Supreme Court New South Wales

• Medium Neutral Citation: Guilfoyle Developments Pty Ltd v Geoffrey Craig Frumar [2012] NSWSC 859
• Hearing dates: 30.04.12, 01.05.12, 02.05.12, 03.05.12, 04.05.12, 29.05.12, 30.05.12
• Decision date: 01 August 2012
• Before: Nicholas J

Decision

Pars 89-92

• Catchwords: CONTRACT - specific performance - vendor and purchaser - contract for sale and purchase of "off the plan" unit - negotiations for variations for inclusion in replacement contract - whether concluded contract - whether vendor estopped from denying performance of variations - whether conduct of vendor misleading and deceptive, and unconscionable - whether vendor entitled to order for specific performance
• Legislation Cited: Australian Consumer Law, Sch 2 to the Competition and Consumer Act 2010 (Cth); Trade Practices Act 1974 (Cth) repealed
• Cases Cited: ABC v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540; Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153; Gould v Vaggelas [1985] HCA 85; (1983-1985) 157 CLR 215; Lam v Ausintel (1989) 97 FLR 478; Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353; Mehmet v Bensen [1965] HCA 18; (1965) 113 CLR 295
• Texts Cited: Meagher, Gummow and Lehane: Equity Doctrines and Remedies, 4th Ed (2002)
• Category: Principal judgment
• Parties: Guilfoyle Developments Pty Ltd - plaintiff; Geoffrey Craig Frumar - defendant; Geoffrey Craig Frumar - cross-claimant; Guilfoyle Developments Pty Ltd - first cross-defendant; Alexandre Machkevitch - second cross-defendant
• Representation: Counsel: W V McManus - plaintiff/cross-defendants; J Knackstredt - defendant/cross-claimant; Solicitors: Harris Freidman - plaintiff/cross-defendants; Geoffrey C Frumar & Associates - defendant/cross-claimant
• File Number(s): 11/377547

Judgment

1 By statement of claim filed 25 November 2011 the plaintiff/vendor seeks an order for specific performance of a contract for the sale of a unit at Double Bay against the defendant/purchaser, an award of damages, and interest.

2 By his amended cross-claim filed 30 April 2012, the defendant/cross-claimant seeks an order for specific performance by the plaintiff/first-cross defendant of the contract as varied. He also seeks relief against both cross-defendants in respect of misleading and deceptive, and unconscionable, conduct in contravention of s 51AA and s 52 Trade Practices Act 1974 (Cth) repealed (the Act) (now s 20 and s 18 Australian Consumer Law, Sch 2 to the Competition and Consumer Act 2010 (Cth) respectively).

3 On 20 November 2009 the plaintiff (Guilfoyle) entered into a contract with the defendant (Mr Frumar) and his late wife, Denise Ann Frumar, for the sale and purchase "off the plan" of a residential unit (the unit) situated in Double Bay, for the price of $3,300,000. The second cross-defendant (Mr Machkevitch) is a director of Guilfoyle. Mr Frumar is a solicitor who acted for himself and his late wife in the transaction. On 8 April 2010 Mrs Frumar died, and Mr Frumar became the sole purchaser of the unit.

4 The unit is one in a block of six. The units were constructed between July 2010 and September 2011. On 30 September 2011 Strata Plan 85972 for the development was registered. At present, four units in the building have been sold and are occupied. Of the remainder, one is unsold, and the other is the subject of these proceedings.

5 These proceedings arise in the following circumstances. Guilfoyle required settlement to take place on/before 11 November 2011. Mr Frumar refused, contending that there had been variations to the contract which extended the date for completion to 30 April 2012, and which required Guilfoyle to carry out additional building works in the nature of internal fittings and improvements for the unit. Mr Frumar seeks specific performance of the contract as varied, alternatively damages including damages for work not performed, rectification, and interest.

6 The principal issues are whether there were binding agreements to extend the date of completion to 30 April 2012, and by which Guilfoyle was obliged to carry out the additional works required by Mr Frumar. In short, Mr Frumar contends that the parties had reached a binding agreement, partly oral and partly written, on the variations by 4 August 2010. Although it was common ground that a replacement contract for sale would be prepared to incorporate the variations, Mr Frumar contends that a binding agreement was not conditional upon the preparation and execution of a replacement contract. The crucial question in this case is whether negotiations had resulted in a binding agreement within the first or second classes identified in Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 (p 360) as Mr Frumar argued, or whether the case was one in which the intention of the parties was that a concluded bargain was conditional upon the execution of a formal contract within the third class identified in Masters, as Guilfoyle contended.

Background

7 The following history is taken mainly from the documentary evidence.

8 On 12 October 2009 there was a meeting at which Mr Machkevitch and Mr Frumar discussed the proposed development of the unit with particular reference to fittings and installations requested by Mr Frumar. About this time a promotional brochure was provided to Mr Frumar which described in general terms some design features, fittings, and fixtures proposed for inclusion in what were referred to as "Six Ercole Palazzetti Designed Apartments".

9 By letter of 18 October 2009 to Mr Gregg Watson, Guilfoyle's solicitor, Mr Frumar advised of 34 matters to be considered for inclusion in the contract following the meeting of 12 October 2009. He concluded:

"Please oblige in acknowledging receipt so that we are assured that, consistent with the arrangement the Writer made with your client, the contents of this letter are discussed with him so that they can be incorporated within the Contract for Sale. In this regard, I note that, at this stage, I have made no attempt to peruse the draft Contract that I have received from you as, clearly, the form of that Contract shall alter in the light of the above comments and observations."

10 By letter of 28 October 2009 to Mr Watson, Mr Frumar advised of numerous requirements, and made suggestions, with reference to specific provisions in the draft contract. He concluded:

"We do apologise for the length and detail of this letter but our clients are concerned that the Contract for Sale between the parties is as precise as possible in order to avoid conflict, disputation and/or tension between the parties. Please oblige in acknowledging your receipt of this letter and in providing us with your client's instructions and comments as early as possible so that, subject thereto, the parties can proceed to exchange with minimum loss of further time."

11 Between 29 October and 19 November 2009 there was correspondence between Mr Frumar and Mr Watson negotiating the terms and conditions for inclusion in the contract. The degree of detail is illustrated by the following extracts:

(1) Letter of 30 October from Mr Watson to Mr Frumar:

"(xxiii) The contract should and will form the entire agreement between the parties, any agreed amendments should be included in the contract"

(2) Letter of 9 November from Mr Frumar to Mr Watson:

"(x) & (xi) with respect, we do seek clarification of your client's comments so that there are no subsequent surprises or disputes

...

