Phung v Phung

[2019] NSWSC 117

Supreme Court

New South Wales

Medium Neutral Citation:	Phung v Phung [2019] NSWSC 117
Hearing dates:	4 February 2019 – 6 February 2019
Date of orders:	19 February 2019
Decision date:	19 February 2019
Jurisdiction:	Equity
Before:	Darke J
Decision:	Plaintiff entitled to orders for specific performance
Catchwords:	LAND LAW – contract for sale of land – claim for specific performance – whether oral contract for sale of land concluded – defendant subsequently signs written note referring to agreement to “transfer the ownership” of property – whether written note satisfies writing requirements under Conveyancing Act 1919 (NSW), ss 23C(1)(a) and 54A – doctrine of part performance – whether sufficient acts of part performance – plaintiff goes into possession, pays outgoings and undertakes renovations – sufficient acts of part performance established – whether specific performance should be refused on the basis of unfairness or hardship – specific performance granted
Legislation Cited:	Conveyancing Act 1919 (NSW), ss 23C, 54A Supreme Court Act 1970 (NSW), s 68
Cases Cited:	Baloglow v Konstantinidis (2001) 11 BPR 20,721; [2001] NSWCA 451 Cavallari v Premier Refrigeration Company Pty Ltd (1952) 85 CLR 20 Cooney v Burns (1922) 30 CLR 216 Dougan v Ley (1946) 71 CLR 142 Dowsett v Reid (1912) 15 CLR 695 Fragomeni v Fogliani (1968) 42 ALJR 263 Fullers’ Theatres Ltd v Musgrove (1923) 31 CLR 524 Harvey v Edwards, Dunlop & Co Ltd (1927) 39 CLR 302 Johnson v Buttress (1936) 56 CLR 113 Khoury v Khouri (2006) 66 NSWLR 241; [2006] NSWCA 184 Maddison v Alderson (1883) 8 App Cas 467 McBride v Sandland (1918) 25 CLR 69 Pipikos v Trayans (2018) 92 ALJR 880; [2018] HCA 39 Regent v Millett (1976) 133 CLR 679 Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 Stewart v Kennedy (1890) 15 App Cas 75 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Tamplin v James (1880) 15 Ch D 215
Category:	Principal judgment
Parties:	Cam Vinh Phung (Plaintiff) Cam Tai Phung (Defendant)
Representation:	Counsel: Ms M Gaven (Plaintiff) Mr K G Bennett (Defendant)   Solicitors: Ma & Co Solicitors (Plaintiff) Lincoln Legal (Defendant)
File Number(s):	2017/161958
Publication restriction:	None

Judgment

Introduction

1. By an Amended Summons filed on 13 April 2018 the plaintiff, Cam Vinh Phung, seeks orders in the nature of specific performance of an alleged oral agreement for the sale of a residential unit in Swete Street, Lidcombe. The property is owned by the plaintiff’s younger brother, Cam Tai Phung, who is the defendant in the proceedings.

2. The alleged oral agreement is claimed to have been made in about January 2010. In short, the alleged agreement is to the effect that the defendant would transfer the title to the Swete Street property to the plaintiff in consideration of the plaintiff paying $180,000 to the defendant. The plaintiff has in fact made payments of approximately $180,000 to the defendant since January 2010.

3. The defendant disputes that any agreement for sale of the unit was made. He contends that if any agreement was made, it was an agreement conferring a right of residence or a life tenancy. The defendant further contends that the plaintiff cannot enforce the alleged contract for sale, or any proprietary interests arising from it, due to a want of writing that satisfies ss 23C(1)(a) and 54A(1) of the Conveyancing Act 1919 (NSW). In response to this, the plaintiff seeks to rely on a document that was prepared by the defendant in September 2013, and failing that, invokes the law relating to part performance. Finally, the defendant raises various arguments as to why the Court should not in any event make orders in the nature of specific performance.

Background

4. The dispute between the brothers (now aged about 67 and 60 respectively) arises in the context of a family of Vietnamese migrants who came to Australia at various times following the Vietnam War. The plaintiff was the first to migrate. He arrived in Australia in December 1977. Another brother arrived in about 1980, and the defendant arrived in about 1981. Other family members also migrated, including sisters (My Tran, My Linh and Tuyet Minh Tang), and the parents of the children. The parents arrived in about 1987. It seems to be accepted that the plaintiff was instrumental in facilitating the migration of the other family members, and then assisting them in adapting to life in Australia.

5. In December 1988 a property in Delhi Street, Lidcombe was purchased for the purpose of the family living in it together. The title was placed in the names of the defendant and Tuyet Minh Tang. The purchase price of $133,000 was funded by a loan of $15,000 from the plaintiff, and a loan for the balance from Advance Bank Australia Limited. The $15,000 advanced by the plaintiff was repaid to him in June 1995. There was no interest payable. It seems to be the case that the various family members who lived in the Delhi Street property at various times made payments, sometimes referred to in evidence as “rent”, to the defendant. The plaintiff, who resided in the property since its purchase in 1988, made such payments until he moved out in early 2010. The plaintiff gave evidence that the purpose of those payments was to assist the defendant in paying the mortgage.

6. The defendant married in 1994. He and his wife acquired Tuyet Minh Tang’s interest in the Delhi Street property in 1995 for $85,000.

7. In 1996, the defendant and his wife purchased the Swete Street property for $137,000. The property was purchased as an investment property, using savings and borrowed funds. The defendant and his wife continued to live in the Delhi Street property until 1997, when they moved to Belmore to live with the wife’s parents. The defendant’s wife died in 2001. The defendant thereafter became the sole owner of both the Delhi Street and Swete Street properties.

8. The defendant remarried in March 2006. The couple moved into the Swete Street property shortly thereafter.

9. By late September 2009 Mr and Mrs Phung Senior were both deceased. The plaintiff was then living alone in the Delhi Street property.

10. In December 2009, Frankie, a son of the defendant’s wife, arrived in Sydney from China. It seems that Frankie moved in to the Swete Street property.

