ORDER OF 3 AUGUST 2012 CORRECTED PURSUANT TO S.119 OF THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL ACT 1998 ON 7 AUGUST 2012

The respondent's determination dated 5 August 2011 disallowing the applicant's objection dated 27 January 2011 to the Commissioner's Assessment No 00000001 dated 1 December 2010 of Growth Area Infrastructure Contribution liability under Part 9B of the Planning and Environment Act 1987 and the Taxation Administration Act 1997 is affirmed.

Mr S.A. Tisher of counsel instructed by Best Hooper, solicitors

1. By a referral pursuant to s 106 Taxation Administration Act 1997 upon request of the applicant, the respondent referred to the Tribunal its determination dated 5 August 2011 which determination disallowed the applicant's objection to the respondent's assessment dated 1 December 2010 in relation to Growth Area Infrastructure Contribution (GAIC) liability under Part 9B of the Planning and Environment Act 1987 (the Act) and Taxation Administration Act 1997.
2. By its assessment, the respondent assessed the applicant in the sum of $811,297.15 in respect of land it agreed to purchase and in fact purchased at 971-1003 Plumpton Road, Plumpton 3335 Melton (the land) relating to the GAIC.

1. At all relevant times prior to 17 August 2009, Douglas and Sandra Borthwick (the vendors) were the registered proprietors of the land. Some time around June 2008, Andrew Cowper of Cowper & Associates Pty Ltd secured the permission of the vendors to sell the land. At all material times, Andrew Cowper was a registered real estate agent and had been so registered for a period of approximately 20 years from the date of this hearing.
2. At all times, Souhail Mondous (Mondous) was a real estate developer and had been a real estate developer for many years prior to 2008. He gave evidence that he had purchased 10 parcels of land prior to the subject land. In 2008, Mr Mondous was associated with a Sebastian Canzoneri (who was also involved in real estate development but is a management consultant).
3. Mr Mondous and Mr Canzoneri are directors of the applicant.
4. In June 2008, Mr Cowper approached Mr Mondous to purchase the land and subsequently both Mr Mondous and Mr Canzoneri inspected the land in company with Mr Cowper.
5. Subsequent to the inspection of the land, Mr Mondous and Mr Canzoneri offered to purchase the land for the sum of $1,200,000 and I am told a cheque for a nominal amount was provided to Mr Cowper but not banked. The offer was rejected and, insofar as Mr Cowper can recollect, the cheque was returned.
6. The interest of Mr Mondous and Mr Canzoneri in relation to purchasing the land was rekindled in November 2008. As a result, in November 2008, Mondous on behalf of himself and Canzoneri made an offer to Cowper that they would purchase the land for the sum of $1,400,000 and settlement would take place in six months.
7. Mr Cowper gave evidence that he communicated that offer to the vendors who accepted the same. On 1 December 2008, Mr Cowper spoke to Mr Mondous and informed him that the offer that Mr Mondous had made to purchase the land had been accepted. Arrangements were then made between Mr Cowper and Mr Mondous for the contract to be signed by the purchasers the following day on 2 December 2008.
8. Mr Cowper then altered the contract that had been prepared in June 2008 (which apparently accompanied the previous offer) in preparation for the purchaser's signature. The relevant parts that were amended are as follows :

DEPOSIT: $140,000.00 on the signing hereof of which $10,000 has been paid and the balance of the deposit is payable upon vendor signing of contract

PAYMENT OF BALANCE: On the expiration of 6 6 months from the date

DATE OF SALE: is the earlier of the date of this contract or the

1. In the contract the purchaser was described as Sebastian Canzoneri/Nominee ("SNK INVESTMENTS PTY LTD A.C.N. 106 046 119"). Apparently, at some later time, the applicant was nominated as purchaser of the land pursuant to the contract. At the time that Mr Mondous signed the contract, he gave Mr Cowper a cheque for $10,000. It is noted that the contract requires a deposit of $140,000.
2. In a letter written by Mr Cowper to Mr Mondous dated 23 August 2010, Mr Cowper categorised the cheque given to him by Mr Mondous for $10,000 as follows :

The purpose of this (cheque for $10,000) was to show the Vendor that the purchaser was serious about securing the property for $1.4 million.

