Agius v Sage [1999] VSC 100

5. There are two defendants to the proceeding other than the Developer. The firstnamed defendant John Gerard Sage described himself as "the managing director of the Merchant Pacific Group (Loan Savers Pty Ltd as Trustee for the Horizons Funds Management Trust)". Merchant Pacific Group is and has been since 9 August 1996 a business name registered by Loan Savers Pty Ltd. The expression "Merchant Pacific Group", it seems, was also used as a shorthand reference to a number of companies controlled by Mr Sage. He told me that there were about 20 companies within the group. These companies included the Developer and the thirdnamed defendant Merchant Pacific Pty Ltd. Although Mr Sage maintained that the Developer was not associated with Merchant Pacific Pty Ltd I doubt that this is correct, at least in a technical sense. In a document which was sent to the ANZ Bank on 30 April 1997 the Merchant Pacific family tree is set out. It shows that five named companies were subsidiaries of Loan Savers, the sole director of each of which was Mr Sage. The first of these companies was Merchant Pacific Pty Ltd. The Developer is not shown as one of these subsidiaries but Mr Sage is described as its sole director. Mr Sage also held shares in the Developer and is its secretary. He said that his practice was to use a separate company for each of his projects and that the Developer was the company within the group which he used for the St Kilda Road project. I have no doubt, that in general parlance at least, the Developer was represented by Mr Sage to be a member of the Merchant Pacific Group and would have been seen to be so by a person dealing with the group or with the Developer. The role of Merchant Pacific Pty Ltd in 1997 is more obscure. Mr Sage said that it was just a shelf company that did not enter into specific transactions and, again, that it did not have a particular function at that time. Later, he described it as a service company used to buy photocopying supplies and to run the servicing of the office.

8. A feature of the February agreement as pleaded against the defendants is that it contains a term that the Developer procure and provide to the purchaser an insurance bond. A good deal of the trial concerned this matter and it is convenient that I say something at this stage about this and its function in the project. At the time of the February agreement the purchase of the land in St Kilda Road by the Developer had not been completed and no construction work had commenced. Any sale of a unit by the Developer at that time was, therefore, a sale off the plans of a stratum of air space in which the penthouse was to be constructed in the future. Draft contracts for such sales had already been prepared by the Developer's solicitors Deacons Graham & James ("DGJ"). The structure of these contracts was to divide the transaction into two parts, a contract of sale of land and a development contract. The contract of sale had to comply with the requirements of the Sale of Land Act 1962 s.9AA. This meant that money paid under it prior to registration of the Plan of Subdivision had to be held in trust for the purchaser pending its registration. The development contract did not suffer from those difficulties and had the added advantage that money paid under it to the Developer was available for the development. The purchaser also enjoyed the advantage of a substantial saving of stamp duty. The disadvantage for the purchaser, however, was that its pre-payments under the development contract were not secured or protected in the event that the project was aborted or was not completed for some reason. In the normal case, the purchaser paid a deposit of only 10% of the price of which 90% was taken as a deposit under the development agreement and was therefore at risk. In the case of a sale for $500,000, therefore, this would represent $45,000. But if the purchaser agreed, as Mr Agius said he did, to pay the whole of the price up front, the amount at risk increased tenfold. A purchaser who made such an agreement was referred to as an equity investor.

11. To meet a request by an equity investor for some security in case the project for some reason failed or was not brought to completion, Mr Sage had, in January 1997, put in place a facility with FAI Insurance Co Ltd under which FAI would issue a bond or bonds to such a purchaser or purchasers up to a limit of $1.5M. Under this bond FAI agreed to pay a stipulated sum to the purchaser upon demand in the event of default as defined in the document. The document which in its various manifestations was entitled Advance Payment Bond, Advance Payment Guarantee and Advance Payment Guarantee Undertaking, was referred to at the trial simply as a bond and I shall adopt that terminology.

15. The primary claim was essentially one by Milleye against the Developer for specific performance of the February 1997 contract of sale of the penthouse. Perhaps anticipating problems in obtaining this relief on the basis that the final form of the bond was never agreed or obtainable, Milleye formally waived its entitlement to this benefit (statement of claim paras.41-42) and sought the relief without it. Further and in the alternative, it claimed damages for breach by the Developer of its obligations under the February agreement to procure and provide the bond and to exchange contracts for the sale of the penthouse (statement of claim, paras.26, 37, 42) and to act honestly and reasonably in procuring and providing the bond (statement of claim, paras.27, 38).

18. Secondly, the pleading proceeds to deal with a further anticipated defence, that the nomination by N&C of Milleye as substitute purchaser under the February agreement was invalid or did not occur (statement of claim, para.45). If such a defence were to be made out, it is alleged that N&C itself was ready and willing to proceed with the February agreement and was itself entitled to specific performance (statement of claim, para.46). Next, it is alleged, further in the alternative, that the invalidity of the nomination or its non-existence was the result of the same breaches to which I have referred and, accordingly, N&C seeks damages for those breaches (statement of claim, para.47).

21. The third claim or group of claims was made by N&C or Milleye and was based on estoppel. The estoppel was said to arise from an assumption made by those companies that N&C or its nominee was entitled to purchase the penthouse pursuant to the February agreement. This assumption was known to the Developer (statement of claim, para.50) and was acted on by N&C and Milleye to their detriment (statement of claim, para.49). Then it is put that the Developer refused to exchange contracts for the purchase or to convey the penthouse to one or other of them (statement of claim, para.51). This is said to give rise to an estoppel which would prevent the Developer from contending that either N&C or Milleye is not entitled to complete the purchase of the penthouse (statement of claim, para.53) and declarations to this effect are sought. In their final address, counsel for Milleye relied upon this estoppel, not so much to preclude the Developer from denying the entitlement of Milleye to purchase or to complete the purchase of the unit; the Developer did not adopt either of these positions. They said that the Developer was estopped from asserting unenforceability for want of compliance with the local equivalent of the Statute of Frauds, the Instruments Act 1958 s.126, or for uncertainty.

24. Fourth, there appears a claim based on misleading and deceptive conduct in breach of the Trade Practices Act s.52 and the Fair Trading Act s.11. The facts relied upon as giving rise to the conclusion of such conduct are the same as those relied on for estoppel (statement of claim, para.54). It is said, too, that Mr Sage and Merchant Pacific Pty Ltd were guilty of aiding and abetting this conduct (statement of claim, para.56). N&C and Milleye seek damages for these breaches of statute (statement of claim, para.57).

27. Next appear rather similar claims by Mr and Mrs Agius as purchasers under the September agreement. These claims were made in the event that those based on the February agreement should for some reason be unsuccessful. As pleaded, the September agreement was made in August to September 1997 in resolution of the disputes which then existed as to the existence and enforceability of the February agreement and in order to have removed a caveat which had been lodged by Milleye on the title to the land. The parties agreed to vary the February agreement in certain respects including the substitution of Mr and Mrs Agius as purchasers (statement of claim, para.31). Mr and Mrs Agius seek specific performance of this agreement (statement of claim, para.60), alternatively damages (statement of claim, para.60). They seek, too, a declaration that the Developer is estopped from denying that they are entitled to complete the purchase (statement of claim, para.67) and they seek against the Developer damages for misleading and deceptive conduct and in the case of Mr Sage and Merchant Pacific Pty Ltd damages for aiding and abetting such conduct (statement of claim, para.69, 70).

30. The defence joins issue with many of these allegations, alleging that there was never any concluded agreement made in February or in September. It is put that the parties were then only negotiating a proposed agreement, that any agreement made was subject to formal documentation (defence, para.29(c)) and, further, that in any event, any agreement was unenforceable for want of certainty, for want of intention to enter into legal relations and for non-compliance with the requirements of the Statute of Frauds (defence, para.29(d)). The defences based on s.9AA of the Sale of Land Act 1962 were abandoned. Next it is said that, if the February agreement was made, it was terminated following the Developer's acceptance of the repudiation by the purchaser. The repudiation is constituted by the refusal of the purchaser to pay the purchase price before the completion of the agreement whereby the Developer purchased the land (defence, para.29(e)(f)(g)). Finally, it is put in the alternative that the February agreement was terminated by consent by the negotiations with Mr and Mrs Agius as new purchasers in August to December 1987 (defence, 29(h)). This plea appears to have been wrongly anticipated in the statement of claim for the plaintiffs there allege that the making of the September agreement was merely an accord executory and did not have the effect of discharging the earlier agreement (statement of claim, para. 36). Since it was never put by the defendants that a concluded agreement was reached in September, this plea was not pressed in final addresses. Similar defences, except the last, are raised in response to the claims of Mr and Mrs Agius under the September agreement. Then, in paragraphs 43, 46 and 60 it is said simply that none of the plaintiffs is entitled to specific performance or other equitable relief. These paragraphs were not particularised in the defence nor were they developed in final argument.

33. In reply to the Statute of Frauds defence as it affects the claims based on the February agreement, the plaintiffs allege, first, that the Developer held out Mr Sage and Merchant Pacific Pty Ltd as authorised to sell the penthouse in circumstances which estop it from relying upon the statute (reply, para.2, 4). Second, they rely upon part-performance of the February agreement (reply, para.2A). To the Statute of Frauds defence raised against the claims based on the September agreement Mr and Mrs Agius raise a similar estoppel (reply para.4) but do not allege part performance or waiver. Next, to meet a defence based on the failure of the parties to agree the terms of the bond, the plaintiffs raise an estoppel based on the events of March 1997 to which I shall refer. These events, it is said, are such that the plaintiffs were denied the opportunity to accept the terms of a bond upon which FAI insisted, so that the Developer is estopped from relying upon such non-acceptance (reply para.4). Finally, as I have mentioned, insofar as the non-compliance with the statute arose from a failure to provide a written record of the agreement to provide a bond, or in the event that the non-provision of the bond in some way precluded Milleye from obtaining specific performance of the February agreement, that plaintiff waived its entitlement to insist on the bond: statement of claim, para.41.

36. I should add at this stage that the case was fixed for trial on the basis, agreed to by the parties, that I should not be concerned with the quantum of damages if I conclude that these should be awarded. I can find on the Court file no order to this effect but I am content to proceed on that basis.

40. As things turned out, the factual conflict between the parties was of relatively narrow compass. This was because, for the most part, the significant communications were by letter. A notable exception, however, were the events of 5 to 18 February 1997. The significance of the former date is that the February agreement is said to have been made at a meeting on that evening.

43. Mr Sage and Mr Agius first met in 1984 when they were both insurance agents with the AMP Society. Mr Sage held the other in very high esteem as an accomplished salesman. He knew him, too, to be a careful man who drove a hard bargain. Very recently he had seen an example of this when on 23 September 1986 he sought to obtain from Mr Agius $104,000 which he needed for the deposit on the St Kilda Road property. Mr Agius was able to exploit Mr Sage's evident need for money and to obtain a rate of interest of 10% of the sum advanced for only one month. Notwithstanding this very high rate of interest, Mr Agius extracted from Mr Sage an agreement under which the borrower was another entity. Furthermore, Mr Sage himself was persuaded to agree to pay the interest and to guarantee the loan on terms which required him to pay a $10,000 penalty in the event that he failed to pay the interest on the due date. The loan and interest were, in due course, repaid.

