Vendor and purchaser — Whether money held by vendors’ solicitors as stakeholders or as agents for the vendor — Appeal by solicitors from decision of Judge Paul Baker QC, sitting as a judge of the High Court, holding that they received the money (which was the full purchase price, not merely a deposit) in the capacity of stakeholders and must make repayment to the purchaser on the rescission of the contract of sale — There had been a somewhat confused and unhappy history following the purchaser’s agreement to take the assignment of the lease of an hotel at Southend-on-Sea from the vendors — The arrangements had been made in some haste and the agreement was an ‘ineptly drafted and ambiguous document’ — The subsequent deed of assignment of the lease was executed by the vendors and was effective to transfer the lease to the purchaser, although it was never in fact executed by her — The purchaser found that the state of the hotel and the clientele were not what they were represented to be and she complained that she had been misled — She issued a writ against the vendors and their solicitors — A few months after the contract of sale the purchaser, under pressure from the landlords in regard to repairs, surrendered the lease — At the trial the purchaser sought to set aside the contract on the ground that she had been induced to enter into it by misrepresentations by the vendors — She claimed repayment of the money paid and she joined the solicitors in the action with a view to enforcing the latter claim — The judge found that false representations had been made by the vendors; he ordered that the contract be set aside and that the money paid should be repaid to the purchaser — He decided that the purchase money had been paid to the solicitors as stakeholders, so that they, not the vendors, were accountable for it — The vendors did not appeal, but the solicitors did, although not challenging the judge’s finding of fact as to misrepresentation by the vendors
therefore centred on the capacity in which the solicitors held the purchase
money — It was clear from authorities referred to by the court that if the
solicitors had received the money as stakeholders their duty was to hold it
until the event occurred which entitled them to release it — If, on the other
hand, they received it as the vendors’ agents the position was the same as if
it had been paid at that instant to the vendors themselves; they were entitled
to have it handed over on demand — These rules had been developed in regard to
deposits, but they were applicable to the whole purchase money in this case —
There were two issues, namely, (1) did the solicitors receive the money as
agents for the vendor or as stakeholders pending the occurrence of some future
contingency, and (2) if they received it as stakeholders, then, at the date
when they released the money had the contingency occurred which entitled them
to do so without any authority from the vendors?
agreement provided that a deposit of 10 per cent should be held by the
solicitors as stakeholders, but the effect of this was rendered questionable by
the subsequent arrangement that the purchase money should be paid immediately —
However, on the basis of the contra proferentem rule, or even on the assumption
that the original clause in the agreement should be rejected altogether, the
court held that the judge was right in deciding that the solicitors held the
money as stakeholders
issue the court held that the contingency which entitled the solicitors to
release the money to the order of the vendors occurred on the date when the
vendors had performed their obligation to assign the lease of the hotel and its
business in accordance with the agreement; and the fact that the deed of
assignment was not executed by the purchaser was immaterial — The money was
released on or soon after that date and the solicitors were justified in doing
so — The appeal was allowed, the judge’s order set aside and the action against
the solicitors dismissed
The following
cases are referred to in this report.
Burt v Claude Cousins & Co Ltd [1971] 2 QB 426; [1971] 2 WLR
930; [1971] 2 All ER 611; [1971] EGD 565; (1971) 218 EG 413, CA
Ellis v Goulton (1893) 1 QB 350
Potters v Loppert [1973] Ch 399; [1973] 2 WLR 469; [1973] 1 All ER
658; (1972) 25 P&CR 82; [1972] EGD 960; 224 EG 1717
This was an
appeal by F T Fisher & Lang, solicitors, of Southend-on-Sea, from part of
the decision of Judge Paul Baker QC, sitting as a judge of the Chancery Division.
The respondent was Mrs Dorothy Anne Tudor, plaintiff in the court below. The
proceedings arose from a contract for the assignment of a lease of the property
known as The Argyle Hotel, 12 Clifftown Parade, Southend-on-Sea, by the
vendors, S Abdul Hamid and Mohamed Nisar Patel, to Mrs Tudor. F T Fisher &
Lang were the vendors’ solicitors.
G M Godfrey QC
and A T C Nicholson (instructed by Reynolds Porter Chamberlain) appeared on
behalf of the appellants; G D Conlin (instructed by Jack Bernstein & Co) represented
the respondent.
Giving
judgment, SLADE LJ said: This is an appeal by a firm of solicitors, F T Fisher
& Lang, from part of an order of His Honour Judge Baker QC, sitting as a
judge of the Chancery Division, made at the trial of an action on January 25
1985. The plaintiff in the action was Mrs Tudor, the first defendant was Mr
Hamid, the second defendant was the appellant firm and the third defendant was
Mr Patel.
The
proceedings stemmed from a contract dated May 31 1978 by which the plaintiff,
Mrs Tudor, agreed for a consideration of £12,500 to take from Mr Hamid and Mr
Patel, as vendors (inter alia), an assignment of the benefit of a lease
of certain property known as The Argyle Hotel, 12 Clifftown Parade,
Southend-on-Sea (‘the hotel’). The vendors retained the appellants to act for
them. Mrs Tudor paid the whole sum of £12,500 to the appellants on May 31 1978.
Subsequently she was let into possession and by her solicitors accepted the
vendors’ title and submitted a proposed form of assignment of the lease before
the vendors had executed any assignment in her favour. On July 4 1978 the
vendors executed an
the vendors the money paid to them by Mrs Tudor.
She then
brought proceedings against the vendors, Mr Hamid and Mr Patel, to set aside
the agreement on the grounds that it had been procured by fraudulent
misrepresentations and for repayment of all the sums paid by her pursuant to
the sale (which in fact totalled £17,500). Presumably in the anticipation
(which I understand has regrettably proved well founded) that she might not
succeed in enforcing any judgment which she might obtain against the vendors,
she also joined the appellants as defendants to the action, claiming repayment
of the money which had been paid to them. The judge upheld her claim against
the vendors and ordered rescission of the contract, so that the vendors became
liable to make repayment to Mrs Tudor.
It then became
necessary for him to deal with her claim for the sum of £12,500 against the
appellants. Her case was that it had been paid to them as stakeholders and not
as agents for the vendors, as the appellants themselves claimed. The judge
decided this point in her favour. The appellants contend that he was wrong and
should have decided that Mrs Tudor paid the £12,500 to them simply as agents
for the vendors. They further submitted that, even if this sum had been paid to
them as stakeholders and not as agents for the vendors, once the vendors had executed
an assurance of the property in favour of the purchaser, the appellants were
entitled and bound to pay the £12,500 to the vendors. The learned judge did not
accept this submission. The appellants submit that he was wrong not to do so.
