161 Castlereagh Street Pty Limited v Citadel Property Group

• 18 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

TUESDAY 2 OCTOBER 2001 2265/01 161 CASTLEREAGH STREET PTY LIMITED V CITADEL PROPERTY GROUP (ROCKDALE) PTY LIMITED known as CITADEL PROPERTY GROUP (CBD) PTY LIMITED JUDGMENT Outline 1 The question for decision is whether the plaintiff company entered into a binding agreement to sell property, 161-167 Castlereagh Street, Sydney, to the defendant. It says it did not and the defendant said it did. Facts 2 161 Castlereagh Street Pty Limited (Castlereagh Street) is the registered proprietor of the property 161-167 Castlereagh Street, Sydney, being the land in Folio Identifiers 1/86187 and 24/547445 (the property). In 2000 the property was for sale. Citadel Property Group (CBD) Pty Limited (Citadel) was an interested prospective purchaser. Castlereagh Street is a subsidiary of Thakral Holdings Limited (Thakral). Citadel is controlled by a Mr Maiolo. 3 There were negotiations between the parties in October 2000. Messrs Phillips Fox, solicitors, acted for the vendors. Chesterton International (NSW) Pty Ltd was the agent for the vendors on the sale. Raine & Horne Special Projects NSW was the agent for Citadel. Mr Paul Duncan of that firm was acting for Citadel and involved in negotiations for the purchase by Citadel of the property and surrounding properties, which it hoped would be consolidated into one development site. Phillips Fox were advised that KPMG were solicitors for Citadel. They were told this by Chesterton who presumably were told it by Mr Duncan. Mr Maiolo said in evidence that Mr Wolf of KPMG was the solicitor for Citadel and in the cross-claim by Citadel in these proceedings, it is pleaded that at all material times KPMG Legal were the solicitors for Citadel and agents of Citadel. Mr Wayne Jones, who is a partner in KPMG, was what he called "an advisor to Citadel". KPMG Legal is a separate entity from KPMG the accountancy firm. Mr Jones insisted that KPMG Legal or otherwise was not acting for Citadel on the purchase. Mr Jones is or was at the relevant time employed by KPMG Legal. He is a solicitor and his name appears in the Law Almanac for 2001. Mr Wolf did not give evidence. Whatever the true position, Mr Wolf of KPMG Legal was certainly represented as its solicitor by Citadel at that stage. It is perfectly clear that Phillips Fox regarded him as such. More importantly he did nothing to correct the misapprehension on the part of Phillips Fox, Chesterton and Castlereagh Street; his lack of action being purposeful and, it seems, being brought about by instructions from Mr Jones, who was well aware of the misunderstanding. Mr Jones was not a convincing witness. 4 Ms Lorraine Straman, a solicitor employed by Phillips Fox, was handling the matter for that firm. By letter dated 30 October 2000 she sent to KPMG, for the attention of Mr Wolf, a draft contract for sale and on 31 October she sent by letter some additional or substitutional material to be incorporated into the contract with a statement which she understood from the agent that the purchaser intended to exchange contracts on 3 November 2000. That exchange did not take place and on 6 November Ms Straman sent to Mr Wolf a further letter with some amended special conditions and an additional annexure to be included in the contract. On the same day Chesterton wrote to Mr Duncan stating that if exchange of contracts did not take place by 5.00 pm on 8 November 2000, the negotiations between the parties would cease. 5 There was then a period of some months during which the evidence does not disclose any contact between the parties. On 1 March 2001, Ms Straman sent to KPMG, for the attention of Mr Jones, some additional material for the contract, noting that she understood that Citadel wished to exchange contracts the following day. At that stage the proposed purchase price was $10 million, the completion date was 1 July 2001 and there was to be a condition included in the contract that the deposit was to be $100,000 paid by bank cheque before 5.00 pm on 15 March 2001 with time of the essence. She said in the letter that on her instructions contracts were to be exchanged at 10.00 am the following day. It seems that prior to this letter being sent a letter had been sent by Mr Duncan to Mr Horne at Thakral, giving details of these proposed changes, and asking for the amendments to the contract to be sent by facsimile by Mr Jones at KPMG, with the statement "He will approve and advise Mr Maiolo accordingly". 6 It seems that at this stage there was another prospective purchaser and that Citadel was told via Mr Duncan and Mr Jones, that either contracts had to be exchanged on the morning of 2 March, or the first person arriving at Phillips Fox to exchange on that morning would be the successful purchaser; the terms of the purchase having clearly been negotiated by then. 7 On the morning of 2 March, Mr Jones was told by Ms Straman that the first purchaser who had turned up ready to exchange with the deposit would be successful. He telephoned Mr Maiolo and it was arranged that Mr Maiolo would go direct to the office of Phillips Fox and that Jones would meet him there. Mr Maiolo telephoned Mr Duncan and asked him what was going on and told him what he had been told and Duncan said that he would go to Phillips Fox as well. Mr Maiolo arrived first, but Ms Straman said that she would not see him until Mr Jones arrived. There is no doubt that she considered that Mr Jones was acting for Citadel on the purchase. Mr Jones arrived and Mr Duncan arrived about the same time so that they all saw Ms Straman at that time. She told them that arrangements had changed. This was because she had received further instructions incorporated in a facsimile from Chesterton, dated 2 March 2001, addressed to Mr Duncan, a copy of which had been sent to her. As it is of significance, I set out that document in full: Paul Duncan Raine & Horne Special Projects GPO Box 4869 SYDNEY NSW 1044 By Facsimile 9229 6414 WITHOUT PREJUDICE SUBJECT TO CONTRACT Dear Sir