46. Mr Sage was keen to have Mr Agius participate in the St Kilda Road venture because of his contacts with likely investors and because of his selling skills. In their discussions, Mr Sage provided him with brochures of the project, told him that the Developer was the corporate vehicle for the development and in January 1997 gave him a copy of the draft contracts to be used for selling the units. Mr Agius, for his part, was sceptical about the likely success of the project and was reluctant to commit his clients to it. He said as much in January and early February 1997 to Douglas Charles Perry who had been retained by Mr Sage to assist him (Agius) in selling the units. There was conflict between the evidence of the two men as to whether Mr Agius committed himself to the selling of units in the project before their meeting of 5 February 1997. There was a conflict between them, too, as to what was said at this meeting. As to these conflicts and, generally, I prefer the evidence of Mr Agius as more reliable. The two men are in my estimation experienced business tacticians each in his own way determined to derive maximum commercial advantage from any negotiation or circumstance which came their way. That said, they are very different, and these differences became apparent from the manner in which they gave their evidence as well as from the content of their evidence. Mr Agius presented as a cautious and meticulous man; Mr Sage, on the other hand, was flamboyant, even at times theatrical, with little concern for detail or for inconsistencies which emerged in his evidence. When challenged upon these he was evasive and frankly unconvincing. In my estimation much of his evidence smacked of reconstruction. Many examples of this may be cited. I refer at this stage only to his attempts to reconcile his evidence before me with that contained in his affidavit sworn on 14 January 1998 in support of the Developer's application to remove the Milleye caveat.

50. I find that on the evening of 5 February 1997 Mr Sage telephoned Mr Agius after he (Sage) had obtained a preliminary approval for the Aurora project from the local planning authority. Late that night he arrived at Mr Agius' restaurant at Patterson Lakes and spoke with him in his office above the restaurant. They then had a long conversation about the project in the then empty restaurant. Matters discussed included whether Mr Agius would join the selling team and Mr Sage's urgent need for money for the project. According to Mr Agius, he told the other that he thought the project was too risky for him or his clients to invest in. Mr Sage discussed the question of the risk and how it might be minimised. He told Mr Agius that he had obtained an insurance bond that would guarantee that the investor recovered the money invested if the project did not go ahead. Mr Sage agreed in evidence that a bond was mentioned but he did not say that he had obtained it. In fact the evidence showed that a few days before, on 29 January 1997, FAI had offered to underwrite an Advance Payment Bond facility in the sum of $1.5M and on the same day Mr Sage had accepted this offer. I accept Mr Agius' account.

53. The conversation then turned to the prospect that Mr Agius might himself become an investor by purchasing a sub-penthouse. Mr Sage offered to sell such a unit which was said to be worth $750,000 to $800,000 for only $500,000. This was an evident bargain, but Mr Agius sought to do better. He offered to purchase one of the penthouses which he was told were worth $1.95M for the same price provided his money was secured by a bond. In response to his enquiry Mr Sage told him that three car parking lots went with the penthouse but that more would be available for sale for $25,000 to $30,000 each. Mr Sage said that Mr Agius was adamant about getting three car parks and it was agreed that the penthouse be sold with three undesignated car parking lots. The point of difficulty was the price. They haggled some, but eventually Mr Sage agreed. The two men then shook hands on the deal. Mr Agius was not content with this earnest of good faith; he insisted that it be in writing. Mr Sage then wrote on a paper serviette or placemat the words which are said to have been the first written record of the February agreement. I will set them out in full:

"I John Sage, Managing Director of Merchant Pacific Group accept and agree to the sale to N & C Finance and Investments Pty Ltd or Nominees the Penthouse No.1902 at 582 St. Kilda Road, Melbourne known as Aurora as shown on Special Investment Offer dated 4 February 1997 and as marked and initialled for the full price of $500,000. This amount will be guaranteed by me personally and FAI or another insurance underwriter against non-completion of the penthouse (apartment 1902). In the event that the project does not go ahead and the penthouse is not completed by 1 June 1999 a full refund of the $500,000 plus a compound interest of 10% per annum will be paid and back-dated from when the $500,000 was advanced. This option is only available to N & C Finance and Investments Pty Ltd or Nominees and N & C Finance and Investments Pty Ltd or Nominees have the option of extending at their own discretion the completion time for the penthouse and the building."

It was dated and signed by Mr Sage and witnessed by Peter William Patrick Desbrowe-Annear, the manager of the restaurant, who was working back after the patrons had left. Mr Desbrowe-Annear said that the handshake took place after the document was signed but I find that he was mistaken in this. It is inconsistent with the evidence of the two participants. Mr Agius did not sign the document himself.

58. At the same time the two men had a number of copies of a glossy brochure for the project dated 4 February 1997. Mr Agius said that two copies of this brochure were initialled each on pages 19 and 23 of the document. He said that he and Mr Sage both initialled one of the copies but this was not produced in evidence. The copy produced bears, on page 19, only Mr Agius' initial and on page 23 an initial which he did not positively identify as his. It seemed to be assumed, notwithstanding this doubt, that it was his initial. Mr Agius said that he retained both copies of the initialled brochure and that some time later they were passed to his solicitors. Mr Sage said that he does not remember initialling any copy of a brochure or seeing Mr Agius do so. Mr Desbrowe-Annear said that only the placemat was signed and that he did not remember seeing any brochure at all at or in the vicinity of the table where the two negotiators were signing. All of this causes me to wonder, but I accept Mr Agius as a witness of truth and, on balance, I find that two copies of the brochure were initialled as he described. It may have been of more than passing interest to him to note on p.23 of the brochure that the other penthouse, unit 1901, was shown as having been sold. It now appears that Mr Sage had reserved or intended to reserve this unit for himself.

61. After the signing and initialling was done, Mr Agius said that a photocopy of the placemat was made and given to Mr Sage and he left the restaurant with this, but with no copy of the initialled brochure. Mr Sage denied receiving a copy of the placemat but I do not believe him. He swore in his affidavit of 14 January 1998 that he believed he was given or made a copy and I reject his explanation for the inconsistency.

64. I conclude this summary of my findings of this important meeting by stating that I am satisfied that at the end of this meeting the two men believed that they had agreed upon the sale and purchase of the penthouse upon the terms which they recorded in the hand-written memorandum. Notwithstanding a powerful submission to the contrary by counsel for the defendants, I am satisfied that the verbiage of the hand-written document is not inconsistent with this conclusion. I reject Mr Sage's evidence that he considered that he only made an offer to Mr Agius and that the memorandum recorded the terms of that offer. I shall return in my examination of the issues to the question whether this finding of the actual intention of the two men has any relevance to this case. There was no discussion of any requirement that the agreement be subject to the execution of some formal documents. I infer, however, from the draft agreement which Mr Agius had been given, from the nature of the transaction, its magnitude and the fact that its performance would extend over a long time, possibly to June 1999, that it was within the contemplation of the two men that the agreement would be formalised in greater detail, but I am satisfied that their overt acts demonstrated that they parted company in the belief that they had concluded a binding agreement. If further demonstration of this be needed it is to be found in the following exchange between them after the deal was made before the placemat was signed. According to Mr Agius:

"Then he [Sage] got up, shook hands and said, `You bastard you have got it. You have got the quickest million dollars I have ever given away', and then I said to him, I said `Let's put it down in writing'. He said, `Norm, when I shake hands, I have got a deal. Its a deal'. I said to him, I said, `When I shake hands, I want it in writing', and he started - we had a placemat, took a biro out from his pocket and starting writing on the thing'."

This evidence was not challenged. Mr Sage confirmed that Mr Agius requested that the deal be put in writing. I accept the accuracy of the quoted passage of evidence.

70. Mr Agius said that he forwarded a copy of the 5 February memorandum to his solicitor, Gary Richard Allwood, a partner in the firm, Kenyons, but he was unable to speak with him about it for some days. He was concerned that the memorandum was not legible and he sought the informal advice of Kelvin Gough, a solicitor who was a patron of his restaurant. He redrafted the memorandum incorporating some suggestions offered by Mr Gough. This document entitled "Acceptance and Acknowledgement" was in typed form and was ultimately executed in a more formal way. It was in the following terms:

" ACCEPTANCE AND ACKNOWLEDGEMENT I, John Sage, Managing Director of Merchant Pacific Group hereby accept and agree to the sale of the to be completed Penthouse number 1902 at 582 St Kilda Road, Melbourne, being part of the Aurora development, to N & C Finance & Investments Pty Ltd of 31 Curlew Point Drive, Patterson Lakes, 3197, and or nominee for a total price of $500,000. This acceptance and acknowledgement, including the enclosed $100.00, is accepted by me and my company in confirmation of my hand-written document dated 4th February, 1997. This agreement is guaranteed by me and Merchant Pacific Group, FAI Insurance Company and or any Insurance Company or Bank which N & C Finance & Investment P/L accepts and which agrees to provide full cover for any loss whatsoever of the capital including non-completion and I hereby assign any future entitlement I may have through any insurance underwriter and/or policy against non-completion of the abovementioned Penthouse by 1st June 1999. In the event that the Aurora project does not proceed to completion and the abovementioned Penthouse is not completed by 1st June 1999 I hereby personally and on behalf of Merchant Pacific Group, which is hereby acknowledged by its execution hereof, guarantee that N & C Finance & Investments Pty Ltd will be repaid the abovementioned $500,000 together with compound interest of 10% per annum which is to be calculated and paid from the date upon which N & C Finance & Investment Pty Ltd paid the abovementioned $500,000. This agreement is assignable by N & C Finance & Investment Pty Ltd at its sole discretion who also have the option of extending, at their sole discretion, the completion date of Penthouse number 1902. Merchant Pacific Group hereby charges its real estate situated and known as 582/584 St Kilda Road, Melbourne in favour of N & C Finance & Investments Pty Ltd."

