Coplin v Al Maha Pty Limited

FACTUAL CONTEXT

1. The plaintiff was at all material times the registered proprietor of residential land known as 7 Canberra Avenue, St Leonards. He lived there with his brother, not far from his elderly mother (resident in a home unit owned by him at 2 Canberra Avenue), for whose care he bore a primary responsibility.
2. He bought the property, as his personal residence, in April 2013 for $1.77 million.
3. In December 2014 Lane Cove Council published a report, commissioned by the Council, entitled "St Leonards South Strategy Precinct Report". It proposed that the area in which the plaintiff's property was located be rezoned from "low" to "high" density residential land.
4. The report followed a process of consultation with the public that involved meetings held in mid-September 2014. The prospect that land in the vicinity of the plaintiff's property would be rezoned was, at and from about that time, in the public domain. It was known to the parties to these proceedings: to the plaintiff, as a resident, in comparatively general terms; to the defendants, in the commercial setting in which they operated, in a more professional, studied way.
5. On 26 September 2014 the plaintiff received an unsolicited telephone call, at work, from Mr Fox, in the interests of the first defendant (engaged in land development under the direction of Mr Antoine Bechara as its managing director) interested in acquiring the plaintiff's property. The plaintiff gave Mr Fox his email address.
6. On 1 October 2014 Mr Fox sent the plaintiff an email containing an offer by the first defendant to purchase the plaintiff's property for $2 million on terms that: (a) there be an expeditious exchange of contracts; (b) a 5% deposit be paid; (c) so much of the deposit as represented 2% of the purchase price be released to the plaintiff, as vendor, on exchange of contracts, with the balance of the deposit (representing 3% of the purchase price) released 12 months after exchange; and (d) settlement of the contract be deferred until 18 months after exchange.
7. The course of events between 26 September 2014 (when Mr Fox first made contact with the plaintiff) and 16 October 2014 (when the option deed was made) requires close attention, as do events immediately before and following that period. However, a focal point in the parties' disputation is the option deed itself, essential terms of which must be noted at an early stage, not only for their own significance, but to facilitate a contrast between those terms and the initial offer conveyed to the plaintiff via email on 1 October 2014.
8. Between 26 September 2014 and 16 October 2014 the defendants, with close cooperation between Messrs Fox and Bechara, pursued a course calculated to cultivate the plaintiff as a vendor; to persuade him that he could trust Mr Fox to deal with him fairly in the context of proposals for redevelopment of his property and his neighbour's property, 9 Canberra Avenue; to condition him to believe that the second defendant was offering him a special opportunity for profit; and, hopefully, to keep him isolated from other land owners with whom, in combination, he might be more demanding of a higher price for his property.
9. Through Mr Fox's disciplined efforts, the defendants conditioned the plaintiff to believe that the second defendant needed his assistance (with less than the full, customary 10% deposit on exchange of contracts, and deferred terms for payment of the balance of the purchase price, so as to facilitate management of the second defendant's cash flow); that the second defendant only reluctantly, but at the plaintiff's request, increased his offer from $2 million to $2.2 million; and that, if the plaintiff did not quickly accept the second defendant's terms, he would miss out on a unique opportunity for profit in a development project of substance.
10. Having only recently purchased his property for $1.77 million, the plaintiff was susceptible to a belief that a sale at a price of $2.2 million or thereabouts was at the limits of what could be achieved. The defendants did not disabuse him of that belief, although, as between themselves, Messrs Fox and Bechara can reasonably be inferred to have held a belief that the market value of the plaintiff's property was substantially in excess of $2.2 million: possibly as high as $2.8 million (the amount bid by an associate of the first defendant, with Mr Bechara in tow, at an auction sale of 9 Canberra Avenue) or $3.2 million (the amount the first defendant offered the plaintiff's rear neighbour, the owner of 4 Holdsworth Avenue).
11. On 16 October 2014 the plaintiff (represented by his conveyancer) and the first defendant (represented by its solicitors) exchanged counterparts of the option deed, entitled "Put and Call Option Agreement", prepared by the first defendant's solicitors, the terms of which included provisions to the following effect: 1. In consideration of a payment of a "call option fee" of $1.00 (receipt of which was formally acknowledged), the plaintiff granted to the first defendant an option to purchase his property during a "call option exercise period" defined as beginning on the 43rd day after the date of the deed and ending on "the date that is 18 calendar months after". 2. The call option was exercisable by the first defendant by written notice accompanied by a form of contract (which provided for a purchase price of $2.2 million and for completion 42 days after "the contract date") and payment of a 10% deposit. 3. In consideration of a payment of a "put option fee" of $1.00 (receipt of which was formally acknowledged), the first defendant granted to the plaintiff an option to require the first defendant to purchase the property during a "put option exercise period" defined as commencing on the day after expiry of the "call option period" (that is, 18 months after the date of the option deed) and ending 7 business days later. 4. The put option was exercisable by the plaintiff by written notice accompanied by a signed copy of the contract form, allowing the first defendant five business days to pay the 10% deposit. 5. The "contract date" was defined as the date upon which the call option was exercised or, in default of exercise of the call option, the date upon which the put option was exercised. 6. Purportedly "to secure performance of its obligations" under the option deed and "to an extent, the contract", the first defendant covenanted, in effect, to pay to the plaintiff $75,000 on the date of the option deed and a further $35,000 12 months later ($110,000 in total). 7. Those amounts (totalling $110,000) were expressed to be non-refundable but, upon an exercise of the option, part of the deposit payable under the contract. 8. The rights of the first defendant under the option deed included: 1. a contractual licence to lodge a caveat on the title to the property. 2. a right, upon exercise of the call option, to nominate a purchaser in lieu of itself. 3. a non-exclusive right to access the property at all reasonable times, except on weekends, for purposes associated with prospective development of the property. 4. rights associated with the preparation of an application to Council for approval to develop the property. 1. The plaintiff covenanted, in effect, not to deal with the property in any way, or to market it, during the operation of the option deed without the consent of the first defendant.
12. Expert valuers retained by the parties for the purpose of these proceedings were unable to reach agreement on the open market value of the plaintiff's property as at 16 October 2014; but their competing valuations can reasonably be taken as providing a reliable range of values for the property between $3.25 million and $3.4 million.
13. Nothing of significance turns on the difference between the valuers. The valuation range they have defined is, on any view, over $1 million in excess of the "contract price" of $2.2 million specified in the option deed. The disparity between the contract price and the market value is implicitly greater than the arithmetical difference between the contract price and the property's value because the terms of the option deed, whilst binding the plaintiff immediately in his enjoyment of the property, enabled the first defendant to defer payment of the contract price for up to 19.5 months, or thereabouts, after the date of the deed (16 October 2014).
14. The fact of disparity between contract price and market value is not, of itself, a ground upon which the plaintiff is entitled to be relieved of any obligation he has under the option deed. That much is common ground between the parties, and correctly so.
15. Quite apart from the law's recognition of the freedom of parties to make a bad bargain, and its predisposition not to remake private agreements, each of the formal valuations of the property prepared for the purpose of the proceedings took into account a fact not known at the time the option deed was exchanged: On 23 October 2014 (7 days after the date of the option deed) the property known as 9 Canberra Avenue adjoining that of the plaintiff sold at public auction for $3.343 million.
16. A fair inference from the whole of the evidence is that the plaintiff had no idea on 16 October 2014 that $2.2 million was a million dollars less than his property may be worth - even if he suspected that it might have been worth more than $2.2 million, perhaps as much as $2.7 million (the price at which 12 Holdsworth Avenue had apparently sold).
17. On 23 October 2014 the plaintiff, by an email addressed to the solicitors for the first defendant, sought to be released from the option deed. No such release was granted.

PARAMETERS OF THE CASE

1. These proceedings were commenced by a statement of claim filed on 14 May 2015.
2. An interlocutory agreement has been made between the parties the effect of which is that (without admissions by any party) the option entitlement claimed by the first defendant has been extended pending the outcome of the proceedings: Transcript, page 2. The precise terms of the agreement are not before the Court.
3. The first defendant's position has been protected, pending the determination of the proceedings, by Caveat Number AI996234.
4. As pleaded, the plaintiff's case relies primarily upon five statutory "causes of action", earlier identified by reference to particular sections of the Australian Consumer Law (more particularly, Schedule 2 to the Competition and Consumer Act 2010 Cth) and the Contracts Review Act 1980.
5. Insofar as sections 18, 20, 21 and 30 of the Australian Consumer Law proscribe conduct "in trade or commerce", there is no dispute but that the conduct of which the plaintiff complains (if established) occurred "in trade or commerce". The first defendant was a property developer; the second defendant, a real estate agent. Their dealings with the plaintiff were, from their perspective, quintessentially commercial in character.
6. Insofar as the plaintiff claims relief under the Australian Consumer Law, his case is that the proscriptions for which sections 18, 20, 21 and 30 of the Law provide were contravened by the second defendant and that (within the meaning of section 2 of the Law) the first defendant was "involved" in each contravention because: (a) it aided, abetted, counselled or procured the contravention; (b) it was directly or indirectly, knowingly concerned in, or party to, the contravention; or (c) it conspired with the second defendant to effect the contravention.
7. It is common ground that: (a) in all its dealings with the plaintiff, the second defendant was the duly authorised agent of the first defendant; and (b) Messrs Bechara and Fox were, respectively, the authorised representatives, and moving minds, of the first and second defendants.

Alleged Representations

1. Each of the plaintiff's alleged "causes of action" has a common substratum that includes an allegation that the second defendant (by Mr Fox) made false representations to the plaintiff; namely: 1. a representation on 3 October 2014 that the first defendant was a substantial company doing some significant developments which included one development of approximately 400 units in Homebush and another development in Newtown (characterised, in the statement of claim, as "the first representations"). 2. a further representation on 3 October 2014 (characterised, in the statement of claim, as "the second representations") that: 1. the first defendant was interested in purchasing the plaintiff's property in order to amalgamate it with adjoining properties that it was interested in purchasing on Canberra Avenue as part of a new development; and 2. the offer made to the plaintiff in the second defendant's email of 1 October 2014 was the same as the offer for the adjoining property at 9 Canberra Avenue.
2. The first representations are said to have been made by an email dated 3 October 2014 addressed by Mr Fox to the plaintiff.
3. The second representations are said to have been made by Mr Fox to the plaintiff orally, shortly after that email, on the same day, in a telephone call made by Mr Fox to the plaintiff.
4. In submissions, the plaintiff articulated what his counsel described as a "third representation" said to have been made by Mr Fox to the plaintiff in a telephone conversation between the two men on 7 October 2014. That representation was said to have been in support of the second defendant's proposal, on 7 October 2014, that there be a "put and call option" rather than an immediate "contract for sale". It was said to have been in response to a question by the plaintiff as to what was meant by the proposal for an "option". The representation said to have been made is that an option (simply) is a form of transaction so that a buyer does not have to pay stamp duty upfront.
5. The defendants complain, correctly, that this "third representation" is not expressly, or specifically, pleaded in the statement of claim. The plaintiff responds that, although not expressly or specifically pleaded, it falls within the framework of an allegation (in paragraph 10 of the statement of claim) that, at no time prior to the plaintiff signing the option deed, did the second defendant "advise or explain the terms of the option deed to [him]".
6. Having elected to plead a case by reference, expressly, to "two representations" specifically pleaded as "false and/or misleading", the plaintiff cannot complain if the defendants object (as they do) to characterisation of a contextual allegation as a "third representation" not specifically pleaded (as are the first and second representations) to be false or misleading.
7. No objection was taken to evidence, or cross examination, relating to Mr Fox's pithy description of an option or, perhaps more accurately, a rationale for an option. However, that evidence cannot be elevated into an unarticulated allegation of "misleading and deceptive conduct" (referable to the Australian Consumer Law, section 18) or an unarticulated allegation of a "false or misleading representation" (Australian Consumer Law, section 30).
8. The evidence, and the allegation in paragraph 10 of the statement of claim to which it is said to have been material, does, however, fall within the ambit of the case sought to be made by the plaintiff under the rubric of "unconscionable conduct" (Australian Consumer Law, sections 20 and 21) and his claim for relief under the Contracts Review Act.

