Plaintiffs v Defendants

2 On 28 October 2021, the first defendant, Insert Pty Ltd, lodged a caveat bearing registration number AU958989C ('the Caveat') against the title to the Property. In the caveat, the defendant ('the Purchaser') claims an interest as purchaser pursuant to a contract with the vendors made 25 October 2021 ('the Purported Contract'). The sole director and shareholder of the Purchaser is Gregory Shaw ('Mr Shaw'). On the date of the hearing, orders were made joining Mr Shaw to the proceeding as to the third defendant. The joinder occurred in somewhat unusual circumstances; on 9 January 2022, the Purchaser was deregistered by ASIC pursuant to s 601AB of the Corporations Act 2001 (Cth), and as a consequence was not in existence when the hearing commenced. In circumstances where Mr Shaw submitted that the de-registration had occurred as a result of administrative error, and that ASIC planned to re-instate the Purchaser forthwith, orders were made for the joinder of Mr Shaw so that the matter could proceed as scheduled. In the result, the Purchaser was re-instated during the course of the hearing. The second defendant, the Registrar of Titles, did not appear at the hearing of the proceeding.

3 In light of the impending settlement date, on 21 December 2021, the Vendors commenced this proceeding by originating motion, along with an accompanying summons seeking orders pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) ('the TLA') that the caveat be removed.

4 The matter was first returnable in the Practice Court on 21 December 2021, at which time directions were made to facilitate the hearing of the proceeding on 11 January 2022.

5 Evidence was given by affidavit. The affidavits relied upon and the dates on which they were made were as follows:

• First affidavit of Mr Wright, made 17 December 2021;

• First affidavit Ilya Fisher ('Mr Fisher'), the solicitor for the Vendors, made 17 December 2021;

• First affidavit of Mr Shaw, made 29 December 2021;

• Second affidavit of Mr Wright, made 5 January 2022;

• First affidavit of Magdalini Wright, made 5 January 2022;

• First affidavit of Karen Wright, made 5 January 2022;

• First affidavit of Mark Wright, made 5 January 2022;

• Second affidavit of Mr Fisher, made 5 January 2022;

• Third affidavit of Mr Fisher, made 10 January 2022.

6 The parties also filed detailed written submissions. They were of a high quality and have been of great assistance in my preparation of these reasons.

Application for removal of a caveat - principles

7 By s 90(3) of the TLA, any person adversely affected by a caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may on the application make such order as it thinks fit.

8 The legal principles for removal of a caveat are well settled and may be summarised as follows:[1]

(a) The application is in the nature of summary procedure analogous to the termination of an interlocutory injunction. Consequently, the procedure is interlocutory in substance, even though it may give rise to a final order.

(b) The court's power to order removal of a caveat under s 90(3) of the TLA is discretionary.

(c) The caveator bears the onus of establishing a prima facie case that it has an interest or interests in land as claimed in the caveat.

(d) If the caveator establishes a prima facie case to be tried in relation to the estate or interest claimed, it must further establish that the balance of convenience favours the maintenance of the caveat until trial.

(e) There is a relationship between the strength of the case established prima facie to be tried and the extent to which the caveator must establish that the balance of convenience favours the caveator. The stronger the prima facie case, the more readily the balance of convenience might be satisfied. It is sufficient that the caveator show a sufficient likelihood of success that in the circumstances justifies the practical effect which the caveat will have on the ability of the registered proprietor to deal with the land in question in accordance with its normal proprietary rights.

(f) The prima facie case test does not require the caveator must show that it is more probable than not at trial that it will succeed. Rather, the caveator must demonstrate a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat and the preservation of the status quo pending trial.

9 The two principal steps involved in an application for the removal of the caveat are as follows:

(a) Firstly, the caveator must establish that there is a prima facie case to be tried. That is, it must demonstrate that there is a probability on the evidence before the court that the caveator will be found to have the asserted legal or equitable rights or interest in the land.

(b) Secondly, having established that there is a prima facie case to be tried, the caveator must then establish that the balance of convenience favours the maintenance of the caveat on the title until trial. The caveator must show 'that probability [that the caveator has the asserted legal or equitable rights or interest] is sufficient to justify the practical effect which the caveat has on the ability of the registered proprietor to deal with the property in question in accordance with their normal proprietary rights'.[2]

10 The first issue for determination, therefore, is whether the Purchaser can establish that there is a prima facie case as to the existence of a legally enforceable agreement made between it and the Vendors to sell the property.

(a) firstly, that no concluded agreement was entered into;

(b) secondly, if a concluded agreement was entered into, there was no intention to be legally bound until such time as the parties signed and exchanged a written contract of sale;

(c) thirdly, that Mr Shaw, as the Purchaser's representative, dealt only with Mr Wright, and that Mr Wright did not have the requisite authority, in writing or otherwise, to bind all the Vendors to the alleged sale, and as such any agreement is not enforceable by reason of the absence of writing having regard to s 126 of the Instruments Act 1958 (Vic) ('the Instruments Act').

12 Relatedly, the Vendors submit that the balance of convenience does not favour the retention of the Caveat, particularly in circumstances where the rights of the Third Party, who entered into the Third Party Contract without notice of the Purchaser's purported contract, will be affected.

13 In my opinion, the Purchaser has not demonstrated a prima facie case with sufficient likelihood of success to justify the maintenance of the Caveat and the preservation of the status quo pending trial.

14 Further, and in any event, in the circumstances of the present case I do not consider that the balance of convenience favours the maintenance of the Caveat until trial.

