts adopted an expansive approach; see Shiloh Ltd. v. Harding [1973] A.C. 691, 722, where Lord Wilberforce stated that if the object of the transaction and forfeiture proviso was to secure the payment of money, equity could relieve the forfeiture on terms that the payments were made with interest, if appropriate, and also costs. This was considered in the Hong Kong case of Golden Eagle Ltd. v. Golden Achement Ltd. [1997] 1 H.K.C. 173 (P.C.), particularly at p. 183, per Lord Hoffmann; and see also Halsbury's Laws of England, 4th edn., reissue (London 1992). vol. 16, para. 897, which showed the change in the court's approach. See also A.L. Diamond, “Equitable Relief for Hire-purchaser of Goods” (1956) 19 M.L.R. 498; and M. Pawloski, “The Scope of Equity's Jurisprudence to Relieve Against Forfeiture of Interests in Property Other Than Land” [1994] J.B.L. 372, where the authors argued that relief against forfeiture should apply and that it should not be restricted to forfeiture of interests in land only. Note that in Golden Eagle Ltd. the Privy Council refused to grant relief against the seller's forfeiture of the deposit because the sale and purchase of the land agreement was clear on the seller's right, and because the agreement was not a mortgage and the proviso not a penalty.

76 (1989) 84 A.L.R. 99, 112.

77 See Cope, Equity—Issues and Trends, pp. 1-19 and 46-61. See also A. Mason, “Future Directions in Australian Law” (1987) 13 Monash university Law Review 141.

78 (2000) 202 C.L.R. 588.

79 Professor Gough in his text, Company Charges, chap. 21, gives a detailed exposition of the theory, and concludes that the approach of the English courts is one of substance over form in determining whether a transaction creates an absolute sale, retention of title, or a charge.

80 Kirby J., the fifth member of the court, dissented.

81 (2000) 202 C.L.R. 603.

82 Ibid., p. 606.

83 In Hendy Lennox (Industrial Engines) Ltd. v. Grahame Puttick [1984] 2 All E.R. 152, 159, Staughton J. commented that the existing law was “a maze if not a minefield”.

84 (2000) 202 C.L.R. 588, 592.

85 See T. M. Carlin, ‘‘Associated Alloys Pty Ltd. v. CAN 001 452 106 Pty Ltd.: A Commentary and Analysis” (2002) 30 A.B.L.R. 106, 113.

86 Based on the observation of Mason and Deane JJ. in the earlier case of Gosper v. Sawyer (1985) 160 C.L.R. 548, at pp. 568-569.

87 See Re Agnew and another v. Commissioner of Inland Revenue and another [2001] 2 B.C.L.C. 188, P.C.

88 See Smith (Administrator of Cosslett (Contractors) Ltd.) v. Bridgend County Borough Council [2002] UKHL 58, [2002] 1 A.C. 336.

89 [1989] B.C.C. 325.

90 [1992] B.C.C. 945.

91 See also Compaq Computer Ltd. v. Abercorn Group Ltd. [1991] B.C.C. 484.

92 [2002] UKHL 13, [2003] 1 A.C. 368.

93 In the Court of Appeal Sir Roy Goode Q.C. relied on this point against relief: [2000] 4 All E.R. 734, 743.

94 (2000) 49 N.S.W.L.R. 513.

95 Ibid., at p. 521.

96 [1998] A.C. 214. However, note that earlier Australian cases failed to support this view; see Broad v. Commissioner of Stamp Duties [1980] 2 N.S.W.L.R. 40, per Lee J., and Estate Planning Associates (Australia) Pty Ltd. v. Commissioner of Stamp Duties (1985) 2 N.S.W.L.R. 495, at 499, per Yeldham J., and Wily as Liquidator of AUR NL (in liquidation) and Another v. Roschild Australia (1999) 47 N.S.W.L.R. 555, at 564-565, per Windeyer J. For academic criticism of the concept of substance over conceptual impossibility, see R Goode, “Charge-backs and Legal Fictions” (1998) 114 L.Q.R. 178.

97 [1987] Ch. 150.

98 See Cope, Equity: Issues and Trends, pp. 1-19, and 46-55.