It is also noted that, in spite of the letter containing a number of details in relation to the events of November and December 2008, Mr Cowper made no mention whatsoever of an "oral contract" in that letter.

1. The purchase was subsequently settled on 16 June 2009 and the applicant became the registered proprietor of the land in August 2009.
2. By letter of 22 December September 2010, the respondent notified the applicant that it may have GAIC liability in relation to the purchase of the land.
3. On 1 December 2010, the respondent issued an assessment to the applicant for GAIC liability in the amount of $811,297.15. On 27 January 2011, the applicant objected to the assessment which objection was disallowed on 15 August 2011.

1. The relevant legislative framework is set out in the respondent's Notice of Determination dated 5 August 2011. It there states :

GAIC is a flat rate contribution made towards the provision of State infrastructure in the growth areas and is levied on the occurrence of specified transactions in relation to land, such as transfers of land.

GAIC is administered under Part 9B of the Planning and Environment Act 1987 (the Act) and the Taxation administration Act 1997 (TAA).

The liability to pay GAIC depends on three factors;

• when a GAIC event occurs;
• whether the land is in the contribution area at the time the event occurs; and
• the type of land.

Under section 201RC of the Act Type B-1 land is any land in investigation areas 1 to 6 [defined in Part 2 of Schedule 1 of the Act] that is brought within a growth area, an urban growth boundary and an urban growth zone on or after the first announcement day - 2 December 2008.

The GAIC Land is Type B-1 land because it is in investigation area 3 [defined as the area of land in the municipal district of Melton Shire Council shown as the investigation area on the plan lodged in the Central Plan Office and numbered LEGL/09-313] and was brought within a growth area, an urban growth boundary and an urban growth zone on 30 August 2010.

A GAIC event is one of the events set out in section 201RA of the Act including, as in this case, a dutiable transaction (transfer of land) but not including an excluded event. Section 201RB(d)(iii) states that an excluded event means -

(d) in the case of any land in the contribution area -

(iii) a dutiable transaction relating to the land, if a contract relating to that transaction was entered into before the relevant day. (emphasis added)

'Relevant day' is defined in section 201R as including, in the case of type B-1 land, the first announcement day being 2 December 2008.

As the Land is type B-1 land the Transfer would be an excluded event, and a GAIC liability would not arise, if the contract between Update and the Borthwicks was entered into prior to 2 December 2008.

1. The issue in this proceeding is whether the contract for the sale of the land was entered into prior to 2 December 2008 which is the relevant day referred to in s 201RB(d)(iii).
2. Section 126 of the Instruments Act 1958 and s 53(1) of the Property Law Act 1958 require that for a contract dealing with land to be enforceable, the same must be in writing. Section 126(1) of the Instruments Act 1958 reads as follows -

(1) An action must not be brought to charge a person upon a special promise to answer for the debt, default or miscarriage of another person or upon a contract for the sale or other disposition of an interest in land unless the agreement on which the action is brought, or a memorandum or note of the agreement, is in writing signed by the person to be charged or by a person lawfully authorised in writing by that person to sign such an agreement, memorandum or note.

1. Section 53(1)(a) of the Property Law Act 1958 reads as follows -

(1) Subject to the provisions hereinafter contained with respect to the creation of interest in land by parol -

(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law;

1. Mr Tisher, who appeared on behalf of the applicant, submitted that the contract was entered into for the purposes of s 201RB(d)(iii) on 1 December 2008 when Mr Cowper informed Mr Mondous that the vendors had accepted the offer to purchase.
2. Mr Tisher stated that the contract was partly oral and partly in writing and that it came within the first principle of Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 or, alternatively, the principle stated by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628D-E. This principle has become known as the fourth principle of Masters v Cameron.
3. The first principle of Masters v Cameron is stated by Dixon CJ, McTiernan and Kitto JJ at [360] as follows :

Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. ...