Before
reverting to the issues which we have to decide on this appeal, I must state
the relevant facts. The history of the matter is unusual and by no means
straightforward. I derive the facts largely from the learned judge’s very
careful judgment.
The facts
By a lease of
August 21 1963 the hotel was demised to a Mr J C Campbell for a term of 21
years from August 21 1963. The lease was thus due to expire on August 21 1984.
It contained a tenant’s repairing covenant and a covenant precluding the tenant
from assigning the hotel without the written consent of the lessor, such
consent not to be unreasonably withheld. Unusually, however, it contained no
proviso for forfeiture for breach of this or any other covenant.
In February
1976 Mr Hamid and Mr Patel entered into a partnership agreement to purchase,
finance and operate the hotel.
In or about
May 1976 they took an assignment of the lease. The appellants acted for them in
regard to that assignment. Mr Hamid thereafter remained their client until
after the present proceedings began.
On November 14
1977 Mr Hamid decided to offer the lease for sale. Before the end of May 1978
there had been a number of serious inquiries by prospective purchasers. During
the course of these inquiries or consequent negotiations the appellants had
prepared a draft form of agreement providing for the sale of the hotel and of
the hotel business.
At the end of
May 1978 Mrs Tudor came on the scene. She was married to an electronics
engineer. He had the name Tahbub, but she preferred, for reasons of
convenience, to use the name Mrs Tudor. At that time she had three young
children and was carrying another. Though the contrary was suggested at the
trial, the learned judge found that she had no legal training and had made no
study of the law. She and her husband were in fairly urgent need to acquire new
accommodation because they had sold their previous house and might shortly find
themselves without a roof over their heads. As the judge found, they had no
very great financial resources at their disposal and were ‘singularly
ill-equipped for the venture into which they now rushed headlong’.
On Friday May
26 1978 Mr Hamid and Mr Tahbub had a discussion in the hotel about the
possibility of Mr Tahbub purchasing the lease. Mr Tahbub gave evidence to the
effect that in this conversation he required assurances that the landlord was
raising no outstanding requirements about repairs to the property and that, if
the deal went through, the landlord would agree to him and his wife moving into
the hotel on the following Friday, June 2.
That same
evening, after telephoning to say that he was coming, Mr Hamid went to Mrs
Tudor’s home, having equipped himself with a document intended for signature.
At that time Mrs Tudor herself had not seen the property. At this meeting a
document bearing the date ‘26.5.78’ was signed by Mr Tahbub and Mr Hamid. It
was by way of a preliminary agreement for the sale and purchase of the hotel.
The learned judge found that it contained certain representations by Mr Hamid
and that further oral representations were made by him at this meeting. For the
purposes of this appeal, however, nothing turns on the precise nature of these
representations. Nor does anything turn on the precise terms of the document of
May 26, since it is common ground that on any footing it was superseded by the
agreement of May 31. I need refer to only the final paragraph, which provided
that ‘deposit of £5,000 is paid to Mr Hamid and the contract will be exchanged
within 7 days’.
A sum of
£5,000 was duly paid to Mr Hamid at this meeting. At the trial there was a
suggestion that as between Mrs Tudor and her husband on the one hand and Mr
Hamid on the other hand, it was agreed or contemplated that the £5,000 should
be treated as a deposit towards a proposed purchase of an entirely different
property in Seaforth Gardens, Southend. The judge, however, did not accept this
suggestion. He considered that the payment related only to the proposed
purchase of the hotel. He accepted Mrs Tudor’s evidence that at the meeting Mr
Hamid also said that he would take her and her husband to his solicitors and
that his solicitors would do what was necessary to tie matters up.
During the
following week Mrs Tudor and her husband made visits to Southend and saw the
hotel. They decided to proceed with the purchase, apparently on the basis that
the assignment would be taken in her name rather than his.
On May 31 1978
Mr Hamid, as contemplated, took them to see his solicitors, the appellants, or
rather their conveyancing partner, Mr Gilbert. The purpose of the meeting was
substantially to conclude a contract for the sale and purchase of the hotel and
its business which would enable Mrs Tudor to take possession within a very
short time. Mr Gilbert, however, was unaware of its purpose until his client,
Mr Hamid, was shown in to him. While Mrs Tudor and her husband waited in
another room for quite a short time, Mr Hamid explained to Mr Gilbert that he
had got a purchaser waiting in Mr Gilbert’s office to sign a contract with a
view to getting possession almost immediately. The judge found the situation as
presented to Mr Gilbert was as follows:
Both parties
(not just Mrs Tudor but both Mr Hamid and Mrs Tudor) were very anxious for this
to proceed and were putting pressure on the solicitor. Mr Hamid had been trying
to sell this property for some time and he was in current difficulties. His
wife was ill and he had proceedings hanging over him. The landlords were being
uncooperative and he had had a number of abortive sales which had given him a
lot of trouble, and he now had a very firm purchaser who had put up £5,000. It would
have seemed a God-sent way, I imagine, to him of getting out of his
difficulties. On the other hand Mrs Tudor plainly saw this as a matter of great
urgency, to get this accommodation, and over and above that she had paid £5,000
the previous Friday and at the moment had not got anything for it. But I also
find that when she went there she was not expecting then and there to have to
pay the whole balance. She went there for the further documentation which was
necessary to enable her to get possession within the next few days.
The situation
which thus confronted Mr Gilbert was a difficult one, bearing in mind that Mrs
Tudor had no legal representation. He could have refused to act altogether.
However, he did not take that attitude, and the judge considered that he was
not to be criticised for trying to do his best to assist his client by at least
seeing Mrs Tudor and her husband. Consequently, they were introduced to him. Mr
Tahbub, although present throughout, took no part in the ensuing meeting. He
was feeling unwell.
At the trial
there was a considerable conflict of evidence as to what was said at this
meeting on May 31. However, on the basis of the findings of the learned judge,
I derive the following picture as to its general course. At the start, Mr Gilbert
warned Mrs Tudor that he himself could in no way act on her behalf nor advise
her and that she would be most unwise to transact the business without the
assistance of a solicitor. He advised her, therefore, to consult a solicitor of
her own. Mrs Tudor, however, found this advice unacceptable. She was ready to
sign whatever contract was appropriate to enable her to get possession on the
immediately following Friday, June 2, which was what she wished. She had been
promised by Mr Hamid that contracts would be exchanged that day.