(xxiii) noted, subject to incorporation within the Contact for Sale of the agreed salient issues which have passed between us in correspondence commencing with our letter to you of 18 October last;"

It concluded:

"Please oblige in acknowledging your receipt of this letter and, if acceptable, in proceeding with the submission to us of the engrossed Contract for Sale with amended Clauses which incorporate the outcome of the negotiations which have taken place between our respective clients. We confirm that, subject to our receipt of the engrossed Contract in final form acceptable to our clients, they shall arrange for the issue by their Bank of the Deposit Bond or Bank Guarantee and proceed to exchange contracts at the earliest opportunity ..."

(3) Letter of 10 November 2009 from Mr Watson to Mr Frumar:

"(xxiii) We have attempted to include all agreed amendments in the revised special conditions attached. If any have not been included please advise the omission ..."

(4) Letter of 13 November from Mr Frumar to Mr Watson concluded:

"... Subject to your client's acceptance of the outstanding issues to which we have referred above ... we anticipate that contracts should be able to be exchanged without delay. In this regard and in order to avoid complications and possible misadventure on our part, we do urge and recommend that you prepare and compile a fresh set of Contract documentation which incorporates the agreed amendments on the one hand and all the appropriate annexures on the other. In this manner, we feel assured that both counterpart copies of the engrossed Contract for Sale will be identical for the purpose of execution by our respective clients."

(5) The email of 16 November from Mr Blaxell (on behalf of Mr Watson) to Mr Frumar concluded:

"Lastly, I note that to date the correspondence between the parties has been voluminous, and the issues raised many. However, I believe that we are now close to finalising the terms of the contract. Accordingly, if you require any further changes to the special conditions could you please telephone me on ... so that such changes can be discussed and agreement reached without any further delay."

12 On 20 November 2009 the contract for sale between Guilfoyle, and Mr and Mrs Frumar was exchanged. The sale price was $3,300,000. The contract included the following provisions:

"30 COMPLETION AND NOTICE TO COMPLETE

30.1 Completion of this agreement (the 'completion date') will take place on the later of the date:

a twenty one (21) days from the date of service by the vendor on the purchaser of written notice that the Strata Plan has been registered. Such notice must include a copy of the registered strata plan and any other dealings registered simultaneously with the Strata Plan ...

...

30.2 The vendor will provide written notice to the purchasers of at least six (6) months that registration of the plan is anticipated and that settlement will be due so as to enable the purchasers to market and sell their house. Where completion would otherwise be due to take place between 1 May and 1 September in any year, then the completion date will be automatically extended to 30 November of that year without any penalty being suffered by the purchasers.

30.3 In the vent that completion is not effected in accordance with special condition 30.1 then either party shall be entitled to give to the other party a notice to complete requiring completion to take place within fourteen (14) days from the date upon which the notice to complete is served time being of the essence and the parties agree that such notice is reasonable and sufficient notice.

31 CONDITIONAL CONTRACT

31.1 Completion of this contract shall be subject to and conditional upon the vendor becoming the registered proprietor of the lands specified on page 1 of this contract and registration of the strata plan of subdivision substantially in the form annexed hereto and marked "A" (the 'Strata Plan') on or before twenty four (24) months from the date of this contract ('Plan Registration Date'). In the event that registration of the Strata Plan has not been effected or occurred before the Plan Registration Date then the purchaser may rescind this Contract upon seven (7) days written notice whereupon the provisions of Clause 19 shall apply PROVIDED HOWEVER that no such right or rescission shall be exercisable by the Purchaser after twenty eight (28) days from expiry of the said twenty four (24) month period.

...

31.2.10 Where construction of the building has not substantially commenced within 6 months of the date of this contact, and for the purposes of this special condition substantially commenced will mean excavation of the site following demolition of the existing buildings, then the purchaser shall be entitled to rescind this contract by giving written notice to the vendor within 14 days of the expiration of the 6 month contract.

...

32 CONSTRUCTION AND SCHEDULE OF FINISHES

32.1 The Vendor must cause the Building of which the property sold forms part to be constructed in a proper and workmanlike manner and substantially in accordance with the Council approved plans and specifications and the Council's Development Consent and clauses 57 and 58 ...

...

32.3.1 Prior to completion, and as an essential term of this contract, the vendor will cause the items specified in the Schedule of Finishes to be installed to the property and in the common property and workmanlike manner and substantially in accordance with the Schedule of Finishes annexed hereto and marked 'B'.

...

37 THE AGREEMENT

37.1 the Purchaser acknowledges the terms and conditions stipulated in this contract form the whole of the agreement between the Vendor and Purchaser and that no reliance is to be placed on any letter document or correspondence whether oral or in writing as amending or adding to the terms and conditions stipulated in this contract.

...

40 RECISSION

Notwithstanding any rule of law or equity to the contrary, should the purchasers, or either of them, prior to completion die or become mentally ill, then the surviving purchaser, or the legal personal representative/s of the deceased or mentally ill purchaser's estate, may by notice in writing served on the vendor rescind this agreement, whereupon the provisions of clause 19 will apply.

...

42 LIQUIDATED DAMAGES

If completion of this contract does not take place by the completion date due to the default of only one party, it is an essential condition of this contract that the party in default shall pay to the other party upon completion, in addition to the other monies payable pursuant to this contract, the amount obtained by applying a simple interest formula of eight (8%) per cent per annum to the balance of the purchase price and calculated on a daily basis from but not including the completion date and including the date upon which this contract is actually completed.

...

57 Variations to Property Configuration

The vendor agrees, at its own cost and at the request of the purchaser to make the following additions, or alterations, to the proposed configuration to the property ..."

Subclauses 57.1 to 57.17 inclusive specified the required additions or alterations.

"58 Purchasers' input to design and architectural matters

At its own cost and expense, the vendor agrees at the purchasers' request to allow the purchasers to provide directions and input to the vendor's architect and design in relation to the following matters and to comply therewith:

...

58.4 design of the cupboards, drawers, robes including mirrors, linen presses, pantry and storage facility in the bedrooms, bathrooms, kitchen with installation of a kitchen tidy as a sliding drawer with retractable lid in the cupboard beneath the double sink and laundry.

58.5 location of all switches, power points, four gas bayonets, hot water system, telephone points, television points, the C-Bus system and broadband cable.

...

60 Insulation to floors and ceilings"

13 On 8 April 2010 Mrs Frumar died.

14 By email of 31 May 2010 to Guilfoyle, Mr Frumar stated that he reserved until 31 July 2010 his decision on the course of action he would take under the contract following the death of his wife.

15 By letter of 11 June 2010 to Guilfoyle, the ANZ Bank offered to provide finance to the amount of $13,265,000, subject to annual review. The termination date was 14 December 2011.