1. The Baulkham principle or fourth principle of Masters v Cameron was stated by McLelland J at [628] of the Baulkham Hills case as follows -

There is in reality a fourth class of case additional to the three mentioned in Masters v Cameron, as recognised by Knox CJ, Rich J and Dixon J, in Sinclair, Scott & Co v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 317, namely, '... one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms'.

1. Mr Tisher said that by late November or 1 December when Mr Cowper communicated the acceptance of the vendors' offer to Mr Mondous, the parties had reached agreement on all material terms. He further stated that the evidence from Mr Mondous and Mr Cowper was that they both intended to be bound once the acceptance of the offer was communicated by Mr Cowper to Mr Mondous. He said that at that time they both considered themselves bound. Mr Tisher said that the way to examine whether there is an agreement was set out by Mahoney JA in Air Great Lakes Pty Ltd & Ors v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at [330] -

The proper view is, in my opinion, that the existence of a contract is a consequence which the law imposes upon, or sees as a result of, what the parties have said and done. Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but it is not, or not always the determining factor.

The matter may be tested by an example: A says, 'I promise to sell Black Acre to B for $100'; and B says, 'I promise to buy Black Acre from A for that price', the promises being made orally. In such a case, a binding contract will be held to exist. And this will be so even though neither A nor B subjectively adverted to (and therefore had no actual subjective intention as to) whether, by the exchange of those promises, a binding contract would be made. The law will hold a binding contract to have been made even though neither had any actual subjective intention that there be a contract, in the sense that neither party gave any thought to the matter.

The law looks, in this regard, to what the parties have done, viz, to their exchange of promises to buy and sell; and it treats the fact of that exchange as prima facie sufficient for imposing on them the legal relationship of contract. It will determine whether, according to what they said and did, they exchanged congruent promises: if they did, a contract will prima facie result.

1. Mr Tisher said that the written contract concluded the same essential terms upon which the agreement had already been reached. That is, he said, the written agreement evidenced an oral agreement that had already been made. The agreement was final prior to 2 December 2009.
2. Mr Tisher stated -

... the contract was partly oral and partly written. It is submitted that the written contract of 2 December 2008 evidenced the agreement that was procured prior to that time. The existence of the written contract does not derogate from the conclusion that it was the earlier agreement that the parties considered themselves bound by. The vendors' acceptance of that agreement had been communicated to the purchaser on 1 December 2008. On this basis, the transaction was an excluded event since the contract that resulted in the dutiable transaction had been entered into before 2 December 2008.

The subsequent reduction of the terms of the oral agreement between the parties to writing does not, as contended by the respondent, supersede the verbal agreement that was reached. Update contends that the contract contained both written and verbal terms. It is well established that scenarios one or four of Masters v Cameron as discussed above create binding legal relations from the outset. The submission by the Commissioner that it was only the written agreement that contained the terms of the bargain is accordingly misconceived.

1. Mr Tisher submitted that the provisions of s 126 of the Instruments Act and s 53 (1) of the Property Law Act are not relevant. While agreeing that a contract for the sale of land needs to be in writing to be enforceable, he stated that that does not detract from the argument that the contract has been entered into prior to 2 December 2008.
2. Mr Tisher also referred to the case of Futuretronics International Pty Ltd v Gadzhis [1992] VicRp 63; [1992] 2 VR 217. That proceeding concerned an allegation of misleading and deceptive conduct against the defendant who had bid at an auction for the sale of land and the property had been knocked down to him. Subsequent to the auction the defendant refused to sign the contract. The court held that the conduct was deceptive and misleading and, in those circumstances, it could be equivalent to ordering specific performance although it was not ordered in that case. It is stated in the headnote that -

"Once a bidder's offer is accepted at auction by the fall of the hammer, a single oral agreement containing all relevant terms in the auction contract including not only the agreed terms of purchase but also any terms requiring signature and payment of deposit comes into existence".

Here the deception led to the knocking down of the property to Mr Gadzhis and the conclusion of the auction, but nothing more.

1. Thus, Mr Tisher concluded that prior to 2 December 2008, there was a contract for the sale of the land within the meaning of s 201RB(d)(iii) of the Act.

