Re London Wine Co (Shippers) Ltd [1986] is a seminal case on certainty of subject matter, concerning trusts over an unsegregated portion of tangible property.

Facts of the Case

The London Wine Company (LWC) sold wine to customers, primarily as an investment. On purchase, customers received a document of title confirming they were the “sole and beneficial owner” of a specific quantity and vintage. Although charged for storage and insurance, the wine remained in LWC’s warehouses and was not physically segregated or appropriated from the company’s general stock for particular contracts.

When the company entered liquidation, the customers claimed a proprietary interest in the wine held on trust for them, which would have given them priority over secured creditors.

The Decision

Oliver J held that no valid trust was created because the subject matter was uncertain. For a trust to “bite”, it must be possible to identify with certainty the specific property to which it attaches. Because the specific bottles had not been set aside for individual customers, the trust failed. Even where the subject matter is part of a “homogeneous mass” in which specific identity might seem unimportant (much like money), it is still a legal requirement to be able to ascertain the property with certainty.

Legal Significance and the Tangible/Intangible Distinction

The decision established a strict rule for tangible goods: a trust over part of a larger bulk will fail unless the trust property is clearly segregated. It is often contrasted with:

  • Re Stapylton Fletcher Ltd: a similar case where a trust was upheld because the company did separate the customers’ stock from its general stock, making the subject matter certain.
  • Hunter v Moss: a later Court of Appeal case distinguishing London Wine on the basis that it concerned tangible chattels, holding that intangible property (identical shares) does not require segregation, because one share is legally identical to another.

Statutory reform

The result was considered harsh for purchasers who had paid for goods they believed they owned. The law was amended by the Sale of Goods (Amendment) Act 1995, introducing section 20A into the Sale of Goods Act 1979: where a buyer has paid for a specified quantity of unascertained goods forming part of an identified bulk, they become an owner in common of that bulk. This statutory reform applies specifically to the sale of goods; it does not alter the general trust-law principle that property must be certain for a trust to be valid.