74. The circumstances of its execution were the subject of conflicting testimony and, again, I prefer that of Mr Agius. I find that a draft of the document, Exhibit 68, was given to Mr Sage on 11 February 1997 with a request that he execute it. He said he was too busy to do so at the time and the document was left with him. On 17 February after a meeting with a journalist at the Merchant Pacific office in Victoria Street, Melbourne, Mr Agius again raised the question of executing the typed document. He had on this occasion a version which had been amended since 11 February. The original of this amended document was in evidence as Exhibit 148. It was executed by Mr Sage in the sense that he signed it himself and affixed on it in the place for the seal of the Merchant Pacific Group, the common seal of Merchant Pacific Pty Ltd and signed again as a witness to the affixing of this seal. Mr Agius said that he selected this seal from a box containing a number of company seals in the Merchant Pacific office and that, in response to his enquiry, Mr Sage said that this was the correct seal. Five or six copies of this document were signed and sealed in this way. Mr Sage dated these documents, surprisingly, 18 February 1997, that is the day after the date on which the seal was, as I find it, affixed. Mr Agius signed one copy which he left and took the others away. On the same occasion, too, Mr Agius wrote out and signed a cheque for $100 dated 17 February 1997 drawn on the N&C account payable to Merchant Pacific Group and left it with Mr Sage. Furthermore, on the back of one of the sealed documents Mr Agius wrote a receipt dated 17 February 1997 acknowledging receipt of the sum of $100 as "deposit for penthouse 1902 at 582-584 St Kilda Road, Melbourne". Mr Sage signed this also at the same time. Mr Sage asked the other if he was confident that the money was available. Mr Agius replied that it was and that all Mr Sage had to do was to organise the bond. The two men then, with Mr Sage's brother, Anthony, and Mr Agius' son, Oliver, went to dinner at the Punch Lane Wine Bar. Mr Sage said that the execution took place in different circumstances and that it was on 18 February. His evidence of this again at variance to that contained in his affidavit of 14 January 1998. I reject his testimony as a reconstruction based on the date on which appears on the sealed documents. To the extent that Mr Agius' evidence of the events relating to the signing of this document is contradicted by that of Mr Sage I accept Mr Agius' version.

77. On the following day Mr Agius affixed the seal of N&C on the typed documents which he had taken away and had Mr Desbrowe-Annear sign as a witness to the signature of Mr Sage. There was again conflict with Agius' evidence that this was done after a telephone call to Mr Sage. It is not necessary that I resolve this. If it were, I should again prefer the evidence of Mr Agius notwithstanding that it is inconsistent with that of Mr Sage and of Mr Desbrowe-Annear. Mr Agius sent a copy of this document duly executed in this way to his solicitor, Mr Allwood.

80. The parties then set about implementing the agreement of 5 February. On the following day Mr Agius made arrangements to have the required $500,000 available. Mr Sage telephoned him on the same day enquiring again whether he was sure that he had the money. Mr Agius reassured him on this point and enquired about the bond and the other papers. He, too, was reassured that this would cause no problem and that he would provide them shortly. Within days, on 20 February he received from Merchant Pacific a set of draft contract documents which he passed on to Mr Allwood. By this date, then, Mr Allwood had a copy of the hand-written memorandum of 5 February 1997 and of the typed document dated 18 February 1997 and the draft contract documents prepared for Mr Sage or the Developer by their solicitors, DGJ. Mr Agius was concerned that he should receive the promised bond and on 20 February he obtained a copy of the FAI Bond Facility and a document explaining how these bonds work.

83. In the meantime, Mr Allwood examined the contract documents and immediately he had concerns about them. His concerns were, shortly, that the contracts comprised a contract of sale of land and a development agreement showing an aggregate purchase price of $1.9M. The true price of $500,000 was shown only in a document called a side agreement. His concern was that there was no connection between the side agreement and the other contractual documents. This might, he feared, have adverse consequences for his client. N&C as purchaser might find itself liable for the full price and, furthermore, it was exposed to risk if the apparent but false sale price contained in the contract of sale and the development agreement were shown as a marketing tool to other persons such as prospective purchasers. This concern was an understandable one. In the sales schedules, too, this unit was shown falsely to have been sold for $1.9M.

87. These concerns were passed on by Mr Agius to Mr Sage and a meeting was arranged for 27 February 1997 at the office of Mr Allwood. Present at that meeting were Mr Sage and Mr Agius, Mr Allwood and Angela Romeo, Kenyons' conveyancing clerk handling the file. The purpose of the meeting was to discuss Mr Allwood's concerns and to enable Mr Sage to allay them if he could. The meeting duly took place and all four persons present gave evidence as to what was said. Ms Romeo took notes.

90. It is clear from the evidence of all participants that there was at this meeting no mention of the hand-written memorandum of 5 February nor of the typed document dated 18 February. In addition to the concerns of Mr Allwood the parties discussed the bond. According to Mr Agius, Mr Sage said that it would be available and would be handed to Mr Agius on settlement in exchange for the price. In his evidence Mr Sage dismissed this meeting as a discussion about technical aspects of the contracts for a resolution of which he referred Mr Allwood to his solicitor, Ross Kenneth Millen of DGJ. He said there was some discussion about the type of bond and that for this he referred the others to the underwriter. He denied that it was said that the bond should be given in exchange for the price. I prefer the evidence of Mr Agius, Mr Allwood and Ms Romeo to that of Mr Sage. Ms Romeo recalled that there was some urgency in the sense that matters had to be finalised by Friday week, 7 March. The settlement of the land purchase was due on Friday, 21 March although this was, I think, not known to Mr Agius or his legal advisors.

94. The form of the contract documents was then discussed between the respective solicitors for the parties and was the subject of correspondence on 5 March 1997 and 11 March. In the latter letter Kenyons agreed to the changes proposed and stated that "the purchaser will be Milleye" enclosing a certificate of registration of that company which shows registration to have taken place on 11 March 1997. This was the first mention of Milleye although it must have been discussed between the two men for its name appears in the draft bonds which were circulating on 6 March.

97. By letter dated 13 March 1987 DGJ forwarded the engrossed contract documents for execution by the purchaser. In their letter the solicitors asked for the cheque for the price to be forwarded payable to them. The contracts show Milleye as purchaser and describe the land sold as Lots 138, 203 and 204 on Plan of Subdivision 404635D. Lot 138 is the penthouse, unit 1902; lots 203 and 204 are two car parking spaces on the lower ground level. Notwithstanding their numbers, they are not adjoining. It would seem that the fact that there was one car park less than had been agreed in February escaped the notice of Mr Agius and his legal advisers. On 14 March 1997 the contract documents were executed and Mr Agius stood by waiting exchange of parts. He had put in place arrangements for obtaining the $500,000 and this money was available. He had on 11 March established the Penthouse 1902 Unit Trust of which Milleye was the trustee. On 19 March Kenyons informed DGJ that they were in a position to exchange contracts. The only apparently outstanding matter was the bond.

101. I say, apparently, because, unbeknown to Mr Agius, Mr Sage was encountering difficulties in achieving settlement of the land contract on 21 March. First, on 10 March he suffered a fall and was confined to bed for most of the following week. By 12 March the solicitors acting for each party to the transaction were readying for settlement on the due date. It is clear from the evidence of Michael Christopher Laino, who was the solicitor acting for the Developer in this transaction, that he was not involved in the financial aspects of the purchase. Then, on 17 March 1997, Mr Sage learnt that Glory Holdings Development Pte had withdrawn. Glory Holdings was a Singaporean company which was to lend $1M to the project as an investor. It was not a purchaser. Mr Laino, whose statement was not the subject of cross-examination, says rather cryptically that "the due date for settlement was missed". Mr Sage said that settlement did not take place due to Mr Agius' failure to pay the $500,000 for the penthouse. On 2 April the vendor gave notice of rescission to the Developer. Eventually Mr Sage was able to gather the funds necessary and he settled on 7 April 1997.

104. I turn back now to consider the evidence relating to the settlement of the form of the bond. A first draft was prepared by Victor Stephen Kikalis who was the National Underwriting Manager, Security Bonds of FAI in Sydney and forwarded on 25 February to the brokers, Alexander & Alexander. On 28 February a copy of this draft was sent by Mr Sage to Mr Millen of DGJ who examined it and considered it quite unsatisfactory. He made very many changes to it and sent it back to Mr Sage on 5 March 1997. These changes were incorporated into a second draft which was sent by Mr Kikalis to Mr Agius on the same day. It is this second draft which shows Milleye as the obligee and the agreed price of unit 1902 to be $500,000. I should add that at the same time a similar bond was prepared in favour of Glory Holdings to secure repayment of $1M. The form of this bond at this time was clearly inappropriate for it appears to treat Glory Holdings as a purchaser. On the following day a bond in similar but not identical terms was sent by Mr Kikalis to Mr Agius. There must have been some further consideration of this second draft for, on 11 March 1997, Mr Kikalis sent to Mr Millen a third draft which he thought "captured your suggestion". In this third draft a demand under the bond could not be made before 31 January 1999. The event of default which had first appeared in the second draft in these terms remained the same:

"inability of the Proprietor [Milleye] to take title to the Lot due solely to non-completion of construction of the Lot by the Developer."

The liability of FAI under the third draft expired seven days after receipt of notification of an occupancy permit relating to the Lot or 28 February 1989 whichever is earlier. The third draft was not submitted to Mr Agius or to Kenyons, his solicitors.

109. Given the imminence of the land settlement and Mr Sage's concern to receive the $500,000, this failure to send the third draft of the bond to Mr Agius is truly remarkable. It is the more remarkable, given the fact that the two firms of solicitors were in communication during the week after 11 March. Mr Millen said that he did not mention the bond to his counterpart at any time before 17 March. He did this, he said, because his instructions from Mr Sage were that he should never mention the availability of such a security to equity investors or to their solicitors because the Developer would prefer to receive their money without the need for a bond to secure repayment for non-completion if that were possible. On 17 March, Mr Millen says, the question of the bond was raised in a conversation with Ms Romeo regarding the details of the pending settlement for the penthouse purchase. She asked that the word "solely" be removed from the description of the event of default. It seems that she was speaking about the second draft and he about the third. He sought instructions and told her on the same day that the word should be deleted. The two then thought, mistakenly, that the terms of the bond were agreed. Then followed the Kenyons' letter of 19 March to which I have referred announcing a readiness to exchange contracts. Accepting as I do Mr Millen's explanation for not mentioning the bond before 17 March and that the two were at cross purposes in their conversations of that date, what still remains puzzling is why the third draft was never sent by Mr Sage or Mr Kikalis to Mr Agius. Mr Kikalis says nothing about this. Nor does Mr Sage who was convalescing from his injury at that time. On 19 March he was told of Kenyons' letter of that date in which the bond was to be handed over at the settlement of the contracts between the Developer and Milleye. He knew that this would have to be no earlier than the settlement of the land contract because FAI would not issue the bond until it held mortgage security over the St Kilda Road land. This meant that, if settlement of the Milleye contracts was to occur as the Kenyons letter of 19 March contemplated, this settlement would have to take place at the same time as the settlement of the land contract. He evidently did not trust Mr Agius. He told me that he feared that the purchaser would not produce the $500,000 at a joint settlement and would thereby cause the settlement of the land contract to fail. No reason was given for this mistrust. In any event Mr Sage rejected out of hand the solution proposed by Mr Millen that the money be held by DGJ for the purchaser pending settlement. Mr Sage said that Mr Agius had previously rejected this. Mr Sage said that this possibility was first discussed at the 5 February meeting and later at the 27 February meeting.

