Entry into possession of land, even where not required by the contract, constitutes sufficient part performance to take an oral agreement for the transfer of land outside the Statute of Frauds, provided the possession is unequivocally referable to some such contract as that alleged.
Later decisions that cite Regent v Millett
Decisions cited by Regent v Millett
REGENT v. MILLETT [1976] HCA 40; (1976) 133 CLR 679
Vendor and Purchaser
High Court of Australia
Gibbs(1), Stephen(2), Mason(3), Jacobs(4) and Murphy(5) JJ.
CATCHWORDS
Vendor and Purchaser - Specific performance - Statute of Frauds - Part performance - Entry into possession - Effecting repairs - Payment of mortgage instalments - Conveyancing Act, 1919 (N.S.W.) s. 54A.
HEARING
Sydney, 1976, August 6. 6:8:1976DECISION
August 6.
2. The respondent sought specific performance of an oral agreement for the
transfer of a house property at Sefton. According to
the findings of the
learned trial judge which were not, and could not have been, challenged, the
appellants bought the house at Sefton
in November 1969 for a purchase price of
$4,500. They provided $1,000 of the price in cash and borrowed $3,500 from a
bank on mortgage.
Some time between November 1969 and April 1970 it was
agreed between the appellants and the respondents that in consideration of
the
respondents agreeing to pay off the whole of the mortgage debt, including the
interest thereon, and repaying the appellants the
amount of $1,000, which was
inaccurately described as a "deposit", the respondents were to be entitled to
live in the house, treat
it as their own and have it transferred to them when
the mortgage was paid off and the $1,000 repaid to the appellants. (at p681)
3. Subsequently, in April 1970, the respondents went into possession of the
property and they were still residing there at the date
of the trial. In June
1970 they began paying off the mortgage instalments. Payments had at first
been made by the male appellant,
but they were thereafter made by the
respondents directly to the bank for credit to the appellants' account.
However, the respondents
were short of money and at times fell into arrears.
Of those arrears some were paid off by the male appellant, and the rest were
met by the respondents. Most of the rates and taxes were paid by the male
appellant, but in one instance payment was made by the
respondents. (at p681)
4. The house was in bad condition and when the respondents went into
possession they effected some repairs to it. In 1972 they
were expecting a
second child and wished to carry out some renovations and extensions. For
this purpose they needed about $3,000
and the male appellant agreed to
accompany the male respondent to the bank with a view to increasing the bank
loan from $2,000, to
which it had by this time been reduced, to $5,000. On 6th
December 1972 they saw the bank manager, who suggested that the house property
be transferred to the respondents immediately and that the money be advanced
to the respondents instead of to the appellants. The
male appellant said that
he would like to think about this suggestion. Later, however, he led the
respondents to believe that he
would accept the suggestion of the bank manager
and in this belief the male respondent transferred his personal bank account
to the
mortgagee bank in compliance with the bank's requirement that he should
do so to obtain the loan. During January 1973 work to the
value of $5,000 was
carried out on the house by the respondents. The male appellant gave the
respondents $400 to pay for building
materials and in addition provided some
secondhand materials. For his part, the male respondent borrowed $2,000 in
anticipation
of receiving the loan from the bank. However, on 18th January
1973, the male appellant stated that he would not transfer the property
to the
respondents and he has since refused to do so. (at p682)
5. In the action the appellants pleaded the Statute of Frauds (whose
equivalent in New South Wales is s. 54A of the Conveyancing
Act, 1919, as
amended). There is no suggestion that the agreement is evidenced by any note
or memorandum in writing and the sole
question
now raised in the case is
whether there was part performance. The acts of part performance on which the
respondents relied
were
(1) the taking of possession; (2) the effecting of
repairs before December 1972; (3) the doing of the work on the renovations
and additions in January 1973; (4) the making of the mortgage repayments. (at
p682)
6. The learned trial judge held that these acts amounted to sufficient part
performance and ordered specific performance of the
agreement. His decision
was affirmed by the Court of Appeal. (at p682)
7. The principle upon which the doctrine of part performance rests was stated
by Lord Cranworth, Lord Chancellor in Caton v. Caton
(1866) LR 1 Ch App 137,
at p 148 in words which appear to have a direct application to the present
case. He said:
"... when one of two contracting parties has been induced,
or allowed by the other, to alter his position on the faith of
the contract, as for instance by taking possession of land,
and expending money in building or other like acts, there it
would be a fraud in the other party to set up the legal invalidity
of the contract on the faith of which he induced, or
allowed, the person contracting with him to act, and expend
his money."