15 Before setting out my reasons for those conclusions, it is necessary to set out the relevant sequence of events in some detail.

16 The parties' dealings in relation to the Property extend back relevantly to 26 November 2020 when the Vendors entered into a contract of sale to sell the Property to Mr Shaw in his personal capacity for the price of $4.8 million ('the 2020 Contract'). A deposit of $240,000 was to be paid with the balance payable at settlement, scheduled to take place on 13 April 2021. The 2020 Contract was in writing and in conventional form. Relevantly, in contrast to the Purported Contract, each of the four vendors executed the 2020 Contract.

17 On 26 November 2020, Mr Shaw nominated the Purchaser as transferee under the 2020 Contract pursuant to General Condition 4 of that contract. The effect of General Condition 4 is that, notwithstanding that the Purchaser would be the designated transferee at settlement, Mr Shaw remained liable for the performance of the Purchaser's obligations under the 2020 Contract.

18 Mr Shaw did not effect settlement under the 2020 Contract by the settlement date of 13 April 2021, nor by a later date agreed between the parties of 20 April 2021. Accordingly, on 16 July 2021 the Vendors gave written notice to Mr Shaw and the Purchaser that unless the default was remedied within 14 days, the 2020 Contract would be rescinded.

19 Subsequently, by email dated 4 August 2021, the Vendors' solicitors emailed Mr Shaw's solicitor confirming that the 2020 Contract was at an end and that the deposit had been forfeited as a consequence. The email advised that the Vendors would now market the Property for resale.

20 Notwithstanding that the Vendors were marketing the Property for sale via an estate agent, Mr Alby Tomassi, Mr Wright nevertheless communicated directly with Mr Shaw to negotiate a further contract for sale. The establishment of this additional negotiation channel had obvious risks and, as events transpired, was ill-advised. It is not in dispute that Mr Wright was authorised by the other Vendors (the second to fourth plaintiffs) to negotiate on their behalf with Mr Shaw. Many of these communications are evidenced in text messages and were exhibited to the affidavits.

21 On Friday 1 October 2021, Mr Wright sent a text message to Mr Shaw that read:

Greg I need something in writing from your lawyer ASAP stating 'it will go up on Pexa[3] on Monday morning with settlement scheduled for Monday afternoon as discussed so I can get it to my lender.

The sooner this happens the better for you. Alby has three interested parties looking at it at the moment.

Nick

There is no evidence before me of the preceding messages, but clearly there had been discussions between Mr Shaw and Mr Wright in relation to a proposed sale to Mr Shaw with a settlement of that sale to occur on the following Monday, 4 October 2021.

22 Mr Shaw responded the same day, saying he had tried to get in contact with his conveyancer, Jill de Groot ('Ms de Groot'), but had not been successful and so had sent her an email. Ms de Groot was a conveyancing clerk, associated with the firm of solicitors who acted for the Purchaser and Mr Shaw in this proceeding.

23 On the following Monday, 4 October 2021, at 8:41am Mr Shaw texted Mr Wright as follows:

Morning Nick

Jill has let me know she will write the email soon so you can let your Funders know. She said she's got 4 settlements on this morning to prepare for first.

I'll forward as well as soon as I receive.

24 Mr Wright responded within the next 30 minutes, stating:

Ok thanks Greg sooner rather than later would be appreciated.

Can you follow up the lender and let me know where they are at and when it will be uploaded on Pexa as we have interested parties finalising their offers.

Greg you will need to finalise settlement today so we know where we stand to move forwards

Nick

25 Four hours later and not having received a response, Mr Wright texted Mr Shaw again stating:

26 That same day, three hours later, Mr Shaw texted Mr Wright that:

Hi Nick

Yes... Pexa will be opened tomorrow. They will send to your lawyers. I'll let you know when the invite is sent.

My solicitor will handle all the outgoings.

Can you follow up Jill regarding the letter so I can send to my lender today.

Why isn't it going up today what is the hold up?

29 Notwithstanding Mr Shaw's promise to call back, it is not entirely clear whether a call in fact took place.

30 At 11:14am the next day, 5 October 2021, Mr Wright texted Mr Shaw stating:

Greg no letter from your solicitor and nothing uploaded onto Pexa?

Greg what the shit is happening from your side!!

I will sell to this to another potential buyer we are currently working with 2 at the moment.

You need to make it happen today or I will be moving forward with the other buyers.

Nick.

31 It would appear that there was no response from Mr Shaw, as Mr Wright's next text message, sent at 5:13pm on Wednesday 6 October 2021, read:

Greg

I've tried calling and left 2 messages and I have not received any confirmation of settlement.

Your letter from your solicitor does not provide any assurance that settlement is actually happening.

I have received an offer above your purchase price and we are also currently talking to other interested parties and I am moving forward with them and I cannot wait any longer for you to finalise settlement!!

Nick

32 The next morning, Thursday 7 October 2021, having still not heard from Mr Shaw, Mr Wright sent another text to Mr Shaw at 9.34 am which read:

'Greg are you in or out. We are in a position to sign and sell it possibly today?

33 Mr Shaw replied within 30 minutes with a one word response, 'In'.

34 At 1:30pm on the same day, Mr Wright texted Mr Shaw:

'I am obviously taking it you are out unless I get a commitment today Greg'.

