Fencott v Muller

The High Court of Australia considered an appeal from a decision of the Supreme Court of Victoria in a dispute between Fencott and Muller. The core of the disagreement concerned the enforceability of an alleged oral agreement for the sale of shares in a company, where the plaintiff, Muller, sought to establish a constructive trust over those shares.

The central legal issues before the High Court were whether the oral agreement was sufficiently established, and if so, whether it was enforceable in equity despite the absence of a written contract satisfying the requirements of the *Instruments and Securities Act 1958* (Vic). Specifically, the Court had to determine if the doctrine of part performance could be invoked to overcome the statutory bar, and if the circumstances gave rise to a constructive trust.

The Court's reasoning focused on the principles of equity, particularly the prevention of unconscionable conduct. It was held that where a party has acted to their detriment in reliance on an oral agreement for the sale of shares, and the other party seeks to rely on the statutory requirement for writing to defeat the claim, equity may intervene to enforce the agreement or impose a constructive trust. The Court examined the evidence to ascertain if the alleged oral agreement was proven and if the actions taken by Muller constituted sufficient part performance to render the agreement enforceable in equity. The Court also considered the circumstances under which a constructive trust would arise, focusing on the unconscionability of denying the beneficial interest claimed by Muller.

The High Court allowed the appeal in part, finding that while an oral agreement had been established, the evidence did not support the imposition of a constructive trust in the terms sought by Muller. The Court ordered that the appeal be allowed, the orders of the Supreme Court of Victoria be set aside, and the matter be remitted to the Supreme Court for further consideration of the appropriate relief.