1. Mr Young of counsel, on behalf of the respondent, submitted that the contract was made in respect of the land on 9 December 2008. He stated that the applicant's offer was not accepted until 9 December 2008 when the vendors counter-signed the contract.
2. Mr Young said that the term "contract" as used in s 201RB(d)(iii) means an enforceable contract_._ Mr Young said the meaning of the word "contract" is a contract which binds the parties which means it must comply with s 126 of the Instruments Act and s 53 Property Law Act.
3. In support of that submission, Mr Young referred to the Explanatory Memorandum to the Bill and the Second Reading Speech. At p 7 of the Explanatory Memorandum it is stated :

Paragraph (d)(iii) (s. 201RB) deals with a dutiable transaction where a contract relating to that transaction was entered into before the relevant day. This is to ensure fairness in application by excluding transactions that had already been formalised in the transitional period.

1. Mr Young submitted that a formal requirement for a contract relating to the sale of land is that it be in writing and signed by the party to be charged and until that is done the contract cannot be "formalised".
2. In the Second Reading Speech Mr Pallas, Minister for Roads & Ports, at p 3932 and p 3933 stated as follows :

Proposed section 201RA defines the GAIC events that trigger the liability to pay a contribution. ... A series of excluded events that do not trigger a liability to pay a contribution are set out in the bill. The excluded events also apply to circumstances where actions in relation to an event have occurred prior to the announcement of the GAIC or land coming within a contribution area. Such circumstances include where a planning permit had been issued for either the subdivision of the land or for building work to be undertaken, or where a binding contract relating to a dutiable transaction or a significant acquisition of interest was entered into before the relevant day.

1. Mr Young said that the use by the Minister of the words "binding contract" indicated that the contract envisaged in s 201RB(d)(iii) was a binding contract, that is a contract in writing signed by the parties.
2. Mr Young said that in determining the intention of the parties as to whether there was a binding contract or not, I should look at the objective rather than the subjective intention of the parties. He referred to the High Court case of Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528. That was a case of specific performance; the facts of that case are set out in its headnote and read as follows -

An estate agent made an offer to the owner of a certain real property to purchase the property on behalf of another person for a stated price. The owner accepted the offer and signed a document by which he authorized the agent to sell the property to the other person for the agreed price and agreed to enter into a contract for sale 'in form approved by The Real Estate Institute of New South Wales'. The stipulated deposit was paid and the agent then told the owner's solicitor that the property had been sold and asked for a contract of sale to be forwarded to the purchaser's solicitor. He also wrote to the owner notifying him that the property had been sold and that details of the sale had been forwarded to the owner's solicitor.

1. The Court held that the parties contemplated that they would not be bound until the formal contract was signed by them and exchanged by their solicitors. Hence, a binding contract had not come into existence. At p 532, the Court stated -

Here, however, we are concerned not with the construction of a written contract or document in the senses already discussed, but with an informal agreement arising out of an oral conversation, supplemented as it was by Ex. D.

... In resolving this dispute it is legitimate to ascertain the terms of the agreement then made by the parties, that is to say, what the parties relevantly intended, by drawing inferences from their words and their conduct in the making of that agreement.

Once it is accepted that it was appropriate for the primary judge to draw inferences from the words and conduct of the parties it is evidence that the conclusion which he reached was correct. There was in our view ample material from which his Honour could legitimately infer, as he did, that the parties mutually contemplated that a contract should come into existence in the normal course, that is, by means of the signing and the exchange of a contract in the form adopted by the Real Estate Institute of New South Wales, without relying on evidence that this was the unilateral intention or understanding of Mr Cummings, a finding which the appellant submitted was irrelevant.

The first consideration is that the usual method of selling real estate in New South Wales is by means of the signing and exchange of contracts in the form approved by the Real Estate Institute of New South Wales (see Eccles v Bryant)... a practice which was confirmed by Mr Cummings' evidence of his understanding. That no departure from this method was intended is suggested by the absence of any discussion ... And it was a preliminary agreement which was not in itself a binding contract.

