Determination
41The first aspect requires the Plaintiff to show a sufficient likelihood of success to justify the preservation of the status quo pending trial by extending the operation of the caveat: Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57, at [65].
42As submitted by the Defendant, the consideration of the significance an exchange of contracts is the starting point of the determination, since that is the usual method for making a legally binding contract for the sale of real estate in New South Wales: Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528 at 533; Brien v Dwyer [1978] HCA 50; (1978) 141 CLR 378, at 391; Sindel v Georgiou [1984] HCA 58; (1984) 154 CLR 661 at 666, 667.
43In Eccles v Bryant [1948] Ch 93; (1947) 2 All ER 865, Lord Greene MR, at 99-100, wrote:
"When parties are proposing to enter into a contract, the manner in which the contract is to be created so as to bind them must be gathered from the intentions of the parties, express or implied. In such a contract as this, there is a well-known, common and customary method of dealing; namely, by exchange, and anyone who contemplates that method of dealing cannot contemplate the coming into existence of a binding contract before the exchange takes place.
It was argued that exchange is a mere matter of machinery, having in itself no particular importance and no particular significance. So far as significance is concerned, it appears to me that not only is it not right to say that the exchange has no significance, but it is the crucial and vital fact which brings the contract into existence. As for importance, it is of the greatest importance, and that is why in past ages this procedure came to be recognised by everybody to be the proper procedure and was adopted. When you are dealing with contracts for the sale of land, it is of the greatest importance to the vendor that he should have a document signed by the purchaser, and to the purchaser that he should have a document signed by the vendor. It is of the greatest importance that there should be no dispute whether the contract had or had not been made and that there should be no dispute as to the terms of it. This particular procedure of exchange ensures that none of those difficulties will arise."
44In Domb v Isoz [1980] Ch 548; (1980) 1 All ER 942 , a decision referred to with apparent approval by the High Court in Sindel v Georgiou, Buckley LJ wrote, at 557:
"... the essential characteristic of exchange of contracts is that each party shall have such a document signed by the other party in his possession or control so that, at his own need, he can have the document available for his own use. Exchange of a written contract for sale is in my judgment effected so soon as each part of the contract, signed by the vendor or the purchaser as the case may be, is in the actual or constructive possession of the other party or of his solicitor. Such possession need not be actual or physical possession; possession by an agent of the party or of his solicitor, in such circumstances that the party or solicitor in question has control over the document and can at any time procure its actual physical possession will, in my opinion, suffice. In such a case the possession of the agent is the possession of the principal."
45In Kirton v Nethery (1996) 7 BPR 14,954 at 14,957, McLelland CJ in Eq, put it higher than "a well-known, common and customary method of dealing". His Honour wrote:
"As is well known, real estate in New South Wales is ordinarily sold by signing and exchanging counterpart contracts in the form approved by the Real Estate Institute and the Law Society with such additions or variations as the circumstances may require. So entrenched is this practice that there has been authoritatively held to be a (rebuttable) presumption that there is no binding contract until contracts are exchanged even where there is written evidence of a putative contract (see eg GR Securities v Baulkham Hills Private Hospital (1987) NSW Conv R 55-324 at 56,984 and Elgas v AJ Young Industries (1987) NSW Conv R 55-329 at 57,016)."
46To suggest that the well-known, common and customary method of dealing was not to be followed, would have required clear language, in order to do away, altogether, with the actual exchange of contracts, or even to give rise to a deemed exchange operating before such an actual exchange: Windrum v Rejilo Pty Ltd [1988] ANZ ConvR 491; (1988) NSW ConvR 55-431.
47In this case, as stated, there was no dispute that there had never been an actual exchange of contracts. It was not stated anywhere in the Plaintiff's evidence that anyone on behalf of the Defendant said that the requirement to exchange duly executed counterparts was to be dispensed with. To the contrary, the proposal referred to such an exchange of contracts and the conversations referred to in the affidavits read by the Plaintiff, are replete with references to an exchange of contracts.