16 In his email of 29 June 2010 to Mr Frumar, Mr Watson said:

"The vendor's financier has yesterday requested as a condition of financing this construction phase that all pre sale contracts have a sunset clause that expires at least 6 months after expected construction completion.

As such I am instructed to seek your agreement to vary the terms of your contract by amending clause 31.1 by deleting 24 months and inserting 19 March 2012. The balance of the contract would remain the same.

If you agree to this amendment by return email before noon today, I am instructed that the vendor would agree to reduce the purchase price by $5000 to compensate for your urgent consideration of this request."

17 Mr Frumar's email of 29 June 2010 in reply included:

"As your client is aware, I have reserved to myself and retained the right to exercise my entitlement to rescind the Contract for Sale dated 20 November 2009 pursuant to Clause 40 until 31 July. Although I would prefer to postpone my response to your email until after the meeting which is now scheduled to take place with your client on 12 July, in a spirit of goodwill and a genuine desire to co-operate with your client I am agreeable to amendment of Clause 31.1 by deleting the reference to 24 months and by substituting 19 March 2012 (which is a Saturday) as the Plan Registration date in its stead subject to your client's favourable consideration that, in view of the unexpected delay in commencement of the building works and the additional requirement of your client's Financier, the following consequential variations should be made to the Contract ..."

Proposed amendments to clauses 30.2, 31.2.10 and 31.2.12.1 were specified. The payment of a sum of $2,475 towards the cost of the bank guarantee was requested should Mr Frumar not rescind.

18 By letter of 29 June 2010 Mr Watson sought Mr Frumar's written confirmation that he agreed to the following:

"1 Clause 31.1 is amended by deleting the words 'twenty four (24) months' and replacing them with '19 March 2012';

2 Clause 30.2 is amended by deleting the words '30 November' and replacing them with '30 April 2012';

3 Clause 31.2.10 is amended by deleting the number '6' where it appears twice and replacing with the number '12';

4 31.2.12.1 is amended by deleting the number '6' and replacing with the number '12' and that the vendor agrees to pay an additional sum of $2,475 towards the cost of funding the bank guarantee deposit bond should that be required."

19 By email of 30 June 2010 to Mr Watson, Mr Frumar agreed with the amendment to clause 31.1. As to clause 31.2.12.1, he said it would be necessary to pay an additional cost of $2,475 for the bank guarantee "... in the event of the waiver of my entitlement to rescind the Contract." He continued:

"... Accordingly, following the meeting with your client on 12 July and should I not withdraw from the Contract, payment by your client of the said sum of $2,475 should be made to the Bank on or about 31 July. Perhaps, as a suitable precaution for both parties, should I elect not to rely upon Clause 40, I should issue to you a letter on or prior to 31 July confirming the waiver of my entitlement simultaneously with my receipt from your client of the cheque drawn in favour of St George Bank Limited."

20 By email of 30 June 2010 Mr Watson agreed with Mr Frumar's terms, and acknowledged his rights under clause 40. He requested confirmation by letter of agreement to the amendments specified. Mr Frumar provided the letter later the same day in which he said:

"We refer to the recent exchange of emails between our firms and hereby confirm our clients' agreement to the alteration or variation of clause 31.1 of the contract for sale between our respective clients by the deletion of the words 'twenty four (24) months' and their replacement by the date '19 March 2012'.

Please oblige in acknowledging your receipt of this letter."

21 By letter of 1 July 2010 to Mr Frumar, Mr Watson said:

"I refer to your facsimile of 29 June 2010 and to your facsimile of 30 June 2010.

As requested I acknowledge receipt of your facsimile and the agreement to amend clause 30 and 31 of the contract for sale of land as set out in those facsimiles."

22 On 12 July 2011 there was a meeting in the office of Mr Palazzetti, Guilfoyle's architect, attended by Mr Machkevitch, Mr Frumar, and his daughter, Mrs Weinman. Issues concerning building variations, and whether Mr Frumar would continue with the contract, were discussed.

Construction of the building commenced.

23 In the email of 20 July 2010 to Mr Machkevitch, Mr Frumar referred to the meeting, and to his suffering from the loss of his wife. He continued:

"...on reflection and in the light of your genuine offer to me not to make or to feel the need to make any decision for the time being in relation to my rights under Clause 40 of the Contract for Sale, I am now of the opinion that I should hesitate prior to making a final decision. At your suggestion, I shall take some further time beyond 31 July but I would hope and do expect that I should be able to inform you of that decision within, say 14 days of your reply to this email.

In the meantime and for the purpose of certainty on my part, I would appreciate your assistance in considering the following which I am now raising after discussion last weekend with several close friends ..."

Thereafter were listed 30 items for advice and/or confirmation, for example:

"(iii) confirmation that the walls of the 3 bathrooms and the laundry will be fully tiled with stone ..."

...

(xxii) please explain the location of the C-Bus system and the full nature and extent of its operation and services;

The email concluded:

"I would appreciate the early receipt of your comments to the above items so that your answers can assist me in determining my preferred course of action due to my present unsettled state of mind.

Please note my sincere intention as I indicated at the meting in your Office that I do not wish to postpone my decision as to whether I should rescind the Contract for Sale for any length of time beyond that which I consider to be practical in my best interests. For that reason and in the hope that I do feel more comfortable and confident with the benefit of your reply to this letter, I remind you off the following in relation to the Contract for Sale:

(a) the Purchaser should now only be me;

(b) arising from the recent exchange of correspondence between your solicitor, Mr Gregg Watson and me, amendments do seem to be necessary at least to Clauses 30.2, 31.1, 31.2.10, 31.2.12.1, 57.15 and, perhaps, generally to Clauses 57 and 58 with the Purchase Price to be reduced by $5,000 and the payment by you of an additional sum of $2,475 in relation to the Bank Guarantee, all of which issues were confirmed by Mr Watson in his correspondence to me on 30 June; and

(c) in the light of the considerable number of amendments which would need to be made to the Contract for Sale, the parties must consider the best means of implementing the same at the earliest opportunity."

24 By email of 22 July 2010, Mr Machkevitch responded to each item raised by Mr Frumar. To many he said "Confirm", and to others "Noted. TBA once the final selection is made". As to item (i) he advised that the architect would be instructed "... immediately upon receiving a confirmation from you that you are proceeding ahead". He also said:

"In relation to items (a), (b), (c) on page 5, Gregg Watson will prepare and submit a revised contract based on [sic] for your consideration upon receiving your instructions."

25 On 27 July 2010 Mr Frumar attended a meeting with Mr Machkevitch, the purpose of which, according to his email, was for:

"... clarification of my understanding of several of your replies to the issues which were raised by me generally for the purpose of removal of uncertainty or doubt with the benefit of suggestions from close friends who are concerned for my future welfare and who wish to assist me through this difficult time."

