Supreme Court New South Wales Medium Neutral Citation: Shuvak Pty Ltd v Australand Holdings Limited [2013] NSWSC 1410 Hearing dates: 11 September 2013 Decision date: 25 September 2013 Jurisdiction: Equity Division Before: Hallen J Decision: (a) Order that the Plaintiff's application to extend the Caveat be dismissed. (b) Order the Plaintiff to pay the Defendant's costs of that application. Catchwords: REAL PROPERTY - Torrens Title - Caveat against dealings - application for extension of Caveat - Real Property Act 1900, ss 74K and 74J - whether caveatable interest Legislation Cited: Conveyancing Act 1919 Real Property Act 1900 Cases Cited: Abou-Hamad v Darwish [2012] NSWSC 231 Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528 Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 Brien v Dwyer [1978] HCA 50; (1978) 141 CLR 378 Domb v Isoz [1980] Ch 548; (1980) 1 All ER 942 Duic v Duic [2011] NSWSC 371 Eccles v Bryant [1948] Ch 93; (1947) 2 All ER 865 Fitzgibbons v Shaftsbury Pty Ltd [2011] NSWSC 525; (2011) 16 BPR 30,837 Kirton v Nethery (1996) 7 BPR 14,954 Sindel v Georgiou [1984] HCA 58; (1984) 154 CLR 661 Sullivan v Sullivan [2006] NSWCA 312; (2006) 13 BPR 24,755 Windrum v Rejilo Pty Ltd [1988] ANZ ConvR 491; (1988) NSW ConvR 55-431 Wu v Dardaneliotou [2008] NSWSC 1319 Category: Interlocutory applications Parties: Shuvak Pty Ltd (Plaintiff) Australand Holdings Limited (Defendant) Representation: Counsel: Mr M K Rollinson (Plaintiff) Mr M Izzo (Defendant) Solicitors: Karam C Ramrakha (Plaintiff) King & Wood Mallesons (Defendant) File Number(s): 2013/267825 Judgment The Claim 1HIS HONOUR: The Plaintiff, Shuvak Pty Limited, relevantly, and by way of interlocutory application, seeks orders under Real Property Act 1900, s 74K, extending the operation of a registered caveat ("the Caveat"), lodged in early August 2013, over a property in Botany, New South Wales ("the Property"), which is owned by the Defendant, Australand Holdings Limited. It does not seek, alternatively, leave to lodge a further caveat pursuant to s 74O of the Real Property Act, or to amend the Caveat that has been filed. 2The Plaintiff's Summons was filed on 4 September 2013. Bergin CJ in Eq. granted leave to serve short notice thereof and the Summons was made returnable before the Duty Judge on 11 September 2013. (The Plaintiff sought other final relief but the only relief sought, on an interlocutory basis, is as set out above.) 3I heard the application on 11 September 2013, in the Duty List, when I declined to make any further order extending the Caveat. Directions for the continuation of the proceedings, otherwise, were made by agreement. Due to the pressure of other court business on that day, I indicated that my reasons would be published in due course. These are those reasons. 4At the time I stated that I declined to extend the operation of the Caveat, the Plaintiff conceded that it should pay the Defendant's costs of the interlocutory proceedings and I shall make that order. 5To help protect the parties against the possibility of identity theft, the address and title details of the Property are not published in this judgment. The Caveat 6Mukesh Gohil, a director of the Plaintiff, made the Statutory Declaration on the Caveat in the presence of Karam Chand Ramrakha, the Plaintiff's solicitor. Mr Gohil solemnly and sincerely declared: "To the best of [his] knowledge, information and belief", "the caveator has a good and valid claim to the estate or interest set out in Schedule 1". 7In Schedule 1 of the Caveat: (a) The nature of the estate or interest in the Property is stated as "Contract for Sale of Land"; (b) The "instrument" by virtue of which the Caveat appears to have been created is described as "Contract 2 August 2013 Australand Holdings Ltd as Vendor and Shuvak Pty Ltd as Purchaser"; and (c) The "facts" by virtue of which the Caveat appears to have been created is described as "As stated above". 8The Plaintiff caused the Caveat to be lodged on 20 August 2013 "to protect its interest". 9On 23 August 2013, the Plaintiff received a Notice of lapsing of Caveat. Accordingly, without an order extending the operation of the Caveat, it would have lapsed 21 days later. 