48Whether it is a well-known, common and customary method of dealing, or a rebuttable presumption, probably does not matter in this case, as it is clear, on the evidence that I have read, that both parties were proceeding upon the basis that there would be an exchange of contracts. I am satisfied that their common intention was to enter into a contract by exchange of identical counterparts.
49In any event, it is a fair inference from what he has stated in his affidavit, that Mr Gohil was well aware that the usual practice for entering into contracts for the sale of land in New South Wales was by exchange of executed counterparts in identical terms. Mr Ramrakha, as a solicitor of many years experience, would, undoubtedly, have known of the well known, common and customary method of exchange and of its importance.
50The words of the Defendant's solicitor relied upon could not lead to the view that it was the common intention of the parties that a contract would come into existence by some informal means, such as the delivery, by the Plaintiff, to the office of the Defendant's solicitor, of a counterpart contract executed by the Plaintiff, as purchaser, and by its payment of the deposit to the Defendant's agent.
51Accordingly, the interest claimed in the caveat, based upon the Contract for the sale of land dated 2 August 2013 cannot be established. This seems to have been accepted by the Plaintiff as it has relied upon estoppel in its submissions.
52I turn then to whether the Plaintiff can establish a seriously arguable case that an interest in the land arises as a result of an estoppel and that the Defendant is estopped from denying the existence of a binding contract.
53On this aspect, I cannot do better than repeat what was written, by Brereton J in Fitzgibbons v Shaftsbury Pty Ltd [2011] NSWSC 525; (2011) 16 BPR 30,837, a case in which the plaintiff claimed an interest described as an "equitable interest claimed by way of estoppel". At [4], his Honour wrote:
"As to whether this caveat has substance, it will suffice for present purposes if I summarise the principles relevant to claims to an interest in land arising by way of estoppel in equity by a reference to what I said in Vukic v Luca Grbin; Estate of Zvonko Grbin [2006] NSWSC 41 (at [27] - [28]), as follows:
[27] Equity comes to the relief of a plaintiff who has acted to his or her detriment on the basis of a fundamental assumption in the adoption of which the defendant has played such a part that it would be unfair or unjust if he or she were left free to ignore it, on the footing that it would be unconscionable for the defendant to deny the assumption [Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 675; Thompson v Palmer (1933) 49 CLR 507 at 547; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404 (Mason CJ and Wilson J)]. It is essential to an equitable estoppel that the defendant knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation [Crabb v Arun District Council [1976] Ch 179 at 188; Waltons v Maher, 423 (Brennan J)]. Such knowledge or intention may easily be inferred where the adoption of the assumption or expectation is induced by the making of a promise, but may also be found where the defendant encourages a plaintiff to adhere to an assumption or expectation already formed, or acquiesces in an assumption or expectation when in conscience objection ought to be stated [Waltons v Maher, 423 (Brennan J)]. The unconscionability which attracts the intervention of equity is the defendant's failure, having induced or acquiesced in the adoption of the assumption or expectation with knowledge that it would be relied on, to fulfil the assumption or expectation or otherwise avoid the detriment which that failure would occasion [Waltons v Maher, 423 (Brennan J)].
[28] Although numerous attempts have been made to identify the various components of equitable estoppel, for present purposes, the matters which a plaintiff must establish to found an equitable estoppel may conveniently be summarised, in the present context, as follows:
First, in relation to the plaintiff's conduct: that the plaintiff acted (or abstained from acting) in reliance upon an assumption or expectation that a particular legal relationship existed or would exist between the plaintiff and the defendant, or that the plaintiff had or would acquire some interest in the defendant's property;
Secondly, in relation to the defendant's conduct: that the defendant induced the plaintiff to adopt the assumption or expectation and encouraged the reliant activities of the plaintiff, or at least failed to deny the assumption or expectation with knowledge that the plaintiff was relying on it to the plaintiff's potential detriment and that it could be fulfilled only by transfer of the defendant's property, a diminution of the defendant's rights or an increase in the defendant's obligations;
Thirdly, in relation to the interest or property: that the assumption or expectation was one which the defendant could lawfully satisfy.
