The problems arose upon the liquidation of Goldcorp Exchange Ltd (“Goldcorp”) when it was hopelessly insolvent and its remaining assets, which included a stock of gold, silver and platinum bullion, were needed to satisfy a floating charge in favour of the Bank of New Zealand. To obtain priority over the bank, purchasers of bullion from Goldcorp claimed either to have a proprietary interest in the bullion or in their purchase monies so as to be afforded a proprietary remedy against the bullion or other assets of Goldcorp. Their claims were rejected by the Privy Council in allowing an appeal from a majority decision of the New Zealand Court of Appeal.2

The purchasers had paid Goldcorp for bullion which had to be ingotted and delivered upon seven days’ notice; Goldcorp falsely promised to keep separate bulk stocks of each type of bullion as a safeguard for the purchasers who received “non-allocated invoices” in respect of their amounts of bullion. However, Gold-corp’s contract was for the sale of unascertained generic goods obtained from any source.

From “the very nature of things” no legal title could pass until specific bullion for a specific customer had been ascertained: “it makes no difference what the parties intended if what they intended is impossible: as is the case with an immediate transfer of title to goods whose identity is not yet known”.3 The Privy Council strongly endorsed Re London Wine (Shippers) Ltd.,4 Re Wait 5 and MacJordan Construction Ltd. v. Brookmount Erostin Ltd.,6 accepting that even in “ex-bulk” cases, like the latter two, where there is a fixed source held by the vendor from