obtainedlet

LetThemInsolvencysituationsrarelyleavecouponholdersinapositionwheretheycanhavetheircakeandeatitThesuddencollapseofMaria'sBakeryinAprilraisesnewcon-cernsovertheextenttowhichholdersofcouponsareprotectedfromthein-solvencyofcouponissuingcompanies.
Inthecaseofcakecoupons,thepurchasermakesanadvancepaymentinreturnfor'onedozenassorted,cakes'(inpracticetheirequivalentvalue)promisedinthecoupon.
Heorshehasacontractualrighttodemanddeliveryofthecakesuponproductionofthecoupon.
Failureonthepartoftheis-suerresultsinabreachofcontract,entitlingthepurchasertopursuelegalredressandobtaindamages.
Thosewhoreceivecouponsasgiftsenjoythesamerightofredemption,astheissuingcompanyhasmadeauni-lateraloffertodeliveronedozencakestoanyonewhoproducesthecoupon.
Ascontractualrightsarepersonalratherthanproprietaryrights,iftheissuingcompanybecomesinsolvent,theholderofthecakecouponisonlyentitledtoashareofthecompany'sassets,alongwiththeotherunsecuredcreditors,onapanpassubasis-unlessthecouponholdercanprove,interalia,thattitleoversomeoftheseassetshasalreadypassedorthatsomeoftheseassetsareactuallyheldbytheinsolventcompanyontrustforhimorher.
Accordingly,theholderofacakecouponmaytrytoestablishthefol-lowingclaims,noneofwhich,however,offermuchhope.
Thefirstclaim,relatingtomer-chandisepromisedunderacoupon,isthattitlehasalreadypassedtothepur-chaserofthecouponbeforethecom-pany'sinsolvency.
Iftheholderisnottheoriginalpurchaserbutadonee,hehasobtainedtitlethroughconstruc-tivedelivery(thatis,deliveryofthecoupon)bytheoriginalpurchaser.
Unders18oftheSaleofGoodsOrdi-nance,'WherethereisacontractforthePage22saleofunascertainedgoodsnoprop-ertyinthegoodsistransferredtothebuyerunlessanduntilthegoodsareascertained.
'As'unascertainedgoods'inthissectionincludegoodstobemanufacturedatsomefuturedatebytheseller,purelygenericgoodsandanunidentifiedportionofaspecifiedbulk,the'onedozenassortedcakes'prom-isedinthecouponsfallwithinthisdefinition.
Eventhoughtheymightbesub-sequentlyascertained,fortitletopass,r5(1)ofs20oftheSaleofGoodsOrdinanceprovidesthat,subjecttocon-traryintention,thegoodsmusthavebeenunconditionallyappropriated;theymusthavebeenearmarkedorat-tachedtothecontractinquestion.
Hence,intheordinarycourseofbusiness,titleoverthecakesdoesnotpassuntilthecustomershavechosenthecakesandthesaleassistantshaveremovedthemfromthedisplayshelves.
Inanycase,thisargumentisofnopracticalhelpwhereperishableitemssuchascakesareconcerned.
Norwoulditbeusefulforconsumersofservicessuchasholdersofrentalcoupons.
Thesecondclaimisthatthepur-chasemoneyisheldbythecompanyintrustfortheclaimant.
Thepurchasercanarguethattheissuingcompanyreceivesthepurchasemoneyinafidu-ciarycapacity,aspurchasershaveplacedtrustandconfidenceinit.
Thisargumentwasrejected(almost)outrightinReGoldcorpExchangeLtd[1995]1AC74,wherethePrivyCoun-cilwasunwillingtofindanyseparatefiduciarydutyinrelationtothepur-chasemoneythatisdifferentfromordinarycontractualduties.
Anotherwayofestablishingatrustoverthepurchasemoneyistoassertthatmoneypaidunderacontractforthesaleofgoodscanbeconstruedasatrustinthepurchaser'sfavour.
Thismayapplyifthereis'eitheramutualintentionthatthemoneysshouldnotfallwithin,thegeneralfundofthecom-pany'sassetsbutshould,beappliedforaspecialdesignatedpurpose,orthathavingoriginallybeenpaidoverwith-outrestrictiontherecipienthaslaterconstitutedhimselfatrusteeofthemoney':ReGoldcorpExchangeLtd,above,affirmingQuistcloseInvestmentsLtdvRollsRazorLtd[1970]AC567.
Hence,inReKayfordLtd(InLiquida-tion)[1975]1WLR279,whereamailordercompanythatwasinfinancialdifficultiesputcustomers'depositmoneysinan.
account,meaningtokeepthemseparatefromitsgeneralassets,atrustwascreatedinfavourofthecus-tomers.
However,forthisargumenttosuc-ceed,theclaimantmustshowthattherecipientisnotfreetospendthepur-chasemoneyasitchooses:ReGoldcorpExchangeLtd,above.
Itwouldthusappearthatintheabsenceofanypromiseoractionbytheissuingcompanytokeepthepurchasemoneyseparatefromitsfunds,itisdifficulttoseehowtherequisitetrustcouldbeestablished.
Furthermore,doneesofcouponsareunabletorelyonsuchtrustsinrelationtothepurchasemoney,asitisdifficulttofindanyvalidassignmentofthebeneficialinterest,ifany,tothem.
CoulditbearguedthatthisresultistooharshonconsumersWhilstonecanappreciatetheirpredicament,pro-tectingcouponholdersbygivingthemproprietaryrightswillupsettheallo-cationofrisksthatthepartieshavealreadyundertaken.
Bypurchasingcoupons,consum-ersshouldrecognisethattheyareexchangingconvenience(orpricedis-counts)fortheriskofinsolvency.
Inthiscurrenteconomicclimate,theyshouldbeadvisedtoexercisethenec-essarycautionbeforepurchasingcouponsorredeemthembeforeitistoolate.
;LusinaHofacultyofLawUniversity''ofHongKongHangKongLaivycrJuly1998