(A) RETENTION OF A PROPRIETARY INTEREST
In determining whether the claimant has retained title in the property which was received by the defendant it is necessary to examine the rules of property law concerning the transfer of title.
(i) The General Rules for the Passing of Title
The fundamental principle relating to the passing of title, regardless of whether the transaction is one of sale or gift, is that title will only pass where the parties intend it to do so. Usually the parties will intend title to pass where the property is delivered to the purchaser or donee, either actually or constructively. Constructive delivery includes where title deeds are delivered or goods are set aside for storage. Where there is no evidence of the parties’ actual intent they will be presumed to intend that title will pass on delivery.
Title can only pass, however, where the property was in existence at the time of the transfer and was ascertainable, even though it had not been ascertained. It is for this reason that the claim of the main group of claimants in Re Goldcorp Exchange Ltd failed. In Goldcorp some of the claimants had entered into a contract to purchase bullion from a company which had gone into insolvent liquidation. It was essential to these claims to the bullion that the claimants had a proprietary interest in it. This was because a bank had lent money to the company and it had obtained a security interest in the bullion by means of a floating charge. Since the company had insufficient assets to satisfy the claims of both the claimants and the bank, the claimants needed to show that they had a proprietary interest which ranked above that of the bank. The difficulty which faced the claimants was that, although they had paid the purchase price for the bullion and had agreed with the company that it would store the bullion on their behalf, the bullion had not specifically been allocated to them. It was for this reason that the Privy Council held that the property in the bullion had not passed to the claimants. Since the claimants’ bullion could not be ascertained it was not possible to conclude that the claimants had a proprietary interest in any particular property.
Alternatively, the claimants in Re Goldcorp Exchange Ltd argued that they had a proprietary interest in the bullion by virtue of estoppel. Their argument was that, since the company had promised to allocate the bullion to each claimant, it was estopped from denying that it had done so and consequently it could be assumed that the claimants did have a proprietary interest in the bullion. This argument was summarily dismissed by the Privy Council, because estoppel could only give the claimants the pretence of a title where no title exists and such a fictional title could not give the claimants priority over the bank’s real proprietary interest in the bullion. Estoppel is essentially a rule of evidence and cannot be used to conjure a title. This is surely right. It is one thing to estop the defendant by virtue of the representations which it has made and which have been relied upon by the claimant to his or her detriment. It is a completely different thing to bind a third party by virtue of the defendant’s representations. In other words, estoppel can be used as a defence but cannot be used to establish a cause of action.
A second group of claimants in Re Goldcorp Exchange Ltd were in a somewhat different position, because they had bought bullion from a different company which had since been taken over by Goldcorp Exchange Ltd. Before this takeover occurred their bullion had been ascertained and appropriated and it was conceded, rightly, that this was sufficient to pass title to the claimants. Consequently, they had a proprietary base on which their proprietary claim could be founded.
The law relating to the passing of title where a purchaser has bought part of an identified bulk has been amended by the Sale of Goods Amendment Act 1995. By virtue of this Act it will be presumed that the parties intended that title should pass where the purchaser has bought part of an identified bulk and has paid part of the price in advance. This presumption of intention can be rebutted by evidence that title was to pass at a later date.
Even where the claimant has initially retained legal title, that title will automatically pass as soon as the claimant’s property, or its product or substitute, ceases to be identifiable. This will be determined by reference to the tracing rules.
-  For analysis of the rules relating to the passing of title in money see D Fox, Property Rights in Money(Oxford: Oxford University Press, 2008).
-  Middleton (1873) LR 2 CCR 38, 43. See the Sale of Goods Act 1979, s 17.
-  Re Stapylton Fletcher Ltd  1 WLR 1181.
-  See the Sale of Goods Act 1979, s 16. Ascertainment may occur by exhaustion: Sale of Good (Amendment) Act 1995, s 1(2), amending the Sale of Goods Act 1979.
-   1 AC 74. See also Re London Wine Co (Shippers) Ltd (1986) PCC 121.
-  Cf Re Stapylton Fletcher Ltd  1 WLR1181 where the property in identical bottles of wine was held tohave passed to the purchasers of wine, even though the bottles had not been appropriated to each customer, it beingsufficient that the purchasers’ bottles were kept separate from the vendor’s trading stock. The effect of this was thatthe purchasers held the wine as tenants in common. See also Hunter v Moss  1 WLR 452, p 581, below.
-  Re Stapylton Fletcher Ltd  1 WLR 1181, 1203 (Judge Paul Baker QC). Cf the doctrine ofproprietary estoppel which can be used to create proprietary rights and so ground a proprietary claim. Seep 581, below.
-  In fact, the proprietary claim of this group of claimants failed because they were unable to identify thebullion in which they had a proprietary interest.
-  Sale of Goods (Amendment) Act 1995, s 1(3).
-  Westdeutsche Landesbank Girozentrale v Islington LBC  AC 669, 703 (Lord Browne-Wilkinson).
-  See p 610, below.