Re London Wine Co (Shippers) Ltd [1986] PCC 121

London Wine sold wine to customers, many of whom paid the full purchase price while leaving the bottles stored in the company's warehouses. The company recorded each customer's purchase in its books but did not set aside or label particular bottles for most buyers. Its general stock contained bottles of the relevant descriptions and vintages. When the company went into receivership, customers argued that the corresponding wine was held on trust for them and should not be available to secured or general creditors. The dispute concerned customers for whom no particular cases or bottles had been appropriated, rather than buyers whose goods had been specifically identified and separated.

Could a trust exist over part of a larger stock of tangible goods when no particular bottles or cases had been segregated or identified as belonging to the individual customers?

Oliver J held that no trust arose for customers whose wine had not been appropriated to them. A trust requires property that is sufficiently certain and identifiable. It was not enough that the company possessed wine matching the quantity, vintage and description bought by each customer. Until particular bottles were separated or otherwise designated, the court could not determine which assets were held for which beneficiary. The buyers therefore had contractual claims but no proprietary entitlement to unallocated stock. The reasoning concerned tangible goods within a bulk, where individual items remained distinct. It must be distinguished from later authority concerning identical intangible property, particularly shares of one class.

A trust of tangible assets forming part of a larger bulk ordinarily requires the trust property to be segregated or otherwise specifically identified. A description of quantity and type does not by itself establish which physical items are held for each beneficiary.

The case is central to certainty of subject matter and becomes particularly important on insolvency, when a proprietary claim gives priority over unsecured creditors. It is usually compared with Hunter v Moss, where a trust of a stated number of identical shares was upheld without segregation. That contrast has generated debate about tangible and intangible property. Statutory rules can alter outcomes for buyers of goods in an identified bulk, but the case remains authoritative for trusts where the alleged assets cannot be matched to the claimant.