Special Disability

1. Further clarification of the plaintiff's case is called for in relation to his bare pleading, in the context of section 20 of the Australian Consumer Law, that he was "under a special disability in dealing with the second defendant".
2. Section 20 provides as follows: "20. Unconscionable conduct within the meaning of the unwritten law (1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time. Note: A pecuniary penalty may be imposed for a contravention of this subsection. (2) This section does not apply to conduct that is prohibited by section 21."
3. The scope and operation of section 21 (read with section 22 of the Australian Consumer Law) can be addressed in their place. By express provision found in section 21(4)(a), section 21 "is not limited by the unwritten law relating to unconscionable conduct".
4. The plaintiff's specific allegation of a "special disability" is intended, aspirationally, to bring him within the operation of equitable principles governing what, in former times, was generally described as a "catching bargain", a term explained in PW Young, C Croft and ML Smith, On Equity (Lawbook Co, Australia, 2009) at paragraphs [5.220] and [5.290] and used in Meagher, Gummow and Lehane's Equity: Doctrine and Remedies (LexisNexis Butterworths, Australia, 5th ed, 2015) as a chapter heading (currently, chapter 26).
5. In modern times, the territory occupied by equitable principles governing a "catching bargain" is generally marked out in Australia by reference to cases such as Bromley v Ryan (1956) 99 CLR 362, Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 474, Louth v Diprose (1992) 175 CLR 621, Bridgewater v Leahy (1998) 194 CLR 457 at 479 and Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited (2003) 214 CLR 51 at 74 and 76-77.
6. The jurisdiction is not constrained by any formulaic description of it, but the following observation taken from Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 474 can be taken as both representative and authoritative: "The jurisdiction [of equity in dealing with a catching bargain] is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with a consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or 'unconscientious' that he procure, or accept, the weaker party's assent to the impugned transaction in circumstances in which he procured or accepted it."
7. The plaintiff's case as pleaded, particularised and addressed in the evidence does not sit comfortably with this, or any comparable, formulation of equitable principles relating to "unconscionable conduct" dependent upon a finding of "special disability" or, as it is sometimes described, "special disadvantage".
8. There is, in the plaintiff's case, the flavour of a "catching bargain" insofar as, I find, he can reasonably be characterised as naive, gullible and trusting (but, perhaps, a victim of his own hubris) and he was placed under commercial pressure to exchange contracts without delay.
9. Nevertheless, he cannot easily be said to have suffered any physical, intellectual, educational or social disability. In September-October 2014 he held down a responsible job as a credit manager, on a base salary of $124,000. On his own admission, he was in a sound financial position, repaying the mortgage debt and outgoings on his property without difficulty. He was able to manage his own affairs. He was ostensibly literate, numerate and articulate, although ponderous in presentation.
10. He evidently lived a sheltered life with his brother and mother close at hand. His judgement was, in the current controversy, demonstrably poor, grounded in misplaced trust of the defendants and an overly optimistic expectation of reciprocity in fair play; but, given time for reflection, he appears generally to have been able to make judgements as to his own best interests. All things considered, he can fairly be characterised as an unsophisticated person.
11. I am not prepared to hold that, in his dealings with the second defendant, he operated under a "special disability" of a kind sufficient to attract the operation of equitable principles governing catching bargains. It follows that the plaintiff's claims for relief based upon section 20 of the Australian Consumer Law must be dismissed.
12. His case can, more appropriately, in any event, be advanced as a claim for relief under the Contracts Review Act, paying due regard to the factors enumerated in section 9 of that Act, particularly sections 9(2)(h), (i), (j) and (l). Those provisions require the Court to consider, inter alia, whether or not and when the plaintiff obtained independent legal or other expert advice; the extent (if any) to which the provisions of the option deed and their legal and practical effect were accurately explained to the plaintiff; whether the plaintiff understood the provisions of the option deed and their effect; whether any unfair pressure or unfair tactics were exerted on or used against the plaintiff by the defendants; and the commercial or other setting, purpose and effect of the option deed. That case falls squarely within the case pleaded, particularised and debated at trial.

Forensic Context, Common Interest and Jones v Dunkel

1. An assessment of the evidence, including questions of credit and the availability of inferences under Jones v Dunkel (1959) 101 CLR 298, depends upon an appreciation of the forensic context in which these adversarial proceedings have been fought.
2. The Defendants' Common Interest. By his statement of claim, the plaintiff sued both defendants. Each defendant filed a defence. Neither filed a cross claim. Whether they have a private arrangement between themselves as to distribution of the commercial burden of the proceedings is not known. They have made common cause against the plaintiff in their conduct of the proceedings.
3. Cross Examination of Mr Fox. That fact is relevant in the present context insofar as, and I am inclined to think only insofar as, the plaintiff contends that it should be taken into account upon an assessment of evidence given by Mr Fox, in cross examination by counsel for the first defendant, without prior notice to the plaintiff's lawyers, about the course of negotiations between the defendants and the plaintiff's neighbour in 9 Canberra Avenue.
4. The same, "new" evidence of which the plaintiff complained (namely, evidence of an oral offer of $2 million made by Mr Fox to Mr Sam Sarzentich, the owner of 9 Canberra Avenue, on 1 October 2014) might have been given by Mr Fox in chief with the leave of the Court. Nothing of decisive significance attaches to the fact that it emerged for the first time in cross examination by a party in the same interest as Mr Fox's company; but, equally, the fact that it did emerge that way can be weighed in the balance when assessing whether Mr Fox's evidence on the point should be accepted.
5. The order in which Mr Fox was cross examined on behalf of other parties was agreed so as to accommodate the defendants' common interest. Mr Fox was cross examined, first, by counsel for the first defendant; then, by counsel for the plaintiff. No submission was made that unfairness attended that procedural expedient or that the plaintiff did not have a full opportunity to test Mr Fox's evidence by reason of its course.
6. Mr Bechara's Unavailability. Potentially of greater significance is the course of evidence adduced on behalf of the first defendant.
7. Shortly before the final hearing, the first defendant gave the plaintiff notice that: (a) its principal, Mr Bechara, would not be in attendance at the hearing for the purpose of cross examination on his affidavit long before served; and (b) it proposed to read, in substitution for Mr Bechara's affidavit, an affidavit recently sworn by its financial controller, Mr Lee.
8. At the time of the final hearing Mr Bechara is said to have been in the United States of America attending a family wedding.
9. As it transpired, Mr Lee had been employed by the first defendant long enough to verify company records, to describe the first defendant's business activities, and to give evidence about Mr Bechara's whereabouts; but not so long as to have any personal knowledge of material, primary facts or to explain the absence of particular records alleged by the plaintiff to be of significance. The plaintiff's cross examination of him was, as it was bound to be, of limited utility in terms of advancing the narrative of what occurred in or about the critical period in September - October 2014. He did not join the first defendant's employ until 28 October 2014. In all things internal to the first defendant, he was at all times totally subordinated to Mr Bechara. Mr Bechara ran his own show.
10. Counsel exchanged debating points about whether Mr Bechara's absence was explained sufficiently to preclude the drawing of any inference arising from his absence, by reference to Jones v Dunkel, having regard, inter alia, to the absence of any application by any party for evidence to be taken from him via video link.
11. That debate did not displace the fact that Mr Bechara, evidently, chose to prioritise a family wedding over his personal participation in the hearing. In my opinion, his absence was attended by an explanation insufficient to preclude the drawing of a Jones v Dunkel inference, if otherwise available.
12. That said, a Jones v Dunkel inference cannot be drawn at large or for the purpose of filling gaps in an opponent's case.
13. This counsel of caution is required, not only because of the plaintiff's loud complaints about the absence of Mr Bechara, but because his submissions bordered upon an invitation to the Court to construct a case against the defendants based on the "failure" of the defendants to call a variety of witnesses who, the plaintiff alleged, could have thrown light on the nature and quality of the defendants' conduct had they been called. I decline to travel that path.
14. One does not need much forensic guile to understand that Mr Bechara's absence (and Mr Lee's substitution for him) placed the plaintiff at disadvantage in denying to counsel for the plaintiff an opportunity: (a) to explore the knowledge and motivation of the first defendant through a critical examination of its moving mind; and (b) to test the evidence of Mr Fox by measuring it against evidence from Mr Bechara.
15. Mr Bechara's absence limited the plaintiff's opportunities to explore the defendants' knowledge about the state of the market, and their strategies for inducing the plaintiff to enter a contract with the first defendant on terms favourable to the first defendant. Given that any personal contact between the plaintiff and the defendants was confined to the plaintiff's telephone and email contact with Mr Fox, Mr Bechara's absence made more difficult the task of the plaintiff in proving (for the purpose of sections 2, 232(1)(e), 237(1) and 243 of the Australian Consumer Law) that the first defendant was "involved" in any contravention of the Australian Consumer Law found to have been committed by the second defendant.
16. The defendants were under no obligation, either to the plaintiff or to the Court, to call Mr Bechara and, whatever be their proper outcome, the proceedings must be determined on the evidence before the Court.