1. Mr Young also referred to Goulburn-Murray Rural Water Authority v Rawalpindi Nominees Pty Ltd & Reid [2010] VSC 166 (unreported) 30 April 2010. At paragraph 157, his Honour Ross J stated -

In determining the existence of a binding contract the law is concerned with the objective manifestation of both the fact of agreement and the intention to enter into a binding agreement. The subjective intention of the parties is immaterial. As their Honours Gaudron, McHugh, Hayne and Callinan JJ observed in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105-106 :

Because the search for the 'intention to create contractual relations' requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word 'intention' is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.

To be binding the parties must have reached a concluded bargain and must have intended that their agreement would bind them and have legal effect.

1. Mr Young then submitted that, as a result, I should look at what actually happened between the parties rather than the stated intentions of Mr Mondous and Mr Cowper as given from the witness box.
2. Mr Young also referred to the New South Wales Court of Appeal case G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd [40 NSWLR] 631. It will be recalled that Mr Tisher referred to that proceeding before the judge at first instance.
3. In the G R Securities case, the issue was whether there had been a sufficient contract for the sale of land by an exchange of letters. At p 634, the Court of Appeal stated -

An agreement for the sale of property at a specified price does not necessarily indicate a legally binding contract. The magnitude, subject matter or complexities of the transaction may indicate that the agreement was a limited one not intended to have legal effect : Sinclair, Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 316-317. In New South Wales, real estate is ordinarily sold by signing and exchanging contracts in the form approved by the Real Estate Institute and Law Society. Accordingly, even though the parties agree in writing that real estate is sold for a specified price, the presumption is that no binding contract exists until 'contracts' are exchanged.

1. Mr Young said the same principle applies in Victoria in accordance with the REIV contract for the sale of land. He referred to Chen v Tullamarine Estate Pty Ltd Tadgell J SCV (unreported) 26 June 1989 where his Honour stated that the New South Wales proposition had been accepted in Victoria.
2. In the Chen case, Chen was a developer. There was an oral agreement to purchase real estate and the purchasers had signed the contract. Mr Young commented that the situation there was very similar to the facts in this particular instance. In that case, Tadgell J stated at [BC8900627 at 13 ff] -

The central question is whether there is an agreement on foot for the sale of the subject land or whether there is not. ...

The evidence which may be considered is not confined to that of events before the date of the contract alleged by the plaintiff. Statements of conduct of the parties after that inconsistent with the existence of a concluded contract are relevant to the enquiry whether there was a concluded contract : Howard Smith and Company Ltd v Varawa [1907] HCA 38; 5 CLR 68,78. As counsel for the plaintiffs correctly argued, one is equally entitled to consider conduct or statements of the parties after the date of the alleged contract which is consistent with the existence of such a contract.

I venture to suggest that all the parties would have been surprised, if not astonished, if it had been asserted on 18th June last year that any of them was bound, without more, upon the strength of what had passed between Mr Saheed and Mr Cook. This was, on any view, a substantial, important, unusual and not uncomplicated transaction. Yet in June last year there passed between the parties no written word save for what was written on the cheque.

1. Mr Young then referred to a number of matters which indicated objectively that there was no contract between the parties until the entire contract had been executed by both parties on 9 December 2008. Those matters were :

1. Contracts for the sale of land in Victoria must be in writing to satisfy both the Instruments Act and the Property Law Act; 2. This was a substantial and important transaction;

1. The written contract provided in advance an inference that there are terms for the parties to agree to in the contract;

1. The contract effectively was in the REIV standard form; 2. Particulars of sale make reference to solicitors on both sides.

Therefore, objectively infer a contract needs to be in writing.

And there were a number of clauses in the contract which indicate that it was the written contract which was the agreement between the parties.

1. Those matters are stated by Mr Young in his written submissions as follows :

The parties intended that it was necessary for the Borthwicks to sign the contract to demonstrate acceptance of the offer. That was expressly provided for in the handwritten additions to the Particulars of Sale in relation to the deposit: 'balance of the deposit is payable upon vendor signing of contract of sale'.

That intention was confirmed in the exchange of letters of 25 February 2009 ... and 26 February 2009 ... in which it was agreed that the date of the contract should be the date of acceptance by the vendor. The attached letter of Mr Cowper dated 15 January 2009 expressly recorded that 'the contracts of sale were signed and executed by the vendors on the 9th December'.