112. Whether this be the true explanation, it does not explain Mr Sage's conduct in instructing DGJ and apparently Mr Laino not to respond to the Kenyons communications relating to the settlement in the weeks after 19 March. Ms Romeo spoke of her telephone calls and letters of 20 March, 24 March, 26 March, and 4 April. Eventually she was able to speak to Mr Millen on 9 April when he told her that he had no instructions to respond to her communications. And in answer to her enquiry as to the land settlement, he told her that he thought it had already taken place.

116. Settlement of the land contract did indeed take place on 7 April, and without Mr Agius' money. It was achieved, too, without the involvement of FAI and without the issue by FAI of a bond to any person. Mr Laino said that the settlement sum of nearly $5M was provided by a first mortgage of $4.1M, a second mortgage of $200,000 and the balance of $860,000 from funds provided by purchasers under development agreements, some of whom had already paid 100% of the price but without requiring or obtaining any security.

119. Having obtained title in the name of the Developer, Mr Sage had no immediate need for Mr Agius' money. The latter, however, still posed a difficulty for he was insisting that the sale of the penthouse go ahead. He threatened to lodge a caveat on the title to the land. Mr Sage then engaged in a tactic which was described as "stringing him along", a term which the witness was content without a blush to adopt. This involved telling Mr Agius falsely that he (Sage) was having difficulties getting the bond and holding out the prospect that the sale would go ahead. On 28 April Mr Sage agreed to exchange contracts on the basis that the money should not be paid until the bond was available. I accept Mr Agius' evidence of this. Mr Agius said, and I accept too, that he continued to hold the money available for the purchase. In the Kenyons letter of 29 April confirming this agreement, it appears that Mr and Mrs Agius were to be the purchasers in the place of Milleye. The response of DGJ dated 30 April is evasive, doubtless on instructions. This prevarication continued until 14 May on which date Mr Sage said that the bond would be ready on the following day.

122. While all of these discussions were going on Mr Sage's conduct showed his true intention. As early as 7 April he had learnt that the bond facility which he had obtained from FAI for investing purchasers and not used had a value as a security. One month later he obtained from ANZ Bank a personal loan in the sum of $1,235,355.98 on the security of a bond from FAI of the full amount of the facility agreed in January, namely, $1.5M. The advance was applied by him as to $200,000 to pay out the second mortgage, permitting FAI to take its own second mortgage, and the balance of a little over $1M was paid to DGJ. This money was used by Mr Sage to purchase in his own name the other penthouse, unit 1901, with two car parking lots, for $1.95M which by side agreement was discounted by $591,508. The actual price, therefore, of unit 1901 was $1,358,490 of which $1,126,397 was paid in advance. The contract for the purchase of unit 1901 was entered into on 7 May 1997. Needless to say, none of this was disclosed to Mr Agius who was still hoping to receive the promised bond. It shows that Mr Sage's assurances to Mr Agius in April and early May that the bond would be provided to him were simply false and false to his knowledge. It was not until 28 May that Mr Sage was obliged to admit that the FAI facility had been used for his own purposes and that no bond would be forthcoming.

125. On 16 May, his patience exhausted, Mr Agius caused Milleye to lodge a caveat on the title to the St Kilda Road property. Mr Agius was still keen to obtain the penthouse and he again sought to negotiate a solution to the dispute. I will not prolong this judgment with a recitation of Mr Sage's evasions and duplicity during the negotiations which continued until 24 July. It is a dispiriting tale.

129. On 24 July the two men reached an agreement which was recorded in note form on a piece of paper initialled by each of them. Mr Millen was informed and on 30 July he wrote to his client to confirm his instructions to implement this agreement. He told Ms Romeo at this time that he was awaiting confirmation of the terms of the agreement. By letter dated 27 August 1997 DGJ formally put to Kenyons the offer which the two men had agreed one month previously. This is a significant document being the first of four letters which are said to comprise the September agreement. It is in these terms:

"We are instructed that our client is willing to offer to settle all matters with your client on the following basis: 1. Our client will prepare a Contract of Sale, Development Agreement, Vendors Statement and Proprietor's Side Agreement concerning the sale of the relevant property to a purchaser nominated by your client for a discounted price of $500,000.00. Please advise us of the name and other details of the nominated Purchaser. 2. Upon exchange you are to provide us with a registerable Withdrawal of the Caveat which you have lodged over the property on behalf of your client. 3. The $500,000.00 discounted price is to be paid as follows: * $250,000.00 when 50 apartments have been sold * $150,000.00 when 65 apartments have been sold * $100,000.00 when 85 apartments have been sold 4. This firm is to receive certificates from the independent Accountant Mr LCH Gleeson when apartments have been sold and his certificate will be conclusive. Upon receipt of that certificate we shall notify you and your client must pay the relevant amount to this firm within seven days of that notification. Apart from the deposit payable under the Contract of Sale which will be held in our Trust Account until final settlement the balance of the $500,000.00 is to be immediately released to our client for that company to apply as it sees fit without limitations or restrictions whatsoever. Would you please confirm that your client agrees to the above arrangements.

133. Kenyons responded by letter dated 3 September 1997 in these terms:

"Thank you for your letter of 27th August, 1997. We confirm the content of the telephone conversation between your Mr. Millan and our Mr. Allwood yesterday wherein you indicated that the word `immediately' appearing in the third last line of paragraph 4 is to be read in the context of the payments referred to in paragraph 3 of your abovementioned letter. We have taken our client's instructions in relation to the offer contained in your abovementioned letter as follows: 1. Your letter does not refer to the particular unit being purchased by our client. Could you please confirm that it is Penthouse 1902 as referred to in the previous Contract of Sale and Vendors Statement. 2. Our client has instructed us that your client has agreed to offer four carparks with the abovementioned Penthouse unit. You will recall that in the previous contract two carparks were referred to. Could you please obtain your client's instructions in relation to this issue. 3. Our client has no knowledge of Mr. L.C.H. Gleeson. Could you please advise what role Mr. Gleeson plays in your client's organisation or in relation to the development of this property. Our client wishes to sight the original certificate of Mr. Gleeson subject to being satisfied concerning the query raised in the previous paragraph. Our client requires seven clear working days in relation to the payments referred to in paragraph 3 of your letter. Our client requires that the sales contemplated in paragraph 3 of your abovementioned letter be unconditional with full deposits being paid in order for the apartments to be defined as sold. We look forward to hearing from you."

137. Then followed a letter from DGJ dated 11 September 1997 as follows:

"We refer to your letter dated 3 September 1997. Concerning the word `immediately' we point out that your client does not pay any amount to this firm until the agreed number of apartments have been sold, a certificate is issued and a copy of that certificate provided to your client. When the funds are actually paid, however, they may then be immediately released to our client. We trust that this clarifies the intended position. Concerning your numbered points we are instructed by our client to respond as follows: 1. The Apartment to be sold will be Apartment 1902 as referred to in previous documentation. 2. The property sold will include four carparks namely Lots 213-216 (inclusive). 3. Mr Lee C H Gleeson is an independent accounting consultant engaged by our client. Mr Gleeson is an experienced, professional accountant. He is a Certified Practising Accountant, a Registered Company Auditor and Business Consultant. His qualifications include FCPA, ARMIT, AFAM. Purchasers who pay amounts under Development Agreements permit these to be used to pay project related expenses. To provide comfort to these Purchasers funds may only be deemed project related expenses if Mr Gleeson issues a certificate in respect of them. Therefore he will attend our client's office on a regular basis, review various items of expenditure and will then certify in writing that certain items relate to the project and may be paid using those funds. In connection with the proposed settlement with our client and with various other purchasers it is also necessary for Mr Gleeson to certify when sales have been effected. Mr Gleeson will attend our client's office, will review signed and exchanged Contracts of Sale, will examine whether appropriate deposits have been paid and will, when he is satisfied as to all matters, issue appropriate certificates as to the number of apartments which have been sold. Mr Gleeson will provide the original certificate to this firm. We would prefer to retain that original certificate in our own records. We are prepared to provide you with a copy of the original Certificate and, if you wish, to allow you to sight the original at our office when you or your client attends to make the relevant payment. Our client will agree to seven clear working days in relation to the payments as you have requested. Concerning the sales our client agrees that these must be unconditional (save and except for the fact that the sale is conditional on completion of the development) with at least 5% deposit having been paid in order for the apartment to be deemed to be sold. Please confirm that all of the above matters are to your satisfaction and we will prepare an appropriate Deed between our respective clients dealing with these issues in order to settle this matter."

141. The final letter in this sequence is that from Kenyons dated 12 September 1997 which replies as follows:

"Thank you for your letter of 11th September 1997. We confirm that in light of the clarification to the offer contained in your letter of 27th August 1997, we have instructions to accept that offer. Could you please prepared an appropriate deed for our perusal at your convenience."

145. Having gone this far the solicitors turned to the terms of the deed. DGJ forwarded a draft on 16 September 1997. This draft was the subject of comment and suggested changes in a series of letters passing between the solicitors from that date to 4 December 1997 when the last of the matters was agreed to by Kenyons. Meantime, in their letter of 2 December DGJ, having dealt with the drafting matters raised another concern on behalf of their client. It was that Mr and Mrs Agius had ordered a significant number of variations to the standard layout and finishes for the penthouse. Mr Sage said that his concern about the variations had been raised with Mr Agius as early as 13 October 1997. At that time Mr Sage referred Mr Agius to the designer, Nigel Graeme Livesey Fitton. It is not disputed that variations were ordered; Mr Agius says they were not substantial and he disputed the claim that their value was $208,500. In any event, he said that this was a matter separate from the purchase agreement.

148. The question of variations then became another stumbling block. In its letter of 11 December DGJ required Mr and Mrs Agius as purchasers to agree to pay the sum of $208,500 as the assessed value of the variations. In that letter, too, they informed Kenyons that their client had reconsidered his position as to the personal guarantee which was to be given by him as part of the contract documents. This guarantee was to be given to support the otherwise unsecured loan of $150,000 from Mr and Mrs Agius to Merchant Pacific Pty Ltd. Finally, and very surprisingly, given the terms of the negotiations to date, DGJ required Milleye to withdraw its caveat by 16 December.

151. This letter becomes explicable only when it is read in the light of the fact, then unknown to Mr Agius and his advisers, that on 8 December 1997, three days before the letter, the Developer had issued a reservation certificate in respect of the penthouse unit 1902 and four car parks and accepted a reservation fee of $5,000 from new purchasers, Shane Ronald Zantuck and Karmene Zantuck. The price Zantucks had agreed to pay was $1.6M. The terms of the reservation certificate and the payment were explained by Mr Sage and one such certificate was in evidence. It gives to the prospective purchaser a 14 day option to enter into a contract to purchase the unit in question in which case the reservation fee forms part of the deposit. If the option be not exercised the fee is forfeit. It would not be correct, therefore, to say that Mr Sage had sold the penthouse at a time when he was, to adopt his own terms, negotiating with Mr and Mrs Agius; he was nevertheless treating with a purchaser at a very much greater price. It would not be unreasonable, therefore, to see the DGJ letter of 11 December as an attempt on his part to rid himself of a troublesome purchaser and to obtain a windfall of $1.1M.