10(The Defendant did not seek to argue about the form of the Caveat. Accordingly, it is unnecessary to determine whether the Caveat described a proprietary interest in the Property or whether it claimed an interest under a contract of the sale of land, the nature of which interest was not identified.) The Hearing 11When the hearing commenced, I granted leave to the Defendant, without objection, to file in Court, and to read, the affidavit of Ilana Rykki Crudden, a Senior Associate at the firm of solicitors acting for the Defendant. The exhibit to her affidavit was tendered and marked Ex. 1 in the proceedings. 12The Plaintiff read the affidavit sworn 3 September 2013 of Mr Gohil and the affidavit of Mr Ramrakha also sworn 3 September 2013. The Defendant read the affidavit of Ms Crudden and relied upon her exhibit. No deponent was cross-examined. 13There were few objections taken to the affidavits and the matter proceeded, after the affidavits were read, by each party's counsel making oral submissions in support of written submissions that were filed and which shall remain with the papers. 14I am grateful to the legal representatives for the way in which each conducted the case, and for the assistance provided to the Court in a busy Duty List. The Background Facts 15The following facts provide the basis for the Plaintiff's claim. 16The Plaintiff is an Australian Proprietary company limited by shares. It has three directors. There are 10 issued shares, each with a fully paid value of $1.00. Another company, Shuva Pty Limited, is the sole shareholder. 17The Plaintiff is associated, also, with another company, South Austral Pty Limited, of which Mr Gohil is a director, and together, the companies are engaged in property development. 18It appears that Mr Gohil was introduced to the Property in mid-July 2013. On behalf of South Austral Pty Limited, he made an offer to purchase the Property, which offer was increased, on 16 July 2013, to $2,203,905 plus GST. 19On 23 July 2013, the Defendant's agent informed Mr Gohil and others, by email, that "Australand's board have agreed to accept your offer" and attached to the email, a document, dated 23 July 2013, headed "Heads of Agreement- Proposed Land Sale to South Austral". 20I shall not set out all of the terms of the Heads of Agreement. Importantly, it provided that: (a) The purchaser was required to pay a holding deposit of $10,000 which amount would be credited "towards the deposit payable under the contract for sale at the time of exchange of the contract" and that "[I]f a contract for sale is issued by the vendor's solicitors and the purchaser does not proceed to an exchange of contract, the vendor may apply the holding deposit to costs incurred by the vendor including the vendors' (sic) legal costs of preparing contract for sale documentation". (b) A deposit of 10 per cent was payable "on exchange of contracts". (c) Despite anything else in "the proposal", "the commercial terms set out ... and the transaction contemplated by this proposal are subject to the approval of Australand's Senior Management and the Board of Directors of Australand Holdings Limited and South Austral Pty Ltd". 21South Austral Pty Limited, initially, accepted the proposal on 23 July 2013. Mr Hasmukhlal H Gohil, on behalf of South Austral Pty Limited, signed the Heads of Agreement and it was returned to the Defendant's agent. 22However, subsequently, the Heads of Agreement document was amended to refer to the Plaintiff as the purchaser and it paid the holding deposit of $10,000 into the Bank account of the Defendant's agent. Mr Mukesh Gohil signed the Heads of Agreement and returned it, also, to the Defendant's agent. 23At, or about, the same time, Mr Mukesh Gohil gave instructions to Mr Ramrakha to act as solicitor for the Plaintiff on the purchase of the Property. He informed the solicitor that "we want to exchange contracts as soon as possible". 24On about 31 July 2013, Mr Ramrakha advised Mr Gohil that the Defendant's solicitors were arranging for a copy of a draft contract for sale to be sent to him. 25On 1 August 2013, the solicitor and Mr Gohil attended at the offices of the Defendant's solicitors and met with Ms Kristen Dumitrescu, a solicitor, who provided a copy of an unsigned contract for sale of the Property between the Defendant as vendor and the Plaintiff as purchaser. 26I shall set out the relevant parts of Mr Gohil's affidavit as to what then occurred: "... 