## Facts

- Goldcorp Exchange Ltd sold gold bullion to customers, claiming it would hold purchased gold on their behalf.
- The company did not keep separated or specifically marked reserves of gold for each customer.
- All gold was combined into a general stock, which proved insufficient to meet all customer claims when Goldcorp failed.
- Customers believed they had ownership of specific gold, but no physical separation or marking took place.

## Issues

1. Whether a valid trust could be established in favour of customers without specific, identified gold being separated or earmarked for them.
2. Whether the company's general, unallocated pool of gold could satisfy the trust requirement of certainty of subject matter.
3. Whether customers could be treated as beneficiaries or only as unsecured creditors when assets were commingled and not separately identified.

## Decision

- The Privy Council held that no valid trusts were created for the customers.
- The absence of separately identified and marked gold for individual customers meant trust property was not sufficiently certain.
- Customers could not claim specific assets and were therefore treated as unsecured creditors of Goldcorp Exchange Ltd.

## Legal Principles

- A fundamental requirement of trust law is the certainty of subject matter: trust assets must be clearly identified and, for physical goods, separated or specifically marked.
- Failure to separate or earmark physical assets for beneficiaries prevents the creation of a valid trust.
- Commercial arrangements purporting to hold assets for others must comply with trust law’s strict separation and identification requirements.
- The case distinguishes between physical assets, which require physical separation (as reaffirmed in Re London Wine Co (Shippers) Ltd), and intangible, interchangeable assets like shares, where separation is not always required (as seen in Hunter v Moss).

## Conclusion

The Privy Council's decision in Re Goldcorp Exchange Ltd confirms that a trust over physical property fails without clear, separated, and identified trust assets. Customers without specific allocation became unsecured creditors, highlighting the importance of strict compliance with trust law requirements for certainty of subject matter in commercial dealings.

Re Goldcorp Exchange Ltd [1995] 1 AC 74