Questions of Credit

1. Three witnesses were cross examined at the final hearing: the plaintiff, Mr Lee and Mr Fox, in that order. Mr Fox, as the representative of the second defendant, was present throughout the evidence of the other two - a debating point made against him by counsel for the plaintiff, not to be made in derogation of the right of the second defendant to be present in court.
2. Mr Lee. No question arises as to Mr Lee's credit. His involvement in the case was, in all respects, too peripheral for that. He gave no evidence of substance beyond description of the first defendant's business and verification of business records.
3. The plaintiff and Mr Fox. The plaintiff and Mr Fox presented their evidence as two very different types of person. As has been noted, the plaintiff was ponderous and unsophisticated. Mr Fox was more disciplined, more street-wise. What they had in common, though, was an apparent consciousness of their interest in the outcome of the proceedings. This is not, necessarily, to be held against them upon an assessment of their honesty. It is natural enough for witnesses personally engaged in litigation of consequence. Nevertheless, it is a factor to be borne in mind on an assessment of each witness's reliability.
4. The plaintiff. In substantially similar terms, counsel for the defendants heavily criticised the plaintiff's credit. Both submitted that he was not a "satisfactory" witness. Indeed, he was not.
5. The plaintiff was cross examined at length by senior counsel for the first defendant. The cross examination was effective insofar as it exposed the plaintiff as an unsatisfactory witness, but counter-productive insofar as it highlighted personal qualities of the plaintiff noticed in this judgment upon a consideration of whether he could be said to have suffered from a "special disability" for the purpose of an application of equitable principles.
6. He appeared to me to suffer from a form of hubris in that he conveyed a stubborn, misplaced pride in his ability to transact business.
7. One example of this is the misleading nature of emails he sent to Mr Fox (respectively, on 2 and 14 October 2014) in which, fairly read, he may be taken to have suggested that he had obtained independent advice when the reality was otherwise. He had not obtained "external advice" as suggested; he had simply obtained an ASIC search on the first defendant via a colleague. He had not obtained legal advice as suggested; he had merely obtained a quotation for a conveyancer's fees. He had not consulted real estate agents as suggested; he had merely examined two brochures. He appears to have felt a need to impress Mr Fox with a doubtful display of competence. I doubt that Mr Fox was deceived.
8. The plaintiff's evidence, in cross examination, was equally patchy, prone to inconsistencies manifesting a want of real sophistication and a tendency: (a) to anticipate the effect of answers; and (b) to try to advance what he perceived to be his own cause.
9. With all his blemishes exposed by cross examination, I do not attribute to the plaintiff deliberate dishonesty. On closer examination of the course of events, his evidence acquires a cogency not apparent at first blush.
10. Making full allowance for volatility in a new market for residential land emerging from a prospective rezoning, an experienced, professional real estate agent such as Mr Fox would not have shared the plaintiff's self-estimate of competency. The bottom line is that, as Mr Fox probably knew or suspected, the plaintiff had no idea of the true value of his property, or of the importance of securing timely, proper, professional advice. Confirmation of that can be found, for example, in the defendants' studied, reluctant acquiescence in an increase of the prospective contract price for the plaintiff's property from $2 million to $2.2. million; Mr Fox's identification of a conveyancer (not a solicitor) from whom the plaintiff might obtain advice; the defendants' belated substitution of an option for an immediate conveyance in negotations, no small matter in itself or in context; the need for Mr Fox to offer to the plaintiff any form of explanation of what an option entailed; the plaintiff's willingness to entertain any proposal, let alone an option agreement, for a deferred purchase of his property; and Mr Fox's perception that the plaintiff could be (as he was) rushed into an exchange of contracts. Mr Fox deliberately cultivated the plaintiff's trust, and correctly assessed that he had secured it.
11. Mr Fox. Mr Fox was no more deliberately dishonest than the plaintiff in presentation of his evidence. However, without an independent recollection of primary facts and without contemporaneous written records of his conversations with the plaintiff, his evidence necessarily entailed a process of reconstruction in which, not unnaturally, he was influenced by personal partisanship.
12. Four illustrations of his conduct offer an insight into Mr Fox's predisposition.
13. The first relates to negotiations between Messrs Bechara and Fox for the first defendant's retention of the second defendant as an agent. The prospective principal and agent negotiated the terms of their companies' relationship between 25 September 2014 (when Mr Fox put a fee proposal to Mr Bechara) and 2 October 2014 (when Mr Fox received a signed copy of an Agency Agreement following an oral agreement as to terms made on 1 October 2014).
14. Mr Fox was quite prepared to act upon a prospective retainer in circumstances in which continuing negotiations for the second defendant's remuneration included a proposal that the agent receive a "performance fee" of 25% plus GST of total savings achieved below an average purchase price of $3.5 million. That proposal was not, in the ultimate, accepted by the first defendant, but its promotion by Mr Fox illustrates his perception both of the market in which he was operating and his role in performance of a retainer on behalf of the first defendant. He was a player, not a detached professional.
15. The second illustration is an email addressed by Mr Fox to the first defendant's solicitor (Ms Shanna Kruger of HWL Ebsworth) on 16 October 2014, at 11.54am, in the following terms (copied, inter alia, to Mr Bechara): "Subject: 9 Canberra Ave Hi Shanna, I want to ensure that both the vendor for each property is bound by confidentiality (maybe they sign something) as we don't want them spruiking to other owners in the street. If this is too late for 7 Canberra Ave let's not add this at such a late stage. With reference to 9 Canberra Ave there is an agent involved, we want to ensure that they don't publicise this sale when it happens also. Just want to keep this under wraps."
16. This email was written contemporaneously with endeavours by Mr Fox and the first defendant's solicitor to effect an exchange of contracts with the plaintiff through the plaintiff's conveyancer. Implicitly, it illustrates a consciousness that no real estate agent was involved in advising the plaintiff. Explicitly, it illustrates a consciousness on the part of Mr Fox that negotiations with the plaintiff had reached an advanced stage and that, as he perceived the defendants' strategy, it was important to isolate prospective vendors from each other so as to contain their expectations and thus to limit their bargaining power. In his oral evidence he confirmed the importance of such containment to the defendants' strategy.
17. The third illustration is an email Mr Fox addressed to Mr Bechara on 11 December 2014. Referring there to the possibility that the first defendant might purchase two adjoining properties nearby the plaintiff's property, Mr Fox advanced the following proposal: "As a thought, what you think about me getting an agency with these owners? If I could get an agency then I can control the flow of purchasers and may have a better chance of conditioning them."
18. In context, as Mr Fox agreed in cross examination, the word "conditioning" embodied the idea of adjusting the prospective vendors' expectations downward to something more "realistic".
19. Although this email was written after the plaintiff's execution of an option deed had been procured through Mr Fox's efforts, it is sufficiently proximate in time and circumstance to provide an insight into how Mr Fox approached his role vis-a-vis the plaintiff. It does not sit well with a "generic letter", promising generosity, he distributed to landowners (other than the plaintiff) at about the time he commenced courting the plaintiff in late September 2014.
20. He evidently saw himself as "conditioning" the plaintiff to accept terms less favourable than those which, but for his intervention, the plaintiff might have expected. In his performance of that role he identified himself, intimately, with Mr Bechara's commercial objectives and demonstrated a preparedness to put aside concerns about conflicts between professional duty and personal interest. True, in his dealings with the plaintiff he was the disclosed agent of the first defendant; but he actively cultivated the trust of the plaintiff, encouraging in the plaintiff a belief that he (the plaintiff) could rely upon him to ensure that the plaintiff was dealt with fairly. It may be that he was assisted in this by the absence of any face-to-face contact between the two men, and the plaintiff's (naïve) preparedness to do business on that basis.
21. The fourth illustration relates to Mr Fox's representations to the plaintiff about the state of the market and the first defendant's dissembling reluctance to increase from $2 million to $2.2 million the price it was prepared to pay for 7 Canberra Avenue.
22. The defendants' endeavours to buy the property known as 4 Holdsworth Avenue (the neighbouring property immediately to the rear of 7 Canberra Avenue) early in October 2014 demonstrate a ready acceptance that that range of price was below market or, at least, at the very bottom of the market.
23. On 1 October 2014 Mr Fox, by email, submitted an unsolicited offer on the part of the first defendant to purchase 4 Holdsworth Avenue for "$2,100,000, 18 month settlement, 2% deposit released". An initial offer of that order appears to have been the defendants' common, opening gambit. In this case, the immediate response by the offeree, the next morning, was: "Thank you for your email but we are not interested in selling, and certainly not on such unfavourable terms." Undeterred, by another email Mr Fox unsuccessfully invited the offeree to "advise what terms/price will change your mind to sell?"
24. On 15 October 2014, at 3.13pm, at the very same time the first defendant (through Mr Fox and its solicitors) was pressing the plaintiff for an exchange of contracts, Mr Fox wrote a third email to the owner of 4 Holdsworth Avenue: "I have been discussing your property with my client. If my client increases the price and deposit would you consider selling? My client is thinking $3.2M."
25. Absent a response, he followed that up with another email on 21 October 2014: "Was $3.2M of interest to you?"
26. That elicited a same-day response: "It is certainly of more interest that [sic] your first offer but we are not interested to sell."
27. The evidence does not disclose any rational foundation for setting a price of $3.2 million for 4 Holdsworth Avenue whilst insisting that $2.2 million was a fair market price for 7 Canberra Avenue, save for expediency in paying no more than an amount for which a particular vendor could be induced to sell.
28. On the other hand, Mr Fox's email correspondence with the first defendant demonstrates that the defendants saw a strategic connection in their attempts to purchase 7 and 9 Canberra Avenue and 4 Holdsworth Avenue as a block. That, and considerations of timing in coordinating their negotiations with several land owners, may, to some extent, explain divergences in offers made on different properties.
29. Mr Fox's calculated approach to his professional duties counsels caution against ready acceptance of his reconstruction of events as reliable.

