Stathopoulos v Cremin

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2022 01336

BETWEEN:

GEORGE STATHOPOULOS	Plaintiff
v
HELEN TERESA CREMIN & ANOR (according to the attached Schedule)	Defendant

AND BETWEEN:

HELEN TERESA CREMIN	Plaintiff by Counterclaim
v
GEORGE STATHOPOULOS	Defendant by Counterclaim

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JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	27 February 2023
DATE OF RULING:	8 May 2023
CASE MAY BE CITED AS:	Stathopoulos v Cremin & Anor
MEDIUM NEUTRAL CITATION:	[2023] VSC 238

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PROPERTY – Application for summary dismissal pursuant to s 62 of the Civil Procedure Act 2010 (Vic) – Application for summary judgment pursuant to s 61 of the Civil Procedure Act 2010 (Vic) – Plaintiff seeks enforcement of contract of sale of land – Plaintiff by counterclaim seeks removal of caveats from land – Whether the plaintiff has no real prospects of success and there is a real question to be tried – Whether contract is not a binding agreement for sale because it falls within the third category discussed in Masters v Cameron – Whether contract does not comply with the requirements of s 126 of the Instruments Act 1958 (Vic) – Held, the plaintiff has a real prospect of success and there is a real question to be tried – Application for summary dismissal set aside – Applications for removal of the caveats set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Defendant by Counterclaim	Mr A Herskope	Welner Lawyers
For the First Defendant/Plaintiff by Counterclaim	Mr W Rimmer	Altus Lawyers

TABLE OF CONTENTS

Application and material.................................................................................................................. 1

Background......................................................................................................................................... 1

Submissions...................................................................................................................................... 11

Principles regarding summary judgment................................................................................... 11

Principles in relation to whether there is a binding agreement............................................. 14

Is there a real question to be tried regarding whether the second contract is a binding agreement?........................................................................................................................................................ 18

If there is a real question to be tried, does the balance of convenience favour the status quo? 23

Section 126 of the Instruments Act................................................................................................ 23

Submissions regarding s 126 of the Instruments Act................................................................ 23

Principles regarding s 126 of the Instruments Act..................................................................... 25

Does the second contract identify the parties to the contract sufficiently to comply with the requirements of s 126?............................................................................................................... 26

Removal of caveats.......................................................................................................................... 28

HIS HONOUR:

Application and material

In this proceeding, the plaintiff seeks to enforce the contract of sale of properties owned by the first defendant, being Lots 1 and 2 at 343 McGlone Road, Drouin. The first defendant denies the relevant document was a binding agreement for the sale of land primarily on the basis that the agreement to sell the land was subject to the execution of a legally enforceable contract, and also because it did not satisfy the requirements of s 126 of the Instruments Act 1958 (Vic) (‘Instruments Act’). By her counterclaim, the first defendant seeks orders for the removal of caveats lodged on the titles.

By summons filed on 13 October 2022, the first defendant has applied for summary dismissal of the plaintiff’s proceeding pursuant to s 62 of the Civil Procedure Act 2010 (Vic) (‘CPA’), and for summary judgment on counterclaim pursuant to s 61 of the CPA. The plaintiff opposes the applications, and submits that even if the plaintiff has no real prospects of success, the Court should, in the exercise of its power pursuant to s 64 of the CPA, not summarily dismiss the proceedings because it is not in the interests of justice to do so, and/or the dispute is of such a nature that only a full hearing on the merits is appropriate.

The first defendant relies on her affidavit sworn on 5 October 2022 and written submissions filed on 1 February 2023. The first defendant has also filed an affidavit of Richard Bridge sworn on 25 November 2022, which was not formally relied on but was referred to during the hearing.

The plaintiff relies on his affidavit sworn on 16 November 2022 in opposition and written submissions filed on 2 February 2023.

Background

The following background is apparent from the pleadings and correspondence between the parties.

On 3 September 2018, the first defendant and plaintiff entered into a contract for the sale of property at 343 McGlone Road, Drouin. This contract is defined as the ‘First Contract’ in the statement of claim. The plaintiff pleads that this contract related to Lot 1, whereas the defendant says it was for Lot 2. Nothing seems to turn on that for present purposes, but I note that the property address in the written contract of sale refers to the address of the property as ‘Lot 2/343 McGlone Road, Drouin 3818’. It has been signed by the plaintiff on 30 August 2018 and the first defendant on 3 September 2018. The purchase price is $13,250,000. The deposit is in the amount of $2,650,000, which is stated to be due by 1 November 2018. The contract records that $5000 of the deposit has been paid, and that the balance of the purchase price is to be paid in two instalments: $1 million by 1 September 2019 and the remaining $9,600,000 by 1 September 2021. It is unclear whether any deposit was paid pursuant to the first contract beyond the $5000 apparently paid, but it is clear that the first contract did not proceed.

The plaintiff says that between 30 March 2020 and 9 April 2020 he communicated with Mr Schnall, by telephone, email and in person. The plaintiff says that the first contact he had with Mr Schnall was when he received a telephone call from him in the week commencing 30 March 2020 on his mobile phone. The plaintiff says Mr Schnall identified himself as ‘a real estate agent from RPM Real Estate, calling on behalf of [the first defendant]’ and that prior to this call, he had never met or had any dealing with Mr Schnall. The plaintiff recounts the conversation as follows:

He said: ‘I believe you have interest in a property in Drouin.’
I said: ‘Which one?’
He said: ‘McGlone Road in Drouin.’
I said: ‘I’ve been there before and it’s got issues. There is a contamination buffer zone with the egg farm next door, and you lose approximately 20% of the subdivision. [The first defendant] also told me she wants to keep Lot 1 which is her house.’
He said: ‘If I could convince [the first defendant] to also sell Lot 1, would you be interested?’
I said: ‘Yes, at the right price.’
He said: ‘OK, what are you offering?’
I said: ‘$8 million.’
He said: ‘That won’t go anywhere.’ ‘I‘ll give it a good shot.’