154. Some evidence was led as to the genuineness of Mr Sage's assertion that the variations were significant and worth $208,500. The building designer, Mr Fitton, was responsible for these costings. It became apparent that the most significant variation, the enlargement of the unit from 320m2 to 360m2 was not the result of any special requirement of Mr and Mrs Agius; it was a change which affected the building generally and one which was introduced for the more convenient cleaning of the external windows. This to my mind throws a good deal of doubt upon the bona fides of Mr Sage's concern as expressed in the DGJ letter of 2 December 1997.

157. If the DGJ letter of 11 December was intended to bring matters to a head it was indeed successful. Kenyons' reply of 16 December refused to remove the caveat. On 14 January 1998, the Developer commenced Proceeding No.4082/98 in this court seeking its removal. Mr Sage's affidavit to which I have referred was sworn the same day and filed in that proceeding. In that affidavit Mr Sage deposed that the Developer had on 8 December sold the penthouse to the Zantucks. In truth he had on that date given to the Zantucks an option to purchase the unit which option had by 14 January 1998 long expired. Challenged upon this assertion as being inconsistent with his testimony before me, Mr Sage did not seem to apprehend or be concerned about the significance of the difference. It was, however, a matter of some consequence for him at the time of the caveat application, because he apparently relied on it to obtain an order that Milleye remove the caveat. To obtain this order the Developer on 19 January 1998 undertook to the court pending the determination of this proceeding to not complete the Zantuck contract and not to offer the penthouse for sale. A contract of sale between the Developer and the Zantucks is in evidence. It is dated 25 March 1998, a little over two months after the giving of this undertaking. The contract contains a condition under which the contract is terminated if the title of Milleye to the penthouse is established by the court in this proceeding.

164. As pleaded, this agreement was made at the meeting in the restaurant on 5 February 1997 and recorded in the hand-written memorandum signed by Mr Sage on that date. It is alleged, too, that the agent was also contained in the typed document executed on 17 and 18 February. In final submissions, counsel for the plaintiffs appeared to have some difficulty with this formulation. Their position as it was finally put was that the February agreement was oral. The hand-written document of 5 February was a note or memorandum of this agreement. The typed document dated 18 February was a separate contract which perhaps varied the oral agreement.

167. The defendants' first and fundamental position upon the February agreement was in truth that there was no agreement at all. Mr Sage said that the discussions in the restaurant on 5 February were part of on-going negotiations between the two men which started in January 1997 and were never consummated in an agreement. I have, at [16] and following, set out my findings of fact as to the events of 5 February. I am satisfied that the proper inference to be drawn from the conduct of Mr Sage and Mr Agius is that they reached agreement at the meeting in the restaurant. The terms of this agreement were that Mr Agius would purchase and Mr Sage sell the penthouse, unit 1902, with three car parks for $500,000 and that, since Mr Agius was to pay the whole price in advance of completion, he should receive a guarantee and an insurance bond as security. Mr Agius was well aware that Mr Sage was carrying out the development by a company within the Merchant Pacific Group. The agreement was therefore made by Mr Sage on behalf of that company. The discussions, therefore, were conducted by Mr Sage on behalf of that company, the Developer. Mr Sage was happy to concede this. I infer from the terms of the memorandum that the two men understood, too, that Mr Agius would make the purchase through his company, N&C. As I have mentioned, the two men contemplated that the transaction would be formally recorded in contracts along the lines of the drafts which Mr Agius had previously received. Notwithstanding this, I infer that the two men by their handshake concluded the deal and intended that each should be bound by it. In short, they intended to enter into legal relations. The hand-written document was then prepared and signed as a memorandum of their agreement. I make these findings as to the actual state of mind of the two men conscious of the debate as to the relevance of subjective intent to the question whether a contract was entered into with the requisite contractual intention: Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 314-9, per Hope JA, at 330-1, per Mahoney JA, at 335-8, per McHugh JA; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550, per Gleeson CJ, Hope and Mahoney JJA concurring. See, also, Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] VicRp 55; [1994] 2 VR 106 at 134, per Brooking J. I am satisfied, too, that the proper inference to be drawn by a bystander from their words and conduct on this evening and the context in which these occurred is that the two men intended to make a binding contract.

170. This conclusion is confirmed by the terms of the memorandum which the parties prepared and which Mr Sage signed on that day. This document, notwithstanding its informal provenance, is couched in legal language which shows that non-legal drafters were intending to impose a solemn tone on the document. In its first sentence it speaks of accepting and agreeing to the sale. Counsel for the Developer said that these are not words of contract and they drew attention to the word "to" in the clause "agree to the sale". They emphasise, too, the use of the word "option" in the last sentence as indicating what the negotiators had agreed to. This conclusion, they said, was confirmed by the absence on the document of Mr Agius' signature. I am not at all persuaded that the document bears this interpretation. It was prepared by non-lawyers albeit experienced businessmen. It is to be understood as a note or memorandum recording what had orally passed between them. It must be read in the light of the terms of the brochure which is referred to in it and as a response by a person responsible for the brochure, John Sage of the Merchant Pacific Group, to an offer by Mr Agius to purchase the penthouse described in the brochure. There are two aspects to the document. The agreement to sell and the securing of the prepayment. The security which may be called upon in the event of non-completion by 1 June 1999 may be extended at the option of the purchaser. This is the option referred to in the last sentence. I am of opinion that the terms of the document are consistent with the existence of an immediate and binding contract.

174. This, however, does not dispose of the Developer's point, for the agreement which they relevantly intended to make may, even so, not be one which the courts will enforce: South Australia v The Commonwealth [1962] HCA 10; (1962) 108 CLR 130 at 154-5, per Windeyer J. Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548, per Gleeson CJ; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] VicRp 55; [1994] 2 VR 106 at 130-3, per Brooking J, at 168-70, per Tadgell J. The parties must agree with sufficient certainty upon such terms as are, in the circumstances, legally necessary to constitute a contract. This means that, whatever the negotiators might have thought and, more importantly, whatever the reasonable bystander might infer as to their state of mind, the law will not find a contract exists unless it has been relevantly established that the essential and critical terms of the bargain have been agreed upon: Vroon BV v Fosters Brewing Group Ltd [1994] VicRp 53; [1994] 2 VR 32 at 67, per Ormiston J and the cases there cited. This is the burden which the plaintiffs must discharge: Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] VicRp 55; [1994] 2 VR 106 at 177, per Tadgell J. This said, I approach my task with a strong disposition to give effect to the intentions and expectations of the negotiators who by their handshake signified that they had concluded a binding agreement. This means that I should strive to overcome any uncertainty in such a case: Hawthorn Football Club Ltd v. Harding [1988] VicRp 6; [1988] VR 49 at 55, per Tadgell J. It is necessary to observe, too, that at this level I am not concerned with the question whether the note or memorandum is sufficient; it is whether the parties agreed on all the necessary terms at their meeting in the restaurant on the evening of 5 February. I turn now to the respects in which it has been suggested that there was no agreement.

177. Counsel for the Developer submit, first, that nothing was agreed as to the time of payment of the price. Reliance was placed on the old decision of this Court in Corcoran v O'Rourke [1888] VicLawRp 158; (1888) 14 VLR 889 as support for the proposition that the time for payment in a contract of sale is an essential term and that, without it, the contract is uncertain and therefore void. See, too, McLachlan-Troup v Peters [1983] VicRp 5; [1983] 1 VR 53 at 60, per Beach J. I do not think that Corcoran v O'Rourke stands as authority for such a proposition. It concerned a supposed contract of sale of land which was briefly recorded in a document which suffered from a number of deficiencies. The price was £400 payable as to £10 for commission foregone, £375 in cash and the remaining £15 by a bill from the purchaser. It is clear from the judgment of the Chief Justice, first, that he was concerned with the validity of the contract under the Statute of Frauds; second, that the inadequacy of the description of the land was fatal to the claim so that his observations as to the terms of the payment were obiter; and, finally, that the vice as to the terms of payment lay in the failure of the parties to specify the terms of the bill.

180. Furthermore, there is abundant authority which would not hold the contract of sale land to be bad for want of agreement as to the date of payment of the price: Perri v Coolangatta Investments Pty Ltd [1982] HCA 29; (1982) 149 CLR 537 at 543, per Gibbs CJ, at 554 per Mason J; Aberfoyle Plantations Ltd v Cheng [1960] AC 115 at 124; Farrell v Green (1974) 232 EG 586. The same is implicit in the judgment of Griffith CJ in Canning v Tenby [1905] HCA 45; (1905) 3 CLR 419 at 427 and O'Connor v Slattery [1981] 2 NSWLR 447. Where the parties to a contract of sale of land do not fix a time for payment and completion of the contract, this must take place within a reasonable time in all the circumstances. Doubtless, reasonableness in this case would have regard to the fact that Mr Sage told Mr Agius that he required the money urgently. It is, however, not necessary for me to determine what is a reasonable time in this case for the Developer does not assert any breach of such a term. It is sufficient that I conclude, as I do, that the absence of any date for completion including payment of the price does not render the agreement of 5 February 1997 bad for uncertainty.

183. Next, it is said that the agreement made no provision to deal with the question whether payment was to be temporally connected with the provision of the bond. There is no substance in this contention. It is clear from the evidence of both men that the provision of the bond was a very important aspect of the transaction from Mr Agius' perspective and that its function was to protect the purchaser in the event the project failed. It was implicit in the discussions at the restaurant that the cheque for $500,000 was to be given in exchange for the bond. This conclusion, incidentally, is fatal to the further defence raised in paragraphs 29(e), (f) and (g) of the defence that, by insisting upon the bond in exchange for payment of the price, Milleye repudiated the February agreement.

186. Third, the terms of the bond were not agreed. Again, I do not think that this is a matter whose absence destroys the apparent agreement. The two men had a clear idea what was intended to be the event of default to be inserted in the bond. They spelt it out in the hand-written memorandum of 5 February. The fact that Mr Sage or the Developer was left with the task of obtaining such a bond was a matter for his performance of this obligation. If some dispute between the contracting parties arose as to its terms, this is a matter which might be resolved by the court: Axelsen v O'Brien [1949] HCA 18; (1949) 80 CLR 219 at 225, per Latham CJ.

189. Next, it was put that the agreement as to the car parks lacked certainty. It was agreed between the negotiators that three car parks were sold with the penthouse. It is said on behalf of the Developer that the absence of their lot numbers or of any other means of identification of them, shows that no agreement had, in the eye of the law, been achieved. No evidence was led to suggest that any one car park was better or worse or different from any other or that the location of the three was a matter of concern to the negotiators. To my mind, this was also a matter to be worked out later. Ultimately, it was for the vendor to allocate to this purchase three car parks of its own choosing. In this regard the case resembles Powell v Jones [1968] SASR 394, approved by Walsh J in Godecke v Kirwan [1973] HCA 38; (1973) 129 CLR 629 at 641-2 (Mason J concurring). The failure of the parties to deal with it in terms does not render the contract uncertain.