That the date of contract was 9 December 2008 was also confirmed by correspondence exchanged by the parties that treated 9 June 2009 as the date of settlement (being 6 months from the date of contract). ....

Further, the notice of acquisition declared by the applicant ..., the goods statutory declaration made by the vendors ... and the transactions treated as sub-sales of land declaration made by a director of the applicant ... all gave 9 December as the date of contract.

1. As an alternate submission, Mr Young said that the written contract integrated or merged all the terms of the bargain. He referred to Gordon v Macgregor [1909] HCA 26; (1909) 8 CLR 316 at [319-320] and stated that -

The written contract is properly construed as having been executed with the objective intention of superseding entirely any prior negotiations in relation to the sale of the land.

1. He then referred to Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471. That case involved a failed tax scheme. There was an assignment of a loan. Investors said the vendor was limited to earlier pre-paid interest and to capital repayments. However, the written agreement between the parties did not include those terms. At [484] the Court said :

If there was an earlier, oral, consensus, it was discharged and the parties' agreement recorded in the writing they executed. It is the written loan agreement which governed the relationship between Rural Finance and each respondent.

1. Mr Young thus submitted that I should conclude that the contract was made on 9 December 2008 and that the most that happened prior to 2 December 2008 was the parties agreed that they would enter into a contract which agreement had no validity.

1. The Commissioner's case is put on three bases. First, the transitional provision applies only where there was a binding contract in existence before the relevant date 2 December 2008 because of non-compliance as at that date with s 126 of the Instruments Act 1958. Any oral contract was not "binding". Secondly, there was no contract at all because the parties did not finally consent to an agreement until they exchanged contracts on 9 December 2008 and, finally, that if there was an oral enforceable contract it was discharged by the entering into the written contract on 9 December 2008.

Meaning of the word 'contract' as used in s 201RB(d)(iii)

1. Mr Tisher submitted that I should not have recourse pursuant to s 35 of the Interpretation of Legislation Act 1984 to the Explanatory Memorandum and Second Reading Speech referred to by Mr Young. Mr Tisher said that the meaning of the text is clear and the word "contract" should be given its usual and ordinary meaning of an agreement between two parties. He referred to Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 at [47], where it was stated :

The Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention.

1. Mr Tisher further referred to the High Court decision of Saeed v Minister of Immigration and Citizenship [2010] HCA 23 (23 June 2010) at [31] where the Court stated :

Statements as to legislative intention made in explanatory memoranda or by Ministers, however clear or emphatic, cannot overcome the need to carefully consider the words of the statute to ascertain its meaning.

1. In my view, the word "contract" as used in the section is quite ambiguous. Does it mean a contract per se, ie, unenforceable or does it mean an enforceable contract? Part 9B of the Act deals with the acquisition of land and the GAIC payment. It would seem to me that for the word "contract" to be used in the ordinary sense rather than in the sense relating to land could create quite ridiculous results. For instance, it could create liability for a party to some form of oral understanding. It is unlikely in a statute, such as the present, that that would be the case. Given these circumstances, in my view, Mr Young was quite correct in referring to the explanatory memorandum and the Minister's Second Reading Speech in relation to the statute in order to assist in interpretation. Those documents make it abundantly clear that the section refers to a "binding" contract. In order for a contract to be binding in Victoria, in relation to the sale of land, the provisions of s 126 of the Instruments Act and s 53 of the Property Law Act must be complied with. In this particular instance, those provisions were not complied with until 9 December 2008 when the contract was executed by the vendor. It necessarily follows that the exception in section 201RB(d)(iii) cannot apply in this situation because it was after the "relevant day". On this ground alone, the applicant cannot succeed. However, because other matters have been argued before me, it is desirable that I make a ruling on the same.