26 In his email to Mr Frumar of 28 July 2010, Mr Machkevitch summarised the matters discussed at the meeting. No reference was made to anything said about Mr Frumar's right of rescission under clause 40. He invited addition of anything missed.

27 In his reply of 3 August 2010, Mr Frumar asserted that alterations or amendments should be made to specified items. He concluded:

"Subject to your acceptance of these further points of clarification, please inform Gregg Watson of the issues which have been discussed between us at the meetings in your Office on 12 and 27 July and the content of the emails which have passed between us. Furthermore, he should be reminded of the issues raised in correspondence and discussion which took place between him and me during the period from 29 June to 1 July so that he can proceed to prepare the revised documentation for my consideration and final resolution of my position pursuant to Clause 40 of the existing Contract for Sale.

Please note that, following my receipt of the documentation from Gregg and my approval of the same, I will proceed without delay."

28 During 4 August 2010 there were written communications between Mr Machkevitch and Mr Frumar concerning the preparation by Mr Watson of documentation of the changes. Mr Frumar requested that Mr Watson be sent the emails of 20 July, 22 July and 28 July "... in order to assist him with his understanding of the developments which have taken place between us and with further direct communication between him and me before he undertakes preparation of the appropriate documentation".

29 By email of 11 August 2010, Mr Watson sent Mr Frumar amended special conditions which he proposed for the new contract. He said:

"I believe I have covered all points with the exception of 2, but you may pick up other matters I may have omitted.

The 2 issues not covered are the alternate car spaces as the strata plan is to be amended. Depending on when this amendment is made, then we can just use the new plan otherwise we will need to draft a further special condition.

The other matter is the ad valorem transfer duty which I have left for you to word how you prefer."

The draft included clause 40, amended by substituting "purchaser" for "purchasers".

30 By email of 17 August 2010, Mr Frumar provided a detailed response. It included:

"We have reviewed those Special Conditions against the background of both the correspondence which passed between your Firm and us on 29 and 30 June and 1 July on the one hand and between your client and our client during the period 12 July and 3 August on the other and now make the following observations:

(a) although we have no objection to the retention of both Special Conditions Nos. 30.1 and 30.2, we remind you that your client has agreed with our client to 30 April 2012 as the Completion Date;

(b) consequential upon amendment to Special Condition Nos. 30.1 and/or 30.2 in accordance with (a) above, we suggest that Special Condition 30.3 requires qualification in order to accommodate such amendment ...

...

(g) in Special Condition No. 40, we submit that the words "or either of them" at the end of the first and at the commencement of the second lines should be deleted;

(h) in Special Condition no. 57.15, we submit that this provision should refer to a suitable first rate or superior commercial vacuum cleaner and should confer upon our client the discretion to choose either an upright or hose-type mobile vacuum cleaner ...

...

(p) in relation to Special Condition No 57.11, and the issues raised by our client in points (xxiii), (xxiv) and (xxvi) - (xxx) of his letter dated 20 July last to your client, our client does seek insertion of adequate or suitable provisions within this Special Condition ..."

It concluded:

"Kindly oblige in acknowledging your receipt of this email and in seeking your client's instructions. Finally, we do note that our client did accept your client's earlier proposal to reduce the Purchase Price by $5,000 yet, in view of the existence of the Bank Guarantee for a sum which will now exceed 10% of the Purchase Price, our client suggests that the transaction should proceed on the basis of the same Bank Guarantee without any replacement."

31 With his letter of 15 September 2010, Mr Watson sent Mr Frumar a draft of further amended special conditions for consideration. Inter alia, clause 40 was amended as Mr Frumar had suggested. Response was invited for some proposed amendments and, in respect of some conditions, Mr Frumar was asked to provide his required wording.

32 By email of 1 October 2010, Mr Frumar provided a detailed response to each of Mr Watson's proposals, and raised additional matters. As to some conditions, further amendments and additions were required; with respect to others, an alternative wording was suggested; in some cases, review and reconsideration of the issue to which the condition related was requested. He noted (subpar (g)) that clause 40 had been amended in accordance with his earlier request. An example is:

"(k) for the same reasons mentioned above in relation to point (i), our client seeks your client's review and re-consideration of these matters which were discussed with him in the presence of the architect during the course of a meeting in your client's office in July and our client does expect that your client will honour his agreement for the installation of the items mentioned in point (k) of our letter of 17 August last ..."

He concluded:

"(i) please ensure the annexure to the Contract for Sale of the proposed Strata By-laws which are to be registered simultaneously with the Strata Plan;

(ii) as the updated and amended Location Plan differs substantially from the earlier draft Strata Plan with only Lots 4 and 5 retaining the same approximate areas with the other four (4) Lots having markedly increased areas, please explain this unexpected development and advise the manner in which your client proposes to treat the Lots for the purpose of Unit Entitlement in view of the fact that apparently Lots 1, 2, 3, and 6 will have considerably larger areas than Lots 4 and 5 with obviously enhanced values which may have a potentially detrimental effect upon the comparable values of Lots 4 and 5 - presumably and in the light of acceptable explanation from your client, the proposed Unit Entitlements will be reviewed and revised in order to reflect the differential treatment of Lots 4 and 5 on the one hand and Lots 1, 2, 3, and 6 on the other

...

(iv) we do request your client to review the outstanding issue of the Purchase Price which, in addition to being reduced by the agreed sum of $5,.000, your client undertook to further reduce by extending this benefit to our client should he withdraw the earlier requirements for the ducted vacuum system and the partition between the kitchen and dining/family room.

Please oblige in acknowledging your receipt of this letter and in furnishing to us your client's comments and instructions at his early convenience ...We suggest that, subject to resolution and finalisation of the above issues, you prepare the appropriate form of Contract for Sale with all appropriate annexures and forward the same to our Office for the Writer's approval upon his return from overseas and for execution in readiness for exchange which should be able to take place during the last week of this month."

33 On 10 November 2010 Mr Watson informed Mr Frumar that Guilfoyle did not intend to reply to the letter of 1 October 2010. In a telephone conversation on 22 November 2010, Mr Machkevitch told Mr Frumar he did not consider he was bound to extend the completion date to 30 April 2012.

34 The letter of 23 November 2010 from Mr Watson to Mr Frumar said:

"I am instructed that Alex Machkevitch has spoken with you in relation to the proposed new contract and that he has confirmed to you that the existing contract will be relied upon without entering into a new contract. I am also instructed that the settlement date provided for in the contract will not be extended.

The vendor will continue to build the property and the unit sold to you in accordance with the contract and the finishes and fittings as agreed with you and documented in the contract and subsequent exchange of correspondence between our firms.