11. In early 2010 certain discussions took place between the plaintiff and the defendant. The content of these discussions (which occurred in the Chinese Cantonese language) lies at the heart of the dispute.

Summary of evidence concerning the discussions in early 2010

12. The plaintiff gave evidence in his affidavits of 29 May 2017 and 16 July 2018 that he was party to two conversations in about January 2010 which “went over the same subject matter” and concerned an agreement to purchase the Swete Street property. He says that the first conversation was with the defendant alone at the Delhi Street property, and the second was with the defendant and his wife at the Swete Street property.

13. The plaintiff deposed that the first conversation included words to the following effect:

Plaintiff:   How much money do you still owe to the bank for both of the properties (I mean the Delhi Property and Swete Property)? I can pay off all the mortgages for you and in return you transfer the title of Swete Street property to me.

Defendant:   I owe about $180,000 to banks for all mortgages, about $90,000 for each property. You are my big brother. Even you can take this house (Delhi Property). This one is bigger.

Plaintiff:   I’m alright. I am happy to live in the smaller apartment at Swete Street. No problem. Then I pay off the mortgages for you. But I do not have $180,000 right now. I will pay you in instalments.

Defendant:   That’s all OK.

14. The plaintiff deposed that the second conversation occurred a couple of days later, and included discussion of the matters as set out above. The plaintiff deposed that there was also some discussion about whether the Swete Street property was noisy.

15. It should be interposed at this point that the plaintiff gave evidence to the effect that on 20 January 2010, after at least the first conversation, he obtained a bank cheque in the amount of $30,000 and gave it to the defendant. That was not denied by the defendant in his affidavits. The giving of another bank cheque (in the amount of $20,000) in March 2010 is also not denied by the defendant. It is an agreed fact that in the period from 10 January 2010 to 2013 the plaintiff made a series of lump sum instalments in relation to the Swete Street property totalling $90,000. It is also an agreed fact that between 2010 and the present time, the plaintiff has made fortnightly payments of $400 to the defendant in relation to the Swete Street property. These payments, which commenced in about mid-March 2010, total $92,600.

16. The defendant deposed that after his wife’s son Frankie arrived in Sydney, and due to the fact that the Swete Street property was not large enough for three people to live in, “the plaintiff and I decided to swap our place of living around early February 2010 after replacement of timber flooring in [the] Delhi Street Property”. The defendant asserts that this agreement did not involve any “monetary considerations”. He deposed that there was a conversation to the following effect:

Defendant:   My wife’s son is now living with us, Swete Street Property may be too small for three people. How about we swap places of living?

Plaintiff:   Sure. When?

Defendant:   I think we need to make some renovations to the Delhi Street Property first. After changing the carpet to timber flooring, it is about time to swap.

Plaintiff:   Agree.

17. The defendant further deposed that in about mid-February 2010 (after he and his wife had moved into the Delhi Street property), the plaintiff came to the property wanting to speak to him. The defendant says that he and the plaintiff went to a nearby park where there was a conversation that he recalls included a proposal by the plaintiff “to pay my remaining mortgages in return for a transfer of the Swete Street Property”. The defendant deposed that the conversation contained words to the following effect:

Plaintiff:   I cannot borrow money to purchase a place to live in. Will you help me?

Defendant:   Yes sure.

Plaintiff:   How much mortgage do you owe on both of your properties now?

Defendant:   The actual amount remaining is around $90,000.00 each.

Plaintiff:   I can pay your remaining mortgage repayments of $90,000.00 for each property, in return you transfer me your Swete Street Property so I can have a place to live after my retirement so I do not have to move around anymore.

Defendant:   Alright.

Plaintiff:   I am doing a spousal visa deal. Once I have the money in hand, I will be able to pay you some time later.

Defendant:   Whenever you are ready! I hope you can find the right one and make a genuine marriage.

Plaintiff:   You go back and have a discussion with Ping first. See what she thinks.

Defendant:   I will certainly.

18. The defendant deposed that when he returned to the Delhi Street property immediately following the above conversation, he had a conversation with his wife in the following terms:

Defendant:   Vinh offered to pay off the mortgages of $180,000.00 for our two properties on the condition that I transfer him the Swete Street Property so he can remain living there for the rest of his life.

Xiuping Wu:   Does [sic] Swete Street Property worth only $180,000.00? If you have a remaining mortgage balance of $20,000.00, does it mean that he will pay you $20,000.00 for the transfer? Did Vinh mention anything about the value of Swete Street Property?

Defendant:   No.

Xiuping Wu:   Did he mention to pay you back 15 years’ worth of mortgage repayments and interest? You worked hard to pay out the villa over the last few years.

Defendant:   No.

19. The defendant’s wife, Xiuping Wu, deposed that on this occasion she had a conversation with the defendant to the following effect:

Defendant:   Vinh offered me assistance to pay off the mortgage of $180,000.00 for our two properties. In return, he asked me to grant him permission to live in the villa at Unit 14, 16-20 Swete Street, Lidcombe (Swete Street Property) and pay the outgoings.

Xiuping Wu:   Does [sic] our villa worth $180,000.00 only? If you have a remaining mortgage balance of $20,000.00 in return for s [sic – a] lifelong stay in the villa?

…

Xiuping Wu:   Did Vinh tell you how much does [sic] our villa worth?

Defendant:   No.

Xiuping Wu:   Did he mention to pay you back 15 years’ worth of mortgage repayments and interest? You worked hard to pay out the villa over the last few years.

Defendant:   No.

20. The defendant does not suggest in his affidavits that he told the plaintiff about the conversation with Xiuping Wu. However, Xiuping Wu deposed that on the following day she had a conversation with the plaintiff at the Delhi Street property in words to the effect:

Plaintiff:   I am the first person who came to Australia. I am the person who sponsored my whole family to Australia. I have made substantial contributions towards our family.

Xiuping Wu:   Yes, I agree! When you have the need, the brothers and sisters should be looking after each other. However, the burden should not be on Cam’s (the Defendant) shoulder alone. It should be beared [sic] by all the family members. Other family members should contribute the same way as your [sic] contributed.

