Enforcing a bill of sale

What is a bill of sale?

A bill of sale is a formal document that transfers the title to the goods to a third party (the grantee), but allows the original owner (the grantor) to retain possession and use of the goods in exchange for money (normally in the form of a loan) which is referred to as the “consideration”.

Relevant legislation

Bills of sale are governed by the Bills of Sale Acts 1878 and 1882. There are stringent formalities around the creation of bills of sale. The bill of sale must be witnessed and an affidavit needs to accompany the bill and it must be registered to make it valid.

The goods covered by the bill of sale will be detailed in an inventory, which is registered at the same time as the bill of sale and affidavit. Registration is with the High Court, within seven days of the date, to make the bill valid.

The register is publicly available and may be searched (there is a small fee).

When can the grantee enforce a bill of sale?

As part of the agreement, the grantor (the person transferring the title to the assets) will be required to make loan repayments according to the agreed schedule.

If they default, then the grantee (the holder of the bill of sale) has the power to take control of the property without having to obtain a court order or a writ of control; the bill of sale itself is sufficient authority.

How is a bill of sale enforced?

The bill authorises the taking control of the goods covered in the inventory.

The grantee can enforce this themselves, but may also instruct an authorised High Court Enforcement Officer (HCEO), who is an expert in the taking control of goods, to enforce it.

Bills of sale are often used in relation to high value goods, for example pieces of art, luxury vehicles and property.

Setting up a bill of sale

The formalities around correctly creating and registering a bill of sale is complex and involved. Expert legal advice should definitely be sought.