The "Sale" of 7 Canberra Avenue by Put and Call Option

1. In about late September 2014 Mr Fox commenced doorknocking properties in the vicinity of the plaintiff's property (defined by a block of residences bounded by Canberra Avenue, Holdsworth Avenue and Marshall Avenue in St Leonards) leaving generic letters at some of the properties inviting landowners to call him if interested in selling their property.
2. The generic letter (a copy of which dated 25 September 2014 is in evidence) was in the following terms: "Dear Sir/Ma'am, Re We would like to buy your house in St Leonards We called by your house today as we have been retained by a client to assist them in purchasing some houses in St Leonards. Specifically, they have requested we door knock a couple of houses in your street. Our client will be offering a premium to the current market value. We are not looking for an agency fee from you nor are we looking to list your property for sale. This is a unique, once off opportunity. As you were not home, could you please call the undersigned [Tim Fox on specified telephone number]. Thanks."
3. The plaintiff did not receive a copy of this letter. His introduction to Mr Fox came via his neighbour, Mr Sarzentich.
4. On Wednesday, 24 September 2014, at 11.54am, the owner of 9 Canberra Avenue (Mr Sarzentich) sent Mr Fox an email in the following terms: "Good afternoon Tim, I spoke to you last night at 9 Canberra ave at leonards [sic] regarding purchase for a developer who was interested in the area. As advised, the house is about to go on the market and I have set up with an agent for a typical house sale, but I am interested in your offer to buy the land. The offer I have is $2.2 mil as a sale price. Now I am flexible, and if you want to have delayed settlement (12-18 months) I am happy to do that. Let me know how that gels with yourself and the developer."
5. Mr Fox described this "offer" of $2.2 million as an offer to sell made by Mr Sarzentich to the first defendant, not an offer by the first defendant (or some other party) to buy Mr Sarzentich's property at that price. I accept this characterisation of the offer.
6. On the afternoon of Friday, 26 September 2014, at about 4.30pm, Mr Fox called the plaintiff at work. They had a conversation to the following effect: "Mr Fox: "Hello. I got your number from Sam who lives at 9 Canberra Avenue while doorknocking homes. He said you might know who owns number 7 Canberra Avenue next door." Plaintiff: "Yes, I am the owner. I am Gary Coplin". Mr Fox: "OK Gary. I am a buyer's agent. I have a client looking to buy in the area. Are you selling your house?" Plaintiff: No I am not selling my house. Sorry but I'm at work now." Mr Fox: "Well, my name is Tim Fox. Do you mind if I have your email Gary?" Plaintiff: I suppose so. It's [an identified email address]." Mr Fox: OK, thanks for taking my call."
7. On Wednesday, 1 October 2014, at 9.47pm, Mr Fox sent an email to the plaintiff in the following terms: "Subject: offer to purchase 7 Canberra Ave Hi Gary, As discussed, my client [the first defendant] has requested I submit the following offer to you on 7 Canberra Ave, St Leonards: $2,000,000 18 month settlement 5% deposit released (2% on exchange, 3% 12 months from exchange) We would look forward to exchange this expeditiously. We look forward to your feedback."
8. In the afternoon of Thursday, 2 October 2014, at about 3.09pm, the defendants formally entered a "Buyers Agency Agreement" according to which the first defendant retained the second defendant, for a period of 12 months commencing on 1 September 2014, to identify and recommend potential properties for purchase, to negotiate the purchase of property and to bid at auctions, if instructed to do so. The Agreement identified as prospective targets properties in the area bounded by Canberra Avenue, Marshall Avenue and Berry Road, including properties in Holdsworth Avenue, which dissects land lying between Berry Road and Canberra Avenue.
9. The Agreement recorded that the "approximate price range in which the Principal [the first defendant] wishes to acquire" property was between $2 million and $4.5 million for each property.
10. The Agreement provided for the second defendant to be remunerated by way of a "buying fee" calculated as a percentage of the total purchase price including GST, if any, of each property purchased. The agent's commission, as it was, was payable at the rate of 1.25% plus GST (1.375%), half of which was expressed to be payable "on exchange of option or contract" and half "on settlement".
11. Mr Bechara opted for this fee arrangement rather than an alternative earlier proposed by Mr Fox (evidenced by Exhibit P19) based upon a "Base Fee" coupled with a "Performance Fee". The structure of that commission arrangement was set out in an annexure to a draft Agency Agreement. That schedule was in the following terms: "The fee arrangement for Property Fox acting for Al Maha Pty Ltd and related entitles in the purchase of 1, 3, 5, 7 & 9 Canberra Ave, 2, 4, 6, 8, 10, 12, 14 & 16 Marshall Ave, 1, 2, 3, 4, 5, 6, 8 & 10 Holdsworth Ave, 2 & 4 Berry Road, St Leonards is: Base Fee: 1.0% + GST of the purchase price: 0.5% + GST paid on exchange, 0.5% + GST paid on settlement; and Performance Fee: 25% + GST of the total saving achieved below as an average purchase price of $3,500,000. This is paid on settlement on a pro-rata basis for each party. For example, if the average purchase price was $3,400,000 and 23 properties were purchased, the Performance Fee calculation is: 25% of 23 x ($3,500,000 - $3,400.00 = 25% of $2,300,000 = $575,000 + GST Therefore, $575,000/23 = $25,000 + GST would be paid on settlement of each property in addition to the Base Fee. "
12. In the afternoon on 2 October 2014, at about 3.04pm, the plaintiff obtained (via a work colleague) a "company search" of the first defendant from the register maintained by the Australian Securities and Investments Commission. It disclosed that the company was incorporated in February 2006, and that Mr Bechara was the company's sole shareholder, director and secretary. The company was, in the vernacular, a "one dollar company", with one share issued at a par value of $1.00.
13. On 2 October 2014, at 4.08pm, the plaintiff sent an email to Mr Fox in response to Mr Fox's email of 1 October 2014. In his email the plaintiff wrote: "Subject: Re: offer to purchase 7 Canberra Ave Hi Tim, Thanks for your email, which was referred for external advice. Please see below the response. Can your client please consider and let us know at your earliest convenience."
14. The "response" to which the text of the email referred took the form of annotations to Mr Fox's original email. Against the proposed purchase price of $2 million, the plaintiff wrote "OK". Against the proposal for an "18 month settlement" he also wrote "OK". Against the proposal for a 5% deposit with 2% released on exchange and 3% 12 months after exchange, he wrote: "ACCEPT 5% DEPOSIT INSTEAD OF THE STANDARD 10% HOWEVER THIS 5% TO BE PAID ON EXCHANGE. CANNOT ACCEPT PAYMENT OF DEPOSIT OF ONLY 2% GIVEN RISK OF DEFAULT OF COUNTERPARTY WHICH APPEARS TO BE A $1 COMPANY."
15. Against Mr Fox's proposal for an expeditious exchange of contracts, the plaintiff wrote: "OK, VENDOR [sic] PREPARES CONTRACT FOR SALE. PLEASE ADVISE".
16. The following day, Friday, 3 October 2014, at 5.28pm, the plaintiff sent a further email to Mr Fox responding to Mr Fox's original email. It was in the following terms: "Subject: Re: offer to purchase 7 Canberra Ave Thanks for your email Tim. If I decided to sell my home now and not in 18 months, I have a number of upfront costs to pay right away. These costs include legal fees and conveyancing costs, removalist/relocation costs etc as a minimum. What if the buyer was unable or unwilling to proceed with the purchase in 12 months time? The 2% deposit ($40,000) would not cover my upfront costs of preparing for a sale and settlement. Are there any other conditions your client proposes to attach to the purchase? A cash deposit of $70,000 released on exchange will be adequate to meet all of my costs of selling now. On that basis I would be willing to accept the other terms of the offer [in Mr Fox's email of 1 October 2014] and start the process from my end."
17. Shortly after that email, at 5.46pm, Mr Fox sent an email to the plaintiff responding to the first of the plaintiff's emails that day. It was in the following terms: "Re: offer to purchase 7 Canberra Ave Hi Gary, Thank you for forwarding your solicitor's comments [sic]. Firstly, I don't work with $1 companies. [The first defendant] is a substantial company doing some significant developments which include approximately 400 units in Homebush and another development in Newtown. [Website address provided]. I appreciate you need to feel comfortable with this party. Is it possible for you to reconsider the 5% deposit released (2% on exchange, 3% 12 months from exchange)? This is to assist with cash flow. Thank you for reconsidering this. Please feel free to call me to discuss if you wish."
18. Shortly after that email communication, Mr Fox telephoned the plaintiff. They had a conversation to the following effect: "Mr Fox: Gary it's Tim Fox." The plaintiff: "Hello Tim, how are you." Mr Fox: "Good. I see you also own a unit at 2 Canberra Avenue [where the plaintiff's mother resided]." The Plaintiff: "Well, yes. There are few units in the block. I am on the committee for the block. Why is your client interested in these units?" Mr Fox: "My client is interested in the houses in Canberra Avenue because they can be amalgamated." Plaintiff: "Is the offer you've made for my home the same as the offer you've made for Sam's place at number 9 next door?" Mr Fox: "Yes." Plaintiff: "I see." Mr Fox: "So Gary the football grand final is on this weekend." Plaintiff: "I know. It would be good to see the Rabbitohs win. It's been 43 years since they've won a grand final." Mr Fox: "Yes it would be. Ok Gary have a good weekend."
19. On Tuesday 7 October 2014, at about 1.30pm, Mr Fox telephoned the plaintiff at work. They had a conversation to the following effect: Mr Fox: "Gary it's Tim Fox." Plaintiff: "Hello Tim." Mr Fox: "About the deposit, my client has agreed to $70,000 on exchange. There is also going to be a put and call option with the sale." Plaintiff: "What's that?" Mr Fox: "It's so the buyer doesn't have to pay the stamp duty upfront. My client will prepare this, which saves you some money. So Gary what you do for work?" Plaintiff: "I work for a company that sells agricultural equipment, like tractors to farmers." Mr Fox: "Yeah right. OK Gary bye for now."
20. That evening, 7 October 2014, at 6.53pm, the plaintiff sent an email to Mr Fox in the following terms: "Subject: Re: offer to purchase 7 Canberra Ave Hi Tim, I am awaiting for my solicitor [in fact, he had in mind Ms Vittoria De Martino of VDM Conveyancing, a conveyancer] to confirm that she can handle the put & call option to be attached to this offer and sale. In the interim, I confirm your verbal advice today that your client can provide the cash deposit of $70,000 to be released on exchange."
21. Mr Fox responded to that email later the same evening (7 October 2014), at 9.26pm, in the following terms: "Re: offer to purchase 7 Canberra Ave Hi Gary, My client will draw up the contract as well as the Put and Call, we can then have this sent to you. Yes, my client has agreed to $70K deposit released on exchange. All this will be detailed in the sales advise [sic] I will draw up once I receive your solicitors details. Thanks."
22. By an email sent on the evening of Wednesday, 8 October 2014, at 8.05pm, the plaintiff informed Mr Fox of the contact details of his conveyancer, "Vittoria."
23. Later that same evening, at 11.26pm, Mr Fox sent an email to that conveyancer (copied to the plaintiff) in the following terms: "Subject: Sales advise [sic] for purchase of 7 Canberra Ave Hi Vittoria Please find attached the sales advice for 7 Canberra Avenue, St Leonards. Whilst your client Mr Gary Coplin is the vendor, we have agreed for my client's solicitor to draw up the Put & Call Option/Contract. Any questions please feel free to call. Thanks."
24. The sales advice referred to the plaintiff as "vendor " and to the first defendant (and/or nominee) as "purchaser", identified the parties' "solicitors" and recorded the following substantive details: "SALE PRICE: $2,000,000 (two million one hundred thousand dollars). DEPOSIT: $100,000 dollars (5%). $70,000 dollars paid upon exchange released to vendor and $30,000 paid 12 months from exchange. SETTLEMENT DATE: 18 months from exchange of Put and Call Option SPECIAL CONDITIONS: Purchase via a Put and Call Option Vacant possession on settlement".
25. The inconsistency in specification of the "sale price" appears in the original document.
26. The "typo" was corrected in a follow-up email sent by Mr Fox to the conveyancer (and copied to the plaintiff) during the morning of Friday, 10 October 2014, at 11.16am.
27. Very shortly thereafter, at 11.19am, the conveyancer, Ms De Martino, sent an emailed reply to Mr Fox (copied to the plaintiff) in which she simply recorded that she did not act for the plaintiff "with respect to this matter".
28. At 11.37am the plaintiff responded with an email addressed to the conveyancer ("Vittoria" or "VDM" ), copied to Mr Fox, in the following terms: "Subject: Re: Sales advise for purchase of 7 Canberra Ave Vittoria is correct - VDM was unable to negotiate the option that has been added unexpectedly to the sale. As a result I will need to reconsider this offer with another representative and come back to you next week."
29. That evening (Friday, 10 October 2014), at 10.31pm, Mr Fox recommended "a solicitor" (in fact, a conveyancer) to the plaintiff, observing that he had "used her personally and she is very thorough and reasonably priced" and noting that he looked forward to hearing from the plaintiff "next week". The subject heading for the email remained "Re: Sales advise for purchase of 7 Canberra Ave".
30. At 11.47am on Tuesday 14 October 2014 the plaintiff sent an email to Mr Fox in the following terms: "Subject: Re: offer to purchase 7 Canberra Ave Hi Tim, I have now obtained advice from Vanessa Tait, principal of VJ Tait & Associates about the offer from [the first defendant] and/or Nominee to purchase my home at 7 Canberra Avenue via Put and Call Option. I have also contacted two real estate agents in the St Leonards South area. Recent sales in this area have achieved record prices. In Holdsworth Avenue, No. 12 sold last month for $2.7 ml. This was on 557 sqm - my block of land is 669 sqm. I suggest viewing the latest St Leonards South Strategic Plan by Lane Cove Council. The concepts include rezoning my property to High Density with a floor ratio up to 5:1 and over 8 floors in height. I expect to see developers in the next few months paying in excess of $2.5ml for big blocks like mine which are close to St Leonards station. It will be first in, best dressed for them. Unlike my neighbour who has his home for auction (on a smaller block of 631 spm) I am happy living here. But I am prepared to enter into a put and call option with your client for a sale in 18 months if the price is fair - and that price is $2.2 ml."
31. In fact, the plaintiff had not obtained an advice (only a quote of fees) from VJ Tait and Associates.
32. Nor, in fact, had he contacted two real estate agents. He had only perused two real estate brochures.
33. Later that day (14 October 2014), at 2.57pm, Mr Fox emailed the plaintiff: "Subject: RE: offer to purchase 7 Canberra Ave Thank you for your email - can you please call me to discuss? Thanks."
34. That evening, at about 7.30pm, the plaintiff and Mr Fox had a telephone conversation to the following effect: Plaintiff: "Hi Tim. Sorry I missed your call." Mr Fox: "Yes, I didn't think you had changed your mind. So you're going to sail away to the Greek Islands ha ha. You can laugh, you know." Plaintiff: "What?" Mr Fox: "That's OK. You want an extra two hundred grand. But it's an opportunity. You owe me a lunch for this Gary. Can you give me the details of the new conveyancer? Plaintiff: "I will email her details to you". Mr Fox: "Thanks".
35. Immediately after this conversation (at 7.49pm) the plaintiff sent an email to Mr Fox and Vanessa Tait (his new conveyancer) in the following terms (omitting the contact details of V.J. Tait Associates): "Re: offer to purchase 7 Canberra Ave Hi Vanessa, Mr Tim Fox has asked for your contact details. He is aware the price is $2.2 ml…."
36. During the morning of the following day (Wednesday, 15 October 2014), at 11.11am, Mr Fox sent Ms Tait an email in the following terms: "Subject: FW: 7 Canberra Avenue, St Leonards Dear Vanessa, My client's solicitor [the firm, HWL Ebsworth and, possibly, Ms Shanna Kruger of that firm] has requested I forward the contract/option deed to you - please refer to attached and below email from them. Subsequent to the contract/option deed being drawn up, [the plaintiff] advised that he now wanted an increased price of $2.2M for his property. I am working with my client to try and get him to this level. Could you please liaise with the purchasers solicitors on any matters relating to the attached? I would like to finalise/agree both documents, then I anticipate [the plaintiff] and my client will meet at your office with a view to finalising a deal. I would like this to happen later today."
37. The edited form of the email in evidence does not disclose whether the email was copied to the plaintiff. I infer, from what followed, that it was.
38. A short time later on 15 October 2014, at 11.36am, the plaintiff sent an email to Mr Fox and Ms Tate (copied to the first defendant's solicitors) in the following terms: "Subject: RE: 7 Canberra Avenue, St Leonards Vanessa, Please do not liaise with any of the parties on this email until we have received [documentation] that reflects a price of $2.2 ml."
