BUS2320 Business Law Case Study: Analyzing Yacht Ownership Rights

This case study examines a complex yacht ownership dispute involving multiple parties and legal instruments. Amelia, the original owner, sold a yacht subject to an unregistered chattel mortgage to Donald, who then traded it to a dealer for a larger yacht. The dealer sold the yacht to Martin under a conditional sale agreement, which Martin violated by selling to Wray without completing payments. Wray, unaware of the existing security interest, purchased the yacht. The dispute arose when Martin defaulted, and the dealer seized the yacht from Wray. The analysis focuses on the legal implications of unregistered chattel mortgages and conditional sale agreements, determining the rights and liabilities of each party, and exploring potential compensation claims. The case highlights the importance of conducting thorough searches for existing security interests before purchasing property and the rights of the dealer to repossess the yacht.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Summary:.........................................................................................................................................2
Problem statement:..........................................................................................................................2
Analysis:..........................................................................................................................................3
Argument:....................................................................................................................................3
Defense:.......................................................................................................................................4
Decision:......................................................................................................................................5
Implementation/Plan of Action:..................................................................................................5
Reference:........................................................................................................................................7

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Summary:
The main subject matter of the case is evolved with the selling and purchasing of yacht. There
are five parties in the case and the first owner of the yacht was Amelia. It has been observed
from the case that she had sold the yacht to her friend Donald by concealing the fact that the
yacht is subject to a chattel mortgage. Donald had sold the yacht to a dealer and gotten a bigger
yacht. The dealer sold the yacht to Martin through a conditional sale agreement and it has been
observed that Martin sold the yacht to Wray without paying the stipulated sum mentioned in the
conditional sale agreement. However, it can also be observed that Wray did not make any search
for claim as against the yacht and therefore, he had no knowledge about the sale agreement in
between the dealer and Martin. The dispute arises when Martin had failed to pay the amount to
the dealer. In this way, he had made a breach regarding the terms and conditions of the
conditional sale agreement. Soon after the incident, the dealer had seized the yacht, which was
possessed by Wray. Therefore, it has been observed that the rights and interest of Wray
regarding the yacht has been violated. In this study, the rights and liabilities of the parties has
been pointed out. Further, it is to be identified that what are the possible outcome to this effect.
This report will help to understand the scope of certain legal instruments like the unregistered
chattel mortgage and conditional sale agreement.
Problem statement:
The main problem cropped up in this case is to determine the rights of the parties
regarding the contract that has been made in between several parties. The main issue of this case
is to determine whether Amelia can sell the yacht to other where the yacht was a subject to the
unregister mortgage or not. Further, it is to be determined whether the dealer can seize the yacht

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purchased by Wray or not. If he can, then it is to be analyzing on what basis. The rights of Wray,
who has purchased the yacht, should also require to be determined. These are the main problem
statement in this case.
Analysis:
Argument:
Considering the subject matter of the case, it can be stated that two things are to be
decided first. The scope of unregistered chattel mortgage and the nature and importance of
conditional sale agreement are to be discussed for determining the rights and liabilities of the
parties.
The term mortgage is used as an instrument that has been used for the debt or loan (Han,
Lutz & Sand, 2016). Certain conditions are included under the instrument and it is a general rule
that states the borrower of the loan is required to pay the money or amount of the loan within
time. There are certain mortgages and in this case, the chattel mortgage is in use. It is a legal
term where certain personal movable properties are used as security for obtaining the loan, the
borrower of the loan is under an obligation to pay the amount within stipulated period, and when
the payment has been over, the borrower can take back the security from the person who gives
the loan (Mordel & Stephens, 2015). There are certain differences in between the chattel
mortgage and traditional mortgage. The term chattel mortgage can be defined as lien on personal
property. According to the general rule, the mortgage agreement should be registered and the
rights of the lender and the borrower can be established in this case. However, an unregistered
mortgage can also be enforced. This process is based on the principle of equitable mortgage.
This principle has been observed in the case of Goldstein v Shyzi Pty Ltd [2017] NSWSC 398.

