Regent v Millett

[1976] HCA 40

HIGH COURT OF AUSTRALIA

Gibbs, Stephen, Mason, Jacobs and Murphy JJ.

REGENT v. MILLETT

(1976) 133 CLR 679

6 August 1976

Vendor and Purchaser

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.

Decisions

August 6.
GIBBS J. This regrettably protracted litigation arises out of an unfortunate family dispute. The respondents, the plaintiffs in the action are husband and wife. The appellants, the defendants, are the parents of the female respondent. (at p680)

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."

The books are full of cases in which it has been held that the entry into 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) 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) 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)

Orders

Appeal dismissed with costs.