Part performance: Steadman v Steadman

Section 3(2) of the Conveyancing and Property Ordinance states that section 3 (laying down the formalities to be observed in the case of land contracts) does not affect the law relating to part performannce.

The equitable doctrine of part performance makes an oral contract concerning land enforceable. The idea is that sometimes a party to an alleged land contract might have performed actions that indicate the existence of the land contract. In these circumstances, it can be inequitable for the other party to be allowed to use section 3(1) of the Conveyancing and Property Ordinance as a defence in an action to enforce the contract. The modern statement of the requirements of part performance are found in the House of Lords decision in Steadman v Steadman ([1976] AC 536, HL).

In Steadman v Steadman, the parties’ marriage had broken down. The wife had applied for a declaration that the matrimonial home was jointly owned and an order for sale. The husband was making maintenance payments to the wife and he had applied for a variation of the maintenance order. Negotiations took place at the door to the courtroom and it was agreed that the wife would sell her interest in the house to her husband for GBP1500. He also agreed to pay GBP100 in respect of arrears of maintenance payments. The agreement was explained to the court which made orders implementing what the parties had agreed concerning maintenance. The husband paid the GBP100 and his solicitors prepared a deed to transfer the wife’s interest in the house to the husband. The wife, however, refused to sign the deed and relied on the English equivalent of s.3(1) of the Conveyancing and Property Ordinance. The husband argued that she was legally bound to transfer her interest in the matrimonial home to him since there had been acts of part performance of the oral agreement. The husband succeeded.

In essence, the House of Lords held that part performance is available where the alleged acts of part performance point on the balance of probabilities to some contract between the parties and either showed the nature of the contract or were consistent with the oral agreement alleged. There was some inconsistency of view between the members of the House of Lords as to whether the acts relied on had merely to point to the existence of a contract or whether they had to point specifically to the existence of a contract concerning land. There was also a difference of aproach as to which of the acts that had been performed were relevant.

Lord Simon of Glaisdale provided an explanation as to why he thought that it was enough that the acts showed on the balance of probabilities that some contract (not necessarily a land contract) had been entered into:

‘The law here is not logical: it represents the compromise of the two principles to which I have referred near the outset of this speech. If the contract alleged is such that it ought not to depend on oral testimony, it is this contract, not merely some contract, that the acts should prove. If the plaintiff has so performed his obligations under the contract that it would be unconscionable for the defendant to plead the statute, it is immaterial whether or not the plaintiff’s acts prove the contract – let alone some other contract. But it is this sort of illogical compromise, doing some deference to each of two competing and inconsistent principles, in which English law abounds. There is no reason to disturb it so long as it does subsantial justice’ (at 562)

The equitable doctrine of part performance does not require the court to find some acts that point to the existence of a contract and only then to hear oral evidence of the alleged contract. It looks at the acts and the alleged contract side by side when deciding whether the acts are acts of part performance.

Michael Lower

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