39. At 12.05pm on 15 October 2014 Mr Fox sent an email to the plaintiff, Ms Tait and the first defendant's solicitors in the following terms: "Subject: RE: 7 Canberra Avenue, St Leonards Gary, I have just spoken again to my client. We could negotiate back and forth on the price with you but I have understood your request and now have agreement at $2.2M on the basis we exchange today."
40. The email concluded with a direction to the first defendant's solicitors: "Please resend documents ASAP to Vanessa [Ms Tait] with the amended purchase price of $2,200,000."
41. At 12.11pm on 15 October 2014 the plaintiff sent an email to Mr John Poole, solicitor, in the following terms: "Request for Legal Services - Sale of Real Estate Property Dear Mr Poole, This is Iraklis Gary Coplin. I have received an offer for my property. The buyer wants to purchase this via a put and call option, with settlement in 18 months time. The solicitor for the buyer will prepare the option deed in the contract rather than [blank space, sentence unfinished]. Please let me know if your firm is prepared to assist me and the costs for each; 1. Review of the option deed and arrange execution; 2. Review the contract and arrange execution. If you have any questions, feel free to call me on my mobile [number supplied] or on this email address.
42. At 11.34am on 15 October 2014 Ms Tait sent an email to Mr Fox (copied to the plaintiff and the solicitors for the first defendant) in terms which, so far as they are in evidence, included the following: "Subject: RE: 7 Canberra Avenue, St Leonards Thank you for the email Tim. I will have a look through all paperwork and come back to you. We have been flooded last night, so office in great disarray, possibly be better to see them [presumably, in the context of Mr Fox's email of 11.11am on 15 October 2014, the plaintiff and Mr Bechara] tomorrow morning. I will contact once I have looked through, only just able to use computers as they were also flooded.…"
43. In an email forming part of a chain with Ms Tate's email of 11.34am on 15 October 2014, the solicitors for the first defendant (at 12.37pm the same day) sent an email to Ms Tait (copied to Mr Fox, but not the plaintiff) in the following terms: "Subject: RE: 7 Canberra Avenue, St Leonards Vanessa, Please see the following amended documents reflecting the amended purchase price of $2,200,000, on the basis that exchange occurs today: 1. Option agreement. 2. Front pages of the contract for sale. Our client will exchange today on the above. Please advise whether your client is agreeable with the same. Please note that no legal relationship will be created until we exchange the Option Deed."
44. At 5.34pm on 15 October 2016 Ms Tait sent an email to the first defendant's solicitors (copied to the plaintiff and Mr Fox) in the following terms: "Subject: Coplin Sale to Al Maha Pty Ltd Dear Shanna, Attached is correspondence in respect to the Option Deed and contract submitted earlier today by you. I have met with my client this afternoon and submit this with his knowledge and look forward to your return of re-engrossed documents so that we can proceed to exchange. I can meet with him again tomorrow afternoon if all is in order with a view to finalising and exchanging on Friday [17 October 2014] in the city."
45. The plaintiff concedes that he met with Ms Tait on the afternoon of 15 October 2014 but denies that Ms Tait's correspondence was sent to the first defendant's solicitors with his knowledge. He said he read the email upon his arrival home that evening.
46. Ms Tait's correspondence (entitled "Coplin Sale to Al Maha Pty Ltd, Property: 7 Canberra Ave, ST LEONARDS) "required" 11 specific changes to the draft option deed and six specific changes to the draft contract. It concluded in the following terms: "We look forward to your feedback regarding the above and re-engrossed documentation. Further we advise that we will require on exchange of the Option a Section 66ZF waiving cooling off rights under the Option."
47. At 5.43pm on 15 October 2014 Mr Fox sent an email to Ms Tait (copied to the plaintiff), in response to an email inquiry made by her at 5.36pm, in which he confirmed that he was acting as a buyer's agent and that, therefore, "there is no fee obligation" between the plaintiff and the first defendant. The subject heading for the email was "RE: Coplin Sale to Al Maha Pty Limited".
48. At 6.15pm on 15 October 2014 Mr Fox sent to Ms Tait (and copied to the plaintiff and the first defendant's solicitors) an email in the following terms: "Subject: RE: Coplin Sale to Al Maha Pty Limited Hi Vanessa, Please find attached the sales advise [sic] I had previously sent to vendor and purchaser, prior to the price changing - note the deposit payments. Obviously, the price is now $2.2M."
49. At 9.43am on Thursday 16 October 2014 the first defendant's solicitors sent an email (entitled "Subject: RE: Coplin Sale to Al Maha Pty Limited") to Ms Tait (not copied to either the plaintiff or Mr Fox) attaching amended documents, concluding with the following statement: "We are arranging for our client to execute this morning and please advise when you are in a position to exchange."
50. At 11.04am on Thursday, 16 October 2014 Ms Tate sent an email to the first defendant's solicitors (copied to the plaintiff) in the following terms: "Re: Coplin sale to Al-Maha Pty Limited Thank you Shanna. I will have a look through shortly, however with respect to the deposit issue before we go further, I am instructed as follows: My client agreed to 5% of the price as the option tranche/deposit - he had not discussed or thought further regarding the deposit to be paid at the time of exchange of contracts. Accordingly, when contracts are finally exchanged, he requires that a full 10% deposit having been paid by or at that time, so he requires that the 5% be paid at exchange to make up full 10% deposit as is common for the deposits on contracts. Please confirm your client's agreement to this and provided amendment [sic] We look forward to your reply. My client is able to attend the office again this afternoon to sign the contract so that exchange can proceed tomorrow if all is agreed."
51. At 3.01pm on 16 October 2014 Ms Tait sent an email to the plaintiff in the following terms: "RE: Coplin sale to Al Maha Pty Ltd Hi Gary Shanna just came back to me and said she has the go ahead for the full 10% on exchange. Can you ring me to arrange a time that you can call past to sign the amended docs this afternoon with a view to us exchanging this tomorrow."
52. At about 4.30pm on 16 October 2014 the plaintiff attended the office of Ms Tait for about 20 minutes. In that time, he initialled each page and signed the Option Deed.
53. The plaintiff says that he signed the Option Deed expecting that it would not be exchanged until the following day, allowing him time still to obtain legal advice from his solicitor, Mr Poole. He says that he left Ms Tait's office believing that the deed would be exchanged the following day, Friday, 17 October 2014. I accept that evidence as truth.
54. In fact, the Option Deed was exchanged, and dated that very same day, Thursday 16 October 2014, no later than 6.08pm (the time at which, by email, the first defendant's solicitor reported the fact of exchange). Ironically, the deed bears a certificate under section 66ZF of the Conveyancing Act 1919 NSW, signed by the solicitor for the first defendant, waving any "cooling off period" otherwise attaching to the call option for the first defendant's purchase of the plaintiff's property. In reality, it was the plaintiff, not the first defendant, who was in need of a cooling off period.
55. Precisely how, when and by whom on behalf of the parties counterparts of the Option Deed were exchanged on 16 October 2014 is not explained by the evidence.
56. Ms Kruger signed the section 66ZF certificate on behalf of the first defendant. Whether she attended an exchange of documents with Ms Tait, or whether each woman arranged for someone else to attend on their behalf, is not disclosed by the evidence.
57. No party adduced evidence from HWL Ebsworth Lawyers or VJ Tait Associates to explain precisely what happened. No party adduced evidence to explain the absence of such evidence.
58. Nor did any party adduce evidence from the office of Mr Poole (to whom the plaintiff sent an apparently unanswered email at 12.11pm on 15 October 2014) and no evidence was adduced to explain his absence.
59. As far as the evidence goes, the plaintiff appears to have made no connection with Mr Poole until Thursday, 23 October 2014.
60. At 7.51pm on Friday 17 October 2014 Mr Fox sent the plaintiff an email in the following terms: "Subject: RE: Offer to purchase 7 Canberra Ave Hi Gary, Congratulations on the sale of 7 Canberra Ave. It would be good to catch up with you for a coffee sometime this coming week to discuss 2 Canberra Ave."
61. On Monday, 20 October 2014, VJ Tait Associates sent a letter to the plaintiff (apparently via email) in the following terms: "Dear Mr Coplin Your Sale to Al Maha Pty Limited Property: 7 Canberra Ave, ST LEONARDS We confirm that the Put & Call Option was exchanged on 16th October 2014. The Grantee provided us with a cheque in the sum of $75,000 which we have banked to our trust account and upon its clearance we will deposit same to your account as previously provided to us. We attach herewith final agreement for your records. The Grantee can have access to the property to carry out surveys etc, however they must first provide us with the relevant insurances before they can access. Please advise us if they contact you for access, so that we can ensure the correct insurances are in place. The next instalment of the tranche is due on 16 October 2015 in the sum of $35,000. The Grantee can exercise the Option any time from 28th November 2014 until 16th April 2016 (which is 18 months from exchange of the option). If they don't exercise the option by that last date you can elect to call them to exchange from 17th April 2016 for 7 business days. If neither of you exercise the option rights, then the option expires and you both walk away at that time and you retain the deposit funds already paid. We will be in touch with you again closer to the payment of the 2nd Tranche. We will advise once the funds have been banked. In the meantime, we enclose our invoice, which we will deduct from the $75,000 that is in our trust account. We note that we agreed to reduce our fee to $990 from our normal $1200 for options, based on the fact that you indicated you had done all the negotiations. We as you are aware, undertook further negotiations with respect to the option agreement and ensuring it was more in your favour than it was submitted as well as ensuring that when final exchange takes place, that the purchaser pay the further 5% deposit so that full 10% has been paid. We believe that we have more than carried out the work to justify us charging the original fee quoted to you. However as good faith, we have continued to only charge you the $990, if you are in agreement to paying us the $1200 as originally quoted, please advise. Any questions, please don't hesitate to contact us."
62. At 4.53am on Thursday, 23 October 2014, the plaintiff sent an email to Ms Tait in the following terms: "Subject: 7 Canberra Avenue St Leonards Dear Vanessa, I cannot go ahead with this contract. Please do not disburse the funds in your trust account to me. Please await further details. I will need to engage a solicitor to assist me."
63. At 9.55am on 23 October 2014 the plaintiff sent an email to Ms Tait in the following terms: "Subject: URGENT: 7 Canberra Avenue St Leonards Dear Vanessa I request you to write to Al Maha Pty Limited (the Grantee) as soon as possible as follows; As a result of pressure tactics applied by the buyer's agent, I was unable to obtain legal advice in relation to the sale of my home under a Put and Call option from my solicitor, John T Poole of Maurice, Buckley CT Poole & Son before it was signed on 16 October 2014. I consider the Put and Call Option to be unfair and onerous on me and places me at high risk of losing my home. The document does not give me any right to sell the property to the Grantee for 18 months. This was not my understanding at the time the document was signed. I genuinely believed that I had the right to call on the Grantee to purchase my home at any time during the 18 months. In contrast, he [sic] grantee has the exclusive right to purchase my home at any time during the 18 months. Anyone can see that 18 months is a long time for me and my family to be at risk. In particular, I am at risk if I were to become unemployed (terminated as I was in 2013 or retrenched as I was in 2010). I would be unable to continue to pay the ANZ Bank mortgage on my home without a job. Under this Option, I would be unable to sell my home to the Grantor to save myself from financial distress, and I would be unable to borrow funds to pay my mortgage. I would never put myself and my mother at risk in this way. I am the carer for my mother, Aristi Coplin, who is permanently disabled and is only in receipt of a disability benefit. My mother relies on me to house her. If I lost my job, I would lose my home - that is why the Option is unfair. I seek to be fully released from the Option. I do not want a legal dispute, however the severity of the Option is serious and the risk to me and my family is unbearable. The funds of $75,000 currently in the trust account should be refunded in full to the Grantee. Please understand that I will be unable to fulfil the Option in this regard and must be released. Iraklis Gary Coplin".
64. At 10.09am on 23 October 2014 the plaintiff sent an email to Mr Poole in the following terms: "Subject: URGENT: 7 Canberra Avenue St Leonards Dear John, Please read the email below to the conveyancer that handled this matter. I need to be fully released from this Put and Call Option. I will call you to discuss."
65. By that email, the plaintiff sent to Mr Poole a copy of his email of 9.55am to Ms Tait.
66. At 11.08am on 23 October 2014 Ms Tait replied to the email (of 9.55am) addressed to her in the following terms: "Subject: URGENT: 7 Canberra Avenue St Leonards Dear Gary, Thank you for your email, explaining all of your concerns. In light of your email, I believe that you should obtain further independent advice prior to me forwarding any further correspondence to the solicitors for the purchasers. I confirm that I am holding the $75,000 in my trust account. Please advise further once you have received that advice. I look forward to hearing from you."
67. At 11.11am on 23 October 2014 the plaintiff sent an email to Mr Poole in the following terms: "Subject: FW: Coplin sale to Al Maha Pty Limited Dear John, Attached is a copy of the Put & Call Option agreement. I will forward to you the email from Vanessa Tait."
68. At 11.33am on 23 October 2014 the plaintiff sent an email to Ms Kruger and Mr Poole (copied to two colleagues of Ms Kruger, and to Ms Tait) in the following terms: "RE: 7 Canberra Avenue, St Leonards Hello Shanna, I request you to write and inform Al Maha Pty Limited (the Grantee) as soon as possible as follows; As a result of pressure tactics by the buyer's agent, I was unable to obtain legal advice in relation to the sale of my home under a Put & Call Option from my solicitor, Mr John Poole of Maurice Buckley, CT Poole & Son before it was signed on 16 October 2014. The Put & Call Option to be unfair and onerous on me and puts me at high risk of losing my home [sic]. The document does not give me any right to sell the property to the Grantee for 18 months. This was not my understanding at the time the document was signed. I genuinely believed that I have the right to require the Grantee to purchase my home at any time during the 18 months. In contrast, the Grantee has the exclusive right to purchase my home at any time during the 18 months. This is not fair on me. Anyone can see that 18 months is a long time for me and my family to be at risk. In particular, I am at risk if I was to become unemployed (terminated as I was in 2013 or retrenched as I was in 2010). I would be unable to continue to pay the ANZ Bank mortgage on my home without a job. I would be unable to sell my home to the Grantor to save myself from financial distress, and I would be unable to borrow funds to pay my mortgage if unemployed. I would never put myself and my mother at risk in this way. I am the carer for my mother, Aristi Coplin, who is permanently disabled and is only in receipt of a disability benefit. My mother relies on me to house her and if I lost my job, I would lose my home - that is why the Option is unfair. I seek to be fully released from the Option. I do not want a legal dispute, however the severity of the Option is serious and the risk to me and my family is unbearable. The funds of $75,000 currently in the trust account are to be refunded in full to the Grantee. Please understand that I will be unable to fulfil the Option and need to be released. My solicitor, Mr John Poole, is included on this notice."
69. Ms Kruger forwarded the plaintiff's email to the first defendant and Mr Fox at 11.40am on 23 October 2014.
70. The auction sale of 9 Canberra Avenue commenced at about 5.00pm on 23 October 2014 according to auctioneer's notes subpoenaed (from Blunts Real Estate of Lane Cove) for the purpose of these proceedings. Before that time, the plaintiff had communicated his request to be released from the Option Deed, lending force to his evidence that his desire to be released from the Deed was not related to the outcome of his neighbour's auction.

