A mere payment of a sum of money might amount to an act of part performance, as might the act of a purchaser instructing solicitors to prepare and submit a draft conveyance or transfer, so as to leave asituation capable of enforcement in equity. There is no general rule against the payment of a sum of money constituting an act of part performance for the purposes of s 40. It is necessary to look at the surrounding circumstances, including payments of money, to see if they pointed to some oral contract consistent with the alleged contract.
Lord Reid said: ‘This matter has a very long history. Section 40 replaced a part of section 4 of the Statute of Frauds 1677 (29 Car. 2 c. 3), and very soon after the passing of that Act authorities on this matter began to accumulate. It is now very difficult to find from them any clear guidance of any general application. But it is not difficult to see at least one principle behind them. If one party to an agreement stands by and lets the other party incur expense or prejudice his position on the faith of the agreement being valid he will not then be allowed to turn round and assert that the agreement is unenforceable. Using fraud in its other and less precise sense, that would be fraudulent on his part and it has become proverbial that courts of equity will not permit the statute to be made an instrument of fraud . . It must be remembered that this legislation did not and does not make oral contracts relating to land void; it only makes them unenforceable. And the statutory provision must be pleaded; otherwise the court does not apply it. So it is in keeping with equitable principles that in proper circumstances a person will not be allowed ‘fraudulently’ to take advantage of a defence of this kind. There is nothing about part performance in the Statute of Frauds. It is an invention of the Court of Chancery and in deciding any case not clearly covered by authority I think that the equitable nature of the remedy must be kept in mind.’
References:  AC 536
Judges: Lord Reid
Statutes: Law of Property Act 1925 40, Statute of Frauds 1677 4
Jurisdiction: England and Wales
This case is cited by:
- Cited – Yaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
(Gazette 14-Jul-99, Times 08-Jul-99, ,  EWCA Civ 1680,  1 WLR 1217,  Ch 162,  EGCS 92, ,  EWCA Civ 3006,  1 All ER 711)
- Cited – Inglorest Investments Ltd v Robert Campbell and Another CA 2-Apr-2004
The appellants appealed an order that property be part of the estate of the deceased. There had been an agreement to assign the reversion of the lease to the claimant. That was not completed, but he later acquired the freehold reversion. No written . .
( EWCA Civ 408, )
- Cited – Actionstrength Limited v International Glass Engineering In Gl En SpA and others HL 3-Apr-2003
Actionstrength agreed with Inglen to provide construction staff to build a factory for St-Gobain. Inglen failed to pay. Actionstrength claimed against for the amount due. Inglen went into liquidation. The claim was now against St-Gobain. The claim . .
(,  UKHL 17, Times 04-Apr-03, ,  2 AC 541,  2 WLR 1060,  1 CLC 1003,  2 All ER (Comm) 331,  2 All ER 615,  BLR 207, 88 Con LR 208)
- Cited – Orton v Collins and others ChD 23-Apr-2007
The court considered how a Part 36 offer could be treated as accepted when it involved an agreement to transfer land, because the offer and its acceptance would not operate under the 1989 Act.
Held: The agreement was enforceable. The Civil . .
(,  EWHC 803 (Ch),  3 All ER 863,  1 WLR 2953)
- Cited – In Re Alton Corporation 1985
Sir Robert Megarry V-C, said in relation to a loan accompanied by the deposit of title deeds: ‘I have to remember that the basis of an equitable mortgage is the making of an agreement to create a mortgage, with the deposit of the land certificate . .
( BCLC 27)
- Cited – United Bank of Kuwait Plc v Sahib and Others CA 2-Feb-1996
The bank appealed against a decision that the simple deposit of deeds with a bank did not take effect as an equitable charge.
Held: Depositing deeds with a bank is not sufficient to create a charge over them. The old law as to the creation of . .
(Times 13-Feb-96,  Ch 107, ,  EWCA Civ 1308,  3 WLR 372,  3 All ER 215)
These lists may be incomplete.
Last Update: 27 November 2020; Ref: scu.193604