Shaw v Foster: HL 14 Mar 1872

As regards the trusteeship which arises for a vendor of land after exchange of contracts: ‘there cannot be any doubt of the relation subsisting in the eye of a Court of Equity between the vendor and the purchaser. The vendor was a trustee of the property for the purchaser; the purchaser was the real beneficial owner in the eye of a Court of Equity of the property, subject only to this observation, that the vendor, whom I have called the trustee, was not a mere dormant trustee, he was a trustee having a personal and substantial interest in the property, a right to protect that interest, and an active right to assert that interest if anything should be done in derogation of it’. A purchaser of land obtains rights which are akin to ownership after exchange, and a purchaser had not only the right to devise the property (under the equitable doctrine of conversion) but also the right to alienate it or charge it.
Lord O’Hagan said that the purchaser’s interest could be the subject of a charge or assignment, and that the sub-assignee or encumbrancer could enforce his rights against the original vendor.
Lord Hatherley LC referred to the ‘fiction of Equity which supposes the money to be paid away with one hand and the estate to be conveyed away with the other,’


Lord Cairns, Lord O’Hagan, Lord Hatherley LC


(1872) LR 5 HL 321, [1872] UKLawRpHL 2




England and Wales

Cited by:

CitedJerome v Kelly (Her Majesty’s Inspector of Taxes) HL 13-May-2004
In 1987, trustees holding land for various beneficiaries in undivided shares entered into a contract to sell it to a purchaser. In 1989 Mr and Mrs Jerome, who were absolutely entitled to interests in the land, assigned part of their beneficial . .
CitedEnglewood Properties Limited v Patel and Another ChD 16-Feb-2005
The claimant was a property developer, which sought to sell a row of shops at auction. One lot was a Woolworths store, where the company owned both freehold and leasehold interests, with Woolworths occupying an underlease, which the claimant had . .
CitedCook v The Mortgage Business Plc CA 24-Jan-2012
The land owners sought relief from possession orders made under mortgages given in equity release schemes: ‘If the purchaser raises all or part of the purchase price on mortgage, and then defaults, the issue arises whether the mortgagee’s right to . .
CitedScott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .
Lists of cited by and citing cases may be incomplete.

Land, Equity

Updated: 26 November 2022; Ref: scu.196886