The auction sale of 9 Canberra Avenue

1. A consideration of the circumstances in which 9 Canberra Avenue was sold at auction is necessary because that sale bears upon: (a) the market value of 7 Canberra Avenue and reasonable pre-auction estimates of its value; (b) an assessment of the expectations and conduct of the defendants; and (c) whether or not, as the plaintiff alleges, Mr Fox falsely represented to him that the first defendant's offer to purchase 7 Canberra Avenue for $2 million was "the same as the offer [made by the first defendant] for the adjoining property at 9 Canberra Avenue".
2. A starting point is Mr Sarzentich's email of 24 September 2014 (11.54am) to Mr Fox, earlier reproduced. In that email Mr Sarzentich offered to sell his property to the first defendant for $2.2 million, with a delayed settlement if required.
3. From that email, one may take two points. First, independently of the defendants Mr Sarzentich had initiated a process of sale; on his own motion, he was in the market as a seller. Secondly, he said that he had already made arrangements to go, and he was about to go, to market; in the ordinary course of practice in NSW, that would generally mean that he had already retained a solicitor to prepare a contract and a real estate agent to market the property on the basis of that contract.
4. Mr Sarzentich's determination to sell his property, and his state of readiness in moving in that direction, may have been a consequence of the recent death of his partner, formerly a joint tenant of his property, and factors associated with administration of her estate.
5. From documents produced on subpoena by Mr Sarzentich's real estate agent (Blunts Real Estate), we now know that Mr Sarzentich signed a "Sales inspection report and auction agency agreement" on 20 September 2014 which recommended a sale by auction based upon a contract prepared by Mr Sarzentich's solicitors. That report contained the following entry: "Agent's opinion as to current estimated selling price (or price range) (this opinion is not to be construed as a valuation): $1,900,000 to $2,000,000."
6. On the day of the auction (23 October 2014) Mr Sarzentich set a reserve price for his property at $2.3 million.
7. The documentary record in evidence relating to dealings between the defendants and Mr Sarzentich is probably not complete. For that reason, alone, it needs to be treated with an element of reserve.
8. Nevertheless, a picture emerges of negotiation manoeuvers on both sides of a prospective transaction.
9. As at 5.15pm on Wednesday, 8 October 2014 the defendants believed that, subject to an exchange of contracts, to be effected through solicitors, Mr Fox had negotiated with Mr Sarzentich an agreement that the first defendant would purchase 9 Canberra Avenue (via an 18 month put and call option) for $2.1 million.
10. That such an agreement was made (subject to an exchange of contracts) is not controversial. The course of any negotiations leading to the agreement is controversial having regard to the absence of a documentary record of it. There is in evidence no written communication between the first defendant and Mr Fox, between Mr Fox and Mr Sarzentich, or otherwise, demonstrating how Mr Sarzentich's offer to sell for $2.2 million became an agreement on price of $2.1 million.
11. In cross-examination by senior counsel for the first defendant, Mr Fox filled the gap by deposing (for the first time) to an oral offer made by him to Mr Sarzentich on 1 October 2014 for $2 million, leaving space for vendor and purchaser subsequently to "split the difference" at $2.1 million.
12. For several reasons, I accept Mr Fox's evidence as more probable than not. First, $2 million marked the bottom end of the price range contemplated by the Messrs Fox and Bechara when they negotiated the Agency Agreement that governed their companies' relationship; that Agreement was agreed orally on 1 October 2014, documented on 2 October 2014. Secondly, the first defendant's opening offer for the purchase of other properties in the area appears to have been pitched at $2 million or $2.1 million, leaving room for the first defendant to negotiate upwards if need be. Thirdly, accepting that Mr Sarzentich opened negotiations with a figure of $2.2 million, there has to be some explanation for his subsequent agreement to accept $2.1 million; a counter offer of $2 million, compromised at $2.1 million, is plausible. Fourthly, the plaintiff's account of his conversation with Mr Fox on 3 October 2014 is predicated upon an acknowledgement by Mr Fox that Mr Fox had, in fact, made an offer on 9 Canberra Avenue at that time. Fifthly, in my assessment, the course taken by Mr Fox's evidence does not significantly weigh against these factors.
13. By an email sent at 4.28pm on Wednesday, 15 October 2014 Mr Serzentich's solicitor advised the first defendant's solicitors that he would be unable, because of work commitments, to attend to a review of their draft put and call option, or to advise his client Mr Sarzentich, until after the coming weekend. Mr Sarzentich hastened slowly.
14. At 2.14pm on 20 October 2014 the solicitors for Mr Sarzentich (McCauley Peters & Cripps) sent an email to the first defendant's solicitor (Ms Kruger of HWL Ebsworth) in the following terms: "SUBJECT: SARZENTICH SALE 9 CANBERRA AVE ST LEONARDS YOUR CLIENT AL MAHA PTY LIMITED We refer to previous correspondence and advise our client is not proceeding with this matter."
15. At 2.20pm on 20 October 2014 McCauley Peters & Cripps forwarded a copy of that email to Mr Fox "for information", without comment.
16. At 8.10am on 21 October 2014 Mr Fox sent an email to Mr Sarzentich (copied to Mr Sarzentich's solicitors) in the following terms: "Good morning Sam, Could you please have your solicitor email through the contract of sale for 9 Canberra Avenue urgently? On the basis we had agreed a deal with you, we proceeded with the purchase of next door, hence our keenness to finalise the purchase with you last week. Subject to the review of your contract we will come back to you today. We acknowledge that you are now wanting a short settlement. Given our interest in next door, we request that you give us the first opportunity to finalise the purchase of 9 Canberra Ave with you. Please advise if you agree to this? We can finalise the purchase with you today if we receive the contract soon. Thank you."
17. At 12.42pm on 21 October 2014 Mr Sarzentich's solicitor emailed Mr Fox to foreshadow that an offer to sell 9 Canberra Avenue to the first defendant was about to be communicated to the first defendant's solicitor, subject to contracts for an outright sale being exchanged by 5.00pm on 22 October 2014.
18. At 12.47pm on 21 October 2014 Mr Sarzentich's solicitors sent to the first defendant's solicitor (Ms Kruger) a copy of a contract.
19. At 1.19pm on 21 October 2014, as a part of the same email chain, Ms Kruger sent an email to the first defendant (copied to Mr Fox and others) in the following terms: "… Despite my email to you yesterday, I have received the attached email and contract. The contract provides for a 42 day settlement at $2,500,000 however its subject to the property being transferred to the executors as it's a deceased estate. The terms are outside the Sales Advice. Please let me know if you are interested in proceeding and I will review the contract terms thoroughly and advise."
20. That email was forwarded by an officer of the first defendant to Mr Bechara at 1.33pm on 21 October 2014.
21. Whether the defendants responded, pre-auction, to Mr Sarzentich's overtures is not disclosed by the evidence. What is revealed by the subpoenaed auction records is that Mr Bechara personally attended the auction, and an associate actively bidded at the auction on behalf of the first defendant up to $2.8 million.

THE PLAINTIFF'S CLAIMS UNDER THE AUSTRALIAN CONSUMER LAW, SECTIONS 18 AND 30

1. The plaintiff's claims for relief under section 18 of the Australian Consumer Law (which proscribes misleading and deceptive conduct) and section 30 (which proscribes false or misleading representations) must fail on the facts.
2. Each of the plaintiff's claims depends upon proof that the first and second representations pleaded in the statement of claim were false.
3. I accept that the representations were made as alleged, but not that they were false.
4. That the statements described in the statement of claim as "the first representations" were made is evident from the terms of the email sent by Mr Fox to the plaintiff at 5.46am on 3 October 2014.
5. The essential feature of those statements was that the first defendant was a substantial company doing significant developments, including developments in Homebush and Newtown.
6. As at 3 October 2014 the first defendant was planning a development at Homebush (which ultimately included 221 residential units and six commercial premises) and undertaking a development at Newtown (which comprised 203 units), a total of 424 units and six commercial premises.
7. Read fairly, Mr Fox's email referred to "400 units" in Homebush and Newtown, not merely "400 units" in Homebush alone. In any event, the primary point made by the email (and correctly so) was that the first defendant was "a substantial company doing some significant developments".
8. The plaintiff attached no particular significance to the number of units the subject of the first defendant's developments when he executed the option deed. If (contrary to my finding) the "first representations" involved any misstatement, the plaintiff cannot build a case based upon them because he did not rely upon them.
9. The "second representations" pleaded in the statement of claim comprised two statements, both of which I accept were made by Mr Fox in a telephone conversation between him and the plaintiff on 3 October 2014, and both of which were true, not false.
10. The first defendant was interested in purchasing the plaintiff's property in order to amalgamate it with adjoining properties that it was interested in purchasing on Canberra Avenue as part of a new development, albeit a development in prospect.
11. The first defendant's offer of 1 October 2014 to purchase the plaintiff's property for $2 million (with a delayed settlement) was, in substance, the same as an offer made to Mr Sarzentich at about the same time.
12. In presentation of his case the plaintiff presented the first limb of the second representations as, essentially, contextual for the second limb. Of the two limbs, only the second (bearing upon the price to be paid for the plaintiff's property by the first defendant) could have had any material significance for decisions the plaintiff was called upon to make.
13. The statement of claim does not plead a future representation, or a warranty in any form, that any offer made by the first defendant for Mr Sarzentich's property would be accompanied by a comparable offer for the plaintiff's. If the plaintiff ever believed otherwise, he had no reasonable ground for doing so.
14. For reasons earlier given, I have found as a fact that (contrary to the plaintiff's contentions) Mr Fox did make an offer to Mr Sarzentich in terms sufficient to justify his statement to the plaintiff that the offer made to the plaintiff at about the same time was "the same" as the offer for Mr Sarzentich's property.