In reference to our client's proposed sale of the abovementioned property we set out below the procedure for conclusion of this matter.

Thakral have instructed Phillips Fox (their solicitors) to exchange contracts with the best offer delivered to their office with an executed contract and bank cheque by 4pm today.

The best offer will be taken to mean price, terms and conditions and deposit.

Yours faithfully CHESTERON INTERNATIONAL (NSW) PTY LIMITED

WILLIAM MULVIHILL Manager, City Agency

cc: John Hudson Chief Financial Officer Thakral Holdings

John Adamson General Manager - Property Thakral Holdings

Lorraine Straman Senior Associate Phillips Fox

8 It is not clear what time this letter was sent by facsimile to Mr Duncan, but by the time of the meeting he had received it as had Ms Straman. Mr Jones said that he did not know of it and had not seen it before giving evidence. 9 There was discussion at the meeting about the terms on which the deposit could be paid and other variations. Up to that time it is clear that the expected purchase price was $10 million with a deposit of $100,000 payable on exchange. Mr Maiolo wanted a variation to allow for the deposit to be paid within six weeks. He was told that the other prospective purchaser was intending to pay a larger cash deposit and said he would increase the Citadel offer to a purchase price of $11 million. Ms Straman obtained instructions from Mr Hudson on behalf of the vendor as a result of which the terms of a new special condition 54 were settled as follows: Deposit The deposit of $100,000.00 is to be paid by bank cheque payable to the vendor before the date that is 42 days from the date of this contract and in this regard time is of the essence in accordance with clause 2.3 of this contract.

and a new front page of the contract was prepared with the purchase price of $11 million. By the time this was done Mr Jones had left. 10 According to Mr Maiolo, this new clause obviated the requirement, otherwise made in the letter from Chesterton of 2 March, for a bank cheque for the deposit to be lodged. He claims this meant that the offer by Citadel was satisfactory for consideration, although the term for payment of the deposit would be a factor in considering whether it was the best offer. According to Ms Straman all that was meant was that the vendor would consider this offer with other offers and decide which one, if any, to accept. 11 No other purchaser put forward any offer prior to 4.00 pm on 2 March. Another purchaser did arrive around 4.15 pm or shortly thereafter and put forward another offer. By this time Ms Straman had left the office to go to Melbourne and Mr Chalabian, a partner of Phillips Fox, looked after the matter for the remainder of the day. After obtaining instructions when the second offer was received, Mr Chalabian said he told the representatives of both the prospective purchasers that neither offer was better than the other and both parties would be asked to "firm up offers with a view to discussing the matter further on Monday". 12 This last evidence is not directly contradicted by Mr Duncan, but he said that Mr Chalabian telephoned him between 4.15 and 4.30 on 2 March, stating that Thakral had told him they had accepted Citadel's offer saying that "the other party did not perform by 4.00 pm, you can congratulate your client". He said that he had then telephoned Mr Maiolo and advised him of this conversation, and that Mr Maiolo had said "get the contract from them". Although he said in his affidavit that during the course of the next week he was not able to obtain a copy of the contract from Phillips Fox, the fact is that he did not ask for one. Mr Chalabian denies this conversation, although it seems clear that prior to 4.15 pm he did have a conversation with Mr Duncan and probably had one after 4.15 pm as well. I should say that the conversation is not put forward as going to the making of the contract, but rather evidence that a contract had been made. Both witnesses seemed to be doing their best to give correct evidence. It is more likely than not the conversation Mr Duncan claims took place was before 4.15pm and that after the second offer was received at about 4.15pm, there was a second conversation as deposed to by Mr Chalabian about firming up offers. I so find. 13 On 5 March, Mr Duncan sent a fax to Mr Adamson, the general manager - property of Thakral, which included the following paragraphs: We refer to our ongoing correspondence regarding the sale of the above-described properties to Citadel Property Group Pty Limited.

