Receipt of purchase price and delivery of possession are the clearest possible acts of part performance

Delivery up of possession and receipt of the purchase price are the clearest possible acts of part performance. The equitable interest created by a contract is not defeated by a successor in title of the seller who inherits the seller’s estate. Chinese customary law does not trump the system of registration contained in the Land Registration Ordinance.

In Wu Koon Tai v Wu Yau Loi ([1996] 2 HKLR 477, PC) a lease of land in the New Territories was granted to Wu Cheong U. He died and, in 1934, his son sold the land. In accordance with Chinese customary law the sale was effected through a document signed by neither party but by a middleman. The purchaser paid the price and went into possession. He and his successors remained in possession. The successor-in-title of the grandson of the seller claimed to be entitled to the land. Among other grounds relied on were the fact that there was no contract for sale satisfying CPO s.3(1) (the document had not been signed by the parties or their authorised repesentative). Lord Browne-Wilkinson held (at 483) that payment of the purchase pice and giving possession were the clearest acts of part performance. Thus there was a specifically enforceable contract. The equitable interest so created was binding on the successor-in-title of the seller’s grandson since he was a volunteer. The successor-in-title’s claim to possession failed. The 1934 sale was effective. In the course of argument the argument had been raised that failure to register the sale in 1934 did not matter since s.13 of the version of the New Territories Ordinance then in force allowed the court to recognise Chinese customary law and this did not require registration. This argument failed. Chinese customary law did not ‘trump’ the system of Land Registration in Hong Kong.

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