The plaintiff says that on 7 April 2020 he met with Mr Schnall in person, who told the plaintiff that he would put the plaintiff’s offer to the first defendant and wrote down the plaintiff’s email address for future correspondence. That afternoon, Mr Schnall telephoned the plaintiff and told him that the first defendant had rejected the offer of $8 million. The plaintiff says that he then gave Mr Schnall four separate offers to take to the first defendant. Later that day, at 5:41pm, Mr Schnall emailed the plaintiff in which he confirmed the earlier discussion, confirmed that the four verbal offers had been presented to the first defendant, and requested that the plaintiff provide him with four separate offer letters in the terms set out in the email. In the email, Mr Schnall said that if the plaintiff could provide the four separate letters of offer by 12pm the following day, he would ‘then have the offer that [the first defendant] selects signed off on Monday.’

The offers set out in the 7 April email are the same in structure but vary according to whether the contract was to include Lot 1 and as to the purchase price and deposit payable. The terms of the offers are as follows:

OFFER 1
343 McGlone Road, Drouin VIC 3818 (Excluding the 1 acre lot with [the first defendant’s] House)
1. Purchase Price: $8,000,000 (inclusive of GST if applicable) payable as follows:
$1,600,000 payable on execution of the Contract of Sale
$6,400,000 payable on 1 September 2021

2. Condition: The purchaser will pay the vendor $10,000 to cover the costs of contract preparation. If the vendor does not execute the contract of sale for any reason, the $10,000 is to be refunded to the purchaser.
The vendor may only retain the $10,000 if the purchaser does not execute the contract of sale.

OFFER 2
343 McGlone Road, Drouin VIC 3818 (Excluding the 1 acre lot with [the first defendant’s] House)
1. Purchase Price: $8,000,000 (inclusive of GST if applicable) payable as follows:
$1,600,000 payable on execution of the Contract of Sale
$1,600,000 payable 12 months from execution of the Contract of Sale
$5,800,000 payable on 1 March 2022

2. Condition: The purchaser will pay the vendor $10,000 to cover the costs of contract preparation. If the vendor does not execute the contract of sale for any reason, the $10,000 is to be refunded to the purchaser.
The vendor may only retain the $10,000 if the purchaser does not execute the contract of sale.

OFFER 3
343 McGlone Road, Drouin VIC 3818 (Including the 1 acre lot with [the first defendant’s] House)
1. Purchase Price: $9,000,000 (inclusive of GST if applicable) payable as follows:
$1,800,000 payable on execution of the Contract of Sale
$7,200,000 payable on 1 September 2021

2. Condition: The purchaser will pay the vendor $10,000 to cover the costs of contract preparation. If the vendor does not execute the contract of sale for any reason, the $10,000 is to be refunded to the purchaser.
The vendor may only retain the $10,000 if the purchaser does not execute the contract of sale.

OFFER 4
343 McGlone Road, Drouin VIC 3818 (Including the 1 acre lot with [the first defendant’s] House)
1. Purchase Price: $9,000,000 (inclusive of GST if applicable) payable as follows:
$1,800,000 payable on execution of the Contract of Sale
$1,800,000 payable 12 months from execution of the on execution of the Contract of Sale
$5,400,000 payable on 1 March 2022

2. Condition: The purchaser will pay the vendors $10,000 to cover the costs of contract preparation. If the vendor does not execute the contract of sale for any reason, the $10,000 is to be refunded to the purchaser.
The vendors may only retain the $10,000 if the purchaser does not execute the contract of sale.

Mr Schnall ended the email with the words ‘[l]ook forward to executing this deal for you George next week.’

The plaintiff refers to further emails on 9 April 2020 at 9:28am and 9:32am where he states that his details on the first contract remain the same. The details of the purchaser on the first contract are ‘George Stathopoulos and or nominee.’ The plaintiff then says that later on 9 April 2020, he received a call from Mr Schnall who said he was with the first defendant at her house and that she had accepted offer number three with the purchase price of $9 million, inclusive of GST, for both Lots 1 and 2. The plaintiff says that Mr Schnall said to him:

he would draw it up and get [the first defendant] to sign it, and that he would then meet me to get me to sign it. He also told me that [the first defendant] wanted $20,000.00 for the contract preparation costs, which I communicated that I agreed to, to Mr Schnall, while he was in [the first defendant’s] presence. In response to this, he then informed me that [the first defendant] said ‘Congratulations!’

On 9 and 10 April 2020, respectively, the first defendant and the plaintiff signed a document headed ‘Offer to Purchase – Key Terms and Conditions.’ This contract is defined as the ‘Second Contract’ in the plaintiff’s statement of claim. It is a very brief document. The substantive terms take up half a page as follows:

Terms Details
PropertiesLot 1 and Lot 2, 343 MCGLONE ROAD, DROUIN VIC 3818
Purchase Price $9,000,000 (inclusive of GST if applicable) payable as follows:
$1,800,000 payable on execution of the Contract of Sale
$7,200,000 payable on 1 September 2021

ContractThis offer is subject to the purchaser and vendor executing a legally enforceable Contract of Sale.
Exclusivity  The vendor confirms that they will immediately upon acceptance of this offer cease any other negotiations and will not start any new negotiations in respect of the property [whilst] contract negotiations with the Purchaser are underway.
Contract Preparation Payment       The purchaser will pay the vendor $20,000 to cover the costs of contract preparation. If the vendor does not execute the contract of sale for any reason, the $20,000 is to be refunded to the purchaser. The vendor may only retain the $20,000 if the purchaser does not execute the contract of sale.
Confidentiality  The vendor agrees to remain confidential as to the existence and subject matter of the offer, make no public announcements or provide any communication relating to negotiations or the terms of the offer.

The plaintiff’s position, as it is pleaded and submitted by counsel, as to the second contract, is that:

(a) it constituted an agreement by the first defendant to sell the property to the plaintiff;

(b) the sale price was to be $9 million, inclusive of GST, with a deposit of $1.8 million payable on the execution of the contract of sale, which is defined as the ‘Third Contract’ in the plaintiff’s statement of claim;

(c) it ‘required the preparation of the Third Contract, and was to be otherwise on the terms of the Second Contract’;

(d) it contained a clause ‘regarding costs of preparing the Third Contract’.

I will refer to the first, second and third contracts in those terms for the purposes of convenience and not to suggest any conclusions as to whether any agreement was entered and if so what its, or their, terms were.

In his pleading, the plaintiff particularises the second contract as being the written contract dated 10 April 2020. He does not say there are any oral or implied terms.