In this
context questions then arose as to repairs to the hotel and the landlords’
consent. Mr Hamid told those present that the repairs had been done and Mr
Gilbert accepted the assurance of his client on this point. References were
then discussed. Mrs Tudor gave the names of three referees, a bank and two
personal referees.
This point
having been dealt with, the discussion moved on to the
this point Mr Hamid told Mr Gilbert that the purchase price was to be £12,500.
Mr Gilbert was not told about the £5,000 or the document of May 26. He had no
knowledge of these matters. So far as he knew, the entire price was to be
£12,500 and no more than that (though, as I have already indicated, the judge
found that the £5,000 had in fact also been paid on account of the purchase of
the hotel).
By this time
Mr Gilbert found himself committed to the preparation of a contract and he set
about preparing one. The contract which he produced was based on a form in
common use in his office for the sale of businesses such as this. Because of Mr
Hamid’s previous attempts to sell the hotel, this form had already been typed
up to some extent, in the form of a draft contract for the sale by Mr Hamid and
Mr Patel of the lease and business of the hotel.
Having regard
to the fact that possession of the hotel was to be taken by Mrs Tudor in two
days’ time, Mr Gilbert told the parties that he could not allow his client, Mr
Hamid, to execute the proposed agreement providing for possession to be taken
so soon unless the full sum of £12,500 was paid at once. However, in adapting
the available form of draft in order to produce a contract for signature by the
vendors and Mrs Tudor, he was clearly under some pressure of time. Otherwise,
he would presumably have noticed that a number of the provisions appearing in
the form of contract which he produced were in terms not appropriate to a
situation in which the entire purchase price was to be paid immediately.
Mr Gilbert,
however, did direct his attention to one important point. Condition 8(3)(c) of
the Law Society’s General Conditions of Sale (1973 Revision) provides that in a
case where on the sale of a leasehold property the reversioner’s licence to
assign is requisite, then, if the licence is not granted within three months
after the date of the contract, either party may rescind it. As at May 31 1978
it was clear that the parties could not have obtained the reversioner’s consent
by June 2, when it was intended that Mrs Tudor should take possession. In order
to ensure against the ultimate refusal of consent, Mr Gilbert therefore advised
Mr Hamid that a clause should be added modifying condition 8. The clause which
was added as clause 15, near the end of the agreement, read as follows:
This Contract
is not conditional upon the landlord’s consent to the assignment of the Lease
being obtained and General Condition No 8 shall be modified accordingly and
rescission of the Contract shall not be entertained by either party in the
event of the landlord’s consent not being forthcoming within the period of
three months from the date hereof.
As the learned
judge pointed out, clause 15 did nothing to abrogate the vendors’ contractual
duty to do their best to obtain the landlord’s consent to the assignment.
However, provided that their best endeavours had been used, it meant that the
ultimate failure to obtain such consent would not entitle the purchaser to
rescind the contract.
I need refer
to only a few of the other provisions of the agreement which Mr Gilbert
produced for signature.
Clause 1
provided in effect that the vendors, Mr Hamid and Mr Patel, would sell and Mrs
Tudor would purchase, first, the leasehold hotel; second, the fixtures,
fittings and utensils; third, the business, and fourth the stock in trade.
Clause 2 provided that the purchase price should be £12,500, apportioned as
between the first three items in the manner therein set out and that, in
default of agreement, the price of the stock should be determined by a
valuation.
Clause 3
provided:
A deposit of
10% of the purchase price shall be paid to Messrs F T Fisher & Lang . . .
as Stakeholders on or before the signing hereof.
Clause 4
provided:
The purchase
shall be completed on the 2nd day of June 1978 at the offices of the Vendor’s
Solicitors when the balance of the purchase money together with the purchase
price of the stock shall be paid.
Clause 13
provided that the sale was subject to the Law Society’s Conditions of Sale
(1973 Revision) so far as such conditions were not inconsistent with the
foregoing provisions of the agreement, but varied the rate of interest payable
under condition 16.
Having been
given the document and the copies of the lease and the inventory which was to
be annexed to it, the parties withdrew from Mr Gilbert’s office separately for
the specific purpose of allowing Mrs Tudor and her husband to read through the
document and see whether they would indeed be willing to sign it. They went to
Mr Gilbert’s waiting room. They read through the document. The upshot was that
Mrs Tudor was prepared to sign. The agreement of May 31 1978 was duly concluded
and they paid over a cheque for the full amount of £12,500 to the appellant
firm. The judge found that on the oral evidence (apart from the documentation)
it was not made clear to Mrs Tudor in what capacity the appellants received
this sum. It was, however, clear that it was paid in advance of possession and
in advance of completion. Later in this judgment I will consider in greater detail
the terms upon which this cheque was paid over.
On the
following day, June 1 1978, a firm of solicitors, H Kennard & Son, entered
the scene, having been instructed to deal with the matter on Mrs Tudor’s
behalf. On June 1 they wrote to the appellants requesting an abstract of title
to enable them to prepare a draft assignment for their approval. They also
inquired as to the position regarding the landlord’s licence.
When June 2
arrived, no one was nearly ready for a formal completion. However, as had been
contemplated, Mrs Tudor took possession of the hotel and of the business. This
brought into play condition 14 of the General Conditions, which deals with the
position where a purchaser is authorised by the vendor before actual completion
to take up physical occupation.
Mrs Tudor soon
became disturbed by what she found. Suffice it to say that the state of repair
of the hotel was not as it had been represented to be. Allegations made by her
at the trial as to after-hours drinking and prostitution at the hotel were
accepted by the judge, who described the general picture as being that of a
‘disorderly house’.
Meanwhile, on
June 5 1978, the appellants sent to Mrs Tudor’s solicitors an abstract of
title. On June 9 1978 she wrote to Mr Gilbert complaining that she and her
husband had been misled and that the lease was worth much less than they had
paid. She asked for a reduction of the purchase price and that the appellants
should find a builder to finish the necessary repairs. Before she wrote this
letter she had already telephoned Mr Gilbert. His evidence as to this telephone
conversation was summarised by the judge as follows: ‘She raised the question
of £5,000 and I told her I would have to discuss that with Mr Hamid. I said I
would not part with the money until I had dealt with the assignment.’ Either in this or some earlier telephone
conversation she apparently offered to surrender the lease, but this offer was
never taken up. Mr Gilbert did not reply to her letter of June 9 and on June 13
1978 she wrote again to him, threatening to sue him personally for the return
of the money paid to his firm.
