Plaintiffs v First Defendant

3 At the outset, I should state my decision. In my view, the second defendant Saxon Nicholls has not adequately shown a defence on the merits, suggested to be available under the doctrine of promissory estoppel. I think an attempt has been made by him to try and make a case turning on competing evidence as between him and the vendors' estate agent in pre-contractual conversations from which to say there is a matter for trial. I think the competing versions of the conversations and any questions of Mr Nicholl's personal credibility are interesting, but they can be put to one side as in truth and on proper analysis the case does not turn on them. The vendors urge that in the face of an ordinary contract of sale of land with a typical 10% deposit obligation which Mr Nicholls does not deny signing and by which he is bound at law, and in circumstances where the proposed defence of estoppel to avoid that obligation had never before been raised until this application, it ought be seen by the Court as incredible and nothing more than an invention. I will confine myself to saying: there are in my view plain and telling documents and objective facts after the disputed conversations (as I shall expose) that show the suggested defence is bound to fail.

4 In reaching that view, I am most conscious of the discretionary principle that on these applications it is not the judicial function to in effect try the case. Rather, the less onerous task is to see if there is ― and the verbal formulae varies ― a 'defence on the merits' or a 'prima facie defence' or 'some defence' or 'adequate defence' or 'a defence to which the Court should pay heed'. If so default judgments are usually set aside (sometimes conditionally) in adherence to the principle that cases should be decided on merit rather than procedural default: see Lau v Citic Australia Commodity Trading Pty Ltd[1] and Lubura v Nezirivic.[2] In Lubura the Chief Justice alone viewed the test as not all that different from the 'no real prospect of success' test for summary judgment in s 62 of the Civil Procedure Act (and why, in coherence, should it not be?) which since Lysaght[3] is taken to be more liberal that the pre-existing 'bound to fail' test but involving the cautionary approach of not dismissing cases unless there is 'no real question to be tried.' It was accepted by counsel for Mr Nicholls, without question, that my task was to make a qualitative assessment of the proposed defence. In modern litigation, I maintain[4] it is not enough to say something is arguable; for anything is arguable as a perfunctory exercise. Whether it is an application for summary judgment or application to set aside default judgment, the matter may require extensive argument and reasoning to show the asserted defence is bound to fail.

5 The facts on which the plaintiffs' judgment is pleaded and judgment obtained are elementary as they are undisputed. There is in evidence a Contract of Sale of Real Estate for the property at 754 Boneo Road, Boneo between the plaintiffs as vendors and the first defendant as named purchaser. The price for the land was $2 million. The contract required a deposit of $200,000 to be paid by 31 July 2015. Settlement, or completion, of the contract was stated to be 30 days after the purchaser signed the contract. The contract was signed on 24 July 2015 by Mr Nicholls as director of the purchaser. (He was also company secretary.) It names the purchaser's legal practitioner or conveyancer as BTG Legal of PO Box 13237 Law Courts Victoria. The contract was signed by the vendors on 25 July 2015.

6 The contract has standard form General Conditions, clause 19 of which states that 'any signatory for a proprietary limited company is personally liable for the due performance of the purchaser's obligations as if the signatory were the purchaser in the case of a default by a proprietary limited company purchaser'. Coextensively or in any case, there is a separate guarantee within the contract also signed by Mr Nicholls on 25 July 2015. The guarantee says that if the purchaser defaults in paying the deposit or the residue or any other moneys payable under the contract, then he will on demand pay all of the deposit or moneys payable under the contract. General condition 28.4 states that if the contract is ended by a default notice from the vendor, then 'the deposit up to 10% of the price is forfeited to the vendor as the vendor's absolute property, whether the deposit has been paid or not.'

7 The deposit was not paid. Completion of the contract was due soon on 24 August 2015, that is, 30 days after Mr Nicholls made his signature. On 7 August the vendor's solicitors wrote to the purchasers named solicitors, BTG Legal, and asked whether they were acting; and given the proximity of completion date, asked when the deposit would be paid. There was no response from them or Mr Nicholls. On 11 August 2105 the vendor's solicitors served a 14 day notice on BTG Legal, on the purchaser and on Mr Nicholls giving the purchaser 14 days within which to remedy its default in not paying the deposit. On 14 August 2014 a practitioner from BTG Legal made telephone contact to say he was having difficulty getting instructions.