The first defendant:

(a) admits that she signed a document titled ‘Offer to Purchase – Key Terms and Conditions’ on 9 April 2020;

(b) denies that the second contract imposes any obligation on the first defendant to sell Lots 1 and 2, but rather says it merely contained an obligation which constrained her freedom to negotiate with other parties in respect of Lots 1 and 2 in certain circumstances. She further says that in any event such obligations were void for uncertainty;

(c) says that it is a term of the second contract that the ‘offer is subject to the purchaser and vendor executing a legally enforceable Contract of Sale’ and that ‘the intention of the parties is that they would only be bound on the execution of a legally enforceable contract of sale. Because until that time, the intention of the parties was that the entire offer, the entire legal effect … of the arrangement was conditional on that execution’;

(d) says that the offer omitted an essential term of any alleged agreement in that it failed to identify the purchaser who was allegedly party to the agreement;

(e) says that for the above reasons, and by force of s 126 of the Instruments Act, the parties have not entered into an enforceable agreement.

The plaintiff says that between 12 and 29 June 2020, he called the first defendant 22 times and that he had five lengthy conversations with her in which she:

congratulated me on completing the deal, and enjoyed discussing my future development plans with the property. She was particularly happy that the Precinct Structure Plan allowed for a school to be part of the development. In my final conversation with [the first defendant] on 23 June 2020 at 3:12 PM, she informed me that she would tell her solicitor Mr Bridge … to ‘hurry up’ with the contracts, and send them to me.

On 24 June 2020, the first defendant emailed the plaintiff saying:

I forgot to mention to you in conversation yesterday that after settlement date I would want to continue living in the house for a further 12 months rent free; so as to give myself time to purchase elsewhere. I will want this in the contract. I also ask you to pay the rates up until settlement date which amount to approximately $21,000 pa. This arrangement is quite common in purchases of development land in the area. This would also need to be in the contract. Thanks George and looking forward to having lunch with you in the not too distant future.

On 24 June 2020, the plaintiff had a conversation with the first defendant’s solicitor Mr Bridge, which he recounts as follows:

[d]uring that conversation, I told Mr Bridge that I had received an email from [the first defendant] earlier that day, requesting the matters referred to in it. I informed him that I agreed to those requests. I also informed him that [the first defendant] required him to ‘hurry up’ with issuing the contracts. He told me that he was aware of what she wanted. He asked me if my details were the same as in the First Contract. I confirmed that my details had not changed, as previously communicated to Mr Schnall.

By emails dated 25 June 2020 and 30 June 2020, the first defendant’s solicitors wrote to the plaintiff seeking details of the entity which would be purchasing the property and the lawyers who would be acting. On 30 June 2020, the plaintiff replied to these emails simply stating ‘I am waiting on a GST ruling from the ATO’. It is unclear what, if any, other response there was to this email, or what other communications there may have been between these emails and the emails referred to below in April 2021.

In April 2021, there was a series of emails between the plaintiff and first defendant’s legal representatives in which the plaintiff’s position was expressed as being that he had expended significant time and money in progressing the purchase and was awaiting the updated contract of sale, being the third contract. The first defendant’s position is that the agreement was subject to the parties entering into a contract of sale and that the terms of the agreement included that the plaintiff was to pay $20,000 in advance, and for the purposes of the preparation of the third contract, which he had not done. On that basis, the first defendant says she was under no obligation to complete the contract.

The plaintiff pleads that on 19 April 2021, the first defendant ‘purported to repudiate the Second Contract.’ It is said that this repudiation is constituted by an email dated 19 April 2021 from Mr Richard Bridge, solicitor for the first defendant, to Mr Albert Jacobs, the agent of the plaintiff. There is a series of emails passed between those parties on 19 April 2021.

The first email in the chain on 19 April 2021 was sent by Mr Jacobs to Mr Bridge at 12:01pm and included the following:

Originally, a [contract of sale] was executed between the parties dated Aug/Sept 2018 – and is attached.
Further, a renegotiation occurred between the parties and previous [contract of sale] which was altered to allow for Lot 1 and Lot 2 in the attached [heads of agreement].

The Purchaser has been awaiting an updated [contract of sale] in line with the [heads of agreement] since December 2020 and has not been able to reach the Vendor since. As you may know, the purchaser has expended significant resource [sic], both money and time, in progressing this purchase and desires to settle.
Could you please advise so we can conclude this purchase.

The relevant email from Mr Bridge which is pleaded as constituting the purported repudiation of the agreement appears to be one that was sent at 12:36pm, the response to which includes the following:

As for the nature of the offer to purchase, it is clearly subject to the parties entering into a Contract of Sale. It is not binding, and clearly encompassed your client (a) paying $20,000 for contract preparation, and (b) further negotiations over the contract. As such there is no immediately binding agreement that was entered on signing that document.
I also note that I liaised with George in June 2020, providing him with our trust account details (for payment of the $20,000) and requesting his purchasing entity details. I received no response, save to say he was getting an opinion on GST. Again, I have not heard from George since that time, nor in November/December 2020.

An email on 19 April 2021 at 1:06pm relevantly provides the following:

The coordinates / details for the new [contract of sale] were clearly to be those of the previous [contract of sale]. This was expressed in writing, and there is no reasonable basis to believe that would not be the case. In any event, there was no further requests for clarification received by the Purchaser.
The original [contract of sale] was not defaulted upon, and at no time was a default notice issued. At no time was a rescission notice issued. This is the first instance in which the subject is raised, and therefore is rejected.
The [heads of agreement] was not and is not based upon any agreement to enter into a new [contract of sale], but that the general terms of the [contract of sale] are to remain standard as previously signed, and with the additional agreement between the parties as referenced in the written correspondence – updated into that new [contract of sale]. This remained the context of the reference, and as agreed between the parties.
The agreement provides that a $20k payment is only due upon receipt of the [contract of sale], and this is referenced quite clearly. There was no agreement to the contrary at any time. The Vendor made subsequent requests, and correspondence continued inviting the Purchaser to work diligently on the project, expending a further year of work with a team of professionals and consultants, at significant cost.

On 19 April 2021 at 1:19pm, Mr Bridge, apparently unpersuaded, replied that the plaintiff was at liberty to seek to establish a claim for specific performance.

The plaintiff says that he is ready, willing and able to perform all of his obligations under the second and third contracts, but that the first defendant has failed or refused to comply with her obligations under the second contract, which is particularised as a failure to provide the third contract.