However due to the costs associated with meeting with the architect, my client requests that you affirm your position of proceeding with the existing contract before incurring the additional architect's costs."

35 The email of 2 December 2010 from Guilfoyle to Mr Frumar included:

"The unit has already been built to drawings prepared by Ercole. You were provided with a copy of the final drawings before the brickwork and concrete floor plumbing, drainage penetration were put in place. Any changes to the internal layout from now on will attract additional cost to you. We are not able to seek advice, instruct Ercole or afford any further costs in relation to redesign of your apartment until such time that you affirm that you are proceedings with the original contract. We have already incurred substantial costs in designing of the unit to your instructions, as the invoice from Ercole send [sic] to you earlier demonstrates, and we cannot afford to continue incur [sic] expenses with the current uncertainty on your side."

36 In his email of 15 February 2011 to Mr Frumar, Mr Machkevitch said:

"... in accordance with clause 30.2 of the Contract we hereby are giving you a notice that the registration of the strata plan is anticipated within 6 months from today and the settlement will be due.

If you wish for us to consider entering into a new contract, please prepare a comprehensive itemized list of additional inclusions of finishes, fittings, changes to property configuration and other matters which you believe you are entitled to receive in your unit and which you want to become a part of the new contract of sale between yourself and ourselves."

37 On 15 March 2011 Guilfoyle notified Mr Frumar that, under clause 30.2, the anticipated date of registration of the strata plan was 1 September 2011, and of settlement was 22 September 2011.

38 By email of 4 May 2011, Mr Watson confirmed to Mr Frumar that Guilfoyle relied on the contract, and would continue to complete construction in accordance with it.

39 On 5 October 2011 notice of registration of the strata plan of subdivision was served on Mr Frumar under clause 30.1 of the contract.

40 On 26 October 2011 Mr Frumar was served with the occupation certificate, and was informed that settlement was required on 2 November 2011.

41 By his letter of 28 October 2011 to Mr Watson, Mr Frumar denied Guilfoyle's entitlement to completion under the contract. He alleged numerous breaches, and itemised work which he said was either defective or yet to be performed. He also claimed there had been many variations to the contract upon which he was entitled to rely.

42 In his letter of 31 October 2011 to Mr Frumar, Mr Watson denied any agreement to vary the contract other than that which was documented in the correspondence of 29 June 2010. The letter included:

"The meetings and exchanges of emails and other correspondence to which you refer that took place in the second half of 2010 were with the express purpose of negotiating terms of a new and replacement contract. The vendor at no time intended that these negotiations were to amend or in any way affect the terms and conditions of the existing contract. This was made clear in the correspondence exchanged between your office and my office, and indeed some of the matters being negotiated arose directly as a result of their being part of a new and replacement contract.

...

The vendor has always acknowledged the purchaser's right to rescind the contract and the purchaser's reservation of this right. At no time did the purchaser purport to exercise his right to rescind the contract and the vendor made no claims at any time that this right had expired. Whether or not the purchaser chose to exercise this right was a matter for him.

It is not open to the purchaser to now claim, notwithstanding that the vendor's position was clearly disclosed to the purchaser on 23 November 2011 [sic] that he was deprived of his right to rescind the contract. This is clearly not evidenced by the facts."

Mr Watson stated that completion was required on or before 11 November 2011.

43 By letter of 3 November 2011 Mr Frumar was advised of the time and place for settlement on 11 November 2011.

44 On 25 November 2011 these proceedings were commenced.

The principles

45 In Masters (p 360) the High Court identified three classes to which a case may belong 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. Dixon CJ, McTiernan and Kitto JJ (pp 360-361) said:

"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. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution.

...

Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own ..."

46 It is well-settled that the question whether the parties intended to enter into a binding agreement must be determined objectively, with regard to the contents of the communications between the parties considered in the context of the circumstances in which they took place. In order to determine whether the parties intended to conclude a contract, their post-contractual conduct may be taken into account (Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, par 25, per Heydon JA).

47 In ABC v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540 Gleeson CJ (Hope and Mahoney JJA agreeing) said (pp 548-549):

"...In a case where a court is required to make a judgment concerning the intention of the parties in relation to what might broadly be described as a Masters v Cameron ((1954) 91 CLR 353) dispute, it will normally be of importance that the court have an understanding of the commercial context in which the dispute arises, and a most significant feature of that context will relate to the subject which the parties regard, or would ordinarily be expected to regard, as matters to be covered by their contract. In some cases, such as transactions involving the sale and purchase of land, or leases, courts may properly feel well equipped to form a view on such matters without the need for much evidence. In many cases, however, of which the present is a good example, there is a need for evidence in one form or another as to what subjects would be regarded as requiring agreement between the parties. In this case the best evidence on that subject is to be found in the actual communications between the parties and, in particular, in the issues which they in fact addressed when they set about drafting their detailed contract.

It is to be noted that the question in a case such as the present is expressed in terms of the intention of the parties to make a concluded bargain: see, eg, Masters v Cameron (at 360). That is not the same as, although in a given case it may be closely related to, the question whether the parties have reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract. To say that parties to negotiations have agreed upon sufficient matters to produce the consequence that, perhaps by reference to implied terms or by resort to considerations of reasonableness, a court will treat their consensus as sufficiently comprehensive to be legally binding, is not the same thing as to say that a court will decide that they intended to make a concluded bargain. Nevertheless, in the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention.

Reference has earlier been made to 'intention'. Cases which typically give rise to problems of the kind presently under consideration are cases in which there is no doubt that the parties had a common intention that at some stage, and by some means, they would enter into contractual relations. They have entered into negotiations for that specific purpose. The problem which arises is that they have exchanged communications which, on the one hand, use the language of agreement but, on the other hand, disclose an expectation that at some future time a document embodying the terms of their contractual arrangement will be brought into existence. Where, as in the present case, the communications which the parties have exchanged are in writing, the question of their "intention" is, prima facie, to be resolved objectively, and as a matter of construction of the relevant documents. Thus, in Sinclair Scott Co Ltd v Naughton (at 317), dealing with precisely such a problem as arises in the present case, the majority in the High Court said:

'... We think, as a matter of construction, that the execution of the further contract was a condition or term of the bargain and not a mere expression of the desire of the parties as to the manner in which a transaction already agreed to will in fact go through .... The case is not 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.'

In Masters v Cameron (at 362), the majority in the High Court said:

'The question depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape.'

Although there are qualifications to it, this general test of objectivity is of pervasive influence in the law of contract ..."

Determination

48 Mr Frumar claimed that a binding agreement for a variation of the contract to extend the date for settlement to 30 April 2012 had been reached on 1 July 2010. He relied upon telephone conversations with Mr Watson on 29 June 2010, and correspondence between then and 1 July 2010. Mr Frumar said that the telephone conversations resulted in Mr Watson telling him that Mr Machkevitch agreed to extend the settlement date to 30 April 2012 in return for his agreement to extend the sunset period. Mr Machkevitch denied such agreement.