8 Settlement was looming. On 17 August 2015, the vendor's solicitors wrote to BTG Legal asking for the transfer of land. General Condition 6 of the contract obliges that to be done by the purchaser 10 days before settlement. The same practitioner from BTG Legal made e-mail contact on 18 August 2015 to say he was having difficulty getting instructions. There was no suggestion from him of any grounds for the purchaser to be excused from the obligation to pay a deposit or to contend the contract was unenforceable or to contend there was to be some indulgence for the payment of the deposit.

9 On 25 August 2015 (completion date) the vendor's lawyers served a 'Rescission Notice' on BTG Legal, the purchaser and Mr Nicholls. The default was, as was the fact, the failure to pay the deposit and a failure to complete. The notice gave the recipient 14 days to remedy. There were no remedial acts. On the evidence, the purchaser and Mr Nicholls did nothing. There was no assertion of an estoppel or some basis to relieve the purchaser of its legal obligations. By operation of the notice, the contract was terminated after the effluxion of the 14 days. Despite the discharge of the contract, under the express terms of the contract, the vendors were entitled to recover from the defaulting purchaser, as a debt, the deposit that should have been paid before the contract was discharged. The position is the same at law; that is the purchaser's obligation to pay the deposit survives termination by the vendor: see the exposition of the law by Brooking J in Bot v Ristevski.[5]

10 It is according to those facts that the plaintiffs filed their writ on 18 September 2015 claiming $200,000 as the unpaid deposit from the purchaser and Mr Nicholls. There is no claim for loss of bargain. According to a Titles Office search, the land was transferred to Brondlax Pty Ltd for a stated consideration of $2 million, and registered on 18 March 2016.

11 On 1 February 2106 I made an order for multiple modes of substituted service having accepted evidence that Mr Nicholls was evading service of the writ. He filed an appearance in person on 22 February 2016, but not a subsequent defence. There was no appearance by the first defendant. On 24 March 2016, the plaintiffs obtained a default judgment against him only. Mr Nicholls filed his application on 30 March 2016.

12 When the application came before the Court on 19 April 2016, Mr Nicholls appeared in person. By occupation, he said he was a mathematician. He explained he converts mathematics into a computer code in his business of buying and selling securities in all markets including futures and derivatives depending on the algorithms. He told the Court he had a data business in an office in South Yarra.

13 His affidavit in support of his application to set aside the judgment was inadequate, vague, opinionated and had parts that were scandalous as it maligned certain people and made gratuitous allegations of fraud, having apparently nothing to do with an understanding of a proposed defence. He said in his affidavit he intended to brief journalists on whom, he said, there would be no restraints on exposing scurrilous conduct. I ordered a removal of the offending parts of his affidavit. I formed the view that some of his assertions ― and that is all they were ― such as an absence of consideration, an absence of intention to create legal relations or an absence of legal advice were fanciful. I regarded his assertion that no contract was ever formed as untenable. He does not dispute he signed the contract or challenge, as I would describe it, the phenomenon of the contract.

14 Submerged under all this, there were exiguous statements in his affidavit that he was acting as 'the arranger' of a syndicate of investors, and the first defendant was a syndicate vehicle with nominal capital, which could not have completed the contract without the syndicate 'being settled'. Paragraph 77 of his 146 paragraph affidavit stated:

Mr Paton [sc. the vendor's agent] made a number of admissions to me that are contrary to the case pleaded by the Plaintiffs including acknowledging that a contract would not be formed until a deposit or partial deposit was paid. Mr Paton has acknowledged that a contract has not been formed.