However, in
neither of these letters did Mrs Tudor suggest that it was her intention to
rescind the contract or to move out of the hotel. On June 14 1978 her
solicitors wrote to the appellants enclosing their requisitions on title and,
subject thereto, a draft assignment of the lease for their approval. On June 15
1978 the appellants answered this letter enclosing replies to these
requisitions together with the draft assignment duly approved. They asked Mrs
Tudor’s solicitors to request her not to communicate further with the
appellants. Thenceforth all correspondence appears to have been confined to the
two firms of solicitors.
On June 16
1978 Mrs Tudor’s solicitors wrote to the appellants saying: ‘We are now putting
in hand the preparation of the engrossment of the Assignment for execution by
our client.’ In saying this, they appear
to have been following the conventional conveyancing course. Condition 11(1) of
the General Conditions, so far as material, provides:
the draft
conveyance prepared by or on behalf of the purchaser shall be delivered at the
office of the vendor’s solicitors at least ten days before the date fixed for
completion and the engrossment (first executed by the purchaser, where requisite)
delivered there within four days after return of the approved draft.
However, it
would appear that at some time after the dispatch of the last-mentioned letter,
Mrs Tudor may have given her solicitors instructions, at least for the time
being, to take no further steps to complete the transaction. For whatever
reason, her solicitors neither sent to the appellants an engrossed assignment
nor, so far as the documentation and evidence before us reveals, gave any
explanation to the appellants for their failure to do so.
By the
beginning of July 1978 the appellants, though not having yet received an
engrossed assignment from Mrs Tudor’s solicitors, had in their hands a form of
assignment of the lease and of the goodwill, which had been approved by her
solicitors. Furthermore, by that time the vendors’ title to the hotel had been
accepted (see condition 10 of the General Conditions) and the vendors had
received the full purchase price. The form of assignment submitted by Mrs
Tudor’s solicitors named the vendors as the parties of the one part and Mrs
Tudor as the party of the other part. It also contained an appropriate
space for Mrs Tudor’s signature and the attestation of that signature by a
witness. However, it contained no provisions by which Mrs Tudor would bind
herself to anything. All the provisions were for her benefit. Clause 1
contained the requisite assignments of the lease and the goodwill. The only
other substantive provisions were covenants on the part of the vendors. It had
not been possible to obtain the landlord’s consent to the assignment, but
clause 15 of the agreement of May 31 1978 covered this situation. Presumably
with considerations such as these in mind, the appellants took the view that
Mrs Tudor’s execution of the assignment would not be necessary and that there
was nothing to prevent their clients from completing the transaction
unilaterally. They therefore themselves prepared an engrossment of the
assignment from the approved draft and this was executed by the two vendors. It
bore the date July 4 1978. Though it named Mrs Tudor as a party, it has never
been executed by her. The learned judge found that this assignment was
effectively delivered as an executed deed by Mr Hamid and Mr Patel. This
finding has not been challenged on this appeal. On July 4 1978 Mr Gilbert
informed Mrs Tudor’s solicitors by telephone, and confirmed by letter, that ‘we
now hold the executed assignment and are proposing now to complete this
matter’. So far as the evidence and documentation before us shows, Mrs Tudor’s
solicitors made no protest on receipt of this information.
On July 4
1978, following the sending of this letter, the appellants ‘distributed’ the
£12,500 in accordance with a typed distribution statement. More than £3,000 was
paid to a bank to which the vendors had mortgaged the lease. Various sums were
retained or distributed on account of costs or disbursements. The statement
also provided for the retention by the appellants of a sum of £750 in respect
of
costs on
account re proceedings to be undertaken by you in defence of action brought by
Mrs Tudor for misrepresentation to include further action to be taken by
landlords against you to forfeit lease, counsel’s fees, disbursements, VAT and
other expenses.
No other
proceedings had yet been instituted. After deduction of certain further items,
a cheque for the balance of £4,907.43 was paid over by the appellants to the
vendors.
On July 18
1978, Mrs Tudor issued a writ endorsed with a statement of claim against the
vendors and the appellants seeking the relief summarised at the start of this
judgment. In para 7 of her statement of claim she alleged (inter alia)
that, in order to induce her to enter into the agreement, Mr Hamid represented
to her as follows:
(a) The annual takings of the said business amounted
to £16,500. It was implicit in the said representation that the takings of the
said business were lawfully earned and did not result in whole or in part from
trade carried on in breach of the licensing laws or through any other improper,
immoral or illegal trade.
(b) That the Landlord has given its consent to
the assignment of the residue of the lease.
(c) The First Defendant has completed all the
necessary repairs and decoration required by the Landlord.
(d) The First Defendant has completed all the
necessary structural alterations and repairs in the ladies and gentlemen’s
toilets as required by the Health Authorities.
In October
1978 Mrs Tudor, under pressure from the landlords with regard to repairs,
voluntarily surrendered to them the lease.
The judgment
At the trial
the judge held that the four representations listed in para 7(a) to (d) of the
statement of claim had indeed been made by Mr Hamid, were false, were known by
him to be false and were relied upon by and were part of the inducement to Mrs
Tudor to enter into the agreements both of May 26 and May 31 1978. The relief
claimed in respect of the misrepresentations was rescission and repayment of
the sums paid. Mr Patel did not appear at the trial. Mr Hamid appeared in
person. The judge therefore did not have the benefit of full legal argument on
the vendors’ behalf and clearly felt some doubts as to whether rescission was
the appropriate remedy, since it could be said that full restitution on Mrs
Tudor’s part was impossible. However, for the reasons set out by him in his
judgment, he concluded that rescission was the appropriate remedy as against
the vendors. Substantially the form of relief which he granted against them was
an order that the agreement dated May 31 1978 be rescinded and that they should
pay to Mrs Tudor the sum of £17,000 and interest, that sum representing £17,500
less a sum of £500, which he assessed as the value of the benefits accrued to
Mrs Tudor under the lease.
Neither of the
vendors has appealed from his judgment and Mr Godfrey QC, on behalf of the
appellant firm, has not sought to challenge the judge’s findings of fact as to
the misrepresentations made by Mr Hamid. However, he has submitted, so far as
this may be relevant, that rescission was not the appropriate remedy, particularly
having regard to the surrender by Mrs Tudor of the lease which had presumably
been made on the footing that the assignment of the term had been fully
effective to pass the legal estate to her (albeit that the term had expired
before the trial).