49 Mr Frumar also claimed a binding agreement had been reached by 4 August 2010 for the further variation of the contract whereby Guilfoyle would carry out additional works on the unit. On this issue he relied upon conversations with Mr Machkevitch at meetings on 12 and 27 July 2010, and correspondence between 20 July and 4 August 2010. Mr Frumar said that at the meeting on 12 July 2010 he told Mr Machkevitch of his inclination to withdraw from the contract, to which Mr Machkevitch suggested he should take time in deciding. Mr Frumar's response was (T p 58) "... I am grateful for that, but I know that I can't leave this transaction hanging and I do have to make a decision as to what's in my best interests". His evidence was (T pp 72, 125, 127) that at the meeting on 27 July 2010 he told Mr Machkevitch words to the effect that as agreement had been reached in respect of the variations he would not exercise his right of rescission. Mr Machkevitch denied that this was said.

50 In the cross-claim, Mr Frumar alleged that the parties had agreed to execute a replacement contract for sale which incorporated the variations, and that in consequence of the agreement to vary the contract his right to rescind by reason of his wife's death had been irrevocably waived.

51 Guilfoyle's case is that no concluded bargain was intended unless and until a formal contract to replace the contract of 20 November 2009 was prepared and signed. On the other hand, Mr Frumar depends upon oral and written communications as constituting a binding agreement irrespective of whether or not the contemplated replacement contract came into existence. In resolving the dispute it is legitimate to ascertain what the parties relevantly intended by drawing inferences from their words and their conduct in the making of that agreement (Allen v Carbone [1975] HCA 14; (1975) 132 CLR 528, pp 532, 533). Relevant to this issue, and to the issue of reliance under the estoppel defence and the claims that Guilfoyle's conduct was misleading and deceptive, and unconscionable, it is appropriate to state my findings about the participants in the negotiations.

52 Mr Machkevitch is a person of commercial experience as a property developer. In my assessment he gave his evidence carefully, and as best as recollection allowed. Overall, his evidence was reliable, and consistent with the correspondence. Mr Watson is a practising solicitor with many years experience as a conveyancer. He, too, gave evidence to the best of his recollection, which overall, I found to be reliable.

53 Mr Frumar, also, is a practising solicitor with extensive experience as a conveyancer. His affidavit, oral, and documentary evidence demonstrated that he is a shrewd and meticulous person, and was ever alert to advance and protect his interests in this transaction. I have no doubt that in these negotiations he was disposed to leave nothing to chance, and recorded in his communications every material matter which he required as a condition of the contemplated replacement contract. Although Mr Frumar made frequent reference to his unsettled state of mind attributable to the death of his wife, the content of his correspondence shows that he remained capable of formulating with precision the numerous variations and amendments he demanded. His understandable grief did not blunt his acuity.

54 The necessary analysis involves consideration of the chain of correspondence as a whole. Relevant detail is earlier referred to (pars 8 -43 above). The extracts are indicative of what the parties had in contemplation, being expressed in language used by parties with a sound understanding and experience of conveyancing. Unsurprisingly, the communications establish that there was to be no departure from the usual method of selling a unit off the plan which is by means of the signing and exchange of contracts in the approved form and, consistently, that the contemplated replacement would be in a form similar to the existing contract (see Allen p 533).

55 Analysis of the correspondence shows that, after a meeting or telephone conversation, it was the practice of the parties to expressly confirm in writing those matters which had been discussed and were intended for inclusion in the replacement contract. Relevant examples are the opening and concluding words of Mr Frumar's email of 18 October 2009 which refers to the meeting of 12 October 2009; Mr Frumar's email of 29 June 2010 which refers to the telephone conversation with Mr Watson; Mr Frumar's email of 20 July 2010, and Mr Machkevitch's email of 22 July 2010 which refer to their meeting on 12 July 2010; Mr Machkevitch's email of 28 July 2010 and Mr Frumar's email of 3 August 2010, which refer to the meeting on 27 July 2010.

56 It follows that it is neither necessary nor relevant to dwell on the different versions of discussions by telephone or at meetings. This is because, in my opinion, the parties were careful to ensure that the correspondence comprehensively identified all issues of importance. Put another way, in my opinion, if it was not in a letter, it was not on the table.

57 Mr Frumar's oral evidence reinforced this conclusion. Examples include his version of a conversation on 8 December 2010 in which he informed Mr Machkevitch that (T p 82, l 9 - l 14):

"... whilst I reserved my rights against his client and my reliance upon the extended settlement date and exchange of correspondence between both him and me and between his client and me following the meeting in July, 12th and 27th of July, I had indicated that I was prepared to settle earlier, but, again, only if the replacement contract contained all the agreed variations."

And, with reference to the item in par (k) of his letter of 1 October 2010 he said (T p 131, l 36 - l 41):

"Q And again this is a matter where you were seeking reconsideration of the position put forward?

A Just trying to straighten out in this case the appliances as I can see an [sic] (i) because Mr Machkevitch had agreed with my wife and me as to which particular Miele appliances we were getting and yet the contract made provision for something entirely new."

58 In this context it is relevant to refer to the evidence on the question of rescission under clause 40 of the contract. Mr Frumar gave evidence that at the meeting on 27 July 2010 he told Mr Machkevitch that because agreement had been reached on variations he would not be exercising his right to rescind. Although thereafter there was no written statement to that effect, in cross-examination he adhered to the assertion that he had waived this right (e.g. T p 131). He accepted that in his letter of 3 August 2010 he gave no indication of his decision to rescind, and that his request for revised documentation for consideration and final resolution of his position under clause 40 was inconsistent with what he had told Mr Machkevitch. Subsequent correspondence supports the finding, which I make, that Mr Frumar consciously retained the right, and intended that it be preserved as a condition in the contract under negotiation. On 11 August 2010 Mr Watson sent proposed amended special conditions which included clause 40. In his email of 17 August 2010 Mr Frumar's response included (par (g)) a requirement for amendment to clause 40 by deletion of the words "or either of them" where appearing. On 15 September 2010 Mr Watson sent a draft of further amended special conditions for consideration which included clause 40 amended as Mr Frumar had suggested. Mr Frumar's email of 1 October 2010 noted (par (g)) the amendment made. This correspondence provides ample justification for Mr Machkevitch's belief that negotiations proceeded on the basis that Mr Frumar retained this right, a concern reflected in Mr Watson's letters of 23 November 2010 and 31 October 2011, and Guilfoyle's email of 2 December 2010.