possession alone, or the taking of possession coupled with the expenditure of
money by one party on the improvement of property,
with the cognizance of the
other party to the contract, may amount to part performance (see the cases
cited in Halsbury's Laws of
England, 3rd ed., vol. 36, par. 416). (at p682)
8. The argument advanced on behalf of the appellants, when reduced to its
essentials, depends upon two propositions. First, it
was said that the acts
relied on were not unequivocally referable to some such contract as that
alleged by the respondents. Indeed,
it was submitted that a narrower test
should be adopted and that it was necessary to establish "such a performance
as must necessarily
imply the existence of the contract" - to use the words of
Lord O'Hagan in Maddison v. Alderson (1888) 8 App Cas 467, at p 483 .
However, the test suggested by the Earl of Selborne L.C. in that case (1888) 8
App Cas, at p 479 , that the acts relied upon as part
performance "must be
unequivocally, and in their own nature, referable to some such agreement as
that alleged", has been consistently
accepted as a correct statement of the
law. It is enough that the acts are unequivocally and in their own nature
referable to some
contract of the general nature of that alleged (see McBride
v. Sandland [1918] HCA 32; (1918) 25 CLR 69, at p 78 ). (at p683)
9. The second proposition submitted for the appellants was that the acts
relied upon must have been done in part performance of
the agreement alleged;
in other words, the acts must have been done under the terms of that agreement
and by force of that agreement.
In support of this proposition particular
reliance was placed on Cooney v. Burns [1922] HCA 8; (1922) 30 CLR 216, at pp 231-232
and
McBride v.
Sandland (1918) 25 CLR, at p 79 . (at p683)
10. It may be said immediately that if the reasoning of their Lordships in
the recent case of Steadman v. Steadman (1976) AC 536
is accepted, the
appellants' arguments must fail. However, it is unnecessary for the present
decision to consider the questions
that are raised by that case. (at p683)
11. In the present case the giving and taking of possession by itself was
sufficient part performance of the contract and it is
therefore unnecessary to
consider whether the other acts relied upon would also, either alone or
together, amount to part performance.
The change of possession of land has
been described as "the act of part performance par excellence" - Williams:
The Statute of Frauds,
Section IV, p. 256. Of course, it may be proved that
the taking of possession was referable to some other authority than the
contract
alleged. That was the situation in McBride v. Sandland (1918) 25
CLR, at pp 84-85 . However, in the present case the circumstances
under which
possession was given indicate contract, to echo the words in McBride v.
Sandland (1918) 25 CLR, at pp 84-85 and the
possession was unequivocally
referable to some such contract as that alleged. The taking of possession was
pursuant to the contract.
It is true that the contract did not require the
respondents to take possession, but if it were necessary that the acts of part
performance
should have been done in compliance with a requirement of the
contract, the utility of the equitable doctrine would be reduced to
vanishing
point, and many cases which have proceeded on the opposite view would have
been wrongly decided. The Judicial Committee
in White v. Neaylon (1886) 11
App Cas 171 indeed appears to have held that the effecting of improvements on
property which were
neither required nor permitted by the contract may be acts
of part performance; but however that may be, it is clear that if a vendor
permits a purchaser to take possession to which a contract of sale entitles
him, the giving and taking of that possession will amount
to part performance
notwithstanding that under the contract the purchaser was entitled rather than
bound to take possession. (at
p684)
12. For these reasons the Court below was, in my opinion, right in holding
that there were sufficient acts of part performance and
the appeal should be
dismissed. (at p684)
STEPHEN J. I agree, and for the reasons given by my brother Gibbs. (at
p684)
MASON J. I likewise agree and for the reasons given by Gibbs J. (at p684)
JACOBS J. I agree and for the same reasons. (at p684)
MURPHY J. I agree also. (at p684)
ORDER
Appeal dismissed with costs.