In relation to
the appellants, the gist of the learned judge’s conclusions was as follows. He
found that the £12,500 had been taken by them ‘as stakeholders’, and they were
accordingly subjected to the duties summarised as follows in Cyprian Williams
on The Contract of Sale of Land in a passage cited with approval by
Pennycuick V-C in Potters v Loppert [1973] Ch 399 at p 409:
Where a
deposit is paid to any person as stakeholder, he shall hold it to abide the
event of the contract, and shall be bound to pay the amount thereof to the
vendor upon (but not before) the completion of the sale or the forfeiture of
the deposit, or to the purchaser if and when the purchaser shall acquire the
right to the return of the deposit; but until the event of the contract shall
be decided the stakeholder shall not pay over the deposit to either party
without the other party’s consent. The stakeholder shall be accountable to the
parties accordingly; but he shall not be chargeable with any interest for any
time during which he shall rightfully retain the deposit, or be accountable for
any profit which he may make, in the way of interest or otherwise, by the use
of the deposit money during that time.
In reliance on
these rules, as I read his judgment, the learned judge concluded that the
appellants as stakeholders ex hypothesi had no authority to release the
sum of £12,500 to the vendors until ‘completion’. However, in his view
‘completion is a consensual act’. A little later he said:
If one gets
to a situation where one party refuses to complete then the remedy for the
other in my judgment is not to complete unilaterally but seek an order for
specific performance. That admittedly was not obtained here. If it could be
demonstrated that the vendor would get an order for specific performance
without any trouble, say under Order 86, I would be inclined to accept it for
the purposes of this case, but to my mind it would be more than doubtful
whether on July 4 1978 the vendor could have obtained an order for specific
performance. The very question as to whether the contract should be rescinded,
as I found was justified, would have been raised as a defence to any such
application. It must follow from that, that the stakeholder could not say that
there has been a completion. He would have to take the attitude that until the
event of the contract shall be decided (referring again to the passage from Potters
v Loppert), he could not release the stake without the consent of
both parties.
Accordingly,
since at most there had been no more than a completion by unilateral acts of
the vendors and no completion of a consensual nature, he considered that the
appellants had no right to release the sum of £12,500. He accordingly ordered
that the appellants should pay this sum to Mrs Tudor, but without interest.
The judge
rejected an argument submitted in the alternative on behalf of Mrs Tudor, but
not repeated in this court, based on constructive trust.
The issues
Substantially
the following issues fall to be dealt with on this appeal in the light of the arguments
presented to us:
(1) Did the appellants receive the £12,500 as
agents for the vendors or as stakeholders pending the occurrence of some future
contingency or contingencies?
(2) If they received it as stakeholders, then, as
at July 4 1978, had some contingency occurred which entitled them to release
the £12,500 to the vendors without any further authority from Mrs Tudor?
Issue (1)
In the context
of issue (1) Mr Godfrey, on behalf of the appellants, has placed considerable
reliance on the decision of this court in Ellis v Goulton [1893]
1 QB 350, or rather a dictum of Bowen LJ in that case, neither of which appears
to have been cited to Judge Baker. In that case on the sale of certain premises
by auction the purchaser had paid a deposit to the vendor’s solicitor under the
terms of a condition which expressly provided that the solicitor should receive
it as agent for and on account of the vendor. Thus, as Lord Esher MR pointed out
(at p 352): ‘by the very terms of the condition the vendee was to pay the
money, not to a person who could be agent for him, but to the vendor’s agent,
who was to receive it for his principal’. Subsequently the vendor failed to
make out a title to the property, so that, as between him and the purchaser,
the purchaser became entitled to have the deposit repaid. However, the
purchaser claimed
court rejected the claim on grounds summarised by Lord Esher MR as follows (at
p 352):
In the first
place, it cannot be said that Jackson was in any respect trustee for the
plaintiff; there was nothing in the circumstances to raise any trust. There was
no relation of principal and agent, and no bailment as between the plaintiff
and Jackson; and I have asked in vain for any authority to shew that there was
any fiduciary relation between these parties.
Lord Esher MR
went on to point out (ibid):
The cases
cited draw the distinction between a stakeholder and an agent for one of the
parties; the former is the agent of both, but the latter is the agent of one
only, and responsible only to that one.
Bowen LJ
agreed with Lord Esher MR, but added the following general observations (at pp
352-353):
When a deposit
is paid by a purchaser under a contract for the sale of land, the person who
makes the payment may enter into an agreement with the vendor that the money
shall be held by the recipient as agent for both vendor and purchaser. If this
is done, the person who receives it becomes a stakeholder, liable, in certain
events, to return the money to the person who paid it. In the absence of such
agreement, the money is paid to a person who has not the character of
stakeholder; and it follows that, when the money reaches his hands, it is the
same thing so far as the person who pays it is concerned as if it had reached
the hands of the principal.
In argument
before us Mr Conlin, on behalf of Mrs Tudor, submitted that the dictum of Bowen
LJ was obiter and that it was too widely expressed. I accept the former, but
not the latter, submission. With respect to Bowen LJ, I think that his dictum
accords both with common sense and with principle. No authority has been cited
to us which suggests to me that it is ill-founded.
Accordingly, I
accept the submission of Mr Godfrey that the relevant rule is that, in the
absence of an express or implied agreement to the contrary, money paid by a
purchaser of land to the vendor’s solicitor is received by the solicitor as
agent for the vendor, not as stakeholder. It will therefore be necessary to
look to see whether there was an express or implied agreement to the contrary
in the present case.
Before doing
so, I should say a few words about terminology. The concept of ‘stakeholders’ in
the context of contracts for the sale and purchase of land is well known to
conveyancers. Lord Denning MR summarised the position thus in Burt v Claude
Cousins & Co Ltd [1971] 2 QB 426 at pp 435-436:
If an estate
agent or a solicitor, being duly authorised in that behalf, receives a deposit
‘as stakeholder’, he is under a duty to hold it in medio pending the outcome of
a future event. . . . Until the event is known, it is his duty to keep it in
his own hands: or to put it on deposit at the bank: in which case he is
entitled to keep for himself any interest that accrues to it: . . . If the
purchaser should become entitled to the return of his deposit, he must sue the
estate agent or solicitor for it: . . .. He cannot sue the vendor, because the
vendor has never received it, or become entitled to receive it.