35 Mr Wright deposes that he then had a phone conversation with Mr Shaw in which Mr Shaw assured him that he was serious about purchasing the Property and had the finance in place to do so. According to Mr Wright, he responded to Mr Shaw by saying that there would be no contract unless and until a deposit was paid and a contract signed.[4]

36 At 3:50pm on that day, Mr Shaw's solicitor, Ms de Groot, sent an email to the Vendors' solicitor, Mr Fisher. The email conveyed Ms de Groot's understanding that their respective clients had been in communication and that the purchase by Mr Shaw was to proceed. Ms de Groot requested that Mr Fisher seek his client's instructions as a matter of urgency and advise.

37 At 4:24pm on Friday 8 October 2021, Mr Shaw texted Mr Wright:

I just got a call telling me we are waiting to hear back from your lawyers???

Regards

Greg

38 The foreshadowed response from the Vendors' lawyers was sent by email on 8 October 2021 at 6:51pm.[5] The email is of some importance and warrants setting out in full. It reads as follows:

Dear Jill,

As we discussed, there is no contract currently in place given that the previous contract was rescinded by notice dated 16 July 2021 which took effect on 31 July 2021.

We have instructions that our client is prepared to enter into a new contract with your client provided that it is put in the same position as if the previous contract had been substantially performed.

As our client is currently marketing the property, we have prepared a draft contract and vendor statement for this purpose. It can be downloaded from this webpage:

[webpage details set out.]

Our client is prepared to consider entering into a contract with your client on the following terms:

Purchase price: $4,838,500

Deposit: 5% ($241,925), payable on signature

Settlement: 25 October 2021 (14 days from Monday, assuming the contract is executed on Monday)

Personal Director Guarantee to be provided.

The purchase price has been calculated as follows:

Previous contract purchase price: $4,800,000

Previous contract deposit received: ($240,000)

Residue due on 13 April 2021: $4,560,000

Default interest from 13/04/2021

to 25/10/2021: $341,063

Part payments received from

purchaser prior to rescission: ($75,000)

Legal costs (default notice): $2,750

Legal costs incurred since rescission

(preparing new contract, new searches): $1,100

Marketing costs incurred since rescission: $8,578.50

To be clear, this email is not an offer capable of acceptance. If the above terms are of interest to your client, please let us know on Monday and we will provide a signed vendor statement and prepare a contract for execution and exchange.

39 On 11 October 2021, Ms de Groot emailed Mr Fisher. The email read:

...

We acknowledge receipt of your email of 8th October 2021 and advise that our client requires clarification of the following:-

1. There appears to be an increase in the purchase price of $38,500.00. Please advise the reason for the increase.

2. There is a difference in the deposit payable and no reference to the previous deposit paid to the new Contract. Can you please confirm that your clients are agreeable to the deposit previously paid being allocated toward the new Contract of Sale, namely $240,000.00 only.

Our client is reviewing the balance of your clients' requirements and will provide further instructions to us once your clients respond to these two queries.

40 The next communication between the parties occurred on the following Thursday, 14 October 2021; Mr Shaw texted Mr Wright stating:

Dear Nick

Just FYI I'm awaiting a position back from my funder which I should know later this afternoon.

Will be in touch.

41 On the following Monday, 18 October 2021, Mr Wright texted Mr Shaw stating:

Greg

As discussed can you put something in writing please.

Nick

42 In his affidavit, sworn before Mr Wright's affidavit was made exhibiting the text exchanges, Mr Shaw deposed that this request for something to be put in writing was made in a conversation to which Mr Shaw acquiesced by sending him two emails on 18 and 19 October 2021 respectively. In his affidavit, Mr Shaw described the 19 October 2021 email as confirming that settlement would occur on the next Friday 22 October 2021. In fact the referenced exhibit comprised only one email dated 18 October 2021 which read:

Hi Nick,

As discussed earlier today, Millbrook are issuing me a new term sheet Today/Tomorrow with the required changes.

Once received I will execute, and they will adapt the legals. In parallel with this they will open PEXA, so all have conformation (sic).

They will look to settle on or before Friday.

Regards

Greg Shaw

43 The next page of the exhibit comprised a letter of offer from Millbrook dated 19 October 2021 for a six month loan of $3,881,250, or up to 75% of the combined 'as is' value of $5,175,000 of the Property, which was to be security under the loan. The letter of offer was expressed to be subject to verification by Millbrook and due diligence.

44 The following Friday, 22 October 2021, Mr Shaw texted Mr Wright stating:

Gooood [sic] new ... Millbrook are opening Pexa this afternoon.

I'll call again later as got a zoom on now.

45 There are a series of text exchanges between Mr Shaw and Mr Wright between 7:23am and 10:45am on Monday 25 October 2021 in which they endeavoured to set up a phone call. Mr Shaw deposes that he and Mr Wright did in fact have a telephone discussion that day, in which Mr Shaw confirmed that the Purchaser accepted the terms set out in the 8 October 2021 email and that the purchase would proceed on that basis. According to Mr Shaw, Mr Wright agreed that, if the lender Millbrook accepted those terms, Millbrook would issue a PEXA invitation for settlement to occur on 28 October 2021.

46 Mr Shaw also deposes that later in that day, Millbrook informed him that it would agree to fund the purchase of the Property on the terms set out in the 8 October 2021 email, and he exhibits the conditional letter of offer of 19 October 2021.