On or about 7 May 2021, the first defendant entered into another contract for the sale of Lot 2 with a third party, McGlone Nominees Pty Ltd, which was due to settle on or about 7 May 2023.

On 8 March 2022, the plaintiff lodged caveats AV408825W and AV408826U over the land described in the second contract claiming an equitable estate in the land as purchaser.

On 17 March 2022, the first defendant lodged applications under s 89A(1) of the Transfer of Land Act1958 (Vic) (‘TLA’), seeking removal of the plaintiff’s caveats.

On 19 April 2022, the plaintiff, pursuant to s 89A(3)(b) of the TLA, gave notice to the Registrar of Titles of the commencement of this proceeding.

Submissions

The first defendant makes two primary submissions in support of her summons:

(a) first, that the second contract is not a binding agreement for the sale of property because it is conditional on the execution of a sale contract which has not occurred, and therefore comes within the third category discussed in Masters v Cameron;[1]

(b) secondly, as the second contract (even if it does constitute an agreement), does not set out the terms of the agreement, and in particular the identity of the purchaser, it does not comply with the requirements of s 126 of the Instruments Act and as a consequence is not enforceable.

[1](1954) 91 CLR 353.

The plaintiff submits that:

(a) the second contract is a binding agreement within category one or two in Masters v Cameron;

(b) secondly, the second contract is a sufficient note or memorandum for the purposes of s 126 as it has been signed by a person to be charged and identifies the essential terms, namely the description of the land to be sold, the price and how the price was to be payable.

Principles regarding summary judgment

In 230V Harvest Home Road Pty Ltd v Joseph Salvo, Matthews AsJ summarised the principles applicable to summary judgment applications as follows:[2]
[2][2021] VSC 558, [35]-[42] (emphasis added) (citations omitted) (‘Salvo’).

Applicable law and principles
35 Section 62 of the CPA permits a defendant to make an application for summary judgment on the ground that the plaintiff’s claim or part of that claim has no real prospect of success. Section 63 of the CPA provides that the Court may give summary judgment in a civil proceeding if it is satisfied that a claim, defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has ‘no real prospect of success’.
36 The Court of Appeal has set out the test to be applied in this context in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd, stating that upon the present state of authority:
(a)The test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b)The test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) (‘General Steel’)];
(c) It should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)At the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

37 Of s 62 of the CPA, the High Court has said that:
… the ‘no real prospect of success’ test is to some degree more liberal than [Dey v Victorian Railways] and General Steel. It permits of the possibility of cases in which, although the plaintiff’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding.

38 Section 64 of the CPA provides that:
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a)it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.

39 Section 7(1) of the CPA sets out its overarching purpose, being to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Section 9 of the CPA requires the Court to have regard to these purposes in making any order or giving any direction in a civil proceeding.
40An application made pursuant to s 62 of the CPA is to be made in accordance with Part 3 of Order 22 of the Rules.
41Rule 22.18 of the Rules provides:
(1)If the defendant intends to rely on an affidavit in support of the application, the affidavit shall be filed with the summons.
(2)Where a statement in a document tends to establish a fact upon which the defendant relies and at the trial of the proceeding the document would be admissible by or under the Evidence (Miscellaneous Provisions) Act 1958, the Evidence Act 2008 or any other Act to verify the fact, the affidavit may set forth the statement.
(3)An affidavit relied upon by the defendant may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted.
(4)The defendant shall serve the summons and a copy of any affidavit in support and of any exhibit referred to in the affidavit on the plaintiff not less than 14 days before the day for hearing named in the summons.

42 Rule 22.19 of the Rules provides:
(1)The plaintiff may show cause against the application by affidavit or otherwise to the satisfaction of the Court.
(2)An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out.
(3)Unless the Court otherwise orders, the plaintiff shall serve a copy of any affidavit and of any exhibit referred to in the affidavit on the defendant not less than three days before the day for hearing named in the summons.

Principles in relation to whether there is a binding agreement

In Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd (as trustee for the Jack Road Investments Unit Trust) (‘Edge’), the Court of Appeal set out the principles regarding the construction of a contract as follows:[3]
[3][2019] VSCA 91, [45]-[47] (Kaye, McLeish and Hargrave JJA) (citations omitted) (emphasis added).

45 It is convenient to set out the principles applicable to the resolution of this case, as recently summarised by this Court in [Molonglo Group (Australia) Pty Ltd v Cahill]. First, the meaning of contractual terms is to be ascertained objectively having regard to the language of the contract and, where appropriate, the surrounding circumstances known to the parties. In Electricity Generation Corporation v Woodside Energy Ltd, French CJ, Hayne, Crennan and Kiefel JJ said:
[T]his Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding ‘of the genesis of the transaction, the background, the context and the market in which the parties are operating’.

46 Likewise, where the issue is not the meaning of a term but whether the parties intended that the document in which it appears should be a binding contract, the issue is ‘to be determined, objectively, from the text of the document, construed in the context of the circumstances in which it came into being’. Again, it is relevant to take into account the commercial context and surrounding circumstances of the parties’ dealings. The parties’ pre-contractual conduct is relevant and admissible on the issue of what each party by their words and conduct would have led a reasonable person in the position of the other party to believe.
47 Finally, post-contractual conduct can also be admissible on the issue of whether the parties intended a document to be a binding contract, but only in limited circumstances, such as where the conduct constitutes an admission against interest.Otherwise, the general position is that post-contractual conduct is not admissible for the purpose of construing a contract. The Court in [Nurisvan Investment Ltd v Anyoption Holdings Ltd] explained that it may be relevant to examine correspondence and communications between the parties, including subsequent to the document in question, to place that document in the context of the negotiations and determine whether the parties intended it to constitute the terms of a binding agreement. Alternatively, even where there was no chain of correspondence providing context to the creation of the relevant document, subsequent negotiations and communications between the parties may be relevant to demonstrate the nature and extent of the terms that might be necessary for the conclusion of a binding agreement but which were not included in the document in question.

The Court in Edge also set out the principles applicable to the question whether a binding agreement had been entered, citing extensively from Masters v Cameron as follows:[4]
[4]Ibid [18]-[22] (Kaye, McLeish and Hargrave JJA) (citations omitted) (emphasis added).

