Reservation of title or Romalpa clauses are a standard feature in New Zealand commercial sales contracts today. Their widespread use, however, tends to disguise their ambivalent legal status. New Zealand, as elsewhere, has yet to grasp the nettle in this regard. English descriptions of the Romalpa area as a “minefield”,1 a “quagmire”2 and “a difficult and complex subject”3 seem equally valid here also. This despite the legislature and the courts having ample opportunity to resolve the uncertainty. Parliament balked at the opportunity comprehensively to reform personal property securities law following the Law Commission’s 1989 report,4 a report which unambiguously clarified the status of Romalpa clauses. The courts have similarly yet to answer several key questions about their validity, notwithstanding some five substantive High Court decisions on the subject, one of which went to the Court of Appeal in 1992. This article examines the reception of Romalpa clauses by New Zealand courts with two objects in mind: (1) to inform English lawyers and give them advance warning of how hitherto hypothetical situations might unfold, and; (2) to argue that such clauses, as de facto security devices, are objectionable from a policy viewpoint. I will deal with the second point first.

The case against Romalpa clauses is as familiar as it is formidable. Such clauses are surely no more than de facto charges and therefore ought to be registered to be