15 The vagueness of his supporting affidavit meant it was inadequate in disclosing a defence on the merits. It was open therefore to the Court to refuse the application, as I was urged to do by the plaintiffs' counsel. Mr Nicholls had uttered the word 'estoppel' as being the defence but there was an inadequate basis on his evidence to say it was even arguable. There was no evidence of any clear representations or statements that, as Mr Nicholls would have it, he could sign the agreement but proceed on the unwritten basis, and fundamentally contrary to the contract, that there was a condition precedent to formation, or no obligation to pay the deposit until a syndicate had been formed. Over objection, I allowed Mr Nicholls an adjournment to file any further affidavit material and to obtain legal advice: see the recitals in 'Other Matters' of the Court's order that day.

17 First, on 22 April 2016, Messrs Norton Gledhill filed a notice of their appointment as solicitors for Mr Nicholls (but not the first defendant). Secondly, on 26 April 2016 the plaintiffs obtained a judgment in default of appearance against the first defendant as named purchaser for $200,000, interest of $16,363.42 and costs of $1,395. Thirdly, Mr Nicholls has filed a second affidavit sworn on 3 May 2016. Fourthly, the plaintiffs' solicitor Mr Burdon-Smith (who acted in the sale) has filed an affidavit in rebuttal with a most important exhibit. And the estate agent acting for the plaintiffs Mr Blane Paton against whom most of the evidence seems directed, has filed another responding affidavit sworn 5 May 2016 with important exhibits.

18 Mr Nicholls' second affidavit has jettisoned previously stated defences and confined itself to conversations and email exchanges he had with the selling agent, Mr Paton, between early December 2014 when he first inspected the property and 23 July 2015 which was the day before he signed the contract. He has stated what he says were the words verbatim of the dialogue for some conversations with Mr Paton between December 2014 and July 2015. I need not recite the contents of the affidavit copiously. He says on the first visit, this exchange occurred:

Me: I am interested in the property as a place to live and play polo and because of its mineral hot springs potential because of the Selwyn Fault. Any purchase would be subject to the formation of a syndicate, as I cannot afford the property on my own account.

Paton: I understand.

Me: There is a lot of work in analysing a site like 754 Boneo Road, such as building a financial model, and understanding exactly what the property could be used for; this would require the cooperation of the vendors. Any contract must be conditional on the formation of the syndicate of investors.

Paton: I understand. The vendors will accommodate a syndicate and a conditional contract.

19 Nicholls says that on one visit on 14 January 2015 the first plaintiff was present. On that occasion he says he told him 'If we purchase the property it will only be on the basis that any contract is conditional upon the formation of a syndicate'. It is said, Mr Houlahan responded: 'I understand'.

20 Overall, according to Mr Nicholls the recurrent statement by him in these conversations with the agent could be represented by this statement: 'If we purchase the property it will only be upon the basis that any contract is conditional upon the formation of a syndicate'.[6] According to him the recurrent response from the agent was 'I understand, the vendors will work with you and accommodate the syndicate'.[7] In January 2015, a site visit took place with a town planning consultant as there seemed to be potential problems with the site including overlays. Mr Nicholls said that he told the agent in substance that: 'Any contract had to be conditional on solving the problems with this site, otherwise it would be impossible to form a syndicate because the site would not represent a good investment, that is, be investor ready'.[8]

21 It was submitted by plaintiff's counsel, that I ought to be very sceptical about this evidence of conversations. It purports to be a recollection of conversations well over a year ago in language that is remarkably flawless in its expression and structure; extraordinarily fluent in the circumstances of the occasion and the dealing; and composed in a way that is, to any discerning eye, fashioned by a lawyerly conception of a case. This is the problem with the 'I said ... He said' reconstruction in all but the most basic or laconic of conversations. It does arouse scepticism, but I have to put that aside because it is Mr Nichols' sworn evidence, not cross-examined. I cannot reject it on paper. What I can do is, consistent with that purported precision of his approach is to look at the subsequent objective facts and conduct by Mr Nicholls with the same exacting standards on the very subject matter of the contractual condition that he said was orally stipulated.