I don't know if this makes your position any easier for my client. We anticipate exchanging on or about Wednesday of this week.

14 This was followed by a further fax of the same date which included the following paragraph: I have spoken to my client and he has requested until midday Tuesday to organise the $100,000, as it is now 3.35 Monday the time frame is too short to come up with the funds today.

Once again we thank you for your time and assistance and trust this meets with your approval.

15 On 6 March, Mr Duncan sent a fax to Mr Hudson, the chief operating manager of Thakral, which included the following paragraph: We confirm your acceptance of my clients offer to purchase and wish to advise that he is organising the $100,000 deposit to be paid to 161-167 Castlereagh Street Pty Limited. As soon as these funds are available we shall contact Ms Straman of Phillips Fox to expedite an exchange.

16 There was a further fax to Mr Adamson, sent some hours later, which included the following paragraph: We confirm your acceptance of my clients offer to purchase and wish to advise that he is organising the $100,000 deposit to be paid to 161-167 Castlereagh Street Pty Limited, the deposit is currently being sourced by Mr Maiolo but will take at least a day given the nature of the structure. As soon as the deposit is available, we shall contact Ms Straman of Phillips Fox to expedite an exchange. We confirm that we were the only party to be at Phillips Fox before the 4pm deadline Friday. As you can appreciate, my client and I have put considerable time, costs and effort into this project and we do not want to see it fall over at the eleventh hour. 17 There was a further fax to Mr Hudson, some time later in the day, much to the same effect. 18 On 7 March, Ms Straman sent a fax to Mr Jones as follows: Dear Mr Jones

161 CASTLEREAGH ST PTY LIMITED PROPOSED SALE OF 161-167 CASTLEREAGH STREET, SYDNEY

We confirm that our client is considering all offers made by prospective purchasers. There will be no binding agreement between any purchaser until formal exchange of contracts.

Before considering each offer further, we are instructed that our client requires written confirmation from you (and will also require the same from others) that there is (and will be) no binding agreement between our clients until formal exchange of contracts.

Also, as several offers have been made to our client over the past few days, would you please confirm your client's final offer (and terms) in writing.

Contact: Lorraine Straman Senior Associate

19 No response was ever received from Mr Jones who, in evidence, stated that he made a purposeful decision not to respond. On the same day, 7 March, Mr Duncan sent yet another fax to Mr Hudson as follows: From: Raine & Horne Special Projects [rhspnsw@bigpond.com] Sent: Wednesday, 7 March 2001 8:35 AM To: John Hudson @ Thakral.com.au Subject: 161-167 Castlereagh Street

Good morning John, Please clarify the position with regards to the two properties is Castlereagh Street. Tony, is organising the $100,000 as quickly as he can. As you can appreciate he is trying to free up the capital at present. The offer of $11m is unconditional and Rothschilds have asked for your confirmation in writing that the purchase price and deposit amount are acceptable to Thakral. Please fax it through to me this morning on 92996414. As soon as these funds are available we shall be banging on Lorraine Straman's door!!!! Sartor, Kass & Turnbull have given the project their full support too. It is now a matter of getting the properties across the line as quickly as we can. We do appreciate your patience. Regards Paul Duncan