Plaintiff:   Yeah, alright.

21. Xiuping Wu says that later that day she reported this conversation to the defendant who replied with words to the following effect:

Just let Vinh live there for the time being. We will show him our disagreement with his proposal until [sic] after he comes back to the issue.

22. I have already referred to the making of certain payments by the plaintiff to the defendant. In relation to the fortnightly payments which commenced in about mid-March 2010, the plaintiff deposed that these followed a conversation he had with the defendant to the following effect:

Plaintiff:   Brother, I cannot obtain a loan from the bank due to my age. Can I give you remaining by instalments? Every week $200 can be deducted from my pay to be transferred into your account.

Defendant:   OK.

23. This conversation was accepted by the defendant in his affidavit on 29 September 2017. However, the defendant also gave evidence to the effect that the fortnightly payments were in the nature of rent to enable the plaintiff to continue to occupy the Swete Street property.

24. The plaintiff, the defendant and Xiuping Wu were each cross-examined, including in relation to the discussions in early 2010.

25. The plaintiff did not accept that he agreed to a proposal by the defendant that they swap their places of living. He said “No, I was going to buy it [the Swete Street property]”. The plaintiff said that he had approached a bank in 2009 about obtaining a loan to purchase a property, but was told that due to his age he could not obtain a loan. The plaintiff gave evidence that he approached the defendant about three months after their mother had died. He denied that this approach occurred in a park near the Delhi Street property. The plaintiff agreed that he asked the defendant how much he now owed on both of his properties, and was told that about $90,000 was owing on each. The plaintiff maintained that he told the defendant that he was willing to pay both mortgages for him “and in return he could sell his Swete Street property to me”, and that the defendant agreed. The plaintiff accepted that he told the defendant to speak to his wife “and see what she says”. The plaintiff did not accept that there was a later conversation in which it was agreed that in addition to paying off the loans he was to pay rent of $400 each fortnight. The plaintiff also denied having a conversation with Xiuping Wu at the Delhi Street property the day after his conversation with the defendant.

26. The defendant gave evidence to the effect that he had agreed with the plaintiff to “let him live” in the Swete Street property. He said that the document he prepared in September 2013 was “for one purpose only, just in case if I’m dead he’s still got the right to live in my property”. At one point the defendant seemed to accept the suggestion that the September 2013 document used the words “transfer in [sic] ownership” because that was the deal that was done a few years earlier. The defendant did not recall that there was talk about “the money” prior to the mid-February 2010 discussion that he said occurred in the park. He later agreed that prior to the plaintiff giving him any money there was a conversation about $180,000 being paid. The defendant agreed that in January 2010 the plaintiff said to him something similar to:

How much money do you still owe to the banks for both of the properties? I can pay off all the mortgages for you and in return you transfer the title of Swete Street property to me.

27. The defendant specifically agreed that the plaintiff had used the word “transfer”. He said that when he himself used the word “transfer” in the September 2013 document, he was meaning it to refer to a right to live in the Swete Street property. The defendant did not accept that the plaintiff said “transfer the title”. The defendant accepted that the plaintiff told him that he did not have $180,000 right now and would pay it in instalments, and that he had agreed to that. The defendant asserted that the money was purely “to guarantee he can live, live in there”. The defendant denied that the conversation occurred at the Delhi Street property, and he denied that there was a later conversation at the Swete Street property during which there was discussion about noise.

28. The defendant accepted that another conversation had occurred in which he had agreed to the plaintiff’s request to pay “the remaining” by instalments of $200 per week. He stated that the $200 per week was to be paid towards the $180,000 “to secure for living”. The defendant later said that after the $180,000 was paid, the plaintiff would still need to pay the $200 per week in addition to the outgoings on the Swete Street property.

29. Xiuping Wu said that she was dissatisfied with the arrangement suggested in 2010 because there was a huge difference between the price and the market price. It was put to Xiuping Wu that she did not inform the plaintiff of her position and she answered:

But I spoke to my husband about how I felt. I spoke to my husband about my conversation with the plaintiff and my husband said, he said “let him live there for the time being.”

30. Xiuping Wu agreed that in October 2016 the defendant told her that the plaintiff wanted the property to be transferred to him and she told the defendant that she might divorce him if he went ahead and did so. Xiuping Wu denied that in early 2010 the plaintiff came to the Swete Street property and on that occasion there was a conversation about noise.

Summary of evidence concerning events after the discussions in early 2010

31. There is no doubt that the plaintiff moved out of the Delhi Street property and into the Swete Street property, and that the defendant and his wife moved out of the Swete Street property and into the Delhi Street property. There is some divergence in the evidence as to exactly when these moves occurred, but the differences are not significant. On the plaintiff’s account he moved in about March 2010. On the defendant’s account he and his wife moved around early February 2010. The defendant says that the moves occurred on the same day.

32. The plaintiff deposed that on 1 March 2010 he provided a second bank cheque to the defendant. This cheque was in the amount of $20,000. The defendant agreed in his affidavit that he received this bank cheque from the plaintiff.

33. As mentioned earlier, since about mid-March 2010, the plaintiff has made fortnightly payments of $400 to the defendant. These payments (which at the date of hearing totalled $92,600) were effected by way of regular deductions from the plaintiff’s wages. In addition, further lump sum payments (by way of bank cheque or cash) were made by the plaintiff to the defendant such that lump sums totalling $90,000 had been paid by 2013.

31. Also in March 2010 the plaintiff commenced to pay the outgoings in respect of the Swete Street property, including rates and strata scheme levies. The procedure adopted was that the defendant would give the bills to the plaintiff, who would then make the payments and return the bills, together with receipts, to the defendant. It is agreed that the plaintiff has paid a little more than $27,000 on such outgoings.

32. It should be noted that at least for taxation purposes the defendant continued to treat the Swete Street property as a rental property. The fortnightly payments made by the plaintiff were treated as gross rental income, and the outgoings paid by the plaintiff were treated as expenses. It seems that the defendant also continued to deal with the strata managing agents in relation to issues arising from the condition of the building.