1. The cases referred to by Mr Young strongly suggest that I must judge the parties' intention by the subjective circumstances and those circumstances can also include matters which may take place after the contract. See Chen's case. The applicant's solicitors by letter of 25 February 2009 make it clear that they accept the vendors' proposal and agree to amending the day of sale to 9 December 2008.
2. In a letter from Cowper & Associates Pty Ltd written by Andrew Cowper dated 5 January 2009, it was clear that the contracts were exchanged on 9 December 2009, 5% deposit was paid into the agent's trust account on 8 December, and the balance of the 10% deposit was banked on 9 December. Thus, it is clear the deposit was paid and the actual contract came into being on 9 December 2008. It is further clear from the letter from the estate agent of 23 August 2010, that the $10,000 paid by Mr Mondous on 1 December 2008, was for the purpose of showing "the purchaser was serious about securing the property". There is no suggestion in that letter that the $10,000 was a deposit.
3. Further, I agree with the matters referred to by Mr Young above, that the strong objective evidence in this proceeding, is the parties intended to contract on 9 December 2008, not before. That is, when the contract was executed and exchanged.
4. This contract was for a large and important piece of land insofar as the purchasers were concerned. Mr Mondous gave evidence that he owned adjoining land and the land being purchased would enhance that land considerably and give it a better frontage and a corner position. Thus, it was something that was extremely important and substantial.
5. The fact that a written contract was provided in advance creates an inference that the parties only intended to agree on the contract being executed by both of them.
6. This contract was in the REIV form just as the contracts referred to in Allen v Carbone were in the form adopted by the Real Estate Institute of New South Wales in that state. In Victoria, as in New South Wales, the use of the standard form contract by signing an exchange is the usual way that transactions take place in this state. As in Carbone's case, here I find that there was no departure intended from that normal practice.
7. The particulars of sale making reference to solicitors in itself, in my view, indicates that the parties intended the contract to be in writing.
8. Further, without repeating each of the clauses referred to by Mr Young in the written contract, which clauses I have referred to above (see paragraph [46] hereof), it is clear from those clauses, that it was the written contract and the written contract alone that the parties were relying upon, not any oral discussions that may have taken place prior to the written contract being fully executed and exchanged. Putting the negotiations in the setting of the matters referred to by Mr Young in paragraph [45](a)-(e) hereof fortifies that conclusion.
9. Given the matters discussed in the last paragraph, it is clear that the parties on 1 December 2008 had neither reached finality in "arranging all the terms of their bargain" or to be "immediately bound to the performance of those terms" as in the first principle of Masters v Cameron (see paragraph [22] hereof).
10. In relation to the fourth principle of Masters v Cameron (see paragraph [23] hereof), it is clear by the fact of the clauses in the contract and in particular the "date of sale" in the contract being "2/12/2008" and the matters referred to in paragraphs [45] and [46] hereof, that the parties were not "content to be bound immediately and exclusively by the terms they had agreed".
11. In the cases referred to by Mr Young - (Allen v Carbone; Goulburn-Murray; G R Securities and Chen's cases), it is proper in the circumstances of this proceeding to look at the objective intentions of the parties. The words of the High Court in Allen v Carbone at 532 are appropriate here :

... the parties mutually contemplated that a contract should come into existence in the normal course, that is, by means of the signing and the exchange of a contract".

That was the proper inference to be drawn by the trial judge in Allen's case and it is the proper inference for me to draw on the facts of the present case.

1. In the G.R. Securities case (see paragraph [42] hereof) even though there had been an exchange of letters by the parties, the Court was unwilling to infer a legally binding contract in relation to the sale of land. It held because of the magnitude of the transaction it was necessary for a binding contract, to be signed and exchanged ordinarily "in the form approved by the Real Estate Institute and Law Society". A similar view was expressed by Tadgell J in the Supreme Court of Victoria in Chen's case.
2. Mr Tisher relied on the Air Great Lakes case (see paragraph [24] hereof) for the proposition that there can be an oral contract relating to land. However, Mahoney JA at 330 made it clear that "the existence of a contract is a consequence which the law imposes upon, or sees as a result of, what the parties have said and done". Looking at what the parties have said and done in this case all point to the fact that there was to be no contract until the contract was fully executed and exchanged.
3. In my view, the Futuretronics case relied on by Mr Tisher (see paragraphs [28] and [29] hereof) does not assist on the facts of the present case. The Futuretronics case concerned misleading and deceptive conduct under the Fair Trading Act 1985 and the conduct of a purchaser at an auction after the property had been knocked down to him. The situation here is entirely different. Here, there had been long negotiations between the parties and the cases I have referred to above make it clear that there needed in a situation such as he present to be a signed contract and an exchange.
4. Mr Tisher relied on the fact that both Mr Mondous and Mr Cowper gave evidence that it was the intention that the agreement was concluded when the vendors' acceptance was notified to Mr Mondous on 1 December 2009. In my view, that is subjective intention of the parties and should be given little, if any, weight whatsoever.
5. In this particular instance, for the reasons I have stated above, and because of the submissions made by Mr Young, which I accept, I find that at all times the parties to the contract did not intend the contract to come into being until 9 December 2008 and I find that was the date of the contract for the purposes of s 201RB(d)(iii).

