The position of a stakeholder and the two potential claimants to a stake is the subject of a tripartite contract. The relationship between the stakeholder and the two potential claimants is contractual, not fiduciary. The money is not trust money. The stakeholder is not a trustee or agent; he is a principal who owes contractual obligations to the potential claimants to the stake.
At common law, before settlement, if both parties agree as to the way in which the deposit should be paid or otherwise transferred, the stakeholder is obliged to follow that requirement.
Farquharson LJ said: ‘It is clear from the authorities, and in particular Potters v Loppert [1973] Ch. 399, that the duties and authority of a stakeholder lie in contract or quasi-contract and not as trustee’.
Citations:
[1992] Ch 47, [1991] 4 All ER 659
Jurisdiction:
England and Wales
Citing:
Cited – Potters v Loppert ChD 1973
The court was asked as to the liability of an estate agent to account for interest earned upon a pre-contract deposit paid to him expressly as a stakeholder. No contract was made.
Held: A stakeholder is not a trustee or agent; he is a . .
Cited by:
Cited – Manzanilla Limited v Corton Property and Investments Limited; John MacIver (Southport) Limited; Rootbrights Limited and Halliwell Landau (a Firm) CA 13-Nov-1996
Millett LJ set out the principles applicable to a deposit paid on a land transaction being held by a stakeholder: ”Where a stakeholder is involved, there are normally two separate contracts to be considered. There is first the bilateral contract . .
Cited – Get Nominees Limited v Trinity Welsh Homes Limited ChD 9-Sep-2014
Trial of an action under which the claimant seeks specific performance of an agreement made between itself and the defendant dated 22 June 2010 relating to a freehold property at Bethel Road, Caernarfon, Gwynedd for a sum of andpound;613,500. The . .
Lists of cited by and citing cases may be incomplete.
Contract, Land
Updated: 20 August 2022; Ref: scu.550153