16. Ms Kristen Dumitrescu produced a search of Shuvak and said, "The contract requires signature of two directors". Mr Ramrakha said to her, "Is there another prospective buyer?" She did not answer to that? However, Mr Ramrakha said to her, "Are we at the head of the queue if there is one and is the vendor prepared to sell to my client at that price" She replied, "Yes." Discussion then followed as to how to secure the signature of Kamlesh Gohil the other Director who was in China. Dumitrescu left the room and came back and said, "No, the vendor required an actual signature, not a scanned one." 17. Mr Ramrakha asked, "That would take time. If we got that signature first thing Monday morning, would that be in order." Dumitrescu replied, "Yes." Mr Ramrakha again asked, "Are we at the head of the queue" to which Dumitrescu replied "Yes, and if you sign the contract and pay the deposit that would be it." 18. As we left the offices Mr Ramrakha asked, "How do we exchange?" and Dumitrescu replied, "You bring the signed contract here and pay the Deposit." Mr Ramrakha responded, "Would that be it?" She replied "Yes." 19. I then left the offices of KWM at about 3.30PM time. I had the contract with me. 20. A meeting of Directors of Shuvak was held at the company's office at Banksmeadow at about 7.15PM on 1st August 2013. Kamlesh attended by phone. It was resolved to appoint Hasmukhlal Gohil as an additional Director. Hasmukhlal Gohil and I then signed the contract of sale on behalf of Shuvak on page 3. 21. At about 7.15PM on 1st August 2013, I visited the office of Colliers International and meet (sic) Mr Princi. I said to him, "We are exchanging on the property. Here are our cheques for the deposit." I left him with two cheques, one for $200,000.00 on the account of Shantilal Brothers (Australia) Pty Ltd, one for $20,390.50 on the account of South Austral Pty Ltd and obtained receipts. Shantilal is a company associated with South Austral and Shuvak. The Directors are Hasmukhlal Gohil, Saraswati Gohil, Mukesh Gohil (myself), and Kamlesh Gohil. ... 22. At 7.04PM on 1st August 2013, Mr Princi sent me an email suggesting a way for Shuvak to exchange contracts. In fact by that stage the contract had been executed by the new director Hasmukhlal Gohil and me. ... 23. Late on 1st August 2013 I telephoned Mr Ramrakha and told him, "We have appointed Hasmukhlal Gohil as a new Director and signed the contract. I will deliver it to Mallesons tomorrow. We have paid the deposit to the agent." 24. On Friday 2nd August 2013 - 9.32AM I sent email (sic) to Mr Karam Ramrakha, Ms Kristen Dumitrescu, Hasmukhlal Gohil, Edward Princi, Kamlesh, Jyoti Kapadia - advising of the appointment of new director of Shuvak, payments of Deposits to Colliers International. ... ... 27. On Friday 2nd August 2013 - 9.51AM Mr Edward Princi of Colliers referred our mail to Mr Mark Linfoot. Mr Edward Princi also requested Mr Mark Linfoot to confirm to take the property of (sic) the market. ... 28. On Friday 2nd August 2013 - 10.45AM I arrived the (sic) offices of KWM and personally delivered to Ms Kristen Dumitrescu, the signed contract. 29. On Friday, 2nd August 2013 - 12.05PM Mr Edward Princi advising Mr Mark Linfoot (Senior Business Development Manager of Australand Holdings Limited) that Ms Kristen Dumitrescu of King & Wood Mallesons confirm that she hold the signed contract from South Austral/Shuvak and does not hold signed copy from another party. ... 30. On Friday 2nd August 2013 - 12.23PM Mr Mark Linfoot confirm with Mr Edward Princi of Colliers that the property is off the market in favour of South Austral / Shuvak. . .. 31. On Friday 2nd August 2013 - 2.45PM Mr Edward Princi of Colliers telephoned me and said "Australand has now exchanged contract with someone else for an extra $100,000.00." 32. On Friday 2nd August 2013 - 3.01PM I called on mobile number of Mr Ian Barter Director of Australand Holdings. I could not reach him. Message to call me back, was left on his voice mail. 33. On Friday 2nd August 2013 - 3.20PM Mr Ian Barter of Australand returned my call informed me and said "We are in predicament." I protested say "We have acted in good faith and exchanged as required by your lawyers and mine." Ian Barter "I do not agree with that position, I am not able to do anything. I am pressed by our top management. If you increase your offer by $100,000.00, it will be easier for me to deal with top management." I said "If we did that where is the guarantee that will be final? What is to prevent this becoming a bidding war between two purchases?" Ian Barter said "That won't happen." I said "How can we have confidence in you?" We ended on that note." 27Finally, Mr Gohil stated in his affidavit that the Plaintiff "wishes to complete its purchase of the Property". 