Regent v Millett
(1976) 133 CLR 679
The Regents' bought a house. Shortly afterwards - by an oral agreement - they sold it to their daughter and son-in-law, the Milletts. Consideration involved making mortgage payments and paying a lump sum of $1,000.
went into possession and
began paying the mortgage.
They also made repairs to the house with the knowledge and acquiescence of the Regent’s.
The Regents' refused to transfer the house. The Milletts claimed specific performance and the Regents' sought to rely on failure to comply with formalities. Milletts' succeeded at first instance
Milletts' argued that there was part performance constituted by
- taking of possession
- repairs and renovations
- making mortgage payments
Regents' argued that there was no part performance because:
- the acts were not unequivocally referable to some such contract as alleged by Milletts (they also claimed that a narrower test should apply – that is, that ‘performance must necessarily imply the existence of the contract’, but this was rejected)
- the acts must be done in part performance of the of the agreement alleged – they must have been done under terms of the particular agreement alleged and ‘by force of that agreement’
The basis for the doctrine of part performance is as follows (quoting Lord Cranworth in Caton v Caton):
‘… 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.'
His Honour noted there are many cases in which taking possession, coupled with expending money on the property with the permission of the other party have been held to constitute acts of part performance. In this case, entry into possession alone was a sufficient act of part performance.
While it is possible that in some cases taking possession may be referable to other authority than the contract alleged (as was the case in McBride) in this case the taking of possession did indicate the contract and was unequivocally referable to the type of contract alleged.
Taking of possession was not required by contract by the contract. However, this was not needed for the doctrine to apply – if it was, the utility of the doctrine would be ‘reduced to vanishing point’.
‘… 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.’
The appeal was dismissed