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The second instrument in this case is the conditional sale agreement. It is an agreement
that has been made in between two parties where the buyer purchases certain goods without
transferring the rights of possession (Cuming, 2015). This method will help the seller to enjoy
the absolute possession power even after the sale. The buyer of this agreement is allowed to
make part payment regarding thee goods and he can claim for actual possession of the goods
once he has made the full payment regarding the same. Therefore, it can be stated that the buyer
will not get the full possession unless he paid off the whole money and in case of any failure to
this, the seller can repossess the sold goods (Davies, 2017).
Defense:
It has been observed that both the provision of the chattel mortgage and conditional sale
agreement has been violated. However, the main question to the effect is can Donald and Wray
can claim any compensation from their seller or not.
According to the general principle of law, the mortgage is a kind of security that has been
given by a person who borrow money from the lender (Buckwold, 2017). The mortgage property
acts as a security that makes the payment made by the borrower obvious. If the borrower fails to
make the payment, the lender can take the possession of the mortgaged property. If the borrower
sells the property that will go against the law of mortgage and the lender can take possession of
the goods. In this case, Donald has bought the mortgaged yacht. However, if Ace Finance make
any demand regarding the yacht, Donald can claim compensation from Amelia.
In addition to that, it has been observed that the provisions of the conditional sale
agreement have also been violated (Mba, 2017). It has been observed that Martin has sold the
yacht to Wray, which he had purchased from the dealer under a conditional sale agreement.

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According to the common rule of law, the buyer has no right over the goods until he pay all the
monies to the seller (Moyle, 2017). Therefore, it can be stated that Martin had no right to sell
over the property and the dealer can claim for getting back the property from Wray. However,
Wray can defend him on the fact that the selling process in between he and Martin was
legitimate and therefore, he can claim compensation from Martin. However, Wray has certain
liabilities too. He had not made any search regarding the claim for the yacht. He ought to do so.
Decision:
In this case, it has been observed that the yacht was subjected to mortgage and she could
not sell the yacht, as it was a secured property. Therefore, it can be stated that the before the sale,
she should have to inform the Ace Finance. However, legitimate right of Donald has been
established in this case. He has been sold the yacht to a dealer who had sold the same to Martin
under conditional sale agreement. In this case, it has been observed the absolute right of Martin
over the yacht has not been established (Ziff et al., 2016). According to the rules of the
conditional sale agreement, until the buyer is not paying the full amount of money, the right of
possession will be laid on the seller. Therefore, he has no right to sell the same to Wray. In this
case, it can be understood that Martin has not paid off the full amount and therefore, the dealer is
legally empowered to get back the yacht from Wray. However, Wray can claim compensation
from Martin for the same. The dealer has every right to claim the yacht back from Wray. In my
opinion, Wray should ask for compensation from Martin to this effect.
Implementation/Plan of Action:
The court has to consider the interest of the affected parties. It has been observed that the
no claim has been made against the yacht except the claim made by the dealer. It has been
observed that the dealer has made a search regarding the security interest of the yacht for confirm

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the payment of an obligation (Bridge, 2017). However, as the primary selling process of the
yacht is disputed, therefore, all the parties of the case except Amelia have a right to make claim
from the seller. However, in the case of Wray, the court needs to pass necessary order so that he
can claim compensation from Martin to secure his rights and interest as against the sale. After
that, the compensations should be paid. In case of any other issue, action should be implemented
to enforce the judgment.

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Reference:
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Realization of Powers-of-two FIR Filter. IEEE Transactions on Computer-Aided Design
of Integrated Circuits and Systems.
Bridge, M. (2017). The UK Supreme Court decision in The Res Cogitans and the cardinal role of
property in sales law. Sing. J. Legal Stud., 345.
Buckwold, T. M. (2017). COMMERCIAL LAW CONFERENCE HONOURING
DISTINGUISHED PROFESSOR RONALD CC CUMING: The Reform of Judgment
Enforcement Law in Canada: An Overview and Comparison of Models for Reform. Sask.
L. Rev., 80, 71-289.
Cuming, R. C. (2015). Priority Competition Between Secured and Unsecured Creditors: The
Evolution of Policy. Banking & Finance Law Review, 30(3), 457.
Davies, I. (Ed.). (2017). Retention of Title clauses in Sale of goods Contracts in Europe.
Routledge.
Depauw, M. (2015). Sale in Demotic Documents: an Overview.
Han, L., Lutz, C., & Sand, B. (2016). The effects of macroprudential mortgage insurance
regulation during a housing boom: Evidence from Canada. mimeo.
Mba, S. U. (2017). Reformed Secured Transactions Regulation in Nigeria: An'Endowment
Effect'Justification for Its Self-Help Repossession and Disposition Provision.

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Mordel, A., & Stephens, N. (2015). Residential mortgage securitization in Canada: A
review. Bank of Canada Financial System Review, 39-48.
Moyle, J. B. (2017). The contract of sale in the civil law. Рипол Классик.
Ziff, B., de Beer, J., Harris, D. C., & McCallum, M. (2016). A Property Law Reader: Cases,
Questions and Commentary, Preface and Table of Contents.