22 The last of these conversations seemed to have occurred in early February 2015 according to Mr Nicholls. According to him (with my underlining) -

1. In early February 2015 Mr Paton telephoned me on a number of occasions. Mr Paton said in substance that he wanted to show the vendors some progress and that he wanted the special conditions required by the syndicate.
2. During the course of one of these telephone calls Mr Paton said in substance that the vendors would accommodate any reasonable terms the syndicate wanted and that any contract would be conditional on the formation of the syndicate.

23 Without going through his affidavit paragraph by paragraph, Mr Paton denies Mr Nicholls' account of the conversation. His affidavit says in essence that on one occasion 'the issue of the syndicate was raised but I reiterated the Vendor's requirement that the Contract of Sale be unconditional'.

24 Mr Nicholls says that he had no contact with the vendors or Paton from 25 March to late July 2015. He says 'During this period I thought the project had gone away.' He says he was hospitalised in May with a severe respiratory illness. He does not explain the inactivity in the dealing. He does not say what was going on with the formation of a syndicate or other planning of the project. Despite all that, he says that on 23 July 2015 he received an e-mail from Mr Paton that attached a contract and a s 32 statement requesting him to print the contract, sign it and return it to him. He says this e-mail was unexpected. That is, he says a contract arrives unexpectedly after about 4 months of inactivity. He exhibits the e-mail.[9] It was sent on 23 July 2015 from Mr Paton. It said (with my underlining):

Saxon, attached Contract and Section 32, would you print, sign and return.

Could you pay the deposit to;

Paton Estate Agents Pty Ltd Trust account,

Westpac Hastings,

BSB 033 270

A/C 72 0260.

25 The request to pay a deposit with the account details must have been, according to Mr Nicholls' suggested defence, egregiously contrary to the alleged previous representation that the contract would be conditional, including a condition that no deposit would be paid until a syndicate was formed. The same goes for the contract as sent. It was a printed Contract of Sale of Real Estate. It identifies the property, the three vendors, their selling agent and their legal practitioner. As is typical, there is a separate section for special conditions, but the contract does not have any special conditions. Nowhere else in the contract is it expressed to be subject to finance or subject to a syndicate being formed or any qualifications to the obligation to pay the deposit being dependent upon the formation of a syndicate.

26 I now come to the first piece of objective evidence that is at the foundation of my judgement. The plaintiffs' solicitor, Mr Burdon-Smith has exhibited an e-mail from Mr Nicholls to the agent dated 22 July 2015; that is, the day before the contract was sent unexpectedly as Mr Nicholls has sworn. A litigation lawyer might describe this as a smoking gun. It says (with my underlining):[10]

As director of Trentham Investment Management Pty Ltd (ACN 604 297 243) we are pleased to confirm our unconditional offer to purchase 754 Boneo Road, Boneo for AUD$2,000,000 with a settlement within 30 days of contract.

Our offer on this basis includes all of the water entitlements which shall not be less than 47 Megalitres per annum.

Please furnish a contact [sic, contract] from the vendor and associated section 32 statement.

Yours faithfully

Saxon Nicholls

Director

27 Counsel for Mr Nicholls drew attention to the words 'we' and 'our' as if that carried some special nuance, presumably to convey the collectivism of a syndicate without saying so. I cannot accept that extrapolation. This is a clear and unequivocal and businesslike statement of commitment given by Mr Nicholls him identifying himself as director for the first defendant as purchaser. The significance of this communication is that contrary to all that Mr Nicholls he said about the conversations, or despite them, when it came to the advanced time of making the contract it was he who invited an unconditional contract with no condition about a syndicate and the deposit. That is consistent with Mr Paton swearing in overall opposition that he insisted that dealings had to be unconditional.

28 It is idle to speculate whether the unconditional offer means conditions other than finance. The obvious and telling point is that this was, without embarking on speculation, a serious written statement of an offer to assume a substantial legal obligation and therefore the occasion to reiterate or to introduce any condition that the formation of the contract or the obligation to pay a deposit or the obligation to complete was subject to a syndicate being formed. To this, there was no answer in submissions. I cannot resist saying that it is disturbing that Mr Nicholls' near verbatim account of the dealing in his affidavit did not include that document. He has sought to build an edifice on pre-contractual statements and the contractual dealings yet did not include a document that was manifestly destructive of his case.

