Alan Estates Ltd v WG Stores Ltd and Another: CA 1 Jul 1981

The proposed tenant wanted to get into possession, and was given a key and paid a quarter’s rent to the lessor’s solicitors to be held as stakeholders, before the lease had been formally granted. An undated lease and counterpart were executed and exchanged, but said to be sent in escrow until certain conditions were fulfilled. When the proposed landlords were unable to remove a charge, the tenant sought to withdraw. The landlord said that he could not do so. The lease remained undated.
Held: The tenant could withdraw, but owed rent from the date of delivery of the deed in escrow. The date of the lease was the date of the delivery in escrow. Lord Denning MR explained the doctrine of escrow: ‘What is the effect of an escrow before the conditions are fulfilled? One thing is clear. While the conditions are in suspense, the maker of the escrow cannot recall it. He cannot dispose of the land or mortgage it in derogation of the grant which he has made. He is bound to adhere to the grant for a reasonable time so as to see whether the conditions are to be fulfilled or not. If the conditions are not fulfilled at all, or not fulfilled within a reasonable time, he can renounce it. On his doing so, the transaction fails altogether. It has no effect at all. But if the conditions are fulfilled within a reasonable time, then the conveyance or other disposition is binding on him absolutely. It becomes effective to pass the title to the land or other interest in the land from the grantor to the grantee. The title is then said to ‘relate back’ to the time when the document was executed and delivered as an escrow. But this only means that no further deed or act is necessary in order to perfect the title of the grantee. As between grantor and grantee, it must be regarded as a valid transaction which was effective to pass the title to the grantee as at the date of the escrow’

Lord Denning MR, Ackner LJ, Sir Denys Buckley
[1982] Ch 511, [1981] EWCA Civ 1, [1981] 3 WLR 892, 260 EG 173, [1981] 3 All ER 481, 43 P and CR 192
England and Wales
CitedEccles v Bryant and Pollock CA 1947
The Plaintiff contended that a letter written by the purchaser’s solicitor which effectively set out the terms of the agreement, enclosed the part of the contract signed by the purchaser, and asked in exchange for the counter-part signed by the . .
CitedHarrison v Battye 1974
Where it is intended that a contract should come into existence upon exchange of contract document parts executed by the various parties, it was necessary for the parts exchanged to be identical. The effective date when parties are bound is the date . .
CitedRe Duke of Devonshire’s Settlement 1952
Vaisey J said: ‘As a rule the date properly to be inserted in a deed delivered as an escrow is the date at which it was so delivered and not the date when the condition of the delivery has been fulfilled.’ . .
CitedButler v Baker’s case 1591
The doctrine that a deed delivered in escrow operates from the time of delivery once the condition is fulfilled, does not operate as against a third party. . .
CitedXenos v Wickham HL 1866
Delivery of document in Escrow
Blackburn J said that a deed is delivered ‘as soon as there are acts or words sufficient to [show] that it is intended by the party to be executed as his deed presently binding on him.’
Lord Cranworth said: ‘The maker (of a deed) may so . .
CitedFoundling Hospital Governors v Crane 1911
Farwell LJ approved the description of the operation of the doctrine of escrow as follows: ‘The rules respecting escrows are, 1st, The writing will not operate as a deed till the second delivery. 2ndly, The party deputed to make the second delivery, . .
CitedCory (Wm) and Son Ltd v Inland Revenue Commissioners CA 1964
Diplock LJ discussed the status of a deed delivered in escrow: ‘So long as it remains an escrow it is not yet executed as a deed; for delivery again as a deed is required before it becomes one. While an escrow it conveys nothing, it transfers . .
CitedTerrapin International Ltd v Inland Revenue Commissioners 1976
A deed had been delivered in escrow, but, before the condition was fulfilled, the rates of stamp duty changed. The parties disputed the effective date of the transaction.
Held: Walton J considered what was the effect of a deed being held in . .
CitedKingston v Ambrian Investment Co Ltd 1975
Once a party has delivered a document in escrow, he must await the conditional event before he can recall the deed. . .
CitedSecurity Trust Co v The Royal Bank of Canada PC 1-Dec-1975
(Bahamas) A company, Fisher agreed to buy land with part of the purchase price to be paid by a fixed date and the balance secured by a mortgage to the vendor. A conveyance and a mortgage were duly executed and held in escrow pending payment of the . .
CitedTupper v Foulkes 1861
Anything which shows that a party treats an instrument as his deed will suffice to make it his deed. . .

Cited by:
DistinguishedDyment v Boyden and others CA 26-Nov-2004
Mrs D had gone into business with the respondents to operate a residential care home. It was to be run from premises owned by the respondents. The respondents inter alia had failed to disclose previous convictions, the registration was cancelled, . .

Lists of cited by and citing cases may be incomplete.

Landlord and Tenant

Updated: 27 January 2022; Ref: scu.220263