Contract for sale of land — Stamp duty — Respondent contracting to sell land not yet in its ownership — Appellant purchaser to pay purchase price on completion date five days after land transferred to respondent — Respondent required to have transfer stamped with relevant amount of duty — Whether stamping necessary before purchase price payable — Whether interest on purchase price running from completion date — Appeal dismissed
The respondent (A) was the vendor and the first appellant (B) was the purchaser of a shopping centre in Braintree. The second appellant was the guarantor of B’s obligations under the sale agreement.
At the time of the agreement, the land was not yet under A’s ownership. The agreement provided that the completion date for the sale was to be five working days after completion of the transfer to A. It also provided that: “The… [vendor]… shall stamp the Transfer with the appropriate amount of duty.” The balance of the purchase price was to be paid on the completion date, and interest was to be charged on sums payable in the event of any delay in payment. The agreement also incorporated the standard conditions of sale (3rd ed). The land was transferred to A on 20 September 2000, and the completion date was agreed as 27 September. On that day, B wrote to A stating that it would not complete until A had registered itself as proprietor of the property, in accordance with section 110(5) of the Land Registration Act 1925. A was duly registered as proprietor, and the transfer stamped in January 2001.
In subsequent proceedings by A, the judge ordered specific performance of the contract, and awarded interest on the unpaid balance of the purchase price, to run from the contractual completion date (27 September 2000), five days after the transfer to the vendor, to the actual completion date. He noted that A had been able and willing to make title on that date, pursuant to section 37(2) of the 1925 Act. On appeal, B contended that the balance of the purchase price had not been payable on that date, since the transfer to A had not been stamped and the section 110(5) request had not been complied with. B submitted that the appropriate date was January 2001, when A became the registered proprietor.
Held: The appeal was dismissed.
1. The contract did not specify any time limit for stamping the transfer, and there was no justification for implying one. Until the transfer had been executed, there was nothing to stamp. The permitted five days for completion of the sale was unlikely to be sufficient time in which to stamp the transfer, and the parties had not envisaged that it would be. The implication was that the obligation to stamp did not have to be performed before the completion date. It followed that the absence of a stamp on the completion date did not affect B’s obligation to pay the balance of the purchase price on that date.
2. The judge had been entitled to hold that the balance of the purchase price remained payable on the completion date, under the terms of the contract, notwithstanding B’s request for completion in accordance with section 110(5). Although A had not been the registered proprietor on that date, it had none the less been capable of transferring title, pursuant to section 37 of the 1925 Act.
Simon Berry QC and Timothy Harry (instructed by Taylor Joynson Garrett) appeared for the appellants; John Martin QC and Gordon Nurse (instructed by Freshfields Bruckhaus Deringer) appeared for the respondent.
Sally Dobson, barrister