47 Mr Shaw further deposes that he informed Mr Wright that Millbrook had confirmed finance in a later conversation that same day. He says that Mr Wright responded, saying that if a PEXA settlement appointment was not set up that day, he would sell the Property to an another purchaser the next day. Mr Shaw then deposes that, as a result, he requested Millbrook to open a PEXA transaction that day for settlement to take place on 28 October 2021. He says that this duly occurred such that on 25 October 2021, Millbrook set up a PEXA settlement to take place on 28 October 2021. In fact, documentation obtained by the Vendors' solicitors from PEXA establishes that a PEXA workspace was established on 26 October 2021 (not 25 October 2021) and by the Purchaser's lawyers, not Millbrook.

48 Mr Wright accepts that that one telephone discussion occurred between them on that day. He denies that he agreed to sell the property to Mr Shaw in the event that Millbrook accepted the terms; and denies that Mr Shaw later told him that a PEXA workspace would be set up for 28 October 2021. However, he acknowledges that Mr Shaw promised that a PEXA transaction would be set up.

49 Neither Mr Wright nor Mr Shaw have pin-pointed the time or times at which this discussion or discussions occurred.

50 In a text message sent by Mr Shaw to Mr Wright at 11:20am on 25 October 2021, Mr Shaw advised that Ms de Groot was looking through the contract now and would send it to Mr Shaw to sign.

51 At 11:40am on 25 October 2021, Ms de Groot emailed Mr Fisher:

We believe that given there is no Contract in place, there should not be any penalty interest or other costs. It is our understanding that your clients placed the property back on the market. Our client has already made payments to your client in the sum of $75,000 and this amount has been retained by your clients. The purchase price should remain as negotiated previously. The deposit previously paid should be reflected in the new Contract of Sale.

I will seek instructions on your email and come back to you as soon as possible.

However, just to explain, the point of my previous email was to propose that your client be offered the opportunity to enter a new contract at a price that reflected the previous deal, all payments made, and the default interest that would accrue if the previous deal was revived. I do not expect that my client will be prepared to compromise further on this principle.

I refer to previous correspondence and advise that our client instructs that he is agreeable to proceed with this matter on the terms set out in your email of 8th October 2021.

It would be appreciated if you could provide a Contract of Sale and Section 32 Statement with all the details as per your email of 8th October 2021. I advise that our client wishes to be able to execute the Contract of Sale and Section 32 Statement today (if possible).

54 At 4:21pm, Mr Fisher replied to Ms de Groot, again by email, asking when Mr Shaw proposed to settle, noting that the email of 8 October 2021 contained a settlement date of 25 October 2021. The email also stated:

To be clear, the process will be as follows:

(1) Once the details of your client's proposal have been confirmed, I will prepare a contract accordingly and email to you.

(2) On receipt of the contract signed by your client and receipt of the 5% deposit in my trust account, I will submit your client's offer to my client for signature.

(3) A contract will be formed once the fully signed contract is returned to you by way of exchange.

55 The next day, Tuesday 26 October 2021, Mr Shaw texted Mr Wright:

Hi Nick

Just spoke to Jill ... No contract from your solicitors yet just FYI.

Regards,

Greg

56 Later in the day, at 7:02pm, Mr Shaw texted Mr Wright:

This is a clear reference to the PEXA invitation with respect to the settlement proposed for 28 October 2021. Mr Fisher acknowledged receipt of the invitation, but deposed that he did not accept it.

57 At 10:02am on Wednesday 27 October 2021, Mr Shaw texted Mr Wright:

58 On 27 October 2021, Ms de Groot emailed Mr Fisher requesting a response to Ms de Groot's previous email of 25 October 2021.[6] On the same day at 4:07pm, Mr Fisher emailed Ms de Groot advising that the Vendors had now signed a binding contract to sell the Property to the Third Party. Mr Fisher's email noted:

... in my correspondence with you and in discussions between our respective clients, the parties did not come to an agreement on the terms of the contract and no contract was signed.

Shortly prior to this, Mr Wright telephoned Mr Shaw and told him the same thing.

59 Mr Shaw deposed that he also executed a mortgage on behalf of the Purchaser in favour of Millbrook on 27 October 2021.

60 On Thursday 28 October 2021, the Purchaser lodged the Caveat, alleging the existence the Purported Contract with Vendors arising 25 October 2021.

61 On Friday 29 October 2021, the Purchaser's solicitors advised the Vendors' solicitors that 'the email chain' constituted the relevant contract between the parties notwithstanding the absence of a further contract document. Accordingly, they requested that the Vendors' solicitors accept that PEXA invitation and take appropriate steps to settle the matter promptly so as to avoid protracted legal proceedings. The email concluded by requesting confirmation that settlement could proceed that day.

62 Unsurprisingly, the Vendors' solicitors requested clarification as to which email in the email chain constituted the signing of a contract by the Vendors and requested advice as to how the requirements of s 53 of the Property Law Act 1958 (Vic) and s 126 of the Instruments Act 1958 (Vic) had been met. The purchaser's solicitors advised that they were 'matters that would be further dealt with by learned counsel'.

63 By email sent 1 November 2021, the Vendors' solicitor advised that he did not consider that a contract had been formed and accordingly, on 3 November 2021, the Vendors lodged an application under s 89A(1) of the TLA with the Registrar of Titles. The effect of s 89A(1) of the TLA is that a caveat will lapse unless the caveator commences a proceeding seeking to substantiate the caveat within the period of time set out in the notice given by the Registrar of Titles to the caveator.