33. After moving to the Swete Street property the plaintiff, with the assistance of two brothers-in-law, carried out some renovations to the property. It is agreed that the plaintiff spent between $6,000 and $7,000 on the renovations. The evidence suggests that the renovations were undertaken in about August 2012. The defendant gave some evidence in cross-examination that indicates that he knew about the undertaking of the renovations. There is evidence that the defendant and his wife attended a celebration at the Swete Street property in September 2012, shortly after the completion of the renovations.

34. In September 2013, shortly before the defendant and his wife were due to travel to the United States of America, the plaintiff asked the defendant to give him a document. There is a dispute about the terms of the request. According to the plaintiff there was a conversation to the following effect:

Plaintiff:   I heard that you were going overseas?

Defendant:   Yes.

Plaintiff:   Then what if something happened whilst you are overseas? The Swete Property is still under your name. Can you write something for me.

According to the defendant there was a conversation to the following effect:

Plaintiff:   I know you and your wife are going to the United States for a wedding. If some unlucky things happened to you during this time, will I still be able to live in the Swete Street Property? Can you write a few words just in case something bad happened?

Defendant:   Sure, accidents are not predictable. As you requested, I will just write a few words just in case to cover the period when I am overseas.

Plaintiff:   Agreed.

38. There is no dispute that the defendant prepared and signed a document on 25 September 2013 and gave it to the plaintiff. The document is in the following terms:

Ownership of villa 14/16-20 Swete Street Lidcombe

My brother Cam Vinh Phung and I, Cam Tai Phung have both agree to transfer the ownership of the villa number

14/16-20 Swete Street, Lidcombe from Cam Tai Phung to Cam Vinh Phung privately.

This is may not valid as legal documents as all documents need to be full fill in progress under the common law. But as we both testified and confirmed that agreement verbally about two years ago.

In case of anything unexpected, like serious injury or death to me, Cam Vinh Phung should treat it as fair as the owner of the property.

39. In October 2016 the defendant was requested by the plaintiff to transfer the Swete Street property to him. The respective versions of this event again diverge, but not in my view in any significant way. The plaintiff deposed that on about 24 October 2016 he had a conversation with the defendant at the Delhi Street property to the following effect:

Plaintiff:   Brother, I have the money ready. Can you transfer the Villa (I mean Swete property) to me now?

Defendant:   I do not want to sell the Swete Property to you now. I will return the $90,000.00 back to you for you have paid for the mortgage for this Delhi Property.

Plaintiff:   So what we do next?

Defendant:   You can rent the place by paying $200 per week and outgoings.

Plaintiff:   Rent plus outgoings per week is more than $300 per week. I cannot afford it after my retirement.

40. The plaintiff adduced evidence to show that at that time he had more than $25,000 in a cheque account with St George bank, and approximately $10,000 in an account with the Commonwealth Bank of Australia.

41. The plaintiff deposed that about two weeks later he had a further conversation with the defendant at the Delhi Street property to the following effect:

Defendant:   My wife threatens to divorce me if I transfer the Swete Property to you. I am caught between my two most intimate family members.

Plaintiff:   This is your family matter. We have an agreement. You should not use your wife as an excuse.

42. The defendant deposed that on about 17 October 2016 he had a conversation with the plaintiff at the Delhi Street property to the following effect:

Plaintiff:   I have arranged for my wife, Yen, to sign an agreement with me so that she is not entitled to claim against the Swete Street Property. She was unwilling to sign at first but I persuaded her. So are you able to transfer the Swete Street Property to me now since I have made the payment to you.

Defendant:   My family is currently facing financial difficulties upon my change of job and loss of income. We need to make some amendments to the rental payments whilst I will return the $90,000.00 to you.

Plaintiff:   Many people live with difficulties out there!

Defendant:   I am the sole income bearer. My wife cannot work due to her sickness.

Plaintiff:   My wife is also sick too.

Defendant:   Our financial situation differed substantially since my change of job.

Plaintiff:   Are you transferring the property to me?

Defendant:   My wife disagrees to transfer the Swete Property to you. I am caught between two intimate family members now.

Plaintiff:   I have told our sisters about this. They all showed their support to me. I will not keep my hands off the property!

43. In 2017 the defendant made efforts to have the plaintiff enter into a tenancy agreement with respect to the Swete Street property, but the plaintiff refused to do so, maintaining that the property had been sold to him and that he was the owner. In May 2017 the defendant served a 90 day notice of termination of tenancy agreement upon the plaintiff. These proceedings were commenced shortly thereafter.

Was a contract for sale concluded in early 2010?

44. For the following reasons, I have concluded that the plaintiff has established that in about January 2010 a contract for the sale of Swete Street property came into existence.

45. There is a degree of common ground between the plaintiff and the defendant as to what was said and done in early 2010. To the extent that there are differences, I generally prefer the plaintiff’s account of what took place in early 2010 over the account given by the defendant. That preference is partly based on my overall assessment of the plaintiff as a witness who appeared to be genuinely attempting to accurately recall the events of 2010. I also consider that the plaintiff’s version is objectively more likely to be accurate than the defendant’s version. There are some aspects of the defendant’s evidence that I am unable to accept.

46. For example, I do not accept his evidence to the effect that an agreement was made to swap residences that was separate from the discussions involving the payment of the amounts outstanding on the mortgage (said to be about $180,000). I also do not accept that the discussions involving the payment of monies did not occur until about mid-February 2010, or at any rate after the swap of residences had taken place. The evidence is clear that on 20 January 2010 the plaintiff obtained a bank cheque in the amount of $30,000. The plaintiff gave evidence, which I accept, that he gave the bank cheque to the defendant at that time. In my opinion it is unlikely that this would have occurred prior to the discussions involving the payment of the $180,000. Further, it seems clear that the swap had not occurred by that time. Certain renovations that the defendant wanted effected upon the Delhi Street property, involving the flooring, had not yet been done. In my view it is more likely that the discussions between the plaintiff and the defendant that involved the payment of the $180,000 took place in January 2010, prior to the swap.