Integration or merger of oral understanding in written contract

1. Mr Young made a submission that if there was an oral understanding, its terms become integrated or merged in the written agreement.
2. It is clear from the decision of Equuscorp referred to above, that when there is an oral understanding, and that understanding is embedded in the terms of a written agreement, that written contract is the sole source of the agreement between the parties. That rule is stated in Harnor v Groves [1855] EngR 71; (1855) 15 CB 667 at 674 :

... where a contract, though completely entered into by parol, is afterwards reduced into writing, we must look at that, and at that one, even though part of the terms previously agreed upon are not inserted in he written contract. It is by the written contract alone, ... that the parties are bound. And more especially is that so in a case where, as here, the contract is one which by the statute of frauds is required to be in writing. (per Maule J).

It should be noted that the Victorian equivalent to the statute of frauds is s 126 of the Instruments Act.

1. Mr Tisher said that as this is a contract partly written and partly oral, the merger rule does not apply.
2. I have considerable difficulty with the submission by Mr Tisher that the contract is partly oral and partly written. There are no necessary or any terms to the contract that are not in writing. The whole of the parties' agreement is embodied in the written contract. It is not necessary for any oral evidence to be called for the contract to be enforced.
3. However, if one were to look at the situation prior to 2 December 2008, there is clearly not sufficient for the contract to be enforced. It does not fulfil the statutory requirements of s 126 of the Instruments Act or s 53 of the Property Law Act. Without more, neither party could have brought an action on the agreement without the writing for either damages or specific performance. Without being able to bring an action for breach of contract, it is, in my view, nonsensical to say that the contract, with the importance of this contract, was formed at a time when such an action could not be brought. Given those circumstances, I cannot see how any of this contract is oral at all and I cannot see that the oral part of whatever was the understanding between the parties is sufficient to come within the meaning of the word "contract" in the relevant section. This is reinforced by what I have discussed above, that is, the subject intention of the parties strongly point to the parties' intention to only be bound by a written contract that is signed and exchanged.
4. Thus, I conclude that whatever the oral understanding between the parties was prior to 2 December 2008, the same has been merged or integrated into the written contract. Therefore, it cannot be said that there is a "contract" within the meaning of the section between the parties prior to 1 December 2008.
5. In those circumstances, it necessarily follows that the exemption referred to in s 201RB(d)(iii) is not applicable in this situation.
6. For the above reasons, the assessment of the respondent is affirmed and the disallowance of the applicant's objection is affirmed.

1. During submissions, Mr Tisher raised the issue of part performance of the oral agreement between the parties. The act of part performance relied upon was the payment by Mr Mondous of $10,000 on 2 December 2008 which Mr Tisher classified as a deposit. This submission has two difficulties, first the $10,000 payment was not made prior to 2 December 2008 as required by s 201RB(d)(iii) . Thus, even if the payment was an act of part performance, it would have the effect of making the contract enforceable after 1 December 2008. Secondly, by the agent's own letter of 23 August 2010 (see paragraph [12] hereof), the payment was to show that the purchaser was serious about securing the property. On this basis, and on the basis that the deposit in the contract was 10% of the purchase price, the payment of the $10,000 was a minimal amount. As such the payment was not unequivocally and of its own nature referrable to a concluded contract of sale (see McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69 at 78.