28Mr Ramrakha's evidence is, relevantly, contained in the following paragraphs of his affidavit: "... 17. Against (sic) she left the room and came back and said, " Nothing short of an original signature would suffice." Either I or Mukesh said to her, " We are ready to lodge the deposit, " but KB replied, " No you do that when you bring back the signed contract" 18. At this point we decided to leave and informed Ms Dumitrescu " We will be getting an actual signature from China by courier but it will not be available until Monday. " At this point I again expressed my concern about whether we would be at the head of the queue, asking " Would it be in order if we came back on Monday with the signature and the deposit cheques." She said, "Yes." I then asked her, " Would it be in order if the Agent exchanged it " KD replied, " No , you bring the signed contract back here and pay the deposit." At this point she gestured to the ground when she said " back here" . I then said to her, " Would that be it ?" She replied, "Yes" Mukesh and I then left the office. 19. We left on that note. Ms Dumistrescu's version that we were to leave the signed contract at Mallesons and pay the deposit was provisional and matters were to proceed from there is not correct." 29There is no dispute that contracts for the sale of the Property were not exchanged. 30Later, on 2 August 2013, the Defendant exchanged contracts for the sale of the Property with Baker Street Holdings Pty Limited. The completion date of the Contract was 13 September 2013. 31Ms Crudden's affidavit essentially consisted of copy correspondence between the parties. 32In addition to reading the affidavit of Ms Crudden, the Defendant tendered a copy of a notice to produce served upon the Plaintiff, by its solicitors, on 10 September 2013, which required production of various documents relating to the financial position of the Plaintiff. The Defendant called on the notice to produce, but the Plaintiff did not produce any documents. (I should note that at least some of the documents the subject of the notice to produce had been sought in a letter dated 9 September 2013 from the Defendant's solicitors to the Plaintiff's solicitors.) 33Although the Plaintiff produced no documents, it tendered certain correspondence to a bank in which it identified the purchase of "some land at Botany" and a letter dated 10 September 2013 from the Bank stating that "... Mr Mukhesh Gohil held discussions with the writer with regard to arranging finance to purchase the ... [Property] ... I can confirm that the discussions were based on a loan of some $1.4M to fund a purchase price of $2,203,905 plus GST". 34The Plaintiff also tendered a copy document dated 10 September 2013 addressed "To Whom it May Concern", by the accountant for South Austral Pty Limited, which stated, amongst other things, that "Shuvak Pty Limited has the funds to meet the purchase of land valuing (sic) A$2.5M from Australand". The basis for this statement was not explained in the document and I was not told how the accountant for South Austral Pty Limited had formed the opinion expressed. 35The Plaintiff relied upon this correspondence, so it submitted, to establish its financial position to complete the purchase of the Property. The Submissions 36The Plaintiff's written submissions, which are brief, may be set out in full: "The Plaintiff's claim to an interest 'has, or may have, substance': s. 74K(2), Real Property Act. There was no exchange of executed counterpart contracts, but the vendor is estopped from denying that exchange of contracts has occurred, by the conduct of its solicitor Ms Dumitrescu on 1 August 2013 at paras 14-19, affidavit of M H GOHIL, 3 Sep 2013, and paras 14-18 affidavit of K C RAMRAKHA, 3 Sep 2013. On this the purchaser relied by, on 1 August, appointing the additional director, executing its counterpart, paying the deposit of $220,390 (10% of $2.203 million) to the vendor's agent, and informing the vendor's solicitor of this; and by delivering the counterpart to her on the morning of 2 August, see GOHIL paras 20-28. On that afternoon, apparently, the vendor changed its mind, and refused to proceed unless Shuvak increased its 'offer', see GOHIL paras 31-36. The estoppel also prevents reliance on the absence of a signed memorandum under s. 54A, Conveyancing Act: Waltons Stores (Interstate) Pty Ltd v Maher (1988) 164 CLR 387. Alternatively to the need for detrimental reliance, the payment of the deposit to the agent and notice thereof are acts of part performance overcoming s. 54A. Circumstances of the payment overcome any rule that mere payment of price in whole or part is not 'unequivocally referrable' to the contract, cf. Ciaglia v Ciaglia [2010] NSWSC 341." 