47. I am prepared to accept that there was at least one conversation in January 2010 to the effect of that deposed to by the plaintiff. The defendant conceded in cross-examination that the plaintiff said to him something similar to:

How much money do you still owe to the banks for both of the properties? I can pay off all the mortgages for you and in return you transfer the title of Swete Street property to me.

48. There seems little doubt that the plaintiff spoke of a transfer, although the defendant, when pressed, would not accept that the plaintiff spoke of a transfer of the title. However, it is likely that the plaintiff did speak about a transfer of title, or a transfer of ownership. The document prepared by the defendant in September 2013 specifically refers to an agreement “to transfer the ownership” of the Swete Street property. Even allowing for the defendant’s evident limitations in his use of the English language, his evidence to the effect that the agreement concerned only a right to live in the property is unconvincing in the light of his reference to a transfer of ownership. There is also little doubt that the plaintiff told the defendant that he did not have $180,000 right now, and the defendant agreed to the plaintiff’s suggestion that the money be paid by instalments.

49. In addition to the discussion about the payment of the $180,000 and the transfer of the title (or ownership), the conversation deposed to by the plaintiff encompassed the subject of where the parties would live. It was agreed that the plaintiff would move out of the Delhi Street property and into the smaller Swete Street property. It may well be the case that in the circumstances that pertained towards the end of 2009 the prospect of a swap of that nature had been raised before this discussion. Nevertheless, I do not think that any firm agreement had been reached along those lines before the discussion in January 2010.

50. The defendant’s version of the conversation, contained in his affidavit, is in some respects very close to that put forward by the plaintiff. The defendant suggests that the plaintiff proposed to him that if he paid off the mortgages, the defendant would in return “transfer me your Swete Street property so I can have a place to live after my retirement so I do not have to move around anymore”. As I have said, I think that the transfer referred to was a transfer of title, or ownership. I do not accept that words were said to the effect that the defendant would give (or transfer) a right to live in the property for life. Even the defendant’s version would not in my view be read in that way. Those words rather suggest that there would be a transfer of the property to the plaintiff, and this would result in the plaintiff having a place to live in his retirement.

51. In my opinion, a concluded agreement was reached between the plaintiff and the defendant during these discussions in January 2010. Viewed objectively in the then prevailing circumstances, the parties should be taken to have agreed that the plaintiff would pay $180,000 to the defendant in return for a transfer of the title of the Swete Street property, and that the plaintiff would move out of the Delhi Street property and into the Swete Street property. The parties did not expressly agree upon a date for completion. In those circumstances, a term requiring the parties to complete within a reasonable time would be implied (see Cavallari v Premier Refrigeration Company Pty Ltd (1952) 85 CLR 20 at 25-6).

52. In that regard, it should be noted that in the January 2010 discussions the defendant said that he would be willing to accept payment by instalments. By early March 2010 instalments totalling $50,000 had been paid and accepted. I accept the plaintiff’s evidence to the effect that in about March 2010 the plaintiff had a further conversation with the defendant in which the latter agreed to his proposal that the remaining portion of the $180,000 could be paid by instalments of $200 per week.

53. I have not overlooked the evidence to the effect that the plaintiff told the defendant to speak to his wife and see what she says. However, even if that could be construed as introducing a condition that would need to be satisfied before the agreement became binding upon the parties (or at least the defendant), the condition could not be considered to be unfulfilled once the defendant accepted the bank cheque for $30,000 from the plaintiff. The evidence suggests that no dissatisfaction on the part of Xiuping Wu with what had been agreed was communicated to the plaintiff. I accept the evidence given by the plaintiff to that effect in cross-examination. Indeed, Xiuping Wu gave evidence that indicates that the defendant made a deliberate decision not to tell the plaintiff that there was disagreement with what he had proposed. In cross-examination, the defendant agreed that it was not until 2016 that he raised any disagreement with the plaintiff concerning the purchase price.

Requirement of writing

54. It was not in dispute that s 54A of the Conveyancing Act applies to the contract for sale alleged by the plaintiff. Section 54A relevantly provides:

(1)   No action or proceedings may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged.

(2)   This section applies to contracts whether made before or after the commencement of the Conveyancing (Amendment) Act 1930 and does not affect the law relating to part performance, or sales by the court.

55. Putting aside for the moment the law relating to part performance, the plaintiff’s claim to enforce the contract would be precluded by s 54A(1) unless the agreement or some memorandum or note thereof, is in writing, and signed by the party to be charged, relevantly the defendant.

56. The plaintiff submitted that the document prepared and signed by the defendant on 25 September 2013 amounted to a memorandum or note of the agreement within the meaning of s 54A(1). However, it is well-established that for a memorandum or note to satisfy the requirements of the section it must at least contain all the essential terms of the agreement (see Harvey v Edwards, Dunlop & Co Ltd (1927) 39 CLR 302 at 307; Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 at 318). The document plainly does not do so, there being no reference at all to the consideration to be paid for the transfer of the Swete Street property to the plaintiff.

57. The defendant contended that the plaintiff’s claim is also precluded by the operation of s 23C(1)(a) of the Conveyancing Act. The plaintiff did not accept that s 23C was applicable, relying upon what was said in Baloglow v Konstantinidis (2001) 11 BPR 20,721; [2001] NSWCA 451 at [162]. It is not necessary to resolve that question. It is clear that the 25 September 2013 document does not itself create or dispose of any interest in land as required by s 23C(1)(a). At its highest, the document refers to an antecedent agreement to transfer an interest in the Swete Street property. In any event, the document fails to satisfy the writing requirements of s 23C(1)(a).

58. It follows from the above that the plaintiff’s claim cannot be brought unless the plaintiff can successfully invoke the law relating to part performance (see ss 23E(d) and 54A(2) of the Conveyancing Act).