29 Responsive to his request, the agent asked the plaintiffs' solicitors to prepare the contract and the s 32 statement. As I have narrated, those documents were sent by e-mail to Mr Nicholls on the afternoon of 23 July. It is important to keep in mind that the covering e-mail asked for the deposit, and gave account details for payment.

30 I now return to Mr Nicholls' evidence. After receiving that email, Mr Nicholls responded to Mr Paton saying he would call him at 4.30pm.[11] This is still 23 July 2015. He says he did call, and they had this conversation (with my underlining):

Mr Paton: You have got your deal and the price is now $2 million. You should take the transaction as it is a good opportunity.

Me: That's good, but we still need to assemble the syndicate.

Mr Paton: I understand.

Me: We still need to get planning approval and the stakeholders on board.

Mr Paton: The vendors will work with you and you should take the opportunity.

Me: There will not be a contract formed until the deposit is fully or partially paid and no deposit will be paid until the syndicate is in place.

Mr Paton: OK. You should sign the contract, but you will not have to worry about it as the vendors will work with you.

After this call I considered what Mr Paton had said. I took his reference to 'your deal' to be a deal which was conditional, so that there would be no contract formed until the deposit was fully or partially paid and that no deposit would be paid until the syndicate was in place. This was acceptable to me. I was also attracted by the substantial reduction in price.

32 But the deal, as invited by Mr Nicolls was explicitly unconditional.

33 From there, Mr Nicholls has it that Paton called him the following day, 24 July, and said: 'I'm coming to Melbourne to get the agreement signed'. It is disturbing, I think, that he omitted to reveal something which occurred beforehand which led to that visit happening and which is also destructive of his case. After the contract was sent to Mr Nicholls on 23 July 2015 for signing, Mr Paton exhibits that contract as sent back to him on 24 July signed by Mr Nicholls on 24 July 2015.[12] In the section for special conditions, Mr Nicholls had inserted this in handwriting:

1. This contract is subject to the purchaser obtaining finance on terms satisfactory to the purchaser. This special condition 3 may be waived at the sole discretion of the purchaser.

34 Mr Paton says that upon receiving that contract, he told Mr Nicholls that the vendors would not entertain a conditional contract of sale. There is no evidence that in the face of that rejection, Mr Nicholls protested or reminded Mr Paton about his alleged assent to the contract being subject to the syndicate being formed. It is not the evidence for example that Mr Nicholls said something like 'Right...no deal then'. If there is to be an estoppel based on pre-contractual statements (after first getting over the written unconditional offer from him on 22 July 2015 ) then, on his case, this rejection by Mr Paton was an act of resilement before the contract was signed by the vendors and he could have withdrawn then and there. In the language of estoppel, it was in his own hands to avoid the detriment of making the contract. But he acted to the contrary. Later that day Mr Paton came to Melbourne; met Mr Nicholls personally; told him that there was another offer; and unless the transaction was done that day the vendors would proceed with another purchaser. Mr Nicholls then signed the unconditional contract. The following day Mr Paton called Mr Nicholls to sign the guarantee, which he did and sent it by facsimile.

35 Mr Nicholls says he did not read the contract. He says had he known the contract was unconditional, he would not have signed it, or the guarantee. Yet, on 22 July 2015 it was he that in writing offered to purchase the land unconditionally. And moreover, he signed an unconditional contract after his handwritten inclusion of a subject to finance clause was rejected. Those are the objective facts.

36 Mr Paton says that in the following week he sought payment of the deposit and was not met with a complaint or an assertion that the obligation to pay the deposit was dependent upon a syndicate being formed. From there, the vendors solicitors served the default notices under the contract.

37 'Where a man signs a document knowing that it is a legal document relating to an interest in property, he is in general bound by the act of signature': see Toll v Alphapharm Pty Ltd.[13] The signature is conclusively binding and it is immaterial that the person signing did not trouble to discover the contents of the contract. As was said in Toll:

It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents ... whatever they might be. That representation is even stronger where the signature appears below a perfectly legible written request to read the document before signing it.