On the other
hand, as Lord Denning MR pointed out (ibid at p 435):
If an estate
agent or a solicitor, being duly authorised in that behalf, receives a deposit
‘as agent for the vendor’, it is considered in law to be just as if it was paid
at that very instant to the vendor himself. The vendor is entitled to have it
paid over to him on demand, together with interest from the moment when the
estate agent or solicitor received it.
In using the
phrase ‘stakeholder’ in this judgment, I use it in the broad sense indicated by
Lord Denning MR at the start of the first of these two passages.
For the
purpose of ascertaining the terms upon which the £12,500 was paid to the
appellants and the capacity in which they received it, the evidence as to what
was said by the respective parties to one another before the payment was made
on May 31 1978 is clearly of great potential importance. However, no doubt in
the interests of economy, we have been supplied with no transcripts of the oral
evidence given at the trial. This included the evidence of Mr Gilbert and Mrs
Tudor. Mr Gilbert’s oral evidence apparently included a passage which the
learned judge quoted in his judgment as follows:
I told the
plaintiff that if she wanted possession I could not allow her in without
receiving the full purchase price as solicitors and agents for Messrs Hamid and
Patel.
On the basis
of the notes of evidence taken by Mr Nicholson, the appellant’s counsel at the
trial, we were told that Mr Gilbert in cross-examination also said:
I made clear
it was paid to me as solicitor and agent.
The learned
judge, without suggesting that Mr Gilbert had been trying to mislead him, did
not accept this particular evidence. He said: ‘I find on the oral evidence that
it was not made clear to Mrs Tudor in what capacity that money was being
received.’
The oral
evidence of Mrs Tudor for her part contained a passage which the learned judge
quoted as follows:
I agreed to
give Mr Gilbert a cheque for £12,500. I understood that Mr Gilbert would hold
the cheque until a final document was drafted.
However, the
notes of her evidence in chief taken by Mr Nicholson at the trial recorded her
as going a little further than this, by saying:
We agreed to
make out cheque for £12,500 and gave to Gilbert and I understood [he] would
hold it till such time as a final document was drafted and signed by [Hamid] and
myself. (The emphasis is mine.)
Mr Conlin
submitted that Mrs Tudor’s evidence constituted material upon which the learned
judge was entitled to find, and did find as a fact, that at the meeting of May
31 1978 the interested parties expressly agreed that the appellants
would not hand over the £12,500 to the vendors until the assurance of the
property had been executed by both the vendors and the purchaser. In the
absence of a full transcript of the evidence, it is by no means clear to me
that Mrs Tudor, though referring to her own understanding of the position, ever
went so far as to assert that Mr Gilbert had made any express agreement
or representation to this effect. However, it is clear that if she did so
assert in her evidence, the judge did not go so far as to accept the assertion.
If he had done so, this by itself would have rendered Mrs Tudor’s present claim
against the appellants more or less unanswerable; and it would not have been
necessary for him to explore the surrounding circumstances in nearly so
detailed a manner as he did.
In these
circumstances I think that we must proceed on the basis that, before the
£12,500 was paid to the appellants, (i) no oral agreement was reached between
the parties specifically defining the status or conditions upon which the
appellants would hold the £12,500 if and when it was handed over to them, and
(ii) no oral representation was made to Mrs Tudor specifically defining such
status or conditions.
I now turn to
consider what other evidence is available as to the terms upon which the
£12,500 was handed over, in the light of a specific finding by the learned
judge that the money was taken by the appellants as stakeholders. I begin with
the written agreement of May 31 1978 itself.
No doubt because
Mr Gilbert had very little time within which to make all the adaptations to the
available form of draft contract, which were necessary and appropriate to cover
the peculiar circumstances which were presented to him by his client at the
meeting of May 31 1978, the final form of agreement as prepared by him,
proffered to Mrs Tudor for execution and signed by the vendors and Mrs Tudor
was in a number of respects in an inept form. Clause 3, as has been seen,
provided that ‘a deposit of 10% of the purchase price shall be paid to [the
appellants] as stakeholders on or before the signing hereof.’
In truth, as
everyone present at the meeting appreciated, the intention of the parties was
that the full purchase price should be paid straightaway. Clause 4 provided (inter
alia) for the purchase to be completed on June 2 and for ‘the balance of
the purchase money’ then to be paid. There would, in fact, be no outstanding
balance on that date. Furthermore, as the learned judge observed, there was
really no chance of there being a completion in the legal sense on June 2 1978
(only two days after the making of the agreement). Clause 7, to which I need
not refer in detail, was no less inept, if the agreed date for completion was
in fact to be June 2 1978.
The learned
judge made these comments in relation to clauses 3 and 4:
Any lay
person reading that might be forgiven for thinking that whatever is paid then
and there, whether it is ten per cent or whether it is all the price, is to be
paid to the solicitors as stakeholders. That is the document that was put in
front of them for this purpose. It is said that this was a mistake and it
should not have been in there, and that I can readily believe. But I am not
concerned here to rectify the document. There is no doubt that this was the
document which they were sent out to read, and it had those clear clauses in
it, and they were admonished to read it carefully before they signed it. They
paid the money then and there in order that some time in the future, albeit
only a few days away on June 2, they were to have possession, and at any rate
at the outset they were paying their money then and not upon completion on June
2. The clear indication is that Fisher & Lang were taking that money as
stakeholders.
Mr Godfrey
submitted that the learned judge erred in his conclusion that the appellants
had received the £12,500 as stakeholders and in the route by which he reached
that conclusion. In
of agreement placed before Mrs Tudor ‘might be forgiven for thinking’. The
agreement, he suggested, cannot be read as providing either that the whole
purchase price shall be paid to the appellants on or before completion or that
they shall receive the purchase price as stakeholders. As a matter of
construction, the whole of clause 3 and the reference in clause 4 to the
payment of ‘the balance of the purchase money’ has to be rejected as otiose and
meaningless in the light of the circumstances subsisting at the time when the
agreement was signed. Indeed, he submitted, the very fact that the agreement
did contain an express but inapplicable condition providing that the
conventional 10% deposit if paid (which it was not) should be held by the
vendors’ solicitors as stakeholders made it the more difficult to spell out
from the documentation an agreement that the full purchase price, if paid in
advance of the contract (which it was), should be so held. Assuming that the
appellants received the £12,500 as agents for the vendors, he submitted that
they were bound to pay the money to the vendors on demand and any action to
recover it lies only against the vendors (see Ellis v Goulton (supra)).