64 On 9 December 2021, the Purchaser commenced proceedings in the County Court of Victoria against the Vendors seeking declaratory relief to the effect that it had an equitable interest in the Property pursuant to the Purported Contract, the terms of which were, among others, that:

(a) the purchase price of the Property would be $4,838,500;

(b) the settlement date for the purchase of the Property would be Thursday 28 October 2021;

(c) the Purchaser's lawyer would open a PEXA transaction on 25 October 2021 with a view to settling the transaction on 28 October 2021.

65 The particulars of the purported contract were as follows:

PARTICULARS

The Agreement was partly in writing, partly oral and partly to be implied. Insofar as it was in writing it was constituted by a draft written contract for the sale of real estate, the terms of which were contained in an email dated 8 October 2021 from the lawyers for the defendants to the lawyers for the plaintiffs. A copy of the email dated 8 October 2021 is in the possession of the lawyers for the plaintiff and may be inspected by a prior appointment.

Insofar as it was oral it was constituted by a number of conversations between the plaintiff's Director, Mr Greg Shaw, for and on behalf of the plaintiff and the first defendant, for and on behalf of the defendants, during the period from around 8 October 2021 up to 25 October 2021.

The material substance of the conversations was to the effect that the plaintiff accepted the terms proposed by the lawyers for the defendant in the email dated 8 October 2021 and would purchase the property on those terms. Mr Shaw and Mr Wright agreed that if the plaintiff's financier accepted those terms, the plaintiff would invite the defendants, among others including the plaintiff's financier, to join a PEXA transaction for the settlement of the sale of the property on Thursday 28 October 2021 and the sale of the property would be concluded that day.

Insofar as it was implied, it was implied by the opening of a PEXA transaction on 25 October 2021 to settle the purchase of the property on 28 October 2021, and by the plaintiff's financier approving the terms proposed in the email dated 8 October 2021.

66 The Vendors' solicitors became aware of the existence of the County Court proceedings by way of the receipt of a Land Data Title alert email on 9 December 2021. When they sought clarification from the Purchaser's solicitors as to the commencement of proceedings in the County Court, confirmation was provided but the Purchaser's solicitors were unwilling to provide further details of the proceeding or provide a copy of the writ. The Purchaser's solicitor advised that he would need to obtain instructions from Mr Shaw before serving the writ on the Vendors or providing a copy.

67 On 15 December 2021, the Purchaser's solicitors, in response to a further inquiry from the Vendors' solicitors, advised that they had not received any further instructions from Mr Shaw in respect of the service of the County Court proceedings.

68 As mentioned above, on 21 December 2021 the Vendors commenced this urgent application for removal of the Caveat in advance of the planned settlement of the Third Party Contract on 17 January 2022.

69 The first hurdle for the Purchaser to jump is to establish that an agreement was reached by Mr Wright on behalf of the Vendors and by Mr Shaw on behalf of the Purchaser, under the terms of which the Purchaser was to purchase the Property for $4,838,500 to be paid in its entirety at a settlement scheduled to take place on 28 October 2021. In the caveat, the Purchaser asserted that a contract had been made on 25 October 2021. Although Mr Shaw's affidavit is far from clear, one reading of it it suggests the making of a contract on 7 October 2021; at the hearing, counsel advanced submissions on such a basis. An interest arising pursuant to a contract made 7 October 2021 might be said to be a different interest to that arising pursuant to a contract made 25 October 2021, but no point was taken at hearing that the Purchaser was not entitled to proceed on such a basis.[7] In the result, I have dealt with the prima facie case question by reference to both a contract made 25 October 2021 (being the contract alleged in the Caveat) and 7 October 2021, being the contract alleged in oral submissions.

70 Turning first to the alleged contract made 25 October 2021, it is clear that contrary to the assertion by the Purchaser's solicitors in the email to the Vendors' solicitors of 29 October 2021 that the contract was evidenced by 'the email chain', this is plainly not so. The email chain itself contradicts such a contention:

(a) The email sent by the Vendors' solicitor at 6:51pm on 8 October 2021 made it clear that no enforceable agreement would arise unless and until contracts were executed and exchanged and a 5% deposit was paid by the Purchaser.

(b) The email sent by the Purchaser's solicitor at 3:33pm on 25 October 2021 informed the Vendors' solicitor that the Purchaser was willing to 'proceed on the basis of the terms set out in your email of 8th October 2021' and requested that a contract of sale and section 32 statement be sent out so that the Purchaser could execute it that day;

(c) The email sent by the Vendors' solicitor at 4:21pm confirmed that on receipt of the contract signed by the Purchaser and a 5% deposit, the same would be submitted to the Vendors and that a contract would not arise until exchange had taken place.

71 Insofar as a contract is alleged to have been made on 25 October 2021, the Purchaser's case rests on accepting Mr Shaw's evidence that notwithstanding these communications, by their two (or, on Mr Wright's evidence, one) conservations of 25 October 2021 he and Mr Wright agreed that:

(a) the Vendors would sell the Property to the Purchaser for $4,838,500;

(b) no deposit was required; and

(c) settlement would take place on 28 October 2021, subject to Mr Shaw's financier agreeing to finance the purchase on the basis set out in the 8 October 2021 email.