37The Defendant's written submissions may be summarised as follows: (i) It was not seriously arguable that the Plaintiff had an interest in the Property as asserted in the Caveat, firstly, because there was no binding contract for the sale of land ever formed, and secondly, even if there were a binding contract, it was unenforceable because there was no memorandum, or note, in writing of it, within the meaning of s 54A of the Conveyancing Act 1919; (ii) The Summons alleged an estoppel, but there was no evidence of detrimental reliance on any representation said to have been made to the Plaintiff; (iii) Even if there had been reliance, it would have been unreasonable for any person acting on the advice of an experienced solicitor, to have failed to appreciate, in a transaction involving the sale of land, that either party was free to withdraw until the contracts for the sale of land had been exchanged; (iv) The balance of convenience did not favour the extension of the operation of the Caveat, because the sale to Baker St Holdings could be lost, or a liability for delay damages, could be incurred; (v) The Plaintiff's undertaking as to damages, which would need to be given by the Plaintiff, was not a meaningful one. The Principles for extension of the operation of a Caveat 38There was no dispute about the relevant principles that apply, namely that, if it is to extend a caveat, the Court must be satisfied that the caveator's claim "has or may have substance". If so satisfied, the Court is empowered under s 74K(2) of the Real Property Act, to make an order extending the operation of the caveat for such period as is specified in the order, or until further order, or the Court may make such other orders as it thinks fit. If the Court is not so satisfied, it shall dismiss the application. 39In Abou-Hamad v Darwish [2012] NSWSC 231, at [41] - [42], I wrote: "On an application for the extension of the operation of a caveat on an interlocutory basis, the statutory test prescribed by the Real Property Act, s 74K(2), is whether the caveat has, or may have, substance. As has been said many times, in practice, this approximates the test applied by the court on applications for an interlocutory injunction, namely whether there is a serious question to be tried for the final relief of the party, and, as on an application for an interlocutory injunction, the court takes into account the balance of convenience, although where a caveat is shown to have substance, the court will not lightly jeopardise the validity and/or priority of the caveator's claim on balance of convenience considerations: Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222; Martyn v Glennan [1979] 2 NSWLR 234; Gay v Gooden (1989) NSWConvR 55-445; 70 Pitt Street Sydney v McGurk [2004] NSWSC 413; (2004) 11 BPR 21,643 at [15], 21,645; Ruxan Pty Ltd v Peachme Pty Ltd [2004] NSWSC 1221 at [9]; Milstern Retirement Services Pty Ltd v Owners Strata Plan No22521 [2006] NSWSC 301; (2006) NSW ConvR 56-151 at [19]; Fitzgibbons v Shaftsbury Pty Ltd [2011] NSWSC 525; Syndication Capital Group Pty Ltd v MDR Cornish Investments Pty Ltd [2011] NSWSC 1289. The practice set out above is applied when the extension of the caveat that is being sought to be extended is one that is to last for a limited time, while litigation is under way to establish whether the caveator really has the interest that he, she, or it, claims. 40As was stated, earlier, by Brereton J in Wu v Dardaneliotou [2008] NSWSC 1319, at [4]: "... However, the question of the balance of convenience does not arise unless and until the Court is satisfied that the caveator's claim has or may have substance." 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. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 September 2013