18 It is convenient to set out the relevant passages from the High Court’s judgment in Masters v Cameron. First, the Court described three kinds of case:
Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

19 The Court went on to explain that, in each of the first two cases there is a binding contract:
[I]n the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common. Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v Miller when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: ‘… as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed’: see also Sinclair, Scott & Co Ltd v Naughton [(1929) 43 CLR 310, at p 317]. A case of the second class came before this Court in Niesmann v Collingridge [(1921) 29 CLR 177] where all the essential terms of a contract had been agreed upon, and the only reference to the execution of a further document was in the term as to price, which stipulated that payment should be made ‘on the signing of the contract’. Rich and Starke JJ observed, at pp 184, 185 that this did not make the signing of a contract a condition of agreement, but made it a condition of the obligation to pay, and carried a necessary implication that each party would sign a contract in accordance with the terms of agreement. Their Honours, agreeing with Knox CJ, held that there was no difficulty in decreeing specific performance of the agreement, ‘and so compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion’: see also O’Brien v Dawson [(1942) 66 CLR 18, at p 31].

20 The Court explained that the third class was ‘fundamentally different’:
They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own: Governor &c of the Poor of Kingston-upon-Hull v Petch. The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, as in Summergreene v Parker [(1950) 80 CLR 304] or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed. These possibilities were both referred to in Rossiter v Miller. Lord O’Hagan said: ‘Undoubtedly, if any prospective contract, involving the possibility of new terms, or the modification of those already discussed, remains to be adopted, matters must be taken to be still in a train of negotiation, and a dissatisfied party may refuse to proceed. But when an agreement embracing all the particulars essential for finality and completeness, even though it may be desired to reduce it to shape by a solicitor, is such that those particulars must remain unchanged, it is not, in my mind, less coercive because of the technical formality which remains to be made’. And Lord Blackburn said: ‘parties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if on seeing the result in that shape they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think that the parties ought not to be held bound till they have executed the formal agreement’. So, as Parker J said in Von Hatzfeldt-Wildenburg v Alexander in such a case there is no enforceable contract, either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract.

21 Next, the Court turned to the question how the contract is to be construed and, in particular, the effect of expressions such as ‘subject to contract’:
The question depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape: Farmer v Honan [(1919) 26 CLR 183]. Nor is any formula, such as ‘subject to contract’, so intractable as always and necessarily to produce that result: cf Filby v Hounsell. But the natural sense of such words was shown by the language of Lord Westbury when he said in Chinnock v Marchioness of Ely: ‘if to a proposal or offer an assent be given subject to a provision as to a contract, then the stipulation as to the contract is a term of the assent, and there is no agreement independent of that stipulation’. Again, Sir George Jessel MR said in Crossley v Maycock: ‘if the agreement is made subject to certain conditions then specified or to be specified by the party making it, or by his solicitor, then, until those conditions are accepted, there is no final agreement such as the Court will enforce’.

This being the natural meaning of ‘subject to contract’, ‘subject to the preparation of a formal contract’, and expressions of similar import, it has been recognized throughout the cases on the topic that such words prima facie create an overriding condition, so that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract. Indeed, Lord Greene MR remarked during the argument in Eccles v Bryant and Pollock that when the expression ‘subject to contract’ was used he had never known a case in which it had been suggested, much less held, that this did not import that there was nothing binding till the exchange of parts of the formal contract was made. The effect of the early cases on the subject was stated by Sir George Jessel MR in Winn v Bull when he said in a passage which has become well-known: ‘It comes, therefore, to this, that where you have a proposal or agreement made in writing expressed to be subject to a formal contract being prepared, it means what it says; it is subject to and is dependent upon a formal contract being prepared. When it is not expressly stated to be subject to a formal contract it becomes a question of construction, whether the parties intended that the terms agreed on should merely be put into form, or whether they should be subject to a new agreement the terms of which are not expressed in detail’.

22 In the earlier case of Sinclair, Scott & Co Ltd v Naughton, the High Court recognised a class of case in which ‘the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms’. This kind of case amounts to a variation upon the first of the categories set out in Masters v Cameron, the difference being that the parties contemplate agreeing upon future terms which will be added to the existing, binding, arrangement, rather than envisaging only the creation of a document to the same effect as the terms already agreed. This has been recognised as amounting to a ‘fourth category’. As with the first and second categories, a document falling within the fourth category is an immediately binding contract.

Is there a real question to be tried regarding whether the second contract is a binding agreement?

The first defendant relies on a number of matters to support her submission that the second contract is in the third category specified in Masters v Cameron.

The first defendant’s first submission is that the contract is expressly stated as being ‘subject to the purchaser and vendor executing a legally enforceable Contract of Sale.’ It was submitted that these words should be read consistently with a natural meaning, that is that they manifest an intention that any agreement for the sale of land would only come into effect and be binding upon the subsequent execution of the contract of sale, but until then, there was no binding, or specifically enforceable, agreement for the sale of the land. Many authorities have addressed the question whether a ‘subject to contract’ clause precludes a binding agreement.[5] While the usual meaning may be that there is no binding agreement until the new contract is executed,[6] the use of the expression ‘subject to contract’ is not decisive.[7]
[5]JD Heydon, Heydon on Contract: The General Part (Thomson Reuters (Professional) Australia Limited, 2019) 96-97 [3.150], 96 [3.150] n 109, 97 [3.150] nn 110-111.
[6]See ibid 96-97 [3.150]. See especially 97 [3.150] n 110.
[7]Ibid 96-97 [3.150], 96 [3.150] n 107, 97 [3.150] n 111.

Secondly, the terms of the second contract, under the heading exclusivity, require the vendors to ‘cease any other negotiations’ and ‘not start any new negotiations in respect of the property [whilst] negotiations with the Purchaser are underway.’ The first defendant submitted that this term can only sensibly be read as requiring the first defendant to pause any negotiations with other potential purchasers pending the conclusion of the negotiations with the plaintiff. It was submitted that if the second contract were in fact binding, there would be no utility in a term requiring the first defendant to cease other negotiations because any such negotiations necessarily would be futile if the property had already been sold. There is some force to this submission, particularly in light of the principle that the construction should be favoured that gives effect to each clause of an agreement. If the plaintiff’s contention is accepted then this aspect of the clause would appear to have no work to do. If the first defendant’s contention is accepted, then it has some work to do. The other telling feature of this clause is that it describes ongoing ‘negotiations with the Purchaser.’ However, this latter point is not inconsistent with the existence of a binding agreement in the terms of the fourth category of contract, as explained at paragraph 22 of Edge and reproduced above at paragraph 36, pursuant to which the parties agree on the major terms but continue to negotiate other minor terms to be included.