20 On 8 March, Mr Duncan sent a fax to Ms Straman asking for a copy of the front page of the contract signed by Mr Maiolo and twelve minutes later sent a further fax asking for the same thing, but adding "the sole purpose of this request is so that the deposit can be raised within 24 hours". Ms Straman responded by sending to Mr Jones a copy of the front page of the contract confirming that there was no binding agreement and would be none without formal exchange of contracts. There was some further correspondence and on 2 April Chesterton wrote to Mr Duncan, stating that the vendor was continuing to negotiate the sale with prospective purchasers and was asking all interested parties to reconsider their offers and to submit any further offers in writing by 11.00am on 9 April. There was no response to this from Citadel and on 9 April 2001 contracts were exchanged with another purchaser. I should add that although the contents of the contract are confidential, it is accepted that the sale was at a lower price than $11 million and this is not a case of a vendor endeavouring to terminate a contract to enable it to accept a higher offer. Mr Duncan did not appear to believe what had been said, because on 12 April he sent a memo to Mr Hudson saying that if exchange had not taken place for the property then Citadel's offer stood. On 11 April Citadel lodged a caveat against the title to the property, claiming an interest in them on the following basis: Contracts for sale have been exchanged on the 2nd March 2001. Completion on the 30th September 2001.

Master Macready ordered that the caveat be removed, and no claim is made to assert the interest claimed in it. 21 Most of the communications from Mr Duncan to officers of the vendor company indicated that copies had been sent to Mr Maiolo. Mr Maiolo denied having received them, although Mr Duncan said they were sent. Mr Maiolo said that he never gave any instructions to Mr Duncan other than to get a copy of the contract signed by the vendor so that anything else written by Mr Duncan was done without any instructions and of his own accord. Mr Duncan's evidence was that everything he had done was on instructions from Mr Maiolo. I accept the evidence of Mr Duncan as to this. I find that Mr Maiolo was aware of the actions taken by Mr Duncan. I consider it far more likely than not that he received copies of the facsimile communications forwarded by his agent to Thakral and its representatives. I find those communications were all made on his instructions or on information given to Mr Duncan by Mr Maiolo. 22 On 24 April, Phillips Fox wrote to Mr Jones setting out the provisions of the copy of the contract signed on behalf of Citadel which provided for a deposit of $100,000 within forty-two days. The letter stated that although Castlereagh Street denied any agreement for sale, nevertheless, the deposit had not been paid and Castlereagh Street therefore "terminates any contract which may exist between CSPL and Citadel". That letter does not really take the matter any further. Although one of the claims of the vendor company is that the contract was terminated in any event, that argument was not put very strongly, as it was accepted by the plaintiff, I think, that it would have been futile for Citadel to tender the deposit having been told that the property had been sold to another party as it was clear the deposit would not have been accepted. 23 On 27 April, Citadel lodged a further caveat claiming an equitable interest based upon the letter from Chesterton and the subsequent tender. That caveat remains on the title. The interest now claimed by Citadel is not said to be precisely that claimed in the caveat. It is accepted that if the claim made by Citadel under its cross-claim fails, then the caveat must be removed. Course of proceedings and pleadings 24 The plaintiff's claim is made by further amended summons, seeking a declaration that Citadel has no interest in the property, or alternatively a declaration that Citadel is estopped from asserting it has an interest in the property, an order for removal of caveat, and compensation under s74P of the Real Property Act 1900. In addition, the plaintiff seeks a declaration that Citadel engaged in misleading and deceptive conduct in contravention of s52 of the Trade Practices Act 1974 and s42 of the Fair Trading Act 1987: by (a) failing to respond to the letter from Chesterton dated 2 April 2001; (b) failing to assert between 2 April and 9 April that a binding agreement had been reached; and (c) failing to lodge any caveat during that period. It seeks a mandatory injunction requiring withdrawal of the caveat and an order restraining Citadel from asserting any interest in the property and also seeks damages under s82 of the Trade Practices Act 1974 or s68 of the Fair Trading Act 1987. 