Mr Conlin,
however, on behalf of Mrs Tudor, submitted that in construing clauses 3 and 4
of the agreement of May 31 1978, so as to make sense of it in the circumstances
in which it was signed, it is not necessary or correct to carry the ‘blue
pencil’ operation as far as Mr Godfrey suggested. All that is necessary, in his
submission, is to reject the meaningless words ‘A deposit of 10% of’ in clause
3 and the reference to payment of ‘the balance of the purchase money’ in clause
4.
Neither side
seeks rectification of the agreement of May 31 1978. The court therefore has to
make the best sense of it which it can. Each of the two suggested
interpretations is a more or less equally possible one. No possible third
alternative construction of clauses 3 and 4 occurs to me. The agreement,
however, was a document drafted by the appellants and proffered by them to Mrs
Tudor in their capacity as the vendors’ solicitors. In these circumstances, in
my judgment, the rule of construction, omnia praesumuntur contra proferentem
should be applied. All other things being equal, the alternative construction
should be applied which is less favourable to the vendors and the appellants
and more favourable to Mrs Tudor, to whom this, in part, ineptly drafted and
ambiguous document was proffered. This, I conceive, may have been essentially
the thought behind the criticised passage in the judgment beginning with the
words ‘Any lay person reading that might be forgiven for thinking’. Whether or
not it was, I for my part on balance prefer the construction attributed by Mr
Conlin to the document to that attributed by Mr Godfrey. For this reason I
conclude that the document itself embodied an agreement to the contrary so as
to exclude the application of the general rule expressed by Bowen LJ in Ellis
v Goulton that, in default of agreement to the contrary, money paid by a
purchaser to the vendor’s solicitor is received by the solicitor as agent for
the vendor, not as stakeholder.
However, let
it be supposed that any reading of the agreement of May 31 1978 was incorrect
and Mr Godfrey was right in submitting that clause 3 should be rejected in
toto, so that the document contains no provision which indicates the capacity
in which the appellants are to hold the cheque for £12,500 when paid over to
them.
On this
footing it would be necessary for the court to draw inferences as to the nature
of the agreement made in this respect from all the circumstances of the case.
Even on this footing, I would still hold that it must have been the parties’
intention that the appellants should initially receive the cheque as
stakeholders in the broad sense which I have indicated. They cannot initially,
as from May 31 1978, have held it as agents for the vendors. At least for a
time they must have held it, to use Lord Denning’s words, ‘in medio pending the
outcome of a future event’. The contrary conclusion (namely that from the
beginning they held it as agents for the vendors) would mean that they would
immediately have had the right to endorse the cheque over to the vendors, or to
pay them its proceeds, and indeed the duty to do so on demand even before the
vendors had delivered up possession of the hotel. Mr Godfrey submitted that
this would not necessarily be an unreasonable intention to impute to the
parties, bearing in mind that the vendors were under a contractual obligation
to hand over possession as soon as May 31. I cannot agree. In my judgment, on
the evidence and findings of the judge, it is plain that this cannot have been
the parties’ intentions, whatever the construction of the agreement of May 31
1978. I therefore think that he was right to decide issue (1) by holding that
the appellants received the £12,500 as stakeholders pending the occurrence of
some future contingency.
Issue (2)
I now turn to
consider whether as at July 4 1978 a contingency had occurred which entitled
the appellants to release the £12,500 to the vendors without any further
specific authority from Mrs Tudor. I have already explained that, in my
opinion, we must proceed on the basis that no oral agreement was reached
between the parties and no representation was made to Mrs Tudor specifically
defining the status or conditions upon which the appellants would hold this sum
if and when it was handed over to them. The court therefore has to attempt to
spell out by a process of implication the contingency or contingencies attached
to the appellants’ stakeholding.
Four
alternative possible relevant contingencies have been canvassed in argument. It
has been suggested that, on a proper interpretation of the arrangements made
between the parties on May 31 1978, the appellants would have had authority to
release the £12,500 either:
(i) on June 2 1978, the agreed date for the
delivery up of possession of the hotel to Mrs Tudor (whether or not possession
had in fact been given on that date), or
(ii) the date when possession of the hotel was
actually delivered up to Mrs Tudor (in the events which happened, also June 2),
or
(iii) the date when the vendors had fully performed
their obligation to assign the lease of the hotel and its business in
accordance with the agreement of May 31 1978, or
(iv) the date when the appropriate assignment of
the lease and the goodwill of the business would have been executed by the
vendors and the purchaser.
Mr Godfrey has
sought to support all or any of the first three alternatives. Mr Conlin has
sought to support only the fourth.
In order to
test which of these alternatives is the correct one, it is necessary to examine
the circumstances in which payment of the £12,500 was demanded and made. On the
evidence, Mr Gilbert made it clear to Mrs Tudor that the reason why he insisted
on this requirement was that the parties intended that she should take
possession of the hotel and its business as early as June 2. As the judge
pointed out, there was no chance of the conveyancing formalities being
concluded by that date. The potential risk to the vendors of allowing Mrs Tudor
to take possession of the hotel and its business (particularly the latter)
would obviously have been substantial unless the full purchase price had
already been paid; Mrs Tudor, having taken possession, might have defaulted and
refused to complete by paying the balance. Effective rescission would have been
very difficult, particularly in relation to the business, because of the
problems of restoring the previous status quo. Mr Gilbert’s requirement was
clearly designed to mitigate these risks by giving the vendors the benefit of
the security of the payment of the full purchase price as soon as Mrs Tudor had
taken possession of the hotel and its business. On the other hand, it surely
cannot have been intended that the appellants should be free to release the
£12,500 to the vendors even before the vendors had given Mrs Tudor possession.
In the
circumstances, while I would unhesitatingly reject alternative (i) above, I
think that on the evidence and the findings of primary fact made by the learned
judge, a fairly strong case could be made out for imputing to the parties the
intention that the appellants should have authority to release the £12,500 in
contingency (ii) above. However, I do not find it necessary to decide this
point because, for reasons which I will state later, I am of the opinion that
the proper intention to impute to the parties is that the appellants, as
stakeholders, should in any event have authority to release the £12,500 in
contingency (iii).
The learned
judge, as I have indicated, concluded that alternative (iv) above was the
correct one. He did not find that on May 31 1978 any express agreement had been
reached or any representation had been made by the appellants to this effect.