Thirdly, the first defendant submits that the term under the heading ‘Contract Preparation Payment’ reserves to each party a right to ‘withdraw’ at any time until the formal document is signed. That interpretation is not the only one. In its terms this clause describes the consequences that flow from the failure of either the vendor or purchaser to execute the contract in relation to the amount of $20,000 to be paid by the vendors to cover the costs of contract preparation. An alternative construction is that this clause is directed only towards what is to happen to the $20,000 contract preparation amount in the event that either party does not execute the contract of sale, but it does not mean that either party is permitted in its absolute discretion to refuse to execute the contract of sale. The clause does not, for example, provide that either party ‘may’ determine not to proceed with the contract, or to execute it, but rather says what is to happen to the $20,000 ‘if’ either party does not execute the contract. In my opinion both constructions are arguable.

Fourthly, the first defendant submits that it is significant that the amount of $1,800,000, which is the first amount payable under the second contract, is only payable ‘on the execution of the Contract of Sale’. It was submitted that this supported the interpretation that a binding contract of sale of the land was only to come into effect upon the execution of the third contract. That, so it was submitted, was particularly the case having regard to the nature of the contract being for the sale of land, and the almost invariable practice of requiring a deposit upon the execution of binding contracts.

The plaintiff relies on the acknowledgement by the vendor recorded on the second page of the second contract, which states:

I, the undersigned, agree to the abovementioned purchase details, key terms and conditions.

The first defendant’s signature appears under this statement.

The plaintiff refers at some length to communications that took place between the parties and their representatives after 10 April 2020, being the date it is said the second contract was signed. The plaintiff submits that the Court is entitled to look at such communications:

as they may be relevant to amongst other things admissions by conduct of the existence of a legally binding contract and throwing light upon the meaning of the language in the informal agreement for the purpose of determining whether the language expresses an intention to enter or not enter contractual relations.

The principles in relation to the relevance and admissibility of post contractual communications are as follows:

(a) ‘[w]here the issue is not the meaning of a term in a document to which the parties have agreed, but whether the parties intended that document to be a binding contract, the issue is “to be determined, objectively, from the text of the document, construed in the context of the circumstances in which it came into being”’;[8]
[8]Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147, [131] (Maxwell ACJ, Whelan and Kyrou JJA) (‘Molonglo’).

(b) ‘[i]t is relevant to take into account the commercial context and surrounding circumstances of the parties’ dealings’;[9]

(c) ‘[t]he parties’ pre-contractual conduct is relevant and admissible on the issue of what each party by words and conduct would have led a reasonable person in the position of the other party to believe’;[10]

(d) in determining whether the parties intended a document to be a binding contract, and whether a binding contract was formed, regard may be had to the parties’ post contractual conduct and communications: ‘(1) in order to see what was important or essential to the transaction; (2) as admissions; and (3) as probative of the parties contractual intention.’[11]

[9]Ibid (emphasis added) (citations omitted).

[10]Ibid (emphasis added) (citations omitted).

[11]Queensland Phosphate Pty Ltd v Korda [2017] VSCA 269, [37] (Tate and Beach JJA and Sifris AJA). See Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 547-8 (Gleeson CJ); Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61, [25] (Heydon JA); Molonglo (n 8) [132] (Maxwell ACJ, Whelan and Kyrou JJA); Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149, [99]-[106] (Giles JA, Hodgson JA agreeing at [126], Campbell JA agreeing at [127]); Nurisvan Investment Limited v Anyoption Holdings Ltd [2017] VSCA 141 [7]-[84] (Osborne, Santamaria and Kaye JJA).

The plaintiff relies first on the telephone calls he had with the first defendant between 12 June 2020 and 29 June 2020, in which the plaintiff says the first defendant ‘congratulated [him] on completing the deal,’ ‘enjoyed discussing [his] future development plans with the Property,’ and said she would tell her solicitor to ‘hurry up’ with the contracts. In response, the first defendant submits that these statements do not constitute admissions, and that in relation to the latter, the first defendant was saying nothing more than that the formal contract was yet to be finalised.

The plaintiff also relies on the email dated 24 June 2020 from the first defendant to the plaintiff. That email is set out above in the discussion of the background, being the email where the first defendant notes that she forgot to mention that she wants a term that she can continue living in the house for 12 months rent free after the settlement date to give her time to purchase elsewhere and that she wants such a term in the contract. She also asks the plaintiff to pay rates up until the settlement date, which she says ‘would also need to be in the contract.’ The first defendant says that this email ‘was no more than a step in the negotiations of terms to be included in the Contract of Sale.’

Finally, the plaintiff relies on an email dated 30 June 2020 from the first defendant’s lawyers in which they state:

The Vendor Statement and Contract of Sale are ready to be finalised.
In order to proceed, can you please provide me with your full name and/or entity purchasing the property and your lawyer details.

Again, the first defendant submits that this was simply an inquiry as to the particulars of the purchaser to include in the contract that was ultimately to be executed, and does not assist the plaintiff.

In my opinion there are real question to be tried regarding whether second contract is a binding agreement. There is some force to the factors, as identified by the first defendant, supporting the submission that the second contract falls within the third category in Masters v Cameron and is not a binding agreement for the sale of the property. But the authorities make it plain enough that it is open to the plaintiff to argue that the term ‘subject to contract’ is not decisive, and to argue that consideration of pre- and post-contract circumstances lead to the conclusion that the second contract is a binding contract for the sale of the land. Consideration of those matters will likely involve consideration of the history of the relationship between the parties through various negotiations and at least one signed contract, as well as consideration of oral discussions that occurred after the second contract insofar as it is argued they are relevant. While the first defendant does provide some evidence as to the circumstances giving rise to the second contract, there is a degree of obscurity as to precisely what occurred in the lead up to the signing of the second contract, and in relation to the dealings that each of the parties had with Mr Schnall. Such dealings may well be relevant to questions of agency and therefore authority to act, as well as attribution of knowledge. Further, as already noted, immediately prior to Mr Schnall taking the four offers to the first defendant, he stated in his email to the plaintiff ‘[l]ook forward to executing this deal for you … next week,’ and shortly after that the first defendant signed a document in which she agreed ‘to the abovementioned purchase details, key terms and conditions.’