25 The claim which is likely to determine these proceedings is made by Citadel in a pleaded cross-claim, the basis of which is that there was an agreement by Castlereagh Street to exchange contracts for sale of the property with the person who submitted the best offer for purchase by 4pm on 2 March 2001. It is therefore said that as the offer by Citadel was the only offer received by that time, then there was a binding agreement to enter into a contract upon the terms of the contract signed by Citadel. The cross-claim appears to put this matter in a number of different ways, for instance by asserting that Phillips Fox became the agent of the offeror for exchange, but this was not pressed. Neither was the alternative claim that if no binding agreement came into effect at 4pm as claimed then there was an oral acceptance of the offer as a result of a telephone call between Phillips Fox and Mr Duncan that Mr Duncan claimed to have taken place. This was in the long run asserted to be evidence of a contract having been made rather than one being made by that means. That, I think, is clearly correct. There is also a claim made by Citadel for misleading and deceptive conduct on the basis that there was a representation that the best offer would be accepted, there was a statement that it had been accepted and that Citadel relied upon this to its detriment. There is a similar claim by way of estoppel. I should say at this stage that neither of these claims could be made out. For a start there was no evidence of the reliance pleaded in paragraphs 40 and 43 of the cross-claim and there was no factual basis upon which the reliance could have been placed in view of the clear letters from Messrs Phillips Fox, the lack of response to letters from Phillips Fox and the letters from Mr Duncan, which I have found were written under instructions from Mr Maiolo. 26 It follows from this that the real issue for determination is whether or not there was a binding agreement at 4pm on 2 March between the parties, under which Castlereagh Street agreed to enter into a contract with Citadel by exchange of contracts upon the terms and conditions of the contract signed by Citadel on that day. Although the defence under s54A of the Conveyancing Act 1919 was raised, it was accepted correctly that this would not operate as a defence to the agreement so propounded. Was there a binding agreement? 27 In my view this case falls for determination upon the terms of the letter from Chesterton of 2 March. Before that letter was written the agreement seems to have been for a purchase price of $10 million with a deposit of $100,000 with completion on 1 July 2001. There was at least a suggestion that the first party ready to exchange on that basis would be accepted by the vendor, as purchaser and a contract would be exchanged. That certainly required an exchange of contracts for any agreement to come into effect. It is equally clear that on 2 March there was a change of attitude and the new arrangements were in terms of the letter from Chesterton of that date, known to both sides. There is no doubt therefore that it was the intention of the parties at that stage that an exchange would be effected with the party making the best offer as at 4pm. Nevertheless, it was accepted by Mr Maiolo that the best offer could not have been for an uncommercial sum, rather it would have to have been at a fair market value, whatever that might mean. I do not think that this really takes the matter any further. If there were an implied term to this effect the onus would have been on Castlereagh Street to show it had not been met, and there is no evidence from the plaintiff the offer was commercially unacceptable. In addition the new term inserted into the contract about the deposit amount, accepted by Mr Hudson, would seem to me to be a variation of any requirement for the furnishing of a bank cheque by 4pm for an offer to be considered. 28 The question is whether this was an agreement to accept the best tender made by 4pm on 2 March. There are two matters against this. The first is the heading "Subject to Contract" on the letter. (I do not think the words "Without Prejudice" have any bearing on the matter whatsoever). The second is the precise words of the second paragraph of the vital letter, namely: Thakral have instructed Phillips Fox (their solicitors) to exchange contracts with the best offer delivered to their office with an executed contract and bank cheque by 4pm today.