AUSTRALIAN CONSUMER LAW, SECTION 21

1. The plaintiff's claims for relief under section 21 of the Australian Consumer Law (which proscribes "conduct that is, in all the circumstances, unconscionable", and calls attention in section 22 to a number of factors to which the Court may have regard in determining whether there has been a contravention of section 21) must also fail.
2. Accepting that the concept of "unconscionability" is wider than might operate under the general law, that an exhaustive definition of its field of operation is not to be attempted, and that a finding of unconscionability can be made without attributing impropriety to a party alleged to have contravened section 21 (PT Limited v Spuds Surf Chatswood Pty Limited [2013] NSWCA 446 at [93]-[111]), it is nevertheless difficult, in the commercial setting of the current proceedings, to characterise the first defendant's conduct as "against conscience". That is because, having negotiated an agreement with the plaintiff, he was not directly involved in the process in which the terms of the option deed were drafted, negotiated and settled by others (namely, a solicitor acting on behalf of the first defendant and a conveyancer acting on behalf of the plaintiff).
3. Even if, as I find, that Mr Fox applied commercial pressure to the plaintiff in order to rush him into an exchange of contracts, it is difficult to attribute the character of "unconscionability" to his "conduct" in these circumstances, notwithstanding that (in all the circumstances) the option deed may correctly be characterised as "unjust".
4. If an element of "moral obloquy" is required for a finding of "unconscionability", it is here absent. If it is not required, Mr Fox's remove from the process of exchange nevertheless deprives his conduct of the character of "unconscionability" in its particular commercial setting. See, generally, Baxt, "Unconscionability: High Court emphasies Moral Obloquy in Obiter Dicta Statements" (2016) 90 ALJ 870.
5. Although the respective fields of operation of section 21 of the Australian Consumer Law and sections 7 and 9 of the Contracts Review Act might overlap, they are not the same. The former has at its centre proscribed (unconscionable) conduct. The latter is centred upon the question "whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made", having regard to factors enumerated in the legislation.
6. The plaintiff's case fits more readily into the framework of the Contracts Review Act than it does any of the pleaded provisions of the Australian Consumer Law.

AUSTRALIAN CONSUMER LAW, SECTION 2

1. Having found against the plaintiff's contentions that that the second defendant contravened the Australian Consumer Law, there is no need to dwell upon the factual matrix of his allegation that the first defendant was (within the meaning of section 2 of the Australian Consumer Law) "involved" in a contravention.
2. I have little doubt that whatever Mr Fox did, or did not do, in his dealings with the plaintiff was done, or not done, in close consultation with Mr Bechara. Each man was the embodiment of his company's mind and was authorised to act on behalf of his company. The second defendant, in all things, acted within its authority on behalf of the first defendant.

THE CONTRACTS REVIEW ACT 1980 NSW

1. If the plaintiff has any entitlement to relief, in all the circumstances of the case, it is under the Contracts Review Act.

The Law

1. So far as presently material sections 7 and 9 of the Contracts Review Act are in the following terms: "7 Principal relief (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, (d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that: (i) varies, or has the effect of varying, the provisions of the land instrument, or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument. (2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order…. 9 Matters to be considered by Court (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, (f) the relative economic circumstances, educational background and literacy of: (i) the parties to the contract (other than a corporation), and (ii) any person who represented any of the parties to the contract, (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed, (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract, (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, (k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and (l) the commercial or other setting, purpose and effect of the contract. (3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made. (4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made. (5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made."
2. Section 4(1) defines the word "Court" in terms that include the Supreme Court of New South Wales. It also provides that "'unjust' includes unconscionable, harsh or oppressive; and 'injustice' shall be construed in a corresponding manner".
3. Section 6(2), which precludes a grant of relief under the Act in relation to a contract so far as it was entered into in the course of or for the purpose of a trade, business or profession carried on by the applicant for relief, has no application in the present proceedings because the plaintiff's entry into the option deed was not in the course of or for the purpose of a trade, business or profession carried on by him.
4. The plaintiff's application for Contracts Review Act relief was made within the two year limitation period for which section 16(a) of the Act provides.
5. The Contracts Review Act includes no definition of the word "contract", leaving that term to the meaning it has under the general law. Although an option agreement can be analysed in terms of a grant of a property right, it also bears the character of a contract, whatever its precise juristic character (Carter v Hyde (1923) 33 CLR 115 at 122-123). No party contends otherwise.
6. For completeness, section 15 of the Contracts Review Act may be noticed: "15 Arrangements In any proceedings in which relief under this Act is sought in relation to a contract, the Court may, if it thinks it proper to do so in the circumstances of the case, and it is of the opinion that the contract forms part of an arrangement consisting of an inter-related combination or series of contracts, have regard to any or all of those contracts and the arrangement constituted by them."
7. No party submits that the Court cannot, or should not, have regard to the "contract" designated to come into operation upon an exercise of an option under the option deed. In any event, section 15 permits the Court to have regard, as I do, to the whole of the arrangement constituted by the option deed, including that contract
8. The defendants have not contended that the Court is precluded from granting relief under the Contracts Review Act in relation to the option deed because any contract attending the deed has been fully executed by the grant of property rights for value. Had they done so, section 14 of the Act would have provided a ready answer to that contention. It provides that the Court "may grant relief in accordance with [the] Act in relation to a contract notwithstanding that the contract has been fully executed."
9. A classic statement of the nature, scope and operation of sections 7 and 9 of the Contracts Review Act is found in the judgment of McHugh JA in West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 620E-622B. I here extract more than the customary first paragraph because his Honour's extended observations bear upon the present proceedings. "Under section 7(1) a contract may be unjust in the circumstances existing when it was made because of the way it operates in relation to the claimant or because of the way in which it was made or both. Thus a contractual provision may be unjust simply because it imposes an unreasonable burden on the claimant when it was not reasonably necessary for the protection of the legitimate interests of the party seeking to enforce the provision: Cf, section 9(2)(d). In other cases the contract may not be unjust per se but may be unjust because in the circumstances the claimant did not have the capacity or opportunity to make an informed or real choice as to whether he should enter into the contract: Cf, section 9(2)(a), 9(2)(e), 9(2)(f), 9(2)(g), 9(2)(i), 9(2)(j). More often it will be a combination of the operation of the contract and the manner in which it was made that renders the contract or one of its provisions unjust in the circumstances. Thus a contract may be unjust under the Act because its terms, consequences or effects are unjust. This is substantive injustice. Or a contract may be unjust because of the unfairness of the methods used to make it. This is procedural injustice. Most unjust contracts will be a product of both procedural and substantive injustice. The definition of 'unjust' in section 4 is not exclusive. It is in my opinion a mistake to think that a contract or one of its terms is only unjust when it is unconscionable, harsh or oppressive. Contracts which fall within any of those categories will be 'unjust'. But the latter expression is not limited to the so-called 'tautological trinity'.… Any contract or contractual provision, not excluded from the operation of the Act in which the Court considers is unjust in the circumstances existing at the time when it was made, may be the subject of relief under Act. Moreover, the provisions of section 9(2) do not exhaustively indicate the criteria as to what can be taken into account in determining whether a contract or any of its provisions is unjust. The provisions of section 9(2) of the Act are concerned for the most part with matters of procedural injustice. But the Court is entitled to have regard to all the circumstances of the case, subject to section 9(4), and the public interest. In an appropriate case gross disparity between the price of goods and services and their value may render the contract unjust in the circumstances even though none of the provisions of section 9(2) can be invoked by the applicant. Indeed, notions of unfairness and unreasonableness will, I think, generally be present when a contract or any of its provisions is declared unjust. This will particularly be the case where procedural injustice is relied on. If a contract for one of its relevant provisions is neither unfair nor unreasonable so far as the applicant is concerned, it is difficult to see how the existence of inequality in bargaining power or lack of independent advice, for example, can render the contract or a provision of the contract unjust. It is important to bear in mind that it is the contract or its provisions which must be unjust. As Professor Lang has pointed out 'it is not the transaction but the contract which must be initially examined'. … The Contracts Review Act regulates contracts not investments.… If a defendant has not been engaged in conduct depriving the claimant of a real or informed choice to enter into a contract and the terms of the contract are reasonable as between the parties, I do not see how the contract can be considered unjust simply because it was not in the interest of the claimant to make the contract or because she had no independent advice. The late Professor Peden who is largely responsible for the drafting of the Act has said that in accordance with his recommendation: '… the Act does not include the term 'unfair' since this might have been interpreted to include situations in which, although the contract favours one party, there has been no abuse of power or unfair conduct on his part…' This passage brings out the important point that, under this Act, a contract will not be unjust as against a party unless the contract or one of its provisions is the product of unfair conduct on his part either in the terms which he has imposed or in the means which he has employed to make the contract.…"
10. Although a finding of "unjust" contract may be more readily made if injustice can be attributed to a party to the contract, McHugh JA's suggestion that proof of unfair conduct by a party is required for such a finding to be made was contested by Kirby P in Baltic Shipping Company v Dillon (1991) 2 NSWLR 1 at 20.
11. What is clear, though, is that the Court can have regard to circumstances which, at the time the contract was made, were not known to a party against whom relief is sought: West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 620D.
12. A contract is not necessarily "unjust" merely because one party (the defendant) does not insist that another party (the plaintiff) obtain independent advice whether he or she should enter the contract: West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 629 B-C; Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 at [86]; Canty v Paperlin X Australia Pty Limited [2014] NSWCA 309 at [121] and [142].
13. On an application for relief under section 7 of the Contracts Review Act, the Court undertakes a three-stage process: Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 at [99] and [106]; Canty v Paperlin X Australia Pty Limited [2014] NSWCA 309 at [123]. The first is to make findings of primary fact. The second requires a finding that a contract is or is not "unjust". The third requires an exercise of the power to grant relief under the Act which may, but need not, follow from the conclusion that a contract is unjust.
14. The following observations of Allsop P in Provident Capital Limited v Papa (2013) 84 NSWLR 231 at 233[7] provide guidance as to the nature of the task of the Court in evaluating the "unjustness" of a contract for the purpose of the Act: "The broad evaluation of unjustice under the Contract Review Act 1980, section 4, section 7 and section 9 involves the normative evaluation of the totality of relevant circumstances. Inevitably minds may differ as to conclusions about such questions. Also, it is often not fruitful to compare other cases with the popular circumstances at hand, lest one be deflected from an appropriate overall assessment by focus on particular aspects relevant to any such comparison. Central to the normative evaluation is the recognition that there is a need for the protection of some people in some circumstances, who are not able fully to protect their own interests against factors that may cause injustice. That vulnerability may come from one or more of many circumstances, such as lack of education or of intelligence, from gullibility, from the predation of fraud and greed, and also sometimes from loyalty and love. The characterisation of a contract as unjust and the sheeting home to the other contracting party of the consequences of its unjustness may be a difficult evaluative exercise. At its heart, however, is the recognition of the inadequacy of one party to protect her or his interests in the circumstances…"
15. In further observations made by his Honour incidental to these general observations, but relating to the facts of the particular case then before the Court, Allsop P observed that it would be "unjust" to visit "the inadequacy of fulfilment of retainer by" a solicitor for a borrower on a lender who had not been involved in any form of predation or misleading conduct inducing the borrower to enter into an impugned transaction.

The Facts

1. Shorn of the allegations of misleading and deceptive conduct, false or misleading representations and unconscionable conduct which I have, by this judgment, rejected, the plaintiff's case is perhaps best summarised (in his own words) by his email complaint of 23 October 2014. In substance, that email was addressed, first, to his conveyancer, then to his solicitor and, finally, to the solicitor for the first defendant.
2. Insofar as that email makes statements of fact it is, in my assessment, substantially accurate.
3. Upon an examination of the facts of the case for the purpose of due consideration of the Contracts Review Act, the starting point is the fact that the defendants (the first defendant, through its agent the second defendant) initiated contact with the plaintiff (then settled in his home), and excited his interest in a sale of his property, before proposing a change in the structure of the transaction (from a sale to an option arrangement) and applying commercial pressure on him for a quick exchange of contracts which suited their interests but was attended by haste which was unnecessary on any other account.
4. The plaintiff was placed under commercial pressure by the first defendant (largely, but no only, via Mr Fox) to exchange contracts, first on 15 October 2014, then on 16 October 2014, without delay.
5. As a result of that pressure, the plaintiff signed his counterpart of the option deed on the afternoon of 16 October 2014, thereby (unwittingly) arming his conveyancer with a document which, in an apparent misunderstanding between him and her, she proceeded to exchange without waiting (as he expected) until at least the following day, 17 October 2014.
6. Because the conveyancer proceeded to an exchange of contracts when she did, the plaintiff lost an opportunity (which he had set in train and still proposed to take) to obtain legal advice from his solicitor, Mr Poole.
7. The plaintiff did not, in fact, obtain any legal, or other, advice on the option deed other than advice of a comparatively mechanical character from his conveyancer (shortly before contracts were exchanged) about drafting detail of the option deed. He did not obtain advice about whether he should enter a transaction structured as a reciprocal grant of options (with uncertainty attending a lengthy call option period) rather than as a sale.
8. He did not obtain advice as to whether, in his particular financial circumstances, it was imprudent for him to bind himself to a sale the completion of which might be deferred (against his interests) for up to 19.5 months or, at the election of the first defendant, brought on earlier than that.
9. Despite cross examination of the plaintiff at the final hearing of the proceedings suggestive of a contrary conclusion, the plaintiff did not understand the nature of the transaction embodied in the option deed. His understanding of the transaction was, perhaps, skewed by emails passing between Mr Fox, the first defendant's solicitor, the plaintiff's conveyancer and himself that consistently described the transaction as a "sale" rather than as a reciprocal grant of options. His lack of understanding can, in part, be attributed to the idea planted in his mind by Mr Fox that an option was no more than a mechanism to defer the first defendant's obligation to pay stamp duty.
10. As Mr Fox could not but have known or suspected, the plaintiff was an unsophisticated man who, beneath a veneer of competency, required time to process problems and solutions.
11. Mr Fox having cultivated the plaintiff's trust, and conditioned the plaintiff to believe that he was being dealt with fairly by the defendants, the defendants pressed home an advantage this conferred upon them in insisting upon an exchange of contracts without delay beyond 16 October 2014.
12. In doing that, the defendants knew or suspected that the plaintiff's only adviser was a conveyancer who, as she revealed to the solicitor for the first defendant, was herself under personal pressure arising from calamities within her office.
13. Although the precise state of the real estate market was unknown, the defendants knew that the plaintiff had no real idea of the value of his property, and they believed that the market value of the property was substantially in excess of the $2.2 million they agreed (on deferred terms, subject to an option) to pay him.
14. At all material times, contrary to a belief that Mr Fox engendered in the plaintiff, the first defendant was prepared to pay substantially more for the plaintiff's property than the $2 million initially offered and the $2.2 million later agreed.
15. A reason for the defendants' haste in rushing the plaintiff to an exchange of contracts was the fear that, given time, the plaintiff might discover that he was overly conservative in his assessment of the market value of his property.