As noted above, the test is ‘whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success,’[12] and that ‘the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried’.[13] In the circumstances I am satisfied that there is a real question to be tried and that the plaintiff has a real as opposed to fanciful prospect of success.
[12]Salvo (n 2) [36] (Matthews AsJ), quoting Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] 42 VR 27, 35(a) (Warren CJ, Nettle JA) (emphasis added).
[13]Ibid [35(d)] (Warren CJ and Nettle J), [40] (Neave JA) (emphasis added).

If there is a real question to be tried, does the balance of convenience favour the status quo?

As the question involves an interest in land, the balance of convenience favours the status quo.

Section 126 of the Instruments Act

The first defendant also submits that the plaintiff’s claim to enforce the second contract must fail because the written document relied on as constituting the contract of sale does not satisfy the requirements of s 126 of the Instruments Act. The s 126 submission is relied on in defence to the claim for specific performance and in support of the counterclaim which seeks removal of caveats.

Section 126 provides:

Certain agreements to be in writing
(1)An action must not be brought to charge a person upon a special promise to answer for the debt, default or miscarriage of another person or upon a contract for the sale or other disposition of an interest in land unless the agreement on which the action is brought, or a memorandum or note of the agreement, is in writing signed by the person to be charged or by a person lawfully authorised in writing by that person to sign such an agreement, memorandum or note.

Submissions regarding s 126 of the Instruments Act

The first defendant submits that for an agreement to satisfy the requirements of s 126, it must record all the terms of the agreement between the parties and it must sufficiently identify the vendor and purchaser. The first defendant also submits that documents may be read together to satisfy the requirements of s 126, however such documents must be sufficiently connected in the sense of referring to each other or to a transaction which another document forms a part. The first defendant also submits that s 126 may be satisfied by a document signed by an agent for the vendor but that such an agent must be lawfully authorised in writing to do so, and that authority must be signed by the party to be charged.

The first defendant submits that the plaintiff has no real prospect of establishing that the second contract satisfies the requirements of se 126 because:

(a) the purchaser is not identified on the face of the second contract or in any other document referred to in it;

(b) the email from Mr Schnall to the plaintiff on 7 April 2020 at 5:41pm refers to four offers having been presented to the first defendant, but none of those offers identified the purchaser; nor are they referred to, even by implication. The first defendant also relies on the fact that the covering letter from Mr Schnall dated 9 April 2020 actually conceals the identity of the ‘significant investor who is well respected throughout the industry and has the financial capacity to meet the obligations of the offer.’ The first defendant further submitted that ‘in any event, Mr Schnall held no written authority signed by [the first defendant] authorised to sign contract documents on her behalf’;

(c) oral discussions between the parties do not cure the omission;

(d) the email from the first defendant on 24 June 2020 at 11:40am does not cure the omission of necessary identification because, while it refers to ‘you’, and by implication to the plaintiff as the purchaser in the contract she refers to in the email, that contract is the document still being prepared by her solicitors; that is, the third contract. The first defendant submits that it is not an admission that the earlier offer to purchase contained a term as to who the purchaser would be;

(e) the emails on 25 June 2020 from Ms Griffin of BD Legal do not remedy this deficiency in the second contract because neither Ms Griffin, nor BD Legal hold any authority in writing signed by the first defendant to sign contract documents on her behalf. Further, these emails only relate to the contract of sale that was being prepared; that is, the third contract, and not the second contract.

The plaintiff submits that the second contract is a sufficient note or memorandum for the purposes of s 126 because:

[i]t is signed by the person to be charged, it identifies the essential terms, namely the description of the land to be sold, the price and how the price was to be payable. Importantly, under the heading ‘Acknowledgment by the Vendor’ the document signed by [the first defendant] on 9/4/20 states ‘I, the undersigned, agree to the above-mentioned purchase details, key terms and conditions’. Further, it is incomprehensible to suggest that she would agree to the abovementioned purchase details and sign the document without knowing the identity of purchaser.

Principles regarding s 126 of the Instruments Act

The plaintiff did not take issue with the principles as expressed by the first defendant. I note that in Heydon on Contract the applicable principles are set out as follows:

The legislation does not specify what the memorandum or note should contain. But the authorities require that it deal with the parties, the subject matter, the consideration and the terms of the contract.
The memorandum must name or describe the parties. There must be a ‘sufficiently identifiable description’. This raises an issue about whether the use of a Christian name suffices. It raises an issue of a misnomer of human beings. It also raises an issue whether it is sufficient to give as a name a misdescribed but identifiable company. The memorandum must state the capacity of the parties, for example which party is buyer and which party is seller. A reference to the vendor as ‘proprietor’, or as ‘trustee selling under a trust for sale’, or as ‘legal personal representative’ has been held sufficient. A reference to ‘vendor’ or ‘landlord’ has not. A pronoun has been held sufficient if there is evidence to establish the person to whom it refers. A misdescription of the owner as agent for the owner does not matter.[14]

Does the second contract identify the parties to the contract sufficiently to comply with the requirements of s 126?

[14]Heydon (n 5) 195-196 [6.250] (citations omitted).

The onus of establishing at trial that the second contract does not comply with s 126 rests with the first defendant.[15] The question for present purposes is whether the plaintiff has a ‘real’ as opposed to a ‘fanciful’ chance of success on that issue.
[15]See Marginson v Ian Potter & Co (1976) 136 CLR 161, 168-9 (Gibbs and Mason JJ).

I note at the outset that the terms of s 126 relevantly require that the person to be charged has signed the memorandum, which has occurred in this case. But there is clear authority that there must be a sufficiently identifiable description of the parties.[16]
[16]See Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VR 313, 315-316 (Young CJ and O’Bryan J) (‘Rosser’); Di Biase v Rezek [1971] 1 NSWLR 735, 741-742 (Asprey JA) (‘Di Biase’).