72 Whilst, I do not consider that on an interlocutory application that I should make definitive findings rejecting Mr Shaw's sworn evidence, an assessment of that evidence is nevertheless relevant to my analysis as to whether the Purchaser has established a prima facie case in the sense that there is a probability on the evidence before me that the Purchaser will establish its asserted interest. I note that Mr Shaw's sworn evidence:

(a) is disputed by Mr Wright, who has also given sworn evidence;

(b) does not conform at the very least, or is inconsistent with, the emails between the parties' legal and conveyancing advisers which passed between them on the same day;

(c) is not corroborated in any significant way by contemporaneous documentary evidence;

(d) was not adverted to by the Purchaser's solicitors in their email of 29 October 2021; and

(e) requires me to accept that Mr Wright agreed to sell the Property to the Purchaser subject to a condition wholly for Mr Shaw's benefit (something akin to a finance condition), which was then satisfied on the establishment of a PEXA settlement appointment to take place three days later on the 28 October 2021, without requiring the payment of a deposit or the signing of a contract and as a result of which the Property was effectively taken off the market (despite negotiations then being undertaken with other prospective purchasers), including in circumstances where Mr Shaw had previously defaulted under the 2020 Contract.

73 Nor is the Purchaser's position any better in relation to a contract made on 7 October 2021. The evidence given by Mr Shaw, including the texts which passed between him and Mr Wright, simply does not establish an agreement to sell at an agreed price, whether construed against the 2020 Contract or otherwise. At its highest, Mr Shaw's evidence that he was 'in' evidences that he still wished to pursue the purchase of the Property and that Mr Wright was willing to treat with him. Moreover, it is permissible to have regard to subsequent communications for the purpose of determining whether an agreement has been reached.[8] Here, the communications post 7 October 2021, are all inconsistent with an agreement having been reached on 7 October 2021; I refer in particular (but by no means exclusively) to Ms de Groot's emails to Mr Fisher of 11 October 2021 and 25 October 2021, as well as the Caveat itself.

74 These are significant obstacles which stand in the Purchaser's way.

75 Even if I was to accept Mr Shaw's evidence, the Purchaser must then confront an additional hurdle. Such an agreement is not an agreement in writing. Section 126 of the Instruments Act 1958 (Vic) prevents an action being brought for enforcement of a contract for the sale of land unless the agreement is signed by the person to be charged or by a person lawfully authorised in writing by the person to be charged.

76 I put to one side the related but additional point raised by the Vendors that whilst Mr Wright was authorised to negotiate on behalf of his co-vendors he was not authorised by them to bind them to sell. Each of the Vendors has sworn affidavits to that effect. The Purchaser argues that the co-vendors cloaked Mr Wright with ostensible authority to bind the Vendors collectively, and relatedly that the conferral of the authority to negotiate (which the Vendors concede) carried with it an implied authority to conclude the negotiation by legally binding the Vendors to any negotiated terms.

77 These issues can be passed over. Even if I were to accept that for the purposes of this application that there is a prima facie case that such authority was conferred (whether or ostensibly or otherwise), there is no evidence that the second to fourth plaintiffs conferred such authority to sell on Mr Wright in writing.[9] Accordingly, such a conferral would not meet the requirements of s 126 of the Instruments Act 1958 (Vic).

78 The Purchaser seeks to meet the noncompliance with s 126 of the Instruments Act 1958 (Vic) by pointing to three acts of alleged part performance:

(a) the execution by the Purchaser of a mortgage in favour of Millbrook on 27 October 2021;

(b) the incurrence by the Purchaser of 'substantial fees and prepaid interest' in the alleged amount of $330,878;

(c) the opening of the PEXA transaction workspace.

79 The doctrine of part performance permits the enforcement of an oral contract where the claimant can point to acts undertaken which of their own nature are unequivocally referable to a contract of the kind alleged.[10] The relevant acts must be such as to change the relative positions of the parties as to the subject matter of the contract.[11]

80 In Cooney v Burns[12] the defendant agreed to sell the plaintiff the lease of the hotel of which the defendant was lessee. The preparation by the plaintiff's solicitor of an assignment of lease and documents facilitating an application for the transfer of the liquor licence, in respect of which the plaintiff incurred expenses, as well as the taking of an inventory of the furniture included in the sale, were considered to be insufficient acts of part performance to engage the doctrine. Those acts did not alter the relative positions of the parties in relation to the subject of the contract; being the title to or possession or use of the land.

81 The same reasoning applies with respect to the acts of part performance alleged in the present case, particularly those comprising the execution of the mortgage (by the Purchaser alone) and the opening of the PEXA workspace on 26 October 2021with the settlement scheduled for 28 October 2021. Each was a unilateral act of the Purchaser alone, readily explicable as acts preparatory to the making of an agreement and which in any event did nothing to change the relative position of the Purchaser in respect of the Property. The invitation to participate in the PEXA workspace was not accepted and the Purchaser's execution of the mortgage in favour of the lender Millbrook plainly has no effect unless and until settlement took place.

82 Further, the submission that the Purchaser has incurred substantial fees and prepaid interest in the sum of $330,878 is one which on the present evidence I have some difficulty in accepting. The loan of course has not been drawn down. It would be an entirely surprising contractual arrangement for the Purchaser to have incurred such charges in the event of the loan not having been advanced and there is no evidence of any claim or charge being rendered by Millbrook. The only communication in evidence is the conditional letter of offer of 19 October 2021,[13] which does not readily support such a categorisation of the contractual arrangements, suggesting perhaps at the highest that a non-refundable application fee of $5000 may have been paid.

83 Accordingly, there are no relevant acts of part performance.

84 For related reasons, I also reject the Purchaser's argument that the Vendors are estopped from denying the enforceability of the Purported Contract. The evidence relied on by the Purchaser falls far short of the quality required to support an estoppel claim. A comparison of the facts between those alleged here and those in the seminal case of Waltons Stores (Interstate) Ltd v Maher[14] reveals a yawning gap in the present case between the conduct alleged to have given rise to the estoppel, the detrimental reliance by the representee, and the knowledge of such reliance by the representor.

