Pipikos v Trayans: part performance and the unequivocal referability test

Introduction

Section 26 of the Law of Property Act (SA) is in substantially the same terms as section 3(1) of Hong Kong’s Conveyancing and Property Ordinance:

‘No action shall be brought upon any contract for the sale or other disposition of land or of any interest in land, unless an agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged’

Section 26, like section 3, goes on to say that this provision does not affect the law relating to part performance.

What are the qualities of an act of part performance? In Maddison v Alderson, the Earl of Selborne LC said:

‘the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged’ ((1883) 8 App Cas 467 at 479).

The House of Lords decision in Steadman v Steadman ([1976] AC 536) is authority for the contrasting proposition that the acts relied upon need point on the balance of probabilities to the alleged agreement. This is a relaxation of the unequivocal referability test.

In Pipikos v Trayans ([2018] HCA 39) the High Court of Australia had to consider which standard to apply.

The facts

T and her husband bought a residential property (‘the disputed property’) in South Australia. P, T’s brother-in-law, settled T’s mortgage arrears. There was also an oral agreement that T and her husband would be co-owners with P of property bought as an investment (‘the investment property’) in return for P being given a half-interest in the disputed property.

T signed a hand-written note acknowledging that P had a 50% ownership share in the disputed property. P lodged a caveat claiming a 50% equitable interest in the disputed property. T’s husband surrendered his interest in the disputed property to T when the couple separated.

P brought proceedings seeking a declaration that T held the disputed property as to one half for him or that he be registered as joint proprietor of the property.

The Full Court decided that there was an oral agreement between T and P under which P was to have a half share in the disputed property. The question was whether that agreement was enforceable.

The section 26 formalities had not been complied with and P relied on the doctrine of part performance to enforce the agreement.

The alleged acts of part performance were:

  • P’s payment of the deposit and purchase price in respect of the investment property;
  • payment of money to T’s husband;
  • P’s payment of money to settle the mortgage arrears in respect of the disputed property;
  • attempting to enforce the oral agreement through the hand-written note signed by P; and
  • the lodging of the caveat and bringing these proceedings.

P accepted that these acts were not unequivocally referable to the alleged agreement. She argued, however, that after Steadman, the test had been relaxed and that referability had only to be proved on the balance of probabilities.

Unequivocal referability confirmed as the test

P failed. The test was still that of unequivocal referability and Steadman v Steadman was not to be followed to the extent that it suggested otherwise ([66]). There were no sufficient acts on the facts of the present case to engage the doctrine of part performance ([79]).

Michael Lower

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