192. I turn now to the argument that no agreement was made on 5 February because the vendor, the Developer, was not identified. This argument was deployed in support of a conclusion of no contract as well as to show non-compliance with the Statute of Frauds. I am concerned here with the former question. The evidence of the two negotiators does not lead to the conclusion that any particular company was referred to as vendor. Both Mr Agius and Mr Sage knew that the Developer was the company carrying out the development and it was not disputed that Mr Sage was speaking for the Developer. The brochure referred to in the hand-written memorandum features the Merchant Pacific Group prominently on the cover. It introduces the executive summary on page 5 with the announcement: "Merchant Pacific is pleased to offer the latest development under our Property Investment Program". On page 6, the Developer is introduced but without identifying its precise role in the development. The brochure says that the Developer "has exclusively engaged the Merchant Pacific Group to perform project management and administrative duties on its behalf and to market the apartments for sale". The Developer was and was known to the two negotiators to be a company forming part of the Merchant Pacific Group. The conclusion which I reach from all of this is that, Mr Sage was accepting and agreeing to the sale of the penthouse by one of his companies within the Merchant Pacific Group which was known by the negotiators to be the Developer.

195. The final uncertainty relied on is that the consensus of 5 February inevitably required contract documents to be prepared and executed and that the terms of these were never agreed. This requirement for further documents was said to arise from the nature of the transaction and from the fact, known to the negotiators that this is how sales in the project were to be made. Reliance, too, was placed on the fact that the first thing the parties did after the 5 February meeting was to set about preparation of these documents. I have concluded at [20] above that the negotiating parties contemplated that further documents would be prepared to formalise the agreement.

198. It is true that the transaction for the sale of the penthouse was one of some magnitude and was to be performed by the Developer over a long time. It left many subsidiary matters to be attended to and to be resolved before it could be completed. In such a case the law might be somewhat chary in concluding that the parties entered into a binding agreement in a short and informal document: Sinclair Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 316-7, per Knox CJ, Rich, Dixon JJ. See, too, Clifton v Palumbo [1944] 2 All ER 497 at 499, per Lord Greene MR, at 502 per Finlay LJ. In this the law reflects the experience of commercial people that this is not how things are ordinarily done: Farmer v Honan [1919] HCA 13; (1919) 26 CLR 183 at 192, per Barton J; Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528 at 533.

201. It is convenient at this point to deal with the associated but distinct submission that any consensus achieved at the restaurant on 5 February was subject to the making of a formal agreement in the sense that without such formal agreement, no contract existed. Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528, was such a case. This question is associated with the issue of uncertainty as Allen v. Carbone itself demonstrates. It is, however, distinct because, as JD Phillips J observed in Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] VicRp 55; [1994] 2 VR 106 at 204, the "subject to contract" question truly arises only where the parties have agreed the terms of a complete contract but have in mind the execution in the future of a document to record it.

204. A starting point is the finding of fact which I have made upon an objective basis that the parties expected and intended a formal more detailed agreement would be entered into to record their bargain of 5 February. The Developer's submission, then, fastened upon the distinction formulated by Gleeson CJ in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 543:

"In short, the issue is whether, when the parties negotiated about, and made their agreement concerning, price, they should be held to have entered at that stage into a contract, albeit one that would later be overtaken by a further more formal contract containing additional terms and conditions. The alternative view is that, contemplating that at some future time it would be necessary for them to make agreement on various other terms and conditions, they first set about agreeing on price, in the expectation that if they could agree on that they would have little difficulty in reaching common ground on the other matters which they contemplated would form part of their contractual arrangement, but as to which, in the events which happened, they never reached final agreement."

The negotiators in this case did not on 5 February agree upon the content of the contemplated documents nor on any objective basis for determining it. Compare: Godecke v Kirwan [1973] HCA 38; (1973) 129 CLR 629 at 642, per Walsh J (Mason J concurring), at 646, per Gibbs J. Any terms to be introduced, other than those agreed on 5 February must therefore be inserted by consent of both parties. That this might occur is not necessarily fatal to the characterisation of the transaction as falling into the first category described in the formulation of Gleeson CJ above: G.R. Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 at 634, per McHugh JA (Kirby P and Glass JA concurring). The decisive test is the intention of the parties, objectively determined.

209. I have had regard to the events of 5 February as I have found them, including the terms of the memorandum and the failure of Mr Agius to sign it. I have had regard to the fact that both the negotiators were familiar with the procedures in place for the sale of units including the form of the draft sale documents. I take judicial notice of the fact that a transaction of this kind would normally be implemented by an exchange of contracts and it may have to satisfy the requirements of the Sale of Land Act 1962. I infer that this would be known also to the two negotiators. In my opinion, the transaction is to be characterised as of a kind described generally in the first of the alternatives offered by Gleeson CJ in the passage quoted above. The relevant intention of the parties was to enter into an immediate binding contract which was to be formalised in due course in a document or documents to be prepared by the solicitors, which documents would contain the terms agreed at the meeting of 5 February. The fact that these terms might be amplified and supplemented in these formal documents, provided the parties agreed, is beside the point.

212. I return, then, to the uncertainty point. Does the agreement of 5 February satisfactorily deal with all of the matters which the law requires in order to conclude in favour of the existence of a contract such as that contended for?

215. Mr Agius had in January 1997 received the forms of the contract of sale and the development agreement which were to provide the legal basis for a sale of a unit in this development. These documents were in evidence. It was not suggested in argument that they depart in any respect from those which were delivered for consideration on 20 February and those delivered for execution on 16 March. A comparison of the January documents and the March documents discloses no difference between them. There are two exceptions to this, first, the schedules of fixtures, fittings and finishes - Schedules A and C - were not included in the January documents and, further, it seems that no side agreement was provided at this time. There was, of course, no need at any time for any side agreement. The parties might properly have implemented the agreement of 5 February by inserting the true consideration in the appropriate places in the contract of sale and the development agreement. As to the detail of fixtures, fittings and finishes, it was not suggested in the pleadings or in argument that their absence prior to the March documents was a matter of concern to either party. No submission was presented to me to the effect that their absence should lead to the conclusion that the 5 February agreement was not one which the law would act upon. In these circumstances, I think it would not be proper for me to enter further upon this matter. I shall, however, return to it when I consider remedies.

218. I conclude, therefore, that the contract is not unenforceable on the ground of uncertainty or of any failure to agree upon a material term.

222. The plaintiff sought to raise an estoppel to defeat the Developer's uncertainty arguments if it should appear that they were successful. This plea is found, surprisingly, in their statement of claim in paragraphs 48 to 53 which I have summarised in [7] above. I do not read the pleading as asserting the estoppel here contended for. If accepted, the pleaded estoppel would only prevent the Developer from asserting only "that N&C or Milleye is entitled to complete the purchase of" the penthouse. Even so, and notwithstanding my conclusion on the uncertainty point, I shall briefly set out my reasons for rejecting it. It is based on the principles expounded in Waltons Stores (Interstate) Ltd v. Maher [1988] HCA 7; (1988) 164 CLR 387. It assumes as a matter of analysis that the consensus reached on 5 February was not sufficient for the court to conclude that sufficient terms had been agreed with sufficient particularity to constitute an enforceable contract, that is, it was uncertain. In order to satisfy the first requirement for such an estoppel, the plaintiffs must show that they, or N&C and Milleye, assumed contrary to this fact that the contract of 5 February was sufficiently certain to be enforceable. Assuming the remaining requirements to have been made out, the estoppel will then prevent the Developer from denying this certainty. Let us assumed that this has been achieved. What is left is an inadequate agreement which the plaintiffs wish to enforce or for breach which they seek damages. The fundamental difficulty that I have with such an argument is that equity cannot in this way render certain that which is uncertain. If the parties have failed to agree a material term equity cannot legislate it for them. I shall return to this plea of estoppel in the context of its role as an answer to the Statute of Frauds defence. For present purposes, it cannot avail the plaintiffs.

226. This point is taken by the Developer in paragraph 29(d)(iii) of its defence in fairly general terms. In argument, the non-conformities with the statute are identified as a want of execution of any document by the Developer, the omission from the document of the correct name of the vendor, of any reference to the three car parks, or to the terms of payment. Next, it is said that the February 18 agreement includes extra terms.

229. It will be recalled that the case of the plaintiffs is that the agreement to sell was oral and that the hand-written document of 5 February was a note or memorandum of this agreement. The document dated 18 February, they say, has no role other than as a variation to the oral agreement to the extent that it departed from what had gone before.

232. It was accepted that the note or memorandum must contain all or all of the essential terms of the contract: Sinclair & Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 318, Corcoran v O'Rourke [1888] VicLawRp 158; (1888) 14 VLR 889; Hawkins v. Price [1947] 1 Ch 645. The identity of the vendor is an essential term. The memorandum is expressed as a statement by Mr Sage as managing director of the Merchant Pacific Group. For reasons which I have set out, it is possible by reference to the brochure to know that the Merchant Pacific Group is a shorthand label for a group of companies of which the Developer is a member and that the Developer was the company carrying out the development of the Aurora project. In the ordinary course, this company would be the first vendor of units within that project. I was pressed on the authority of Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VicRp 33; [1980] VR 313, to conclude that the memorandum sufficiently identified the Developer as vendor. I do not think this is correct. This is not a case where the contracting party is described in general terms and is capable of identification from this description. In the memorandum the vendor is in fact misdescribed. It is not Mr Sage; it is not the Merchant Pacific Group. Leaving aside, as I must for present purposes, the words spoken by the negotiators, the terms of the memorandum do not identify the vendor without resort to evidence of the intention of Mr Sage: Rossiter v Miller (1878) 3 App.Cas. 1124 at 1153, per Lord Blackburn; Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VicRp 33; [1980] VR 313 at 318-9. Furthermore, the omission of the three car parks is a non-conformity because these lots formed a minor but appreciable portion of the property sold. The same may be said as to the requirement that contracts be prepared and executed including details of the penthouse to be constructed. As to the terms of payment, I have concluded at [53] and [54] that it was an implied term of the agreement that payment of the whole of the price should be made within a reasonable albeit prompt time upon receipt of the bond. An implied term need not be recorded in the note or memorandum: Hawkins v Price [1947] 1 Ch 645 at 654, per Evershed J.

235. In Victoria, the note or memorandum must be signed by the party to be charged or by an agent authorised in that behalf in writing by the party to be charged: Instruments Act 1958 s.126. Accepting that Mr Sage signed as agent for the Developer, no argument was presented on behalf of the plaintiffs against the Developer's contention that he lacked the necessary written authority.

238. I think it was not seriously disputed therefore that the documentation of 5 February 1997 generally did not satisfy the requirements of the statute that there be a signed note or memorandum recording the essential terms of the 5 February agreement. Before I turn to the three matters raised in answer to this defence, part performance, estoppel and waiver, I shall make reference to the memorandum dated 18 February 1997.