[See generally, Waltons v Maher, 428-429 (Brennan J); Meagher, Gummow & Lehane, Equity: Doctrines & Remedies, (4th ed., 2002), [17-105]].'"
54Thus, the Plaintiff must establish, to have a seriously arguable case based on its estoppel claim:
(a) The making of a clear and unequivocal representation (such that it was objectively reasonable for the Plaintiff to interpret that representation in a particular way and to act in reliance on that interpretation);
(b) The Defendant's representation caused the Plaintiff reasonably to assume that a particular legal relationship existed, or would come to exist, between it and the Defendant;
(c) The Plaintiff acted reasonably in reliance on the representation;
(d) The Defendant knew, or intended, that the Plaintiff would act in reliance on the representation;
(e) The Plaintiff's reliance on the representation was to its detriment; and
(f) The Defendant acted unconscionably in not honouring the representation.
55In this case, based upon the evidence that I have read, I am not so satisfied that the Plaintiff has established a seriously arguable case for final relief in the nature of the caveatable interest claimed upon the basis of estoppel. Most importantly, but not only, I am not satisfied that the representation said to have been made by the Defendant's solicitor was clear and unequivocal.
56In Sullivan v Sullivan [2006] NSWCA 312; (2006) 13 BPR 24,755, Hodgson JA (with whom McColl JA agreed) stated, at [85], that:
"Generally, a promise or representation will be sufficiently certain to support an estoppel if it was reasonable for the representee to interpret the representation or promise in a particular way and to act in reliance on that interpretation, thereby suffering detriment if the representor departs from what was represented or promised..."
57Nor am I satisfied that it is seriously arguable that any representation made by the Defendant caused the Plaintiff reasonably to assume that a particular legal relationship existed, or would come to exist, between it and the Defendant, namely that contracts would be treated as being exchanged when the Plaintiff did what had been suggested. The statements made by the Defendant's solicitor are not reasonably capable of inducing such a belief or assumption.
58Looking at the Plaintiff's evidence as a whole, it seems to me the Plaintiff was aware, in early August 2013, that there was at least one other interested purchaser of the Property. The steps it says were taken, to my mind, were consistent, not upon any representation by the Defendant's solicitor, or by its agent, but rather, with ensuring that the Plaintiff was in a position to exchange contracts as soon as the Defendant was able to do so. In this way, the Plaintiff hoped that it would be the purchaser with which contracts were exchanged.
59Nor am I satisfied that there is a seriously arguable case that the steps relied upon unequivocally and in their own nature are referable to some contract of the general nature of that alleged.
60Furthermore, the Plaintiff has not satisfied me that it would be better, otherwise, to maintain the status quo until the trial of the action, by leaving the Caveat in place so as to prevent disposal of the Property. In this regard, it bears the onus of proof: Duic v Duic [2011] NSWSC 371.
61In case I am wrong in this conclusion, I turn to the balance of convenience. There is little doubt that the maintenance of the Plaintiff's caveat is an interference with the Defendant's right, as registered proprietor, to deal with the Property. It has entered into a contract that was to be completed on 13 September 2013 and the Caveat would prevent that from occurring.
62Whilst the Plaintiff has offered an undertaking as to damages, it has not produced any financial statements in answer to the request made or to the notice to produce. In addition, the documents that the Plaintiff has tendered do not lead me to have any confidence that the undertaking as to damages is of utility.
63I note also, in this regard, that Mr Gohil has not offered any personal undertaking as to damages despite the fact that the utility of the undertaking given by the Plaintiff was raised in correspondence passing between the parties before the hearing.
64In the circumstances, the Plaintiff's Caveat should not be extended. I order that the Plaintiff's application to extend the Caveat be dismissed and order it to pay the Defendant's costs of that application.