38 In this case, above the signing place, this appears:

SIGNING OF THIS CONTRACT

WARNING: THIS IS A LEGALLY BINDING AGREEMENT. YOU SHOULD READ THIS CONTRACT BEFORE SIGNING IT.

39 Generally speaking, one basis for a signatory to be excused from the legal consequences of signing the document is proof of a vitiating element such as fraud or misrepresentation at common law or by statute. Estoppel is possibly another. This is no place for a disquisition on the law of estoppel, in its various forms or its overarching conception, or in its presence before a contract is made or after the creation of relations. I will adopt this compendious statement of the doctrine in Cheshire and Fifoot Law of Contract:[14]

... a contracting party may be prevented from insisting on his or her strict contractual rights if, having regard to the dealings that have taken place between the parties, in particular, assurances about how the contract will proceed, it would be inequitable to allow such insistence. Thus ... a contracting party may promise the other that he or she will not insist on a contractual deadline, and may then be estopped from relying on that deadline as a basis of alleging breach.

What is essential, if the estoppel is to operate, is a sufficient detrimental reliance by the promisee, for in that reliance is found the inequity (or unconscionability) that moves a court to prevent the promisor from reneging on the promise or assurance.

40 Reference must also be made to this classic statement of the nature of estoppel by Dixon J in Thompson v Palmer:[15]

The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations ... or because he has exercised against the other party rights which would exist only if the assumption were correct ... or because knowing the mistake the other party laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption. But, in each case, he is not bound to adhere to the assumption unless, as a result of adopting it as the basis of action or inaction the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted.

41 I have pressed counsel for Mr Nicholls to articulate the ingredients of the estoppel; that is, to articulate the species of estoppel and the representation or conduct or the conventional basis of dealing from which it would be unconscionable for the vendors to resile. The species of estoppel was said to be promissory estoppel as constituted by the last two exchanges in the conversation on 23 July 2015 to which I have referred in paragraph 30. He submits that based on that exchange, Mr Nicholls has a defence on the merits to say that a promissory estoppel operates to prevent the vendors from enforcing the obligation to pay the deposit until the syndicate was 'in place'. Counsel submits that the presence of a conflict of evidence as between Paton and Mr Nicholls about the conversations was of itself a basis for the Court to view the matter as necessitating testing by the rigours of trial, and this court ought be unconcerned about the strength of the case, but satisfied only there was a case to investigate after discovery and cross examination. It was urged that if Mr Nicholls evidence of the contents of the short exchange with Mr Paton on 23 July was accepted, it was arguable that a clear and unequivocal representation had been made on which there had been known reliance and therefore, an estoppel arguably could be made out rendering it unconscionable for the vendors to rely on the legal contract.

42 The problem with the postulated estoppel is obvious. The payment of a deposit is a guarantee of performance. The purchaser's legal obligation under the contract as signed is to pay the deposit and then to complete within 30 days. If there was to be an estoppel of the sort conceived here, it would be commercially unworkable, possibly absurd. It would mean contractual relations and with it the law of the obligation goes off the pages of the contract. If the deposit is to be paid if and when a syndicate is formed, then what of the 30 day obligation to complete? Is the vendor to remain bound and servile under the contract to wait and to see if and when a syndicate is formed which can pay the deposit? And in the meantime, does that not mean the purchaser's equity under the incomplete contract prevents the vendor from dealing with its substantial asset? Such an estoppel appears to be innately perplexing, if not commercially unworkable and unjust. Counsel for Mr Nicholls suggested that somehow there would be an implication to be made about timing. Would it be reasonable time? Would there be a best endeavours clause or a reasonable endeavours clause? Is it entirely and unilaterally in the hands of Mr Nicholls? What has to be shown? As a first point, I think the estoppel here is incapable of clear expression and productive of so many problems and would require a rewriting or radical alteration of fundamental obligations under the contract.