Part performance

59. The law relating to part performance has been heavily influenced by the speech of Lord Selborne in Maddison v Alderson (1883) 8 App Cas 467, recently described by Nettle and Gordon JJ in Pipikos v Trayans (2018) 92 ALJR 880; [2018] HCA 39 at [95] as a “seminal ex post facto rationalisation of the doctrine of part performance and the restrictions to which it is subject”.

60. Lord Selborne stated (at 475-6):

From the law thus stated the equitable consequences of the part performance of a parol contract concerning land seem to me naturally to result. In a suit founded on such part performance, the defendant is really “charged” upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the statute) upon the contract itself. If such equities were excluded, injustice of a kind which the statute cannot be thought to have had in contemplation would follow. Let the case be supposed of a parol contract to sell land, completely performed on both sides, as to everything except conveyance; the whole purchase-money paid; the purchaser put into possession; expenditure by him (say in costly buildings) upon the property; leases granted by him to tenants. The contract is not a nullity; there is nothing in the statute to estop any Court which may have to exercise jurisdiction in the matter from inquiring into and taking notice of the truth of the facts. All the acts done must be referred to the actual contract, which is the measure and test of their legal and equitable character and consequences. If, therefore, in such a case a conveyance were refused, and an action of ejectment brought by the vendor or his heir against the purchaser, nothing could be done towards ascertaining and adjusting the equitable rights and liabilities of the parties, without taking the contract into account. The matter has advanced beyond the stage of contract; and the equities which arise out of the stage which it has reached cannot be administered unless the contract is regarded. The choice is between undoing what has been done (which is not always possible, or, if possible, just) and completing what has been left undone. The line may not always be capable of being so clearly drawn as in the case which I have supposed; but it is not arbitrary or unreasonable to hold that when the statute says that no action is to be brought to charge any person upon a contract concerning land, it has in view the simple case in which he is charged upon the contract only, and not that in which there are equities resulting from res gestæ subsequent to and arising out of the contract. So long as the connection of those res gestæ with the alleged contract does not depend upon mere parol testimony, but is reasonably to be inferred from the res gestæ themselves, justice seems to require some such limitation of the scope of the statute, which might otherwise interpose an obstacle even to the rectification of material errors, however clearly proved, in an executed conveyance, founded upon an unsigned agreement.

61. Lord Selborne further stated (at 478-480):

The doctrine, however, so established has been confined by judges of the greatest authority within limits intended to prevent a recurrence of the mischief which the statute was passed to suppress. The present case, resting entirely upon the parol evidence of one of the parties to the transaction, after the death of the other, forcibly illustrates the wisdom of the rule, which requires some evidentia rei to connect the alleged part performance with the alleged agreement. There is not otherwise enough in the situation in which the parties are found to raise questions which may not be solved without recourse to equity. It is not enough that an act done should be a condition of, or good consideration for, a contract, unless it is, as between the parties, such a part execution as to change their relative positions as to the subject-matter of the contract.

Lord Hardwicke in Gunter v. Halsey said: “As to the acts done in performance, they must be such as could be done with no other view or design than to perform the agreement” (“the terms of which,” he added, “must be certainly proved”). He thought it indeed consistent with that rule to treat the payment of purchase-money, in whole or in part, as a sufficient part performance: Lacon v. Mertens; Owen v. Davies, 1747. This Lord Cowper in Pengall v. Ross, and Lord Macclesfield in Seagood v. Meale had refused to do. On that point later authorities have overruled Lord Hardwicke's opinion; and it may be taken as now settled that part payment of purchase-money is not enough; and judges of high authority have said the same even of payment in full: Clinan v. Cooke; Hughes v. Morris; Britain v. Rossiter. Some of the reasons which have been given for that conclusion are not satisfactory; the best explanation of it seems to be, that the payment of money is an equivocal act, not (in itself), until the connection is established by parol testimony, indicative of a contract concerning land. I am not aware of any case in which the whole purchase-money has been paid without delivery of possession, nor is such a case at all likely to happen. All the authorities shew that the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged: Cooth v. Jackson; Frame v. Dawson; Morphett v. Jones. “The acknowledged possession” (said Sir T. Plumer in Morphett v. Jones) “of a stranger in the land of another is not explicable, except on the supposition of an agreement, and has therefore constantly been received as evidence of an antecedent contract, and as sufficient to authorize an inquiry into the terms, the Court regarding what has been done as a consequence of contract or tenure.”

“It is in general,” said Sir James Wigram (Dale v. Hamilton) of the essence of such an act that the Court shall, by reason of the act itself, without knowing whether there was an agreement or not, find the parties unequivocally in a position different from that which, according to their legal rights, they would be in if there were no contract…But an act which though in truth done in pursuance of a contract, admits of explanation without supposing a contract, is not in general admitted to constitute an act of part performance taking the case out of the Statute of Frauds; as for example, the payment of a sum of money alleged to be purchase-money. The fraud, in a moral point of view, may be as great in the one case as in the other, but in the latter cases the Court does not in general give relief”: (see also Britain v. Rossiter, per Lord Justice Cotton.) The acts of part performance, exemplified in the long series of decided cases in which parol contracts concerning land have been enforced, have been (almost, if not quite, universally) relative to the possession, use, or tenure of the land. The law of equitable mortgage by deposit of title deeds depends upon the same principles.

62. The principles enunciated by Lord Selborne have frequently been cited and approved by the High Court of Australia (see, for example, McBride v Sandland (1918) 25 CLR 69 at 77-8; Cooney v Burns (1922) 30 CLR 216 at 221-2, 229-230, 239 and 243-4; Regent v Millett (1976) 133 CLR 679 at 683). In Pipikos v Trayans (supra) the High Court expressly reaffirmed the correctness of Lord Selborne’s test that acts relied upon as part performance “must be unequivocally, and in their own nature, referable to some such agreement as that alleged” (see Pipikos v Trayans (supra) at [43], [103]-[104] and [157]).

