Rockeagle Ltd v Alsop Wilkinson (A Firm)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAUGHTON,LORD JUSTICE FARQUHARSON |
| Judgment Date | 03 July 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0703-4 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 91/0646 |
| Date | 03 July 1991 |
[1991] EWCA Civ J0703-4
Lord Justice Staughton
Lord Justice Farquharson
91/0646
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE THORPE)
Royal Courts of Justice
MISS FERNANDA PIRIE (instructed by Messrs. Alsop Wilkinson) appeared for the Appellants.
MR. W. R. STEWART SMITH (instructed by Messrs. Michelmores, Exeter, Devon) appeared for the Respondents.
This case is possibly of some importance to solicitors, as the question arises whether a solicitor, taking a deposit on a contract for the sale of land as stakeholder, acquires any contingent security for money that is owed to him by his client, being either the vendor or the purchaser.
In the action Rockeagle Limited claim £9,200 from Alsop Wilkinson, a firm of solicitors. On 12th November 1990 Mr. Justice Thorpe gave summary judgment for that sum and interest in favour of Rockeagle Limited. Alsop Wilkinson appeal.
The facts are simple, not in dispute and set out in a chronology very helpfully prepared on behalf of Alsop Wilkinson. On some date prior to 26th May 1988 a total of £10,749 became due to Alsop Wilkinson from their clients, Moorlock Limited. On 26th May 1988 Moorlock Limited agreed to sell some land at Huntsworth in Somerset to Mallinson-Denny (Estates) Limited; and it was agreed that there should be a deposit of £35,000 held by Alsop Wilkinson as stakeholders. Then a further sum became due to Alsop Wilkinson from Moorlock Limited for fees amounting to £4,025.
On 8th July 1988, by which time Moorlock had gone into receivership, the Receiver assigned their interest in the sale contract to Rockeagle Limited. Then there was a pause for some 18 months. On 4th January 1990, while the sale contract was still uncompleted, the solicitors for the purchasers under the contract required Alsop Wilkinson to transfer the deposit to other solicitors who were acting for Rockeagle Limited. The purchasers had by that time changed their name from Mallinson-Denny (Estates) Limited to Hunter Estates Limited. Rockeagle Limited, the assignees of the original vendors, joined in that request. Alsop Wilkinson, the stakeholders, did not comply with it.
On 4th April 1990 the sale contract was completed. Thereupon the deposit became unconditionally due from Alsop Wilkinson to Rockeagle Limited, subject to the question of set off or lien. A demand was made upon Alsop Wilkinson on 5th April 1990. On 24th May they paid the sum of £25,800 to Rockeagle Limited, retaining the balance of £9,200. This, it would seem, was what was owing to them from Moorlock Limited, the original vendors, some £14,000, less interest that had accrued on the deposit meanwhile. On the same day these proceedings were commenced.
The deputy District Registrar at Exeter refused to order summary judgment, but on appeal Mr. Justice Thorpe made the order sought.
It seems to me that there are potentially three issues here. First, can a stakeholder ever set off against his liability a sum which he maintains is due to him from the person entitled to the stake even after the money has turned out to be unconditionally due to that person; or, which is much the same thing, can he claim a lien? I am not sure if that question is still at issue between the parties here. It seems to me that it was argued below that a stakeholder could never have a right of set off or lien.
The second question depends upon what happened on 4th January 1990 when both parties, Rockeagle Limited and the purchasers Hunter Estates Limited, through their solicitors required Alsop Wilkinson to transfer the money to a new stakeholder, and Alsop Wilkinson did not comply with that requirement. Were they obliged to comply with it?
The third question is whether the assignment on 8th July 1988 makes any difference. If Alsop Wilkinson would have been entitled to set off or a lien against their original client, Moorlock Limited, is that right no longer available to them because there was an assignment to Rockeagle Limited before the event had occurred upon which the deposit became unconditionally payable to the vendor?
I say nothing on either the first or the third question. As I say, I am not sure that the first question is still in issue. The third question we have not heard argument upon, and at first sight is not easy. I turn to deal with the second question, whether Alsop Wilkinson were on 4th January 1990 obliged to transfer the deposit to a new stakeholder because both parties required them to do so.
The analysis of what happens when money is deposited with the stakeholder in the ordinary way is, I think, this. Besides the sale contract between the vendor and the purchaser there is concluded a second tripartite contract between the vendor, the purchaser and the stakeholder. What are the terms of that contract? Miss Pirie, who has appeared for Alsop Wilkinson, says that they are set out in a passage from T. Cyprian Williams on The Contract of Sale of Land (1930) cited by Vice-chancellor Pennycuick in the case of Potters (a firm) v. Loppert [1973] Ch. 399 at page 409:
"Where a deposit is paid to any person as stakeholder, he shall hold it to abide the event of the contract,...
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