43 Secondly, putting aside the commercial unworkability, to my mind the greater and I think decisive problem which has led me to refuse this application is the evidence of the dealing between 22 and 24 July 2015. I think it is convenient for the defendant to seize upon the different versions of conversations and from there to say the Court is bound to let the matter go to trial. That submission does not grapple with the facts to be reiterated as follows.

44 First, the email of 22 July from Mr Nicholls offered an unconditional contract in a serious business communication. That is telling. It eclipses all that precedes it.

45 Secondly, the vendors' agent (the conversationalist) delivered an unconditional contract for signing. The insertion by Mr Nicholls of a subject to finance clause is in one sense consistent with his position, although faithful to his version one might have expected a clause which concerned the formation of the syndicate. What is critical and decisive is that the agent rejected that clause. On the defendant's case, that has to be seen as the agent resiling from the representation on which the suggested estoppel is based.

46 Thirdly, Mr Nicholls did not then withdraw from the transaction on the basis that he would not, to his detriment, sign a deal without such a condition. Instead, he did exactly the opposite. He signed an unconditional contract. He had the opportunity in his own hands of not acting to his detriment by entering into an unconditional contract. Yet by hypothesis he seeks to put a case that he was induced by the vendors to act to his detriment. This makes no sense.

47 On principle therefore at the relevant time there was no representation, creation of an assumption or conventional basis of attracting estoppel at the threshold. The only representation was that the contract had to be unconditional: initially from Mr Nicholls himself and later by Mr Paton when he rejected the handwritten attempt to insert a subject to finance clause. It follows there was no inducement or encouragement or failure to correct; there was no reliance; and there was no detriment. The signing of the contract was voluntary. By law he is bound but his signature and assertions now about his subjective belief about 'the deal' is not only irreconcilable with those facts but is inadmissible at law.

48 Despite all that, counsel for Mr Nicholls submits what prevails or overrides is the exchange in the conversation on 23 July. But I am afraid to say that does not make sense. It cannot prevail, or override, if (assuming the conversation occurred) it was displaced by subsequent unequivocal conduct to the contrary. It amounts to saying that even accepting the objective facts Mr Nicholls can choose to labour under the assumption that a deposit was not payable until a syndicate was formed.

49 In my view, all these matters show that the suggested defence is bound to fail. I see no injustice in allowing the judgment to stand.

50 Finally, there was passing mention of s 49(2) of the Property Law Act which provides that '...in any action for the return of a deposit, the Court may, if it thinks fit, order the repayment of a deposit'. It appears that section applies only to a deposit that has been paid. There is an unreported New South Wales authority of Socratos v Koo[16] for the view that such a discretionary provision might be relevant even where a deposit has not been paid. That is, in an action to recover an unpaid deposit a purchaser could raise as a defence a contention that if a deposit were to be paid the statutory power was available to order a refund. In my view the very same facts that have lead me to the conclusion that an estoppel argument is bound to fail likewise leads to the conclusion that there would be no basis to apply s 49(2). The fact that the land was resold without loss of bargain is no reason to relieve the purchaser of its obligation to pay a deposit. Akin to the conscience based approach in equity, there is no occasion to deprive a party of a contractual entitlement for a person's folly, imprudence or want of foresight.

1. The second defendant's application to set aside judgment is refused.

2. The second defendant's summons filed 30 March 2016 is dismissed.

52 Unless there is consent, I shall hear counsel on the question of lifting the stay on costs as ordered on 6 May last, and the costs of the application.

[2] [2013] VSCA 215.

[3] Lysaght Building Solutions v Blananlko (2013) 42 VR 27.

[4] See O'Toole v Kent [2015] VSC 470.

[5] [1981] VicRp 13; [1981] VR 120.

[6] See paragraph 10 of Mr Nicholls' second affidavit.

[7] See paragraphs 4 and 6 of Mr Nicholls' second affidavit.

[8] See paragraph 14 of Mr Nicholls' second affidavit.

[13] [2004] HCA 52; (2004) 219 CLR 165, [47].

[15] [1933] HCA 61; (1933) 49 CLR 507, 547.

[16] McLelland J, 5 October 1993 considered by Prof Butt in The Conveyancer (1994) ALJ 379.