63. In Pipikos v Trayans (supra) Kiefel CJ, Bell, Gageler and Keane JJ stated:

[49]   The view that the court enforces the equities arising from partial performance, rather than the rights conferred by the parol contract itself, while attended with a degree of subtlety, has the powerful merit of being consistent with the Statute of Frauds. The view that part performance is concerned with matters of proof of the parol contract cannot stand with the Statute of Frauds, the evident purpose of which is to prevent the enforcement of a parol contract, however clear may be the proof of its making.

[50]   It is not correct to say that Lord Selborne's statement of principle evinces the view that part performance operates as acceptable evidence of the parol contract in question in place of the writing required by the statute. When Lord Selborne spoke of acts "unequivocally…referable" to "some such agreement", his Lordship was not speaking of the particular contract in question. The very circumstance that Lord Selborne spoke of referability to "some such agreement" itself suggests that the requirement is not concerned with proof of the particular contract in question, but with dealings between the parties which in their nature establish that the parties are in the midst of an uncompleted contract for the sale or other disposition of land. Given that part performance is relevant only in relation to contracts for the sale or other disposition of land, it is not difficult to appreciate that the acts described by Lord Selborne are acts unequivocally and inherently referable to a transaction for the sale or other disposition of the land. Lord Selborne was clear that unequivocal referability is concerned with the proof of acts partially executing a transaction that remains uncompleted, and that proof of the agreement that had been made was not required to show the equity to have the transaction completed.

…

[54]   The equity to have the transaction completed arises where the acts that are proved are consistent only with partial performance of a transaction of the same nature as that which the plaintiff seeks to have completed by specific performance. At that point, regard may be had to the terms of the oral contract in order to ascertain the appropriate orders by way of specific performance. So, in Maddison v Alderson, Lord Selborne stated that the terms of the parol contract may be taken into account only when the equity to have the transaction carried to completion has been established and it becomes necessary to establish the terms of the order to be made. At that point :

"The matter has advanced beyond the stage of contract; and the equities which arise out of the stage which it has reached cannot be administered unless the contract is regarded."

[55]   In McBride v Sandland, Isaacs and Rich JJ explained that the logical order in which the issues in a case such as the present should be addressed is first to determine whether the acts performed establish the equity and then, and only then, to refer to the terms of the parol agreement in order to ascertain the terms in which the equity is to be enforced.

(See also the judgment of Nettle and Gordon JJ at [99]).

64. The plaintiff seeks to rely upon a number of acts as acts of part performance. In essence, these are:

1. the making of instalment payments, either by lump sums or fortnightly transfers of $400, totalling $182,600;

2. moving out of the Delhi Street property and taking possession of the Swete Street property;

3. the payment of outgoings in respect of the Swete Street property;

4. the carrying out of, and expenditure of money upon, renovations to the Swete Street property; and

5. the carrying out of general maintenance at the Swete Street property.

65. It should be emphasised that in applying the test of “unequivocal referability”, the Court is not concerned with proof of the alleged agreement itself, or the terms of such agreement. The enquiry is not directed to whether the acts are unequivocally referrable to the particular contract alleged, but rather whether they are unequivocally referable to some contract of the general nature alleged. In the present case, the Court must consider whether the acts are unequivocally referable to a contract for the sale of the Swete Street property. To that end, the proved circumstances in which the acts were done must be considered (see McBride v Sandland (supra) at 78, cited with approval by Nettle and Gordon JJ in Pipikos v Trayans (supra) at [99]).

66. In my opinion, the plaintiff has established the existence of acts that are unequivocally, and in their own nature, referable to a contract for the sale of the Swete Street property. In particular, I consider that at least the plaintiff’s acts in taking possession of the Swete Street property, carrying out renovations to the property, and paying the outgoings in respect of the property, together amount to sufficient acts of part performance.

67. As noted in the speech of Lord Selborne, the acknowledged possession of a stranger in the land of another has constantly been received as evidence of an antecedent contract; and, as noted by Gibbs J in Regent v Millett (supra) at 683, a change in the possession of land has been described as “the act of part performance par excellence". It is certainly the case that the giving or taking of possession is generally a sufficient act of part performance for a contract for the sale of land (see Pipikos v Trayans (supra) at [159]; see also at [61]).

68. Regard may be had to the circumstances in which possession is taken in any particular case. The circumstances proven in this case, even allowing for the family context, do not suggest that the taking of possession was the result of “mere permission” (see McBride v Sandland (supra) at 78). The plaintiff gave up his long standing possession of the Delhi Street property, in respect of which money payments had been made, and moved to the Swete Street property instead. As was the case in Regent v Millett (supra) at 683, the circumstances here indicate contract, and the taking of possession was an act unequivocally referable to some contract for sale of the land.

69. The plaintiff’s possession of the Swete Street property has continued for many years. During the period of occupation the plaintiff carried out renovations of not insignificant scale, and paid all the outgoings. The defendant was aware that renovations had been carried out, and he knew that the plaintiff was meeting the outgoings. It seems to me that the plaintiff’s possession, coupled with the carrying out of those works and the making of those payments, ought be regarded as acts unequivocally and in their own nature referable to some contract for the sale of the Swete Street property to the plaintiff. They are consistent only with partial performance of a transaction of the same nature as that which the plaintiff seeks to have completed by orders for specific performance (see Pipikos v Trayans (supra) at [54]). The existence of acts of that character gives rise to the equity referred to in Pipikos v Trayans (supra) at [54] “to have the transaction completed”.

70. I have put aside the carrying out of general maintenance, as the evidence of such, and the extent of such, was too vague to support any clear findings as to the nature of those acts.

71. It is not necessary for the plaintiff to rely upon the making of the various payments of instalments. Payment of money towards the purchase price is, at least on its own, not considered to be a sufficient act of part performance (see Maddison v Alderson (supra) at 478-9; Cooney v Burns (supra) at 222-3; Khoury v Khouri (2006) 66 NSWLR 241; [2006] NSWCA 184 at [82] and [89]-[90]; Pipikos v Trayans (supra) at [89]). To the extent that it is permissible for the plaintiff to rely upon those payments in conjunction with the acts of part performance I have found, they would plainly reinforce the conclusion that the equity to have the transaction completed has arisen in this case.