241. Counsel for the plaintiffs described the legal role of this document as a record of a further agreement varying the oral agreement of 5 February. They submitted that, since this further agreement was recorded in a document which itself did not comply with the requirements of the Statute of Frauds, it cannot be set up by the Developer as an answer in this proceeding to enforce the 5 February agreement: Morris v Baron [1918] AC 1 at 16 per Viscount Haldane. Accordingly, the argument goes, the 18 February document can be ignored. Such an argument involves the plaintiffs themselves setting up the Statute of Frauds, unpleaded, in order to defeat a defence, which is not taken, to a formulation of their own case which is pleaded altogether differently in paragraph 13 of their statement of claim. It must be recalled in this context that the analysis of the role of the two documents upon which this argument depends did not appear until the end of the plaintiffs' final address after the evidence was in and after counsel for the defendants had addressed the court. I have in my consideration of this case been prepared to indulge the plaintiffs to the extent of entertaining a submission that the February agreement was oral, or perhaps partly oral and partly implied, and that the documents in question were notes or memoranda of that agreement. It is, to my mind, quite another thing to entertain this submission which was first raised so late in the day.

244. Accepting, as I do, that the hand-written memorandum of 5 February was a note or memorandum rather than a contractual document, the evidence and the terms of the second document dated 18 February lead me to the same conclusion, namely, that it is not a contractual document but a note or memorandum of the 5 February agreement. Like the handwritten document of 5 February, it, too does not satisfy the requirements of the Statute of Frauds. It suffers from the added deficiency that it contains new terms not included in the oral agreement of 5 February. In short, the second document does not cure any non-compliance with the Statute of Frauds.

248. I turn now to part performance. I accept that following the 5 February meeting Mr Agius and N&C took steps to implement the agreement. $500,000 was procured and set aside pending settlement. In paragraph 2A of their reply the plaintiffs assert as further acts of part performance a number of matters previously alleged in the statement of claim paragraphs 16-23. These are the payment of $100 on 17 February, the engagement of Kenyons to act as their solicitors for the purchase, the nomination of Milleye as purchaser, the negotiation and agreement to certain variations of the standard contract documents, and the fact that Kenyons advised DGJ on 19 March that Milleye was ready to settle. I have omitted from this list as being irrelevant for present purposes any allegations, in those paragraphs of the statement of claim, of acts which were in fact performed by the Developer or its solicitors. Other acts relied on in the reply are the incorporation of Milleye, the establishment of the Penthouse Trust, the nomination of Milleye and the execution by Milleye of the contract documents on 16 March preparatory to settlement.

251. Each of the acts of N&C or Milleye relied on must satisfy the three requirements for part performance. It must have been carried out for the purpose and in the course of performing the contract; it must be equivocally and in its own nature referable to some agreement such as that relied on; and N&C or Milleye must have changed its position on the faith of the agreement: Regent v Millett [1976] HCA 40; (1976) 133 CLR 679. It was, not surprisingly, not suggested on behalf of the plaintiffs that I should apply some more liberal test such as that established in England by Steadman v Steadman [1976] AC 536 at 540-1. The analysis of the Full Federal Court in Australia and New Zealand Banking Group Ltd v Widen [1990] FCA 474; (1990) 26 FCR 21 at 33-8 and the Victorian cases referred to in that case preclude my accepting any such submission.

254. Turning to the acts relied on, they do not, individually or collectively, satisfy the second requirement. They are equally referable to an expectation on the part of N&C or Milleye that a contract would in the future be entered into. On that ground at least, part performance has not been made out.

258. Next, in answer to the Statute of Frauds defence, reliance on behalf of the plaintiffs was placed on a variety of estoppels including those referred to in argument as "agency estoppel" and "reduced to writing estoppel".

261. As to agency estoppel it was put that, since Mr Sage as sole director of the Developer conducted the oral negotiations on 5 February, this carried a representation that he was authorised to enter into the agreement for sale on 5 February on its behalf. Given reliance and detriment, it is said that the Developer is estopped from relying on the Statute of Frauds.

264. There are two things to be said about this submission. First, it was not pleaded. Counsel said it was contained in paragraph 48 of the statement of claim which I have mentioned in [66], but I do not see it there. Second, there is a logical slide in the submission. Assuming that the Developer held Mr Sage out as authorised to speak and contract on its behalf, an estoppel might, if the other elements were established, arise preventing it from denying this authority. In this case the Developer seeks to make no such denial. The problem which the plaintiffs seek to overcome is the technical one, that the authority of the signatory to the memorandum is not written. The estoppel does not touch this matter.

267. I was referred to two cases in support of this estoppel. In the first, Boulis v Angelopoulos (1991) 5 BPR 11,477, the New South Wales Court of Appeal was concerned with a case of an auctioneer's ostensible authority to bind the vendor and whether the vendor by conduct was estopped from denying this authority. There was no estoppel raised to defeat the Statute of Frauds. The second, Colin v Holden [1989] VicRp 48; [1989] VR 510 concerned a proceeding in this Court with respect to real estate. Each party was represented by counsel. When the case was called on, the trial judge was told by counsel that it had been settled and it was accordingly adjourned by consent, presumably to enable the parties to perform the terms of settlement, one of which involved the conveyance of land. Later on the same day counsel signed formal terms of settlement. A few days later, the defendant resiled from the settlement and the plaintiff sought to enforce it notwithstanding that counsel who signed the terms was not then authorised in writing as required by the Instruments Act 1958 s.126. There was therefore no enforceable agreement in existence at the time of the consent adjournment. The consent, however, was given to the adjournment on the assumption to the knowledge of the defendant that an enforceable agreement would be entered into later that day. His Honour at p.514 analysed the conduct of the parties as follows:

"The conduct carried with it, in my view, a representation that the defendant would not insist on his statutory right to require, as a prerequisite to the enforceability of the terms of settlement to be drawn up, either that they should be signed by him or that his counsel should be authorised in writing by him to sign them on his behalf. I conclude that, on the faith of the conduct of the defendant and his legal advisors on 28 September 1987, the plaintiff was induced not to proceed with the hearing of the current sittings and that the defendant intended that she should be so induced."

His conclusion from this was that the defendant was precluded from insisting upon his entitlement to rely upon the statute. This decision has been cited as an example of the modern application of law of estoppel by Mason CJ in Commonwealth v Verwayen (1990) 170 CLR 394 at 411 and has been followed by Chernov J in Hicks & Oakley v Brown (unreported, SC (Vic), 12 June 1997).

272. Reduced to writing estoppel is pleaded in paragraph 2(4) of the reply in which it is said that the Developer, by submitting the draft contract documents in February and the engrossed contract documents for execution in March, represented that the February agreement would be reduced to writing. For authority for such an estoppel counsel relied upon the old case of Maxwell v Mountacute (1719) Prec. Ch 526; 24 ER 235, which was mentioned more recently by Stamp J in Wakeham v Mackenzie [1968] 1 WLR 1175. This estoppel is said still to exist in Meagher, Gummow & Lehane, Equity Doctrines & Remedies, 3rd ed, 1992, par 1221. In Wakeham v Mackenzie it was said, obiter, that where one of two parties to an oral contract represents falsely to the other that there exists a written record of the agreement and the other acts to her detriment in reliance upon this, the former cannot thereafter rely upon the absence of this document to set up the Statute of Frauds as an answer to a claim under the oral contract. This is not the case here. The proposition formulated in Maxwell's case was that, where the parties to an oral agreement agree to reduce their agreement to writing but this is prevented by the "fraud and practice" of one party, that party will not be permitted to set up the non-existence of the writing to resist a claim brought by the other under the oral agreement.

275. Since the High Court decision in Walton Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, these estoppels may be seen simply as manifestations of the more general formulation of the doctrine of equitable estoppel expounded in that case. Cases such as Thwaites v Ryan [1984] VicRp 7; [1984] VR 65 which were decided before Walton's case must be read in the light of this formulation. Compare Spry, Equitable Remedies, 5th ed, 1997 at p.253.

278. Milleye was ready to settle on 14 March 1997 and this fact was communicated to the solicitors for the defendant on 19 March. By that date the conduct of the Developer and its solicitors gave rise to the same assumption in Milleye as Tadgell J was prepared to draw in Colin v Holden [1989] VicRp 48; [1989] VR 510. Like the plaintiff in that case, Mr Agius expected documents to be executed to record formally that which had previously been agreed. Like the plaintiff in that case he assumed that the Developer would execute the documents in the terms which had been agreed. Moreover, to adopt the terminology of Mason CJ and Wilson J in Waltons Stores (Interstate) Ltd v. Maher (1988) 168 CLR 387 at 406, the Developer created or encouraged Milleye to make that assumption. It had done this in the month or so prior to 19 March in the dealings which had gone on to negotiate the terms, not of the principal contracts, for these never caused any difficulty, but in the negotiations as to the side agreement and the bond. It had done this in the three weeks following 19 March by deliberately failing to respond to the communications of Kenyons to which I have referred in [33] above Mr Sage's decision to refuse to settle which had been made and communicated to Mr Millen on or shortly after 17 March was not passed on to Milleye or its solicitors. Milleye continued to hold itself ready to settle from 19 March and even after 7 April during the period that Mr Sage was "stringing it along" with concealment and falsehood. Milleye would have settled and reduced the agreement of 5 February to writing but for the fraud and practice of the Developer, to adopt the expression of the Lord Chancellor in Maxwell v Mountacute. There is abundant evidence of reliance by Milleye upon the assumption that the necessary documents would be executed and that the penthouse would, in due course, be completed and delivered to it. There is likewise abundant evidence that it acted to its detriment in reliance upon this holding the funds ready and incurring legal costs. This is, indeed, a case where it would be unconscionable for the Developer to avoid the consequences of its agreement of 5 February by reliance upon the Statute of Frauds.

281. I should not leave this topic without referring to a passage in the judgment of Deane J in Walton Stores (Interstate) Ltd v. Maher [1988] HCA 7; (1988) 164 CLR 387 at 445 to which I was referred by counsel for the Developer. The passage was said to indicate that estoppel cannot be used to overcome a Statute of Frauds defence. A careful reading of the passage, however, shows that this is not what his Honour was saying. The case then before the court was whether conduct leading a party to a leasehold transaction or its solicitor to assume that the prospective lessee would execute a draft lease and to act accordingly to its detriment was ineffective to bind the prospective lessee for non-compliance with the Statute of Frauds. Deane J in the passage referred to made it clear that the Statute of Frauds had nothing to do with the case because the proposed lessee was bound by equity and not by contract. His Honour goes on to say that the Statute of Frauds does not apply to assumed agreements. See, too, per Brennan, J[1988] HCA 7; , 164 CLR 387 at 433,. The passage to which I was referred supports the proposition that the Statute of Frauds will not operate to defeat an obligation to convey land where this obligation arises in equity. It says nothing about the converse position, with which I am concerned, whether equitable estoppel will defeat a Statute of Frauds defence which would otherwise prevent enforcement of an obligation arising out of a parol contract.