85 Here, even on the most favourable view of the evidence for the Purchaser, there was no clear and unequivocal representation[15] that a legally binding contract of sale had come into existence. Nor is there detrimental reliance of any nature, unless substantial fees had been incurred to Millbrook, about which I am not satisfied; in any event, there is no evidence that the Vendors knew that such fees were being incurred on the faith of a representation by the Vendors. Moreover, the period of any detrimental reliance would be short, two days at most, such that the equity said to arise is wholly disproportionate to the minimum equity necessary to ameliorate the detrimental reliance.

87 It is also something of an oversimplification to characterise the critical question as whether the Purchaser has a prima facie case that it has an enforceable contract of sale; in fact, the Purchaser must establish that it has a prima facie case that it has an enforceable contract of sale in respect of which the Court will order specific performance.

88 Of course, that it the relief that the Purchaser seeks in the County Court proceedings and it is that relief that is foundational to the interest which founds the Caveat.

89 Ordinarily, if a party can establish that it has a prima facie case that it has an enforceable contract for the sale of land, that will be enough for there to be a prima facie case for an order for specific performance, land being of a sufficiently unique character such as to make damages an inadequate remedy, even in the case of land purchased as part of the business of a property developer.[16]

90 However, here there are some features which complicate the basic position. The Third Party has entered into the Third Party Contract to purchase the Property. Therefore, this is in essence a priority dispute between the Purchaser's interest as purchaser under the Purported Contract made either 7 October 2021 or 25 October 2021, and the Third Party's interest as purchaser under the Third Party Contract made 27 October 2021. There is no suggestion that the Third Party was aware of the Purchaser's interest arising under the Purported Contract when it entered into the Third Party Contract.

91 Ordinarily, where there are two competing equitable interests, priority is accorded to the interest created first in time, save where the holder of the prior interest has engaged in conduct which would make it inequitable for the prior interest to prevail.[17] The failure to lodge a caveat may in certain circumstances constitute a form of postponing conduct.[18]

92 In the present case, the Purported Contract was entered into, so it is alleged, on 7 October 2021 or 25 October 2021. However, the caveat was not lodged until 28 October 2021, the day after the Third Party Contract had been entered into. Moreover, at no stage from 7 October 2021 onwards or on either 25 or 26 October 2021, did the Purchaser, whether itself or by its solicitors, make any assertion to the Vendors or the Vendors' solicitors, with whom they were in regular communication, to the effect that it had considered that an enforceable agreement had come into effect.

93 Indeed, a fair reading of the solicitors' communications is to contrary effect. The Purchaser failed to assert such a claim despite knowing that the Vendors' agent was negotiating with other parties from at least 4 October 2021 onwards. Had it done so, there is every reason to believe that the Vendors would not have entered into the Third Party Contract. There might therefore be some considerable force in the proposition that any interest of the Purchaser under the purported contract would be postponed in favour of the Third Party,[19] in which case, specific performance would not be ordered. The claim for postponement would be stronger if the contract was entered into on 7 October 2021.

94 Specific performance is an equitable remedy, and a court exercising equitable jurisdiction requires by the doctrine of laches that those who seek to invoke such remedies do so with due diligence, where they are on notice or otherwise know that prejudice could arise to the defendant or a third party if a claim is not pursued.[20]

95 Another unusual feature of this case is that the Purchaser has hardly pursued its claim for specific performance with any alacrity. Notwithstanding its lodgement of the caveat on 28 October 2021, it only commenced the County Court proceeding on 9 December 2021 and even then only as a result of the Vendors' initiation of the present application. Further, after initiating the Country Court proceeding it made a conscious choice not to serve the proceedings on the Vendors. The fact that it was not obliged to serve the writ for 12 months is correct but irrelevant.

96 Of course, mere delay is not enough to deny equitable relief. To invoke laches, the delay must result in some form of prejudice to either the defendant or a third party if it is to lead to the denial of such relief.[21] In the present case, such prejudice that has arisen to the Vendors or the Third Party is perhaps most likely to have arisen in the period from 7 October 2021 onwards and again in the period from 25 October 2021 onwards. Whilst it is possible that either the Vendors or the Third Party could point to some form of additional prejudice from the date the Caveat was lodged on 28 October 2021, as matters presently stand I do not see that the delay in initiating legal proceedings and prosecuting the claim for specific performance is of itself a matter to be held against the Purchaser in its plea for equitable relief. Nevertheless, the delay in the initiation of legal proceedings and the prosecution of such claim is nevertheless of some relevance to the balance of convenience.

97 The Purchaser's claim faces a myriad of difficulties. I am not persuaded on the current evidence that the Purchaser has established a prima facie case that it has the interest claimed, and that a court would grant the Purchaser specific performance of the contract giving rise to that alleged interest.

98 Whilst it is not strictly necessary for me to have regard to the balance of convenience, given my conclusions on the question of the prima facie case, I have done so briefly.

99 Had I been minded to refuse the application to remove the Caveat, I would only have done so on the basis that an undertaking as to damages be provided of substance.[22] Clearly, an undertaking from the Purchaser alone would not have had that quality.[23] Upon the matter being raised, Mr Shaw's counsel indicated that Mr Shaw was willing to provide such an undertaking as to damages. Although there was no evidence before me as to the substance of that undertaking, the Vendors had not previously raised the matter so I am prepared to accept that the undertaking is of substance.