That paragraph itself does not appear to me to be written in terms of an irrevocable offer to accept by the best offer at 4pm or a binding agreement do so made with each prospective purchaser. It seems to me to be a notification of instructions and a statement of fact. On any basis it seems to envisage a requirement for formal exchange, even though Ms Straman did say to Messrs Jones and Maiolo that her instructions were to exchange with the party making the best offer. The position is that those instructions changed, presumably when the second prospective purchaser appeared after 4pm. The words, "subject to contract" mean, in conveyancing terms in this State, subject to the exchange of contracts between vendor and purchaser. They can really mean nothing else. It was put that the contract referred to was a binding agreement to enter into a contract upon the terms of the best offer proffered. That would make those words superfluous and, I think, make them meaningless. Mr Duncan was told what had happened and appeared to accept it. He never asserted that there was a binding contract. Neither did Mr Jones, who was given every opportunity to do so. Even Mr Maiolo's evidence to the effect that what he wanted to get was a contract signed by the vendor goes to support the proposition that the parties were not bound. Conduct after the event is relevant evidence of whether or not the parties considered there was a binding agreement. 29 The decision to which I have come results from a consideration of the following matters: (a) An offer to sell to the highest bidder or tenderer submitting the best tender is one which is accepted by the highest bidder or tenderer: Johnston v Boys [1899] 2 Ch 73; Harvela Investments Limited v Royal Trust Company of Canada [1986] 1 AC 207. If the letter from Chesterton - aside from the words "subject to contract" - were such an offer to sell to the highest bidder at 4pm, with the variation agreed upon that special condition 54 was acceptable as a provision for payment of deposit in lieu of bank cheque, then there would be a binding agreement. It is clear that the parties were operating upon the terms of the letter, altered as to deposit, and not on anything said by Ms Straman to vary those terms. Any statement of hers did no more than confirm them. In my opinion the letter in terms is not an offer by the vendor through its agents to sell to the highest bidder, nor an agreement to exchange contracts with the highest bidder, but a letter notifying the proposed purchaser of instructions given. (b) The common assumption and intention in agreements for the sale of land in New South Wales is that it is intended that there shall be no binding agreement until contracts are exchanged. In other words such contracts fall within the third limb of Masters v Cameron (1954) 91 CLR 353: See Allen v Carbone (1975) 132 CLR 528 at 533; Sindel v Georgiou (1984) 154 CLR 661 at 665-6; GR Securities Pty Limited v Baulkham Hills Private Hospital Pty Limited (1986) 40 NSWLR 631 at 634. There are many cases to a similar effect. In other words the presumption is that there is no binding contract until exchange. The terms of the critical letter clearly require exchange and, as I have said, in my view they do not amount to an offer to accept the best terms put forward by 4pm on 2 March, and an agreement to exchange a contract on those terms. (c) But if I am incorrect in that, I consider the words "subject to contract" put the matter beyond doubt. Chillingworth v Escher [1924] 1 Ch 97; Masters v Cameron . Those words are really meaningless if they refer to a contract being performed or completed by the making of the best offer. In ordinary terms a letter from an agent for a vendor headed "subject to contract" written to a prospective purchaser offering to sell Blackacre to that purchaser for a specified price, followed by a written acceptance by the purchaser of that price and other terms put forward would not be a binding agreement. If, in accordance with the decision of Lord Diplock in Harvela at page 225 the letter, without those words, would have represented a unilateral contract when received by each of the interested parties, bringing about an obligation to sell the property to Citadel if it were the highest bidder, then I think that the inclusion of those words shows that the parties could not have intended that any such unilateral contract arose. In ordinary real estate terms in New South Wales the words "subject to contract" mean subject to exchange of formal contracts. 30 (d) Subsequent conduct is admissible to show whether parties intended and considered that prior dealings resulted in a binding agreement. Howard Smith & Co Ltd v Vanawa (1907) 5 CLR 68. Apart from the statement that Citadel was the winner, all conduct of both parties is contrary to the existence of there being an agreement. And even that statement would not, I think, obviate the requirement for an exchange of contracts. In any event it seems that the statement about being a winner was withdrawn without objection after the second offer was made. There was no challenge to Mr Chalabian's evidence about this. Mr Duncan obviously accepted that to be the position and I am inclined to think that Mr Jones did too. If Mr Maiolo had thought that there were a binding agreement he would hardly have been asking for confirmation to be sent to Rothschilds Limited that Castlereagh Street was happy with the price. 31 It follows from this that the cross-claimant's case for a binding contract is not made out. I have already said that there is no evidence to support the estoppel claim. The cross-claim will be dismissed. It is accepted that in the circumstances the plaintiff is entitled to a declaration that Citadel has no interest in the property and an order for removal of the caveat. These were the matters the subject of the hearing before me. An order was made at an earlier time that any question of damages or compensation be decided after a decision on the present issues. 32 In view of the decision to which I have come it is not necessary to deal with the estoppel and misrepresentation claims put forward by the plaintiff. Had it been necessary to do so then I would conclude the failure of Citadel or its agents to respond to the letters of 7 March and 2 April was a representation by silence that Citadel had no interest in the property. It was perfectly apparent to Citadel that Castlereagh Street was conducting itself in a manner inconsistent with the claim by Citadel that it was the purchaser under a binding contract for sale. In the circumstances Citadel had a duty to put forward its claim but made a conscious decision not to do so. There is clear evidence, which is unchallenged, that Castlereagh Street relied upon this representation when it entered into the contract, which it did on 9 April 2001. All this could have been prevented by taking some sensible action rather than engaging in some policy of deception. In view of the decision to which I have come it is not necessary to consider this further. 33 The orders which I propose are as follows: 1. Declare that the defendant has no interest in the land in Folio Identifiers 1/86187 and 24/547445. 2. Order that the defendant withdraw caveat number 7574387 within three days. 3. Order that the cross claim be dismissed. 4. Order that the defendant cross-claimant pay the costs of the plaintiff cross-defendant of the proceedings to date. 5. Order that it be referred to a Master, Equity Division to inquire into the damages sustained by the plaintiff as a result of the lodgement of the caveats number 7535712 and 7574387 and that judgment be entered for the plaintiff against the defendant for the amount so found. 6. Order that the costs of the inquiry before the Master be determined by the Master. 7. The exhibits may be returned after twenty eight days. **********

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