284. I conclude, therefore, that the Developer is estopped from relying upon the Statute of Frauds to defeat the claim of Milleye for the enforcement of the oral agreement of 5 February 1997.

288. The plaintiffs next say that N&C exercised its right of nomination in favour of Milleye in the Kenyons' letter dated 11 March 1997 statement of claim, paragraph 20. The Developer says that there was no nomination but merely a proposal that Milleye be the purchaser. I have already referred in [28] to this letter in its factual context. Its terms so far as are relevant are these:

"The purchaser will be Milleye Pty Ltd, Suite 19, Harbour Plaza Shopping Centre, Thompsons Road, Patterson Lakes."

Notwithstanding that the word "nominate" is not used, I have no doubt that this letter was an effective exercise of the power to nominate. It was not challenged at the time. Rather the contrary. The documents emanating from the Developer and its solicitors accepted the fact of nomination and Milleye's name thereafter appeared in them as purchaser.

294. The Developer next contended that the February agreement was abandoned by the common consent and agreement of N&C or Milleye and the Developer. This consent and agreement is said to arise from the negotiations between them during the period May 1997 and December 1997 when the proposed purchaser became Mr and Mrs Agius. It is, of course, open to contracting parties to agree to terminate their contract and such agreement may be express or inferred from their conduct.

297. I will not rehearse the correspondence and other events which are included in the particulars given of this plea. Not much was said in support of it. I, too, will not dwell long on the point. I am entirely unable to discern from these matters an agreement between Milleye and the Developer to abandon the February agreement. Because the Developer had put beyond its control the power to provide the bond, the parties were exploring alternatives which, as it turned out, came to naught. I reject the Developer's contention that the February agreement was terminated by consent and agreement of the parties.

301. N&C and Milleye allege that the Developer engaged in conduct which is misleading and deceptive or likely to mislead or deceive contrary to s.52 of the Trade Practices Act 1974 and s.11 of the Fair Trading Act 1985. The conduct relied on is the same as that put forward as the foundation for the estoppel plea in paragraph 48 and following of the statement of claim. It suffers from the same formal defects as afflict the estoppel plea which I have mentioned in [7] above. As a plea of misleading and deceptive conduct it suffers from the added difficulty that it does not show a causal nexus between this conduct and the loss alleged.

304. Of all the plaintiffs' claims this received very little attention in the evidence or in the parties' written outlines of argument. When pressed to explain it in final address, counsel for the plaintiffs said that the claim arose if the February agreement were held to be uncertain or unenforceable for want of compliance with the Statute of Frauds and, further, provided the plaintiffs' estoppel arguments were unsuccessful. What is then said is that the facts which are relied upon as raising the estoppel are relied upon as amounting to misleading and deceptive conduct. Making these assumptions, the claim faces difficulties because the equitable estoppel claim is very different from the statutory claim. Estoppel depends upon detrimental reliance and unconscionability; the statutory claim arises without any need for moral turpitude and requires consequential loss. Moreover, the estoppel here relied upon is of a promissory nature - the Developer will not insist upon its rights under the Statute of Frauds. This means that it is necessary to examine the conduct in terms of s.51A of the Trade Practices Act 1974 or s.10A of the Fair Trading Act rather than the provisions which are pleaded. This in turn raises the questions of the state of mind of the Developer at the time of the conduct in question and, for this purpose, to identify precisely each of the acts constituting this conduct. None of this was pleaded; none was addressed in evidence or argument. The evidence of loss was minimal and no attempt was made, in terms, to establish the necessary causal connection between the conduct and the loss.

307. In all of the circumstances, I am of the opinion that little purpose would be served by considering this claim further. I reject it.

311. This claim by Mr and Mrs Agius for specific performance was put in the alternative to the claims of Milleye and N&C based on the February agreement. I have already set out at [38] and following the four letters which are said to comprise this agreement. Nothing was said for the implied components of the agreement as pleaded. The letters were all written by the solicitors for the parties and at a time when, from bitter experience, they were proceeding with extreme caution. It is apparent that the correspondence is directed to the agreement and in due course the execution and exchange of formal contracts. It is to my mind inescapable that the intention of the negotiators as disclosed in the correspondence was that no concluded agreement should be made unless and until these contracts were exchanged. The closing item in the last of the four letters makes this abundantly clear. I am satisfied, then, that no concluded agreement such as that referred to in the statement of claim as the September agreement was entered into.

315. Having reached this conclusion, I can deal shortly with the other defences raised. Nothing was said about the uncertainty contention made in paragraph 36(d)(i) of the defence. The correspondence which is said to contain the September agreement does not satisfy the requirements of the Statute of Frauds. The correspondence itself does not contain a concluded agreement. There is no evidence of any subsequent note or memorandum of any agreement. There is no evidence of the written authority of any of the signatories to the letters. Mr and Mrs Agius seek to overcome all of this by raising an estoppel in paragraph 4 of their reply. This is ineffective, first, because of the absence of any binding agreement: Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582. Second, the correspondence does not show that Mr and Mrs Agius made the necessary assumption or that the Developer or its solicitor were responsible for this so as to give rise to the required unconscionability.

318. The claims of Mr and Mrs Agius based on the September agreement including the claims of misleading and deceptive conduct which depend upon it must, therefore, fail.

323. Milleye seeks specific performance of the February agreement. It addressed the expected objection to this relief based on the inability of the Developer to procure the necessary bond and to deliver it in exchange for the price, by waiving this term. In paragraph 41 of the statement of claim it says that it "has waived, or alternatively, hereby waives" that requirement. This allegation is simply denied in the defence. No evidence was given as to the past waiver alleged. This may not be significant because it is clear enough that the February agreement is still on foot. It was, however, accepted that Milleye might waive a term which is solely for its benefit provided that it can be severed from the remainder of the contract: Sandra Investments Pty Ltd v Booth [1983] HCA 46; (1983) 153 CLR 153. In Toga Development (No.10) Pty Ltd v Gibson (1973) 2 BPR 9,260 at 9,262-3, Mahoney J said that the requirement of severability arises only where the waiver is made to entitle a party to prevent the operation of a condition the time for performance of which has not yet arrived. In the present case there was no issue as to severability and, in any event, I have no doubt that the February agreement might stand without any requirement for the vendor to produce the agreed bond. The issue, then, is whether the term is solely for the benefit of the purchaser, Milleye, and not for the benefit of the vendor, the Developer: Toga Development (No.10) Pty Ltd v Gibson (1973) 2 BPR 9,260 at 9,263 and the cases there referred to. I am satisfied that it is. No benefit accruing to the Developer was suggested, and I cannot see any, by the requirement that it procure and deliver to the purchaser a bond of the kind agreed. It follows that Milleye might waive the term if this be necessary to cure some defect introduced into the agreement by the presence of that term: Hawksley v Outram (1892) 3 Ch. 359 at 376, per Lindley LJ.

326. In the course of argument I expressed concern about the omission from the 5 February memorandum of any reference to the three car parking spaces. Where an omission of an agreed term from the note or memorandum causes an agreement to contravene the Statute of Frauds and thereby to become unenforceable, this, too, may be overcome by waiver of the term, if it is available: Smith v Lush (1952) 52 SR (NSW) 207 at 210, per McLelland J; Scott v Bradley [1971] 1 Ch. 850. Again, the question is whether the term is solely for the benefit of Milleye, the party which would waive it. Counsel for that party announced in the course of their final address that Milleye would, if it were necessary, waive its right to the car parks; for the price of $500,000 it would accept the penthouse with no car parking allotments. Counsel for the Developer protested that this ought to have been pleaded. Authority is against that submission: Toga Development (No.10) Pty Ltd v Gibson (1973) 2 BPR 9,260 at 9,271. They complained, too, that the rules of fairness which underlie rr.13.07 and 13.10 oblige the plaintiffs to have given them notice of the waiver. It was said, further, that the concession was inconsistent with the way the plaintiffs' case had been presented at trial and that, if the defendants had had notice of it, they would have sought instructions as to the impact on the Developer and on the project of a sale of a unit without parking spaces. My own first impression was that this might contravene the town planning requirements for the site, but no evidence of that was before me. Some of these complaints were raised by memorandum submitted after the trial was concluded. No question of either of the parties reopening their case therefore arose. It is for the plaintiffs to show that the term they would waive is solely for their benefit. Given the lack of evidence on this matter, they have not discharged the burden. If they were entitled to waive the term as to car parks as a matter of procedure, they cannot do so because they have not satisfied me that the term was solely for the benefit of the purchaser.

329. I will not in the exercise of my discretion grant specific performance of the February agreement. Milleye seeks an order that the Developer execute and exchange the contracts prepared in March 1997 but without the bond. It may be that this would be in other circumstances be an appropriate form of order because an order to enforce the agreement of 5 February in accordance with its terms would require Milleye to pay the price and receive nothing immediately in return except the expectation of the penthouse when it is completed. An order that the Developer simply perform the February agreement runs into a number of difficulties. The parties had not at that date specified the fixtures fittings and finishes to be included in the penthouse. The extravagant description of this unit to be found on p.11 of the initialled brochure is not adequate for this purpose. I would not decree specific performance of such an agreement because it is, in part, a contract to construct a building with minimal, if any, specifications. The court is very reluctant to make such orders for they require continual co-operation between the parties and the supervision of the Developer's performance by the court: J.C. Williamson Ltd v Lukey & Mulholland [1931] HCA 15; (1931) 45 CLR 282 at 298, per Dixon J; Graham H. Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93 at 108, per Helsham J. Nor am I any more comfortable in granting the relief sought by Milleye, an order for the exchange of the March contracts. Accepting that these documents represent one way of implementing the February agreement, it is not the only way. I confess, too, to a feeling of disquiet about their form for reasons which are similar to those expressed in evidence by Mr Allwood.

333. Where the court in the exercise of its discretion declines to grant specific performance provided the jurisdiction to grant that relief is otherwise established, an order for damages might be made: Supreme Court Act 1986 s.38. This right, it would seem, is available even where specific performance was sought of a contract which equity was traditionally reluctant to enforce. Compare Spry Equitable Remedies, 5th ed, 1997 at p.628, Meagher Gummow & Lehane, Equity - Doctrines and Remedies, 3rd ed, 1992 at para 2308. See also Price v. Strange (1978) 1 Ch 337 at 359, per Goff, LJ, at 364, per Buckley, LJ.

336. In the circumstances, I see myself as free to make an award of statutory damages in lieu of specific performance of the agreement to sell to Milleye the penthouse and three carparks for $500,000.. Having regard to the conclusions which I have reached on the question of the February agreement, it seems to me that this is indeed a case where an award of such damages is warranted. In accordance with the agreement of the parties I leave the assessment of these to another day.

339. I will hear counsel further as to the orders to be made to give effect to the foregoing including an order under r 47.04.