Sale of Land in UK Law

Even to hold that they have equitable interests in the land for a limited period, namely until the land is sold, would, we think, be inconsistent with the trust for sale being an "immediate" trust for sale working an immediate conversion, which is what the Law of Property Act envisages (see Section 205(1) (xxix)), though, of course, it is not in fact only such a limited interest that the Appellants are seeking to charge.

Neither the seller nor the buyer has unqualified beneficial ownership. Beneficial ownership of the land is in a sense split between the seller and buyer on the provisional assumptions that specific performance is available and that the contract will in due course be completed, if necessary by the Court ordering specific performance. In the meantime, the seller is entitled to enjoyment of the land or its rental income.

That decision is entirely consistent both with the nature of a deposit and with the general approach of the law to repudiation and renunciation of contracts. Since the payment of a deposit at the executory stage of the contract is an earnest (or guarantee) of further performance, it is no surprise that a failure to pay the deposit on time is taken to demonstrate that the buyer is unwilling to perform the contract as a whole.

Whereas an oral contract was allowed and enforceable provided that it was evidenced in writing and the memorandum or note thereof was signed by or on behalf of the party against whom it was sought to be enforced, oral contracts are now of no effect and all contracts must be signed by or on behalf of all the parties.

Since the statutory fusion of law and equity in 1875 it has been enacted (Supreme Court of Judicature Act 1873, Section 25 (7) now re-enacted in slightly different language in the Law of Property Act 1925, Section 41) that stipulations of a contract, as to time or otherwise, which according to rules of equity are not deemed to be orto have become of the essence of the contract are also to be construed and have effect at law in accordance with the same rules, The third parties rely on Section 41 on the point of construction.

In my judgment, upon the true construction of section 63 a beneficial interest in the proceeds of sale of land held upon the statutory trusts is not an interest in that land within the meaning of the section and a conveyance of that land is not effectual to pass a beneficial interest in the proceeds of sale.