The fact that the transaction involves a real estate transaction of considerable value may weigh against an intention that the parties be immediately bound, as does the absence of a s 32 statement and the absence of a deposit 'up front'.
However, the relevant intention is the key, regardless of the subject matter, magnitude or complexity of the transaction.
Further, although it is true that entry into a contract for the sale of land in the absence of a s 32 statement may carry a risk of prosecution (see s 32L(c)), the absence of a s 32 statement is not fatal in and of itself. In fact, s 32K(3) provides for circumstances in which a binding contract might be rescinded, which suggests that there can be circumstances in which a contract will be in existence even though a s 32 statement has not been provided. Moreover, there is no suggestion that the parties had legal advice prior to the execution of the [Cahill] Agreement ...
Finally, although it is true that the first 5% of the deposit is only payable on 'exchange of (formal) contracts', the [Cahill] Agreement ... makes provision for the payment of the deposit earlier. This is made clear by the reference to the 'balance' of the deposit being paid on return of the documentation by the purchaser (which can be understood as a reference to the balance of the 5% deposit then owing). The fact that monies may be 'refunded' if the vendor withdraws (prior to formal documentation) is also consistent with this construction.
...
The important thing then is to determine the objective intention of the parties in relation to this particular case.
I am of the view that the parties did intend that the [Cahill] Agreement ... was a binding agreement for the sale of the ... Property.
First, there is the language contained in [special condition] 1. As highlighted, it includes specific reference to circumstances in which the vendor may 'withdraw from the sale'. There would be no reason at all to provide for a right to 'withdraw' unless the parties intended that the [Cahill] Agreement ... was to be binding. Indeed, the specific provision of prescribed circumstances in which there was a right to withdraw is a very strong indication that the parties otherwise intended the [Cahill] Agreement ... to be binding and thereby takes the case out of the third class of Masters v Cameron ...
Second, as highlighted already, there are a number of other indications in the [Cahill] Agreement ... itself that the parties were making a binding contract. In [special condition] 1, there is reference to approval of the 'final' contract by the purchaser's solicitor suggesting that the parties intended for the [Cahill] Agreement ... to itself constitute a contract ...
The title of the document, as well as [special conditions] 4 and 5, also fortify the existence of a binding agreement. The reference in [special condition] 6 to the fact that the purchaser 'buys' is also consistent, while [special condition] 2 also imposes immediate obligations on both parties.
Third, the document contains all the essential terms necessary for a sale of property (including identification of parties, property, and price). It is true that there is no specific timeframe set for the vendor to provide the final documentation. However, there would be no difficulty in implying a reasonable time period in such a case to give effect to the intention of the parties ...
Although the inclusion of all essential terms is not decisive, it is consistent with an intention to be bound in circumstances where the need for further negotiation can weigh against the existence of a binding agreement.
In this context, it is true that the [Cahill] Agreement ... contemplates entry into a further contract. However, this is true in the context of any Masters v Cameron case. It is also significant that the solicitors (rather than the parties) are only intended to have involvement in relation to the 'final' contract in circumstances where the solicitors had not previously been involved in the negotiations. In such circumstances, I consider that the role of negotiating the 'final contract' (by what is essentially a third party) was intended to be that of finalisation only of what was already a binding bargain.
I am therefore satisfied that the parties intended to make a binding agreement for the sale of the ... Property and it is unnecessary to canvass the wide range of surrounding circumstances cited by Mr Cahill.
I am, however, fortified in my decision by two such circumstances.
First, there are the events of 14 July 2016. I accept that the reference to 'my word is my bond' is of little assistance in circumstances where (as Mr Cahill rightly conceded) it was important to have something in writing with real estate. However, in a context where Mr Cahill was said to be the successful party after a (highest and best bid) process, I consider that the consequent execution of an 'agreement' by both parties the next day must have been intended to carry serious consequences designed to bring the negotiations to a close.
In terms of subsequent conduct, the conduct of the solicitors on both sides tends to also confirm the seriousness with which the agreement document was taken. Thus, it would hardly have been necessary to proffer a formal contract, nor engage in the other steps (dealt with above) if the [Cahill] Agreement ... was regarded as non-binding. The express statement of Mr Brearley on 10 August 2016, where he asked whether Mr Cahill would take money 'to get out of the contract', is also confirmatory of a binding contract.
I am therefore satisfied that there was a binding agreement for the sale of the ... Property. Although the [Cahill] Agreement ... appears to have many features consistent with the fourth category of Masters v Cameron, it is unnecessary to come to a final view on this save to say that it is not within the third category.[75]