Bills of Sale

A few lenders, mostly small businesses and trading only within a locality, provide credit secured on the debtor’s goods but do not take possession of the goods or property. (The goods concerned are normally motor vehicles.) Any breach can lead to immediate repossession. This is of course what happens with a land mortgage, but these are not controlled because there is a presumption of legal advice being taken. Where the security is on goods however, the Bills of Sale Acts (1878, 1882 and 1890) require that the loan be registered at the High Court in London. The OFT has published guidance on Bills of Sale, and can assist Trading Standards staff with looking up the register at the High Court.

The problem is that a consumer who defaults on a loan with an attached Bill of Sale may face immediate repossession of the goods, there being none of the protection provided for Hire Purchase and Conditional Sale agreements.

In a licence revocation appeal, it was considered that all such loans should be cancellable, since the modus operandi of some lenders did not involve their reps doing more than taking the client to a shop to sign. See the pdf here.

13.4 Bills of Sale Acts 1878 and 1882 and the Industrial and Provident Societies Act 1967 (RSC O.95)

13.4.1 Every bill of sale and absolute bill of sale to which the Act of 1878 applies must be registered under s.8 of that Act, within 7 clear days of its making, and, under s.11 of the Act of 1878, the registration of a bill of sale must be renewed at least once every 5 years. The register for the purpose of the Bills of Sale Acts contains the particulars of registered bills of sale and an alphabetical index of the names of the grantors, and is kept in the Action Department in Room E15 – E17.

13.4.2 An application to register a bill of sale, which is made within the prescribed time, should be made by filing in Room E15-E17 the original bill of sale and any document annexed to it together with a witness statement or affidavit in form PF 179 or PF 180. An application to re-register a bill of sale, which is made within the prescribed time, should be made by filing in Room E15-E17 a witness statement or affidavit in form PF 181.

13.4.3 An application to rectify;

an omission to register, by extending the time for registration, or
an omission or mis-statement of the name, residence or occupation of a person in the register, by correcting the registration,
ust be made by witness statement or affidavit to a Master of the Queen's Bench Division. In addition to the matters set out in forms PF 179 or PF 180, the evidence in support must also set out the particulars of the omission and state the grounds on which the application is made.

13.4.4 Where the residence of the grantor of the bill of sale or the person against whom the process is issued is outside the London bankruptcy district, or where the bill of sale describes the goods as being in a place outside that district, the Central Office will send copies of the bill of sale to the appropriate county court district judge.

13.4.5 The Master, on being satisfied that the omission or mis-statement of name, residence or occupation of a person in the register was accidental or due to inadvertence, may order the omission or mis-statement to be rectified by the insertion in the register of the correct name, residence or occupation of the person.

13.4.6 Where the Master is satisfied that the omission to register a bill of sale or a witness statement or affidavit of renewal within the prescribed time was accidental or due to inadvertence, s/he may extend the time for registration on such terms ass/he thinks fit. In order to protect any creditors who have accrued rights of property in the assets in respect of which the bill of sale was granted between the date of the bill and its actual registration, any order to extend the time for registration will normally be made "without prejudice" to those creditors. The order will be drawn up in form PF 182.

13.4.7 An application for an order that a memorandum of satisfaction be written on a registered copy of a bill of sale, made without the consent of the person entitled to the benefit of the bill of sale, must be made by the issue of a Part 8 Claim Form. Where the consent of the person entitled to the benefit of the bill of sale has been obtained, the application may be made by a witness statement or affidavit containing that consent and verifying the signature on it. Form PF 183 contains precedents for the evidence and forms of consent. Where the application is made with consent, the evidence need not be served on any other person. If the Master is satisfied on the evidence, s/he will endorse his/her approval on the witness statement or affidavit (an order is not normally drawn up) and send it to Room E17 for a memorandum of satisfaction to be entered on the copy of the Bill in the Registry. If a copy of the bill of sale has been sent to a county court district judge, a notice of satisfaction will be sent to that district judge.

13.4.8 Where the consent has not been obtained, the Claim Form must be served on the person entitled to the benefit of the bill of sale and must be supported by evidence that the debt (if any) for which the bill of sale was made has been satisfied or discharged.

13.4.9 An application to restrain removal on sale of goods seized in accordance with RSC O.95 r.3 and under the proviso to s.7 of the Bills of Sale Act (1878) Amendment Act 1882 must be made by the issue of a Part 8 Claim Form for hearing before the Interim Applications Judge.

13.4.10 Under the Industrial and Provident Societies Act 1967 an application to record an instrument creating a fixed or floating charge on the assets of a registered society or to rectify any omission or mis-statement in it must be made within 14 days beginning with the date of its execution.

13.4.11 Under RSC O.95 r.5 and in accordance with s.1(5) of the Act of 1967 the court may order;

that the period for making an application for recording a charge be extended, or
an omission or mis-statement in such an application be rectified.
The procedure for obtaining an order as in (1) or (2) above is similar to that under s. 14 of the Bills of Sale Act 1878 and must be made by witness statement or affidavit to a Master of the Queen's Bench Division as in paragraph 13.4.3 above and must exhibit a copy of the instrument duly authenticated in the prescribed manner together with any other particulars relating to the charge.

13.4.12 RSC O.95 r.3 refers to the assignment of book debts; the register of assignments of book debts is kept in Room E15- E17 in the Central Office. An application for registration under s. 344 of the Insolvency Act 1986 should be made in accordance with RSC O.95 r.6(2). Parties may use form PF 186 for their evidence in support. It is helpful if the original assignment is also produced.