100 The effect of not removing the Caveat is equivalent to the grant of an injunction upon the application of the Purchaser restraining the Vendors from settling the Third Party Contract. Denial of the relief sought in this proceeding would have an impact on the innocent Third Party, who entered into the Third Party Contract in good faith and who has already paid the substantial deposit of $495,000 and has no doubt expended time and incurred expenses in anticipation of settlement occurring on 17 January 2022. This points against the grant of any injunction and, correlatively, in favour of removing the Caveat.

101 Second, in Mr Shaw's affidavit he deposed to the fact that when he spoke to Mr Wright on 27 October, 2021 after he had become aware of the Third Party Contract, he gave Mr Wright three options; first that Mr Wright terminate the Third Party Contract pursuant to the 'cooling off period';[24] secondly, that Mr Wright repay the deposit paid under the 2020 Contract with penalty interest; and thirdly, that he sell the Property to the Purchaser.

102 Mr Shaw also deposes that the inability to obtain specific performance of the Purported Contract will deprive him of the ability to generate a profit of $4,200,000, calculated at $700,000 for each of six units which Mr Shaw anticipated building on the Property.

103 Whilst a property developer acquiring property will, all other things being equal, be entitled to final relief by way of an order for specific performance, the fact that a purchaser's interest is of that nature will not, where interlocutory injunctive relief is denied or where as here a caveat protecting that interest is removed, prevent the Purchaser from making a damages claim. The fact that damages might be sought here is a relevant matter to have regard on the question of the balance of convenience.[25]

104 The combination of Mr Shaw's openness to a monetary solution; the lack of urgency in the pursuit of the Purchaser's claim for specific performance; and the remaining availability of a damages claim; all point to the balance of convenience being against the maintenance of the Caveat, particularly when assessed in light of the interference with the Third Party's rights and the weakness of the Purchaser's claim.

105 The separate but related considerations of prima facie case and the balance of convenience all point in favour of the removal of the caveat.

(a) The requirements of r 45.05(2) of the Supreme Court (General Civil Procedure) Rules 2020 (the Rules) be dispensed with and the plaintiffs be authorised to commence the proceeding by originating motion in Form 5C to the Rules.

(b) The caveat lodged in dealing number AU958989C be removed by the Registrar of Titles from the title to the land described in Certificate of Title volume 9838 folio 728.

107 I shall otherwise hear the parties as to costs.

[1] See, inter alia, Hermiz v Yousif [2019] VSC 160 ('Hermiz'), [52]-[53] (Derham AsJ) and the authorities there cited, especially Piroshenko v Grojsman [2010] VSC 240; (2010) 27 VR 489 ('Piroshenko'); Goldstraw v Goldstraw (2006) V ConvR 54-712; Smith v Callegari (1988) V Conv R 54-300.

[2] Piroshenko (n 1) [18] (Warren CJ); as cited in Hermiz (n 1) [26] (Derham AsJ).

[3] PEXA (Property Exchange) is an online property settlement platform.

[4] Mr Shaw denies that Mr Wright said this.

[5] Mr Shaw understandably does not take issue with the receipt or contents of the email; he does depose however that Mr Wright had not told him that a contract would need to be signed and a deposit paid before there would be any agreement. Mr Wright says he did make that clear in their discussions.

[6] In the email, Ms de Groot also requested provision of a contract of sale and section 32 statement as a matter of extreme urgency. In his affidavit, Mr Fisher noted that Ms de Groot did not answer his query about a settlement date raised in his earlier email of 25 October 2021.

[7] Cf TL Rentals Pty Ltd v Youth on Call Pty Ltd & Ors [2018] VSC 105.

[8] See, inter alia, The Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd [2018] VSC 326 [46] (Riordan J).

[9] See Hazelwood v Mercurio & Ors [2021] VSC 362.

[10] Pipikos v Trayans [2018] HCA 39; (2018) 265 CLR 522, 526 [6], 535 [44] (Kiefel CJ, Bell, Gageler, and Keane JJ); 546-7 [82]-[83] (Nettle and Gordon JJ).

[11] Cooney v Burns [1922] HCA 8; (1922) 30 CLR 216, 244 (Stark J); see also 236-8 (Isaacs J); 240-1 (Higgins J).

[14] (1988) 164 CLR 387.

[15] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1.

[16] Pianta v National Finance and Trustees [1964] HCA 61; (1964) 180 CLR 146, 151 (Barwick CJ).

[17] Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326.

[18] J & H Just (Holdings) v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546.

[19] Neither party joined or otherwise gave notice of this proceeding to the third party.

[20] Hourigan v Trustees Executors and Agency [1934] HCA 25; (1934) 51 CLR 619 at 629-30 (Rich J).

[21] Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291, 405-7 [632]-[639] (Murphy JA).

[22] Section 90(3) of the TLA allows for such an undertaking to be provided as the price for dismissal of the application ; invariably such an undertaking is required: Lindsay, Caveats Against Dealings in Australia and New Zealand, (1995, Federation Press), 213-214; see also Harvey v Emery [2021] VSC 151.

[23] The Purchaser defaulted under the 2020 Contract.

[24] In fact, the 'cooling off' period gives the purchaser the right to withdraw, not the vendor.

[25] Rofiza Pty Ltd v Gangley Pty Ltd [2002] NSWSC 98.