72. The equity having arisen, regard may be had to the oral contract in order to ascertain the appropriate orders for enforcement of the equity (Pipikos v Trayans (supra) at [54]-[55]).

Enforcement of the equity

73. The plaintiff has performed his obligations under the contract for sale found by the Court. In particular, he moved out of the Delhi Street property and into the Swete Street property, and has paid the consideration of $180,000. The contract remains unperformed only to the extent that the defendant has not proceeded to transfer the title to the Swete Street property.

74. The contract, being a contract for the sale of land, is of a type that is commonly the subject of orders for specific performance. Damages is generally not considered to be an adequate remedy for a failure by a vendor to complete a contract for the sale of land, as land may have a special value to the purchaser (see Dougan v Ley (1946) 71 CLR 142 at 150). It was not suggested by the defendant that damages would be an adequate remedy in this case.

75. However, the defendant submitted that specific performance should be refused on the grounds of unfairness and hardship. In essence, the defendant submitted that the agreement was unfair because of undue influence exercised by the plaintiff, and inadequacy of the consideration; and that the defendant would suffer great hardship if he was now required to convey the Swete Street property which has a current value of $600,000.

76. In relation to the claim of undue influence (which was not the subject of a cross-claim seeking the setting aside of the transaction), there was no suggestion that the relationship of brother and brother was itself of a type that is presumed to be one of influence. As to whether a relationship of influence was proven to exist, there is evidence to the effect that the plaintiff’s efforts in relation to the migration of family members to Australia was greatly appreciated, to the extent that the other family members felt obligated to the plaintiff. There was also evidence that the defendant looked up to the plaintiff as his older brother. However, I do not think that any relationship of influence, in the relevant sense, was established. That is to say, it was not shown that the plaintiff occupied a position of ascendency or influence over the defendant (see Johnson v Buttress (1936) 56 CLR 113 at 134-5). The defendant’s own testimony does not advance a basis to conclude that such a relationship existed. Further, the plaintiff denied in cross-examination that his younger brother “took directions” from him. The plaintiff further denied that he took advantage of the defendant in the sale transaction, knowing that the defendant felt obligated to him. I accept the evidence of the plaintiff in these respects. I note further that a sister of the plaintiff and defendant, My Tran Donnelly, did not accept that the defendant would be strongly influenced by anything the plaintiff said to him. Whilst she agreed that she was aware of occasions where the defendant was influenced by the plaintiff, these occasions were not further explored in cross-examination.

77. It seems to me that when the plaintiff spoke to the defendant in January 2010 about the Swete Street property, the defendant was quite amenable to the suggestion that the property be transferred to the plaintiff if he paid off the mortgages. It is likely that the defendant did feel some sense of obligation towards his older brother at that time, and even some degree of deference, as reflected in his suggestion that the plaintiff might have the larger Delhi Street property instead. Nonetheless, in my view the evidence falls short of showing that in the circumstances that existed in early 2010, including the history of family relations up to that point, the plaintiff was in such a position of ascendency over the defendant that he should be taken, unless the contrary is proved, to have procured the benefit of the contract for sale by an undue exercise of influence.

78. It is the case that the purchase price of $180,000 was considerably less than the January 2010 market value of $330,000. The plaintiff thought that the property was worth roughly $240,000 to $250,000. I accept his evidence in that regard. The purchase price was in fact well below market value, but the defendant gained the benefit of the plaintiff’s vacation of the larger Delhi Street property he had occupied for more than 20 years, and in respect of which had made payments towards the mortgage. The agreed consideration must itself be seen in the context of an intra-family, not fully arm’s length, transaction.

79. I am not satisfied that the defendant (or his wife) will suffer “great hardship” (see Dowsett v Reid (1912) 15 CLR 695 at 705) or “a hardship amounting to injustice” (see Tamplin v James (1880) 15 Ch D 215 at 221; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438-9; Fragomeni v Fogliani (1968) 42 ALJR 263) such as would justify the withholding of specific performance. Notwithstanding that the agreed price was well below market value, and the value has increased since the contract was made, I do not think there are sufficient reasons of conscience or expediency to withhold specific performance (see Fullers’ Theatres Ltd v Musgrove (1923) 31 CLR 524 at 549, citing Stewart v Kennedy (1890) 15 App Cas 75 at 102).

80. As I have said, I am not satisfied that the contract was tainted by undue influence on the part of the plaintiff. The contract, including the agreed purchase price, should accordingly be taken to have been freely made by the defendant. The contract has effectively been performed save only for the requirement for the defendant to transfer the title of the Swete Street property to the plaintiff. The plaintiff sought to have the title transferred as long ago as October 2016. At that time, the plaintiff offered to pay the remaining balance of the $180,000 and it appears that he had the ability to do so. Finally, even if the remedy of specific performance was refused, the plaintiff would still have a claim for substantial damages under s 68 of the Supreme Court Act 1970 (NSW).

81. I consider that in all the circumstances it is appropriate for the Court to make orders for specific performance of the contract for sale of the Swete Street property. In essence, orders should be made to compel the defendant to transfer to the plaintiff an unencumbered title to the property. In this regard, I note that it was inherent in the agreement that the purchase price of $180,000 was to be applied to the mortgage debt over the two properties. The evidence suggests that the amount owed on the loan account (which was secured over both properties) was in fact only about $95,000 in January 2010. Be that as it may, it appears that the loan account was repaid in full by the defendant in October 2016, but the mortgage remained upon the titles, at least for a while. It is not clear whether the mortgage still remains on the title to the Swete Street property.

82. The plaintiff, having succeeded on his claim for specific performance, should have a costs order in his favour.

83. It is not necessary for the Court to deal with certain claims for relief that would have arisen for consideration if the plaintiff’s claim for specific performance failed.

84. The Court will direct that within 14 days the parties bring in Short Minutes to give effect to these reasons.

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Decision last updated: 19 February 2019