The question of what constitutes a sufficiently identifiable description of the parties is not a simple one, as is evident from the various words that have been held to have satisfied the requirement, and those that have not. For example, ‘proprietor’ has been held to be sufficient whereas ‘vendor’ has not.[17] The distinction was discussed in Di Biase v Rezek (‘Di Biase’)[18] and Rosser v Austral Wine & Spirit Co Pty Ltd (‘Rosser’),[19] and turned on the nature of the extrinsic evidence that might be required to establish the identity of the person not otherwise clearly identified. In Di Biase, Asprey JA held:[20]

Extrinsic evidence to identify a party to a contract is not excluded because there may be a conflict of fact for the judge to decide. It would not be very difficult to imagine a case in which a judge might have to decide a question of fact as to who were the ‘proprietors’, the ‘owners’ or the ‘mortgagees’ (see Rossiter v. Miller) or a number of other terms which have been held to be sufficient to enable the party to the contract to be identified. As Lord Blackburn said in Rossiter v. Miller: It is enough if the parties are sufficiently described to fix who they are without receiving any evidence of that character which Sir James Wigram in his Treatise calls evidence (Wigram on Extrinsic Evidence, Intr. Obs. p. 10) ‘to prove intention as an independent fact’. (See Wigram, 5^th ed., at pp. 9-10.) The same passage in Wigram was cited by Rigby L.J. in In re Grainger; Dawson v. Higgins and, in turn, that part of the judgment of Rigby L.J. was expressly approved by Lord Davey in the House of Lords in Higgins v. Dawson; see also Ward v. Van der Loeff, per Viscount Cave. For example, if an agent purported to contract (without binding himself personally) on behalf of his ‘client’ or ‘clients’, evidence as to who were the party or parties on whose behalf he intended to contract would be inadmissible because such evidence, if admitted, would only go to show which of his clients he intended to be the contracting party. The evidence would be proof only of the agent’s intention. But if, on the other hand, he purported so to contract on behalf of the ‘proprietor’ of a given property the fact of the proprietorship can be determined independently of any intention entertained by the agent (see Rossiter v. Miller).

[17]Heydon (n 5) 196 [6.250] (citations omitted).

[18][1971] 1 NSWLR 735, 741-742 (Asprey JA).

[19]Rosser (n 16), 315-316 (Young CJ and O’Bryan J).

[20]Di Biase (n 16) 742 (citations omitted).

More recently in Hookham Constructions Pty Ltd v Lindemann,[21] the Court of Appeal in Queensland considered the question of the sufficiency of identification of a party in a memorandum. Peter Lyons J cited Rossiter v Miller,[22] Di Biase and Rosser in support of the conclusion that:[23]

The principle seems to be that extrinsic evidence is admissible to explain words in the memorandum; but not to prove independently the intention of a party to the document.

[21][2013] QCA 274 (‘Hookham’).

[22](1878) 3 App Cas 1124.

[23]Hookham (n 21) [69] (citations omitted).

There are several factors that render the question whether the second contract complied with the requirements of s 126 less than clear. The extent to which extrinsic evidence may be relied on in the present case, and what such extrinsic evidence will establish, or not establish, as to the identity of the purchaser is not clear. That is particularly so having regard to what was said by Asprey JA in Di Biase.

The plaintiff’s evidence is that in the week of 30 March to 5 April, he received a call from Mr Schnall who said he ‘was calling on behalf of [the first defendant].’ This evidence gives rise to questions about agency, and the extent to which the knowledge of Mr Schnall may be the knowledge of the first defendant. The first defendant does not contradict the plaintiff’s evidence in this regard. That is, she does not say that Mr Schnall was not acting for her. Rather, her evidence is that on 9 April 2020 she:

received the offer to purchase in draft under cover of a letter from Mr David Schnall … The Schnall letter informed me that Mr Schnall’s company was instructed to present this offer to purchase on behalf of a significant investor who is well respected throughout the industry and has the financial capacity to meet the obligations of the offer, without naming that investor.

The letter dated 9 April from Mr Schnall to the first defendant commences with ‘[f]urther to our recent discussions …’, but there is no evidence from the first defendant as to what those discussions were. The first defendant’s submission that ‘Mr Schnall held no written authority signed by [the first defendant] authorising him to sign contract documents on her behalf’ does not assist her. There is no evidence as to that matter, and in any event, it appears to have been [the first defendant] personally who signed the second contract, and not Mr Schnall on her behalf. If Mr Schnall were acting as the first defendant’s agent then it is arguable that, on 9 April 2020, the first defendant by her agent received the four offers under cover of an email that specifically identified the plaintiff as the purchaser. And I note that, in any case, the signature on the second contract appears to be the same as the signature on the first contract, in which the plaintiff’s name appears under that signature.

It is not clear how these issues will ultimately be resolved, but there are significant questions as to whether the second contract contains a sufficient description of the purchaser, either directly by reason of the signature, or by the description as purchaser, or having regard to extrinsic evidence that accompanied the four offers, or other evidence. In those circumstances I am satisfied that the plaintiff has a real as opposed to fanciful prospect of success and that there is a real question to be tried.

Removal of caveats

The issues concerning removal of the caveats are derivative in the sense that they would flow naturally from the questions of the enforceability of the second contract. If summary judgment were ordered dismissing the plaintiff’s claim, there would be no utility in the maintenance of the caveats; nor would the balance of convenience favour the maintenance of those caveats, as the interests protected by those caveats are founded upon the enforceability of the second contract. Having reached the conclusions I have in relation to applications for summary dismissal of the plaintiff’s claim, the applications for removal of the caveats must fail.

In those circumstances it is unnecessary to consider the operation of s 64 of the Civil Procedure Act.

I will ask the parties to provide draft orders giving effect to these reasons, including any order for costs.

SCHEDULE OF PARTIES

S ECI 2022 01336
BETWEEN:
GEORGE STATHOPOULOS	Plaintiff
- v -
HELEN TERESA CREMIN	First Defendant
REGISTRAR OF TITLES	Second Defendant
AND BETWEEN:
HELEN TERESA CREMIN	Plaintiff by Counterclaim
- v -
GEORGE STATHOPOULOS	Defendant by Counterclaim

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Stathopoulos v Cremin [2023] VSC 238

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230V Harvest Home Road Pty Ltd v Joseph Salvo [2021] VSC 558

The Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd [2019] VSCA 91

Marginson v Ian Potter & Co [1976] HCA 35

[2023] VSC 238

8 May 2023