59 In my opinion the correspondence is sufficient demonstration that Mr Frumar's evidence that he had given up the right is implausible; I reject it. The correspondence supports the inference that the question of rescission was kept open in order to exploit Mr Machkevitch's concern so as to assist Mr Frumar in obtaining agreement for the inclusion of numerous extras in the replacement contract.

60 The relevant negotiations terminated with Mr Watson's letter of 23 November 2010. This letter followed Mr Machkevitch's consideration of Mr Frumar's letter of 1 October 2010 which referred to matters unfinalised, and for further negotiations. It appears that at this point Mr Machkevitch was driven to draw the line for fear that, unless brought to an end, negotiations would continue without resolution or certainty for some time.

61 Analysis of all of the correspondence, and particularly during the period between 29 June and 23 November 2010, shows there can be no doubt that there was a process of negotiation intended to hammer out points of difference in order that a final document could be produced. It evidences the mutual intention that detailed terms and conditions for variations of the existing contract would be contained in a formal document to be signed and exchanged by the parties.

62 The transaction was for the sale and purchase of a unit "off the plan", the construction of which included a vast number of detailed fittings and fixtures to a high standard. The contents of the correspondence convince me that the requirement for a contract document to replace the existing contract was a condition underlying the negotiations without which there was to be no binding and enforceable agreement. In other words, I find that the parties did not intend to be bound unless and until they had signed and exchanged a formal contract which included all matters about which negotiations had resulted in agreement. In short, this case is squarely within the third class of cases described in Masters.

63 Furthermore, in my opinion, there is nothing in the correspondence which suggests that a separate and binding agreement(s) about particular matters arose irrespective of the outcome of negotiations about other matters. For example, the correspondence provides no support for the proposition that a binding agreement had been reached by 1 July 2010, or at all to extend the date for completion although many other terms and conditions were under consideration.

64 For these reasons, Mr Frumar's claims that the contract had been varied to extend the date for settlement to 30 April 2012, and that by 4 August 2010 a binding agreement had been reached for additional works on the unit must be rejected.

Estoppel

65 Mr Frumar claims that during telephone conversations with Mr Watson on 29 June 2010 Guilfoyle induced the expectation that he would not have to settle under the contract until 30 April 2012. He also claims that during the meetings of 12 July and 27 July 2010, and in the correspondence between 22 July and 4 August 2010, Guilfoyle induced an expectation that it would perform the building variations. It is claimed that Mr Frumar relied upon those variations. It is put that in relation to the "settlement variation" he consented to other variations sought by Guilfoyle. In relation to what are described as the "building variations" it is claimed that he gave up his right of rescission by 4 August 2010.

66 For reasons earlier given I have rejected (par 59) Mr Frumar's claim that he gave up the right of rescission.

67 With regard to the "settlement variation" Mr Frumar relies on the evidence in the correspondence, together with the evidence in his affidavit of 27 January 2012, pars 23 and 24 which is to the effect that on 29 June 2010 in a telephone conversation with Mr Watson he said:

"Accordingly for the purpose of consenting to the extended sunset period, I would require an extension of the settlement date for at least six months until about 30 April 2012. I also require certain other amendments or variations to the contract."

and in a subsequent conversation that day Mr Watson said:

"Alex is agreeable to the extension of your settlement until 30 April 2012 in your personal circumstances which he understands and appreciates and he accepts the variations set out in your email. I will forward an email to confirm my instructions."

68 The correspondence which followed the conversations is referred to in pars 16 -21 above. It records agreement to an amendment to clause 31.1, the sunset clause, to extend to 19 March 2012, and to the amendment of clause 30.2 by substituting "30 April 2012" for "30 November". In cross-examination (T p 91) Mr Frumar agreed that the correspondence disclosed no absolute entitlement to an extension of the settlement to 30 April 2012, and that the date would not apply unless completion was otherwise to take place between 1 May and 1 September in any year. Amendment to clause 30.1 (which specified the completion date) was not referred to in this correspondence. Amendments of these conditions became part of the negotiations which continued following Mr Frumar's email of 20 July 2010. Mr Watson's letter of 15 September 2010 included clause 30.1 amended to provide 30 April 2012 as the completion date.

69 It was put that Mr Frumar relied on the agreement to extend the completion date to his detriment. In my opinion the submission must be rejected. The question of amendment to clause 30.1 became one of the numerous matters of negotiation and agreement intended to become binding upon the making of the contemplated replacement contract. In the circumstances, it cannot be said that a binding agreement for the extension of the completion date upon which Mr Frumar could reasonably rely had come into existence on or about 1 July 2010. It follows, in my opinion, there was no reasonable basis for Mr Frumar to regard the proposed amendment as immediately binding.

70 Furthermore, in the circumstances, I find no evidentiary basis that Mr Frumar suffered any detriment which is capable of establishing the estoppel claimed. In the result, the claim for an estoppel is rejected.

The Trade Practices Act claims

71 Mr Frumar asserts that the cross-defendants are liable under s 52 and s 51AA of the Act for conduct in making what are claimed to be pre-contractual misrepresentations in reliance upon which he was induced to enter the contract. He also relies upon what are claimed to be post-contractual misrepresentations in reliance upon which he agreed to extend the sunset date, and did not exercise the right of rescission which has now been irrevocably waived.

72 The pre-contractual misrepresentations are alleged to consist of oral statements made by Mr Machkevitch to Mr Frumar at the meeting on 12 October 2009 that:

"(a) a StarServe system would be installed in the property as part of the electrical infrastructure, and there was therefore no need to make specific reference or provision for it in the contract;

(b) a C-Bus system would also be installed in the property as part of the electrical infrastructure, with provision to be contained in the contract for Mr and Mrs Frumar to determine the physical location of the equipment within the property;

(c) Mr and Mrs Frumar would be entitled to determine the number and location of light switches, power points, gas bayonets, telephone points, television points and data points in each room of the property at the costs of the first cross-respondent;

(d) in the event that the contract did not specify the types and models of Miele appliances to be installed in the kitchen and laundry of the property, Mr and Mrs Frumar would be entitled to choose those appliances at their discretion; and

(e) following the installation of wiring to cornices and pelmets throughout the property, Mr and Mrs Frumar would be entitled to engage their own sound consultant to install speakers at their cost prior to the ceiling and walls being closed (together, the pre-contractual representations)."

73 Additional pre-contractual misrepresentations are alleged to have been conveyed in the promotional flyer provided to Mr Frumar by Mr Machkevitch in October 2009 as follows:

"(a) laundries contained in each unit would be stone-finished;

(b) bedroom wardrobes would be custom-fitted; and

(c) units would contain security intercoms with video capacity (together, the written pre-contractual representations)."

