35 / 338
and paid a deposit of £350. The contract incor–
porated cl. 32 (i) fo) of the Law Society's Con–
ditions of Sale which provided for a vendor re-selling
after notice on the purchaser's default. On Apr. loth,
1953, the testatrix, replying to an inquiry from her
solicitors made before the contract was signed,
informed them by letter that she would like to
leave the house to K. as well as the £10,000. On
Apr. 17, 1953,
the testatrix executed a second
codicil which stated, " Whereas I have entered into
a contract for the purchase of (the house), I hereby
give the said property free of all duties to my
daughter " K. On Apr. 21, 1953, which was before
the date fixed for completion of the contract, the
testatrix died. By s. 35 (i) of the Administration of
Estates Act, 1925, where a person dies entitled to
an interest in property charged with the payment of
money, including a lien for unpaid purchase money,
the charge would primarily be payable out of the
interest charged, if the deceased had not by will
or other document signified a contrary intention.
Held :
(i) K. took the dwelling-house subject to
a charge for the unpaid balance of the purchase
money, because the vendor's lien for unpaid purchase
money arose at the moment when the contract was
signed, (cl. 32 (i)-(3) of the conditions of sale not
preventing the lien arising) and accordingly s. 35
of the Administration of Estates Act, 1925, applied,
as a contrary intention excluding it was not signified
either by the testatrix' letter or by her second codicil.
(2) The solicitors' costs of completing the purchase
must be borne by the testatrix' residuary estate, the
solicitors not having at her death possession of
any title deeds to the property and having no lien
thereon.
Per Upjohn J. : It is submitted by counsel for the
specific devisee that, as the date of the death of the
testatrix was before the date fixed for completion,
the vendor had no lien on the estate for the balance
of the unpaid purchase money.
A vendor's lien
he says only arises at the date fixed for completion.
He submits that the executors, in paying the balance
of the purchase money shortly after the date of the
testatrix' death, were not discharging a charge in any
way, but were performing a contract.
Counsel for the residuary legatees submits that the
vendor's charge for the purchase money arises
the moment that the contract is signed. The remedies
available to enforce that charge may vary according
to the state of the transaction, i.e., until the date
fixed for completion, the vendor cannot actively
enforce his lien by action, but he has the right
(subject always to the express terms of the contract)
to remain in possession and to refuse to execute a
conveyance until the purchase money is paid. After
the date fixed for completion he has a right to
enforce the charge or lien by appropriate proceedings
in these courts. Counsel submits the statement of
Sir George Jessel, M.R., shows that throughout,
from the moment the contract was executed, the
vendor has a charge for his unpaid purchase money.
I think that that argument is quite correct.
At first sight it seemed to me that the testatrix
had expressed or had signified a contrary intention,
because it seemed illusory to make a codicil giving
the property to her daughter if indeed all she was
giving was the property subject to payment of the
unpaid purchase price, especially as she considered
apparently that the gift would be substantial, for she
directed that it was to be free of all duties. Having
heard full argument, however, I am unable to come
to that conclusion.
She gives the property which
she has contracted to purchase. That is no doubt
the property referred to in the contract she had
just signed, but it says nothing, either expressly
or by implication, as to the application of s. 35,
and I see nothing which can exclude the operation
of that section.
The last matter is with regard to the solicitors'
costs incurred in completing the purchase.
The
scale fee seems to have been some £56, added to
which there are search fees and petty disbursements,
and so on. The residuary legatees can only establish
a case for throwing those costs on the property
if they can show that those costs were in some way
equitably charged on it. No doubt had the con–
veyance been completed in the lifetime of the testa–
trix, the solicitors would have received the deeds
in the normal course and would have had an equit–
able lien or those deeds for any costs remaining
unpaid ; but what was the position at the relevant
time, i.e., at the date of the testatrix' death? They
were then doing work. No bill of costs had been
rendered. Nothing at that time was due from the
testatrix to her solicitors.
Furthermore they could
have no lien on anything for they had no deeds
in their possession.
It was somehow suggested
they had some form of lien on the contract.
I do
not follow that. It was their duty to carry through
the contract to completion.
I cannot see that at
the relevant date this inchoate claim to costs was
charged on anything.
Accordingly, those costs
must be borne by residue.
Note.
Section 35
of the Administration of
Estates Act replaces
in England Locke King's
Acts of 1854, 1867 and 1877.
(Re Birmingham
Deed. Savage
v.
Stannard (1958) 2. All E.R. 397).