Re Goldcorp Exchange Ltd
Customers who bought unallocated gold from a bulk had no proprietary interest in it, because the gold they had bought had never been identified.
Facts
Goldcorp, a dealer in precious metals in New Zealand, sold gold and other metals to customers on the basis that it would store the metal for them, and that they could ask for delivery at any time. Customers were given certificates of ownership, but the metal was not separated from Goldcorp's general stock, and the company did not keep enough stock to meet all its customers' claims. When the company became insolvent, the customers claimed that they had a proprietary interest in the stock, in priority to the company's secured creditor, a bank.
Legal principle
The Privy Council held that the customers had no proprietary interest in the stock, because the gold they had bought had never been ascertained. Lord Mustill said that a contract for the sale of unascertained goods could not pass title until the goods were identified, and that the customers could not have a beneficial interest under a trust because it was impossible to say which gold was held for which customer. The customers were unsecured creditors. One group of customers, whose metal had been set aside and identified, was entitled to it.
Related cases on certainty of intention and subject matter
- Re Adams and the Kensington Vestry (1884) 27 Ch D 394
- Boyce v Boyce (1849) 16 Sim 476
- Comiskey v Bowring-Hanbury [1905] AC 84
- Re Golay's Will Trusts [1965] 1 WLR 969
- Hunter v Moss [1994] 1 WLR 452
- Jones v Lock (1865) LR 1 Ch App 25
- Re Kayford Ltd [1975] 1 WLR 279
- Knight v Knight (1840) 3 Beav 148
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