The route by which he reached his conclusion was a rather different one. In the
light of the rules referred to in Potters v Loppert (supra)
he appears to have considered that since the £12,500 had been received by the
appellants as stakeholders, it necessarily followed that the relevant
contingency was ‘completion of the agreement’ and he considered that completion
is by its very nature a transaction of consensual nature.
Those rules
are in terms directed to the duties of persons who receive a deposit as
stakeholders in connection with a contract for the sale of land. Subject to the
live possibility that this might amount to a penalty clause, I suppose that in
theory the parties to such a contract
paid by way of deposit. At least in the great majority of cases, however, a
deposit will represent only a proportion (usually a modest proportion) of the
agreed full purchase price, so that in such a case completion necessarily must
be a bilateral or ‘consensual’ transaction, since it will involve payment of
the balance of purchase price. I have no doubt that the rules referred to in Potters
v Loppert were directed to this common situation. Where in that
conventional situation vendor and purchaser agree simply that persons shall
hold the deposit ‘as stakeholders’, the natural inference will be that the
bilateral transaction of completion will be the relevant contingency which
entitles the stakeholders to release the deposit. I am not, however, convinced
that the rules referred to in Potters v Loppert afford any useful
guidance in a case such as the present, where the entire purchase price has
been paid and completion will necessitate merely unilateral action on the part
of the vendors.
Nor have I
derived much assistance from the various authorities which have been cited to
us relating to the meaning of the word ‘completion’ in different contexts. The
circumstances of the present case are exceptional. After the transactions of
May 31 1978 had been concluded, the outstanding obligations as regards
completion of the sale and purchase of the lease and goodwill were solely those
of the vendors. Though the learned judge briefly observed that ‘apportionment
would appear to be necessary’, it has not, I think, been suggested in argument
on behalf of Mrs Tudor that any apportionment as at July 4 1978 would have been
likely to result in a balance due from the vendors to her. On the contrary, I
infer that any such immediate apportionment, if carried out, would have
resulted in the assessment of a further modest sum due from her to the vendors.
It was, however, always open to the vendors to waive any rights to insist on
immediate apportionment, and to proceed to execute the assignment of the lease
without it. If, having made title, they were thereafter to execute a deed of
assignment in the proper form otherwise than as an escrow, it would take effect
as against them according to its purport even though Mrs Tudor were to be named
as a party to the deed and did not herself execute it: see Halsbury’s Laws
of England (4th ed) vol 12, para 1358).
In the
circumstances I can see no sufficient reason for imputing to the parties the
intention that the appellants should be obliged to wait until Mrs Tudor herself
had executed the assignment before releasing the deposit to the vendors. The
agreement of May 31 1978 did not contemplate that she herself would enter into
any obligations under the assignment when it came to be executed. She was
merely to take thereunder the benefit of (a) the lease and the goodwill of the
business; (b) a restrictive covenant on the part of the vendors in the terms
set out in clause 10 of the agreement; and (c) a covenant on the part of the
vendors to pay debts and outgoings in respect of the hotel and business in
accordance with clause 8. The form of the draft assignment subsequently
prepared by Mrs Tudor’s solicitors implicitly confirmed that such would have
been her reasonable contemplation.
In the course
of the hearing before us Mr Conlin sought leave to put in a respondent’s notice
for the purpose of submitting, in effect, that in any event the appellants were
under a duty to retain the £12,500 once they were notified of a substantial
dispute between Mrs Tudor and the vendors (as, he submitted, the appellants
were notified in June 1978) and only to release the sum thereafter in
accordance with the resolution of the dispute. We did not think it right to
permit this point to be raised, since it was not raised in the court below and,
if it had been, it might well have affected the course of the evidence.
However, when
the appellants became stakeholders on May 31 1978, the possibility existed (as
in the case of any other stakeholding) that a dispute between the interested
parties would arise the resolution of which might affect their ultimate rights
to the stake. Mr Conlin was free to submit, as he did submit, that the very
existence of this possibility made it the more reasonable to impute to the
parties the intention that the stake should not be released until not only the
vendors but also Mrs Tudor herself (by executing the assignment) had signified
her consent to such release. I cannot, however, accept this submission. It
involves the suggestion that even though the title had been accepted by or on
behalf of Mrs Tudor and the vendors had executed an assignment in her favour so
as actually to pass title to her, she would still have been in a position
(without purporting to rescind the contract) to preclude the appellants from
handing over the £12,500 to the vendors by raising some complaint against the
vendors in relation to the purchase, however reasonable or unreasonable such
complaint might appear to be. I do not think we can properly impute to the
parties an intention to enter into the stakeholding arrangements on this basis.
I therefore
conclude that on any footing the arrangements made on May 31 1978 conferred on
the appellants the authority to release to the vendors the £12,500 on or after
the date when the vendors had fully performed their obligation to execute an
assignment of the lease of the hotel and its business in accordance with the
agreement of May 31 1978 (ie contingency (iii) above), if not earlier.
In the events
that actually happened, the vendors on July 4 1978 fully performed this obligation.
The learned judge found as a fact that the assignment of July 4 1978 was
effectively delivered as a deed by the vendors. It was not an escrow. It
operated to pass the legal estate in the leasehold interest to Mrs Tudor.
Thereafter the appellants were, in my judgment, justified in releasing the
£12,500 to the vendors. An event had occurred upon which they had been
implicitly authorised to effect the release.
Finally,
though these do not constitute grounds for my conclusion, I again draw
attention to two points. First, though on July 4 1978 the appellants were aware
that Mrs Tudor had made complaints against the vendors, she had never purported
or even threatened to rescind the contract, so far as the evidence shows. On
the contrary, her letters to Mr Gilbert of the previous month had indicated her
intention to proceed with it. Secondly, Mrs Tudor’s solicitors had been
informed on the telephone on July 4 1978 that the appellants intended to
‘complete’ the matter, but they apparently made no protest or request to the
appellants to postpone the distribution of the money so that they could apply
for an interim injunction.
For the
reasons stated, I would allow this appeal. I would set aside the order of the
learned judge and dismiss the action against the appellants.
NEILL LJ
agreed and did not add anything.
Also agreeing,
SIR GEORGE WALLER said: Since we are differing from the learned judge, I had
prepared a short judgment giving my reasons for allowing the appeal. However, I
find the reasons for allowing the appeal so much more fully and elegantly
expressed in the judgment of Slade J that I will merely say I entirely agree.
The appeal
was allowed with costs in the Court of Appeal and below, such order not to be
enforced save with the leave of the court; legal aid taxation of the
respondent’s costs ordered.
