Dear Colleagues;

In its decision today in Pipikos v Trayans [2018] HCA 39 (12 September 2018) http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2018/39.html the High Court of Australia upheld and affirmed the long-standing requirement that, for an action in part-performance of a parol contract to succeed, the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged (in the words of the decision in Maddison v Alderson from 1883).

This was a decision of a full 7-member bench, given that there was a question of whether the court should depart from its own previous decisions. All 7 members of the court agreed in the decision not to water down the “unequivocal” requirement, though there were 3 separate judgements. The “plurality” of Kiefel CJ, Bell, Gagelar and Keane JJ will presumably represent the ratio of the case if there is any debate about it; they reviewed the history of the requirement, and in effect accepted what one might call the traditional rationale of the doctrine, that “the court enforces the equities arising from partial performance, rather than the rights conferred by the parol contract itself”- [49]. (They also note the anomaly that, once the “equities” are recognised, the court then accepts evidence of the actual terms of the parol contract, rather than seeking to craft a general equitable remedy- see [54]. But they accepted this as simply a part of the doctrine as developed.) They decline to follow the decision of the House of Lords in Steadman v Steadman [1976] AC 536 which arguably “loosened up” this requirement, and note that following Steadman the UK Parliament had later abolished the doctrine altogether- see [76].

The “duality” (not sure if this is a word!) of Nettle and Gordon JJ agreed with the outcome, and also conducted their own extensive historical review of the decisions, including reference to US, Canada and NZ. They also noted that none of the conditions laid down for the High Court to overturn its own previous decisions were made out- see [121].

Edelman J gives a very interesting alternative analysis of the reasons for the adoption of the doctrine. His Honour says that it does simply consist of reliance on the “equities” of the circumstances. To quote his Honour’s summary at [125]:

 The reasons that follow explain why the rationale for the doctrine is not that the Statute of Frauds 1677[189] and equivalent statutes must not be used as an instrument of fraud. Nor is it that the court enforces "equities" arising from an act of part performance. Rather, the court enforces the contract itself. The rationale is the imposition of a moral principle despite the terms of the statute. The historical basis for that rationale for part performance lay in the 17th century doctrine by which a court would ignore matters falling within the terms of a statute if they were outside the statute's "equity". (emphasis added)

Not that his Honour suggests that a court today should reason that way: this view, he says, has “long been discarded”. And now that the doctrine has been entrenched for many years it should still be applied. But this argument is a very interesting one.

There are lots of other interesting comments about legal history and the nature of equity in all of the judgments, a fascinating decision overall. Since equity and contracts are not my main area, I may be more likely than usual to have missed something important, so colleagues should feel free to add to this or correct if need be.

Regards

Neil

 

 

 

 

 

 

 

 

NEIL FOSTER

Associate Professor, Newcastle Law School

Faculty of Business and Law

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Blog: https://lawandreligionaustralia.blog

 

 

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