Was the Option Deed an Unjust Contract?

1. Whether or not the option deed was or was not "unjust" in the circumstances relating to it at the time it was made, within the meaning of section 7 of the Contracts Review Act, is a question that requires the Court to attend to the (non-exclusive) criteria set out in sections 9(1) and 9(2) of the Act.
2. The specificity of the criteria set out in section 9(2) invites initial attention, although all factors identified in section 9 must be consulted before the question of the proper characterisation of the option deed is ultimately determined. Section 9 does not prescribe a mere checklist of factors required in every case to be weighed, one against the other, in a mechanical fashion - the evaluative exercise required of the Court is broader than that, and qualitatively different - but the section provides useful guidance as to factors that may be relevant and, on that account, should be consulted, if not considered in depth.
3. Turning first to section 9(2), I am disinclined to attribute any finding of injustice to the factors enumerated in sections 9(2)(a)-(g) and 9(2)(k) because they have no application to the facts of the case.
4. I am not satisfied that there was any material inequality in bargaining power between the parties to the option deed, although the first defendant's ready access to expert knowledge of land development, and market conditions, gave it an edge it over the plaintiff in negotiations, which did take place in the lead up to execution of the option deed. It was reasonably practicable for the plaintiff to negotiate for alteration, or rejection, of provisions of the option deed. Whether or not provisions of the option deed imposed conditions which were unreasonably difficult to comply with, or not reasonably necessary for protection of the legitimate interests of the first defendant, depends upon whether the transaction between the parties was truly intended to be a sale or a genuine option agreement; it is, by itself, too uncertain a reed on which to hang characterisation of the deed as "unjust". There was no want of capacity in the plaintiff to protect his interests by reason of his age or the state of his physical or mental capacity. Nor does any sense of injustice arise from the relative economic circumstances, educational background or literacy of the parties. Although the option deed was expressed in legalese, neither the physical form of the deed nor the language in which it was expressed could reasonably support a finding of "unjustness". Finally, I am not satisfied that there was anything in the parties' conduct in relation to similar contracts, or a course of dealings, supportive of such a finding.
5. In my assessment, the factors which do point in the direction of a finding of "unjust contract" are those found in sections 9(2)(h)-(j) and 9(2)(l).
6. The plaintiff did not in fact obtain independent legal or other expert advice beyond, late in the piece, advice of a limited character obtained from his conveyancer. He did not obtain advice bearing upon the critical question whether he should enter the option deed at all, only advice about the mechanics of entry into the deed.
7. The provisions of the option deed and their legal and practical effect were not accurately explained to the plaintiff by any person, and the plaintiff did not in fact understand the provisions or their effect. It was with a consciousness of that deficiency that the plaintiff sought, as it happens, without success, to obtain the advice of his solicitor Mr Poole before proceeding to an exchange of contracts.
8. The fact that he signed the option deed in anticipation of an exchange of contracts, at the same time as he planned, and expected, to obtain legal advice from Mr Poole is indicative of the commercial pressure applied to him, and which he felt, to proceed with haste. That pressure was applied by the first defendant through its duly authorised agents, the second defendant (acting through Mr Fox) and the first defendant's solicitor. The pressure applied was deliberate, sustained and designed to limit the plaintiff's opportunities for reflection on where his best interests were located and the true state of the market. What the defendants did was within commercial and professional norms, and not deserving of characterisation as unconscionable. It was, nevertheless, unfair in the circumstances in which, to their knowledge, the plaintiff was placed. He was an unsophisticated man represented by a conveyancer rather than a solicitor, trusting the defendants to treat him with the same fairness with which he offered to deal with them, without a full appreciation that the price for which he had agreed to sell his property was not only below market value (or, at most, at the bottom of the range) but substantially less than the first defendant was willing to pay.
9. Viewed from the perspective of the defendants, the option deed was purely a commercial contract, the purpose and effect of which was to allow the first defendant to acquire the plaintiff's property (or not), if and when convenient to the first defendant, at the lowest negotiable price. However, from the plaintiff's perspective, the commercial flavour of the option deed was substantially qualified by its domestic implications. The property in question was his home, and that of his brother, in close proximity with the residence of his elderly mother. The financial and social implications of the option deed were equally important to the welfare of the plaintiff and his family, a reality evidenced by the terms of his email complaint of 23 October 2014.
10. The injunction in section 9(1) that the Court have regard to the public interest, and consequences or results arising in the event of compliance, or non-compliance, with the option deed, focuses attention on three particular aspects of the case.
11. First, the defendants (a property developer and a real estate agent) were the moving force towards the making of the option deed, initiating a relationship with the plaintiff (an unsophisticated, settled homeowner) by an unsolicited approach driven by a strategy of conditioning him to part with his home on terms favourable to the defendants without regard to the plaintiff's personal circumstances.
12. Although I deliberately refrain from embracing any general proposition that property developers or their agents have a duty to ensure that landowners with whom they deal obtain professional advice as a precondition of their conduct of business, in the present case, it seems to me, the public interest requires that the defendants bear the risk of the transaction proposed by them going off in the event (which occurred) that the plaintiff, as the target of their endeavours, did not, in fact, obtain such independent advice as was necessary to ensure that he gave his fully informed consent to the transaction.
13. Secondly, although the option deed would be enforceable under the general law (governed by the objective theory of contract law), viewed from the perspective of the plaintiff's subjective state of mind, the fact is that he did not give his fully informed consent to the deed. He executed it in the belief that, before exchange, he would have an opportunity to obtain legal advice from Mr Poole and, if he chose, either to withdraw from any further dealings with the defendants or to reopen negotiations. Through a misunderstanding with his conveyancer, having armed her with ostensible authority to exchange the option deed by holding her out as his authorised agent, the plaintiff was deprived of the opportunity to obtain the legal advice he reasonably felt necessary to protect his interests.
14. The public interest in requiring parties to adhere to their contracts, and to ensure that they read and understand contractual documents before signing them, is counterbalanced by a public interest in not holding a party to a contract which, all things considered, is "unjust" within the meaning of the Contracts Review Act. The fact that a contractual document is executed by a party and the circumstances in which it was executed are material (and, in some cases, likely to be decisive) but they do not necessarily tell against a finding of "unjust contract".
15. Thirdly, a consequence of the option deed, if performed, would be that the plaintiff would be at risk of a forced sale of his home at a price substantially below market value.
16. Despite superficial appearances to the contrary, this is not simply a case of a plaintiff who made a bad deal and must, or should, be left to endure it. It is a case in which, under commercial pressure applied by the defendants, the plaintiff executed an option deed attended by both procedural and substantive injustice in circumstances in which, subjectively, he did not give his fully informed consent to the contract.
17. Having regard to all the circumstances of the case, particularly those adumbrated by reference to section 9(2), I find that the option deed was (within the meaning of section 7) unjust in the circumstances relating to it at the time it was made.
18. In making that determination I am particularly mindful of the caveat found in section 9(4); the volatility of the market for the plaintiff's property in September-October 2014; the plaintiff's appreciation that the contract price of $2.2 million may, possibly, have been less than market value; and his preparedness to contemplate a sale of his property at a price less than full market value if satisfied that he was being dealt with fairly.

Should the plaintiff be granted relief?

1. Having found that the option deed was relevantly "unjust", I turn attention to the Court's discretion under section 7(1) of the Contracts Review Act, "if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result," to grant particular relief.
2. In my assessment this discretion should be exercised in favour of a declaration that the option deed is wholly, and from the outset, void. The justice of the case requires such an outcome. Such an order is required for the purpose of avoiding, as far as practicable, an unjust consequence or result attending enforcement of the deed; namely, the plaintiff could be displaced from his home, required to sell it on unfavourable terms, in circumstances in which he did not, in fact, give his fully informed consent to the option deed and his execution of the deed occurred under commercial pressure applied by the defendants.
3. In weighing the interests of justice I note that the plaintiff's request that he be released from the option deed was made in a timely manner and, in any event, before the first defendant had an opportunity to bid at the auction sale for 9 Canberra Avenue. Any injustice attending enforcement of the option deed against the plaintiff outweighs any injustice to the defendants in refusing to do so. At the time the plaintiff requested a release, the defendants were free of any obligation or burden arising from a purchase of other property by the first defendant, and they remained free to negotiate terms with the plaintiff as well as other land owners.

PROPOSED ORDERS

1. Subject to allowing the parties an opportunity to be heard as to the form of orders to be made, and costs, I propose to make the following orders in disposition of the proceedings: 1. DECLARE that the contract dated 16 October 2014, styled "Put and Call Option Agreement", made between the plaintiff as Grantor and the first defendant as Grantee is wholly void ab initio. 2. DECLARE that the first defendant has no right, title or interest in the land known as 7 Canberra Avenue, St Leonards, in the State of New South Wales, being the land contained in Folio Identifier 8/3/7359. 3. ORDER that Caveat AI996234 be withdrawn forthwith. 4. ORDER that the defendants pay the plaintiff's costs of the proceedings.
2. In foreshadowing these orders, I assume that the plaintiff does not seek to make a claim for compensation against the first defendant, pursuant to section 74P of the Real Property Act 1900 NSW, arising from its lodgement of a caveat against the title to his land. I note, in passing, that, although a title search of 7 Canberra Avenue is in evidence, it does not include a copy of Caveat AI996234.
3. As presently advised, I do not apprehend any necessity for a grant of ancillary relief under section 8(Schedule 1) of the Contracts Review Act.
4. For completeness, I note that section 19 of the Act appears not to have been engaged because, although an option may confer a caveatable interest in land (Transfield Properties (Kent Street) Pty Ltd v Amos Aked Swift Pty Ltd (1994) 36 NSWLR 321 at 341), the option deed is not a "land instrument" (within the meaning of section 4(1) of the Act), registered under the Real Property Act 1900 NSW; no regulations appear to have been made under the Contracts Review Act in relation to unregistered "land instruments"; and a caveat is not a "dealing" within the meaning of section 3(1) of the Real Property Act 1900.
5. I do not know whether any order is required to ensure that the option fee of $75,000 paid to the plaintiff's conveyancer on 16 October 2014 is duly accounted for; but I note the plaintiff's offer, in his email complaint of 23 October 2014, to refund it to the first defendant if released from the option deed.
6. In any event, I remind the parties that I am not privy to the precise terms of their interlocutory agreement for extension of the purported operation of the option deed pending the determination of these proceedings. If my determination of the proceedings requires consideration of consequential orders arising from that agreement, the onus is on the parties to draw it to my attention.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 December 2016