Terrapin 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 escrow: ‘A document which is intended to take effect as a deed when conditions have been fulfilled may be executed as an escrow: that is to say, with all the formalities of a deed save that the vital unconditional delivery, which is essential for the proper execution of a true deed, is missing; it is replaced by a conditional delivery, usually express, but capable of being assumed. At this stage, the document is not a deed; and although of course it contains within itself the possibility of becoming an effective deed, a deed rising phoenix-like from the ashes of the escrow, at the stage before the condition is fulfilled it is of no effect whatsoever.’ and referring to Cory: ‘If I may repeat the crucial passage; – ‘So long as it remains an escrow it is not executed as a deed; for delivery again as a deed is required before it becomes one’. It follows in my judgment that . . . the first date on which the deed of exchange which is the subject matter of the present appeal was executed was on the day on which the conditions were fulfilled and it was in the eye of the law for the first time delivered unconditionally and thus for the first time delivered as a deed.’
Walton J
[1976] 1 WLR 665, [1976] 2 All ER 461
England and Wales
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 . .

Cited by:
CitedAlan 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 . .

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Updated: 20 May 2021; Ref: scu.252344