74 The applicable principles were stated in Gould v Vaggelas [1985] HCA 85; (1983-1985) 157 CLR 215 (p 236) by Wilson J as follows:

"1.Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case.

2.If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation.

3.The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation.

4.The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract."

75 The ultimate onus of proving inducement rests upon the party seeking relief in respect of the false representation (Lam v Ausintel (1989) 97 FLR 478).

76 The relevant evidence is referred to in pars 8 - 11 above. I have found Mr Frumar to be an experienced solicitor, and a meticulous person concerned to protect his interests in this transaction. This emerges from the correspondence as a whole, but of particular relevance to this claim it is apparent from the terms of his letters of 18 October, 28 October, 9 November, and 13 November 2009, the details of which are unnecessary to recite. They reflect a careful understanding of the terms and conditions of the proposed contract, and support the finding, which I make, that in entering the contract of 20 November 2009 Mr Frumar exercised his own skill and judgment, having satisfied himself that the document specifically incorporated all that he then wanted to be included in the unit. I find it improbable and implausible that he was influenced by any of the alleged representations made in the course of conversation or in the promotional material. I have no doubt that, in entering the contract, he acted on the basis of his own appreciation of what he required, rather than on the faith of any representation by the cross-defendants.

77 Assuming, without deciding, that any or all of the alleged pre-contractual representations were conveyed, I find that Mr Frumar has failed to prove that he was induced by, or relied upon, any of them in deciding to enter the contract and/or that the conduct in making them was unconscionable within s 51AA. It follows that this claim is rejected.

78 The post-contractual misrepresentations were claimed to include the representation that Guilfoyle through Mr Watson between 29 June and 1 July 2010 represented that, in return for Mr Frumar's agreement to an extension of the sunset date, the completion date would be extended to 30 April 2012. Also included were what were claimed to be representations between 22 July and 4 August 2010 by Mr Machkevitch on behalf of Guilfoyle that Guilfoyle would abide by the representation as to the extension of the completion date, and that in return for Mr Frumar's agreement not to exercise his right of rescission, Guilfoyle would provide additional services in relation to the property and would enter into a replacement contract which incorporated those additional promises.

79 It was claimed that in reliance upon these misrepresentations Mr Frumar agreed to extend the sunset date, and did not exercise his right to rescind which has now been irrevocably waived and that as a consequence he has suffered loss and damage.

80 In my opinion, with respect to the post-contractual representations (assuming, without deciding, they were made), Mr Frumar has failed to prove reliance as claimed for the reasons given for rejection of the estoppel claim. This claim must also be rejected.

Conclusion

81 The next issue is whether Guilfoyle is entitled to an order for specific performance.

82 By letter of 23 November 2010 Mr Frumar was advised that the settlement date under the contract would not be extended, and that Guilfoyle would continue to build the unit as provided. This was confirmed in Mr Watson's email of 4 May 2011. On 26 October 2011 Mr Frumar was served with the occupation certificate, and was informed of the requirement that settlement take place on 2 November 2011.

83 In his letter to Mr Frumar of 31 October 2011, Mr Watson stated:

"The vendor has completed construction of the property substantially in accordance with terms and conditions of the contract and is able to transfer legal title free of all interests to the purchaser. The vendor has fulfilled all its contractual obligations under the contract and served all documents required. Following upon service of the certificate of occupation upon you, the purchaser is now required to complete the purchase on or before 11 November 2011.

I am instructed that if completion does not take place by the due date, that the vendor will issue a notice to complete forthwith.

If the purchaser fails to complete the purchase in accordance with the contract, the vendor will suffer damages directly as a result of this breach of contract. I am instructed that should the purchaser fail to complete the contract on or before the due date that the vendor will seek to recover all loss and damage incurred by it as a result of the purchaser's default under the contract."

84 In his letter of 3 November 2011, Mr Watson responded to Mr Frumar's requisitions on title. He confirmed that Guilfoyle was "... ready willing and able to transfer title to the property including all inclusions located therein". A time and place for settlement was nominated for 11 November 2011, and a draft settlement sheet was included.

85 Mr Frumar submitted that, in the circumstances, specific performance should not be ordered by reason of the non-completion of a number of fittings and fixtures. Examples were said to include a ducted vacuum cleaning system, the installation of sound wiring to cornices and pelmets, and the installation of C-Bus and StarServe systems under clause 58.5 of the contract. The value of work claimed to be outstanding when settlement was called for was estimated to be an amount of less than $150,000.

86 The relevant principle was explained by Barwick CJ in the often cited passage in Mehmet v Bensen [1965] HCA 18; (1965) 113 CLR 295 (pp 307-308):

"The question as to whether or not the plaintiff has been and is ready and willing to perform the contract is one of substance not to be resolved in any technical or narrow sense. It is important to bear in mind what is the substantial thing for which the parties contract and what on the part of the plaintiff in a suit for specific performance are his essential obligations. Here the substantial thing for which the defendant bargained was the payment of the price: and, unless time be and remain of the essence, he obtains what he bargained for if by the decree he obtains his price with such ancillary orders as recompense him for the delay in its receipt. To order specific performance in this case would not involve the court in dispensing with anything for which the vendor essentially contracted."

87 In order to succeed a plaintiff is not required to show that in the past he has strictly and literally complied with all his obligations under the contract, or that he is ready and willing to perform strictly and literally his obligations in the future (Meagher, Gummow and Lehane: Equity Doctrines and Remedies, 4th Ed (2002), par 20-120).

88 In my opinion the evidence establishes that Guilfoyle was ready and willing to provide the substance for which Mr Frumar had bargained, and to perform the contract in its essential terms. Mr Frumar's complaint that there remained a number of items of an estimated total value of less than $150,000 under a contract in which the purchase price was $3,300,000 is no bar to an order in the circumstances of this case.

89 For these reasons I propose to make a declaration to the effect that Guilfoyle is entitled to have the contract made with Mr Frumar and his late wife dated 20 November 2009 specifically performed, and an order that Mr Frumar specifically perform the contract, and other necessary consequential orders.

90 I propose to order that the amended statement of cross-claim be dismissed.

91 There remains to be decided issues as to interest, outstanding items of work, and costs. On 30 May 2012 (T p 254) Guilfoyle suggested that determination of these issues be deferred to afford the parties the opportunity to further consider the scope of their competing claims in light of the outcome of the substantive claim. I agree with this proposal.

92 The parties should have the opportunity to agree upon the final terms of the declaration and orders to be made to give effect to these reasons, following which Guilfoyle is to bring in short minutes of orders. The parties are directed to arrange with my associate by 4pm 3 August 2012 for the matter to be relisted for the purpose of making final orders and any necessary directions for the resolution of outstanding issues.

**********

Decision last updated: 01 August 2012