## Facts

- London Wine Co sold wine to customers, issuing certificates claiming to confer ownership, but did not physically segregate or identify specific bottles or cases for each customer.
- The wine was kept in the company’s warehouses, with customers paying for storage and insurance.
- The company became insolvent.
- Customers claimed the wine was held on trust for them and so should not form part of the company’s assets for creditors.
- The central question was whether unsegregated wine could constitute property subject to a trust in favour of the customers, based on the certificates issued.

## Issues

1. Whether a valid trust over tangible property (chattels) can exist without specific identification or segregation of the assets from a larger bulk.
2. Whether certificates of ownership without physical allocation of the wine were sufficient to create a trust.
3. To what extent certainty of subject matter must be satisfied in order for an express trust of chattels to be upheld.
4. Whether general claims or descriptions of property can be sufficient for a trust, particularly in the context of sale of goods and insolvency.
5. Whether any exceptions exist to the general rule of certainty of subject matter for chattels, especially where property is fungible or intangible.

## Decision

- The court held that no valid trust had been created because the wine supplied to customers was not segregated or identified in any way within the company’s stock.
- It was found that, for tangible property, specific identification or segregation is necessary to fulfil the requirement of certainty of subject matter in trust law.
- The certificates issued were insufficient to identify which cases of wine belonged to which customer.
- The customers could not enforce an equitable proprietary interest in the wine, and the wine remained available to the company’s creditors on insolvency.
- The judgment confirmed that the principle of certainty cannot be met through general claims over a bulk of tangible goods.

## Legal Principles

- Certainty of subject matter is fundamental for the creation of a valid trust; the assets must be clearly identifiable.
- For chattels, physical segregation or some other form of specific identification is required; general or unallocated claims are not sufficient.
- The distinction is made between chattels and intangible assets: the rule in Re London Wine Co applies to chattels, while intangible assets (e.g. shares, as in Hunter v Moss) may not require segregation.
- Exceptions may apply where the property is fungible or the law provides for passing of title without individual segregation, such as under commercial law or the Sale of Goods Act 1979.
- Certainty of subject matter has implications for both trust and contract law, particularly concerning the transfer of property in commercial sales.

## Conclusion

The decision in Re London Wine Co [1986] PCC 121 established that for a trust of tangible assets to be valid, the subject matter must be specific and segregated; general allocations or certificates without actual identification are not sufficient to create an enforceable trust, significantly influencing the law on trusts, sales of goods, and property rights in insolvency contexts.