Coplin v Al Maha Pty Limited

In these proceedings, relying upon: (a) allegations of “misleading and deceptive conduct”, “false or misleading representations”, “unconscionable conduct” and “accessorial liability” (under sections 2, 18, 20, 21 and 30 of the Australian Consumer Law, read with the remedies available under sections 232(1)(e), 237(1) and 243 of the Law); and (b) a claim for relief under section 7 of the Contracts Review Act 1980 NSW, the plaintiff challenges the enforceability of an option deed dated 16 October 2014 (“the option deed”).

According to its terms, the option deed provided an opportunity for the first defendant (a corporate land developer) to acquire the plaintiff’s home at St Leonards in the northern suburbs of Sydney.

The option deed was made between the plaintiff (effectively, as grantor) and the first defendant (effectively, as grantee) in circumstances in which communications (limited to telephone and email communications, without any meeting face to face) between the parties were, substantially, confined to communications between the plaintiff and a director of the second defendant (Mr Timothy Fox), a licensed real estate agent, a corporation acting on behalf of the first defendant. On the cusp of the deed being made, by a process of exchange of counterparts, the first defendant was represented by a firm of solicitors and the plaintiff was represented by a conveyancer.

The counterpart deeds were exchanged late in the day on 16 October 2014 in circumstances in which (I accept) the plaintiff believed that no exchange would occur until the following day (17 October 2014) and that, in the interim, he would have an opportunity (as planned by himself) to obtain legal advice from a solicitor.

Deprived of that opportunity to obtain legal advice, and ostensibly bound by the option deed, the plaintiff complained, in a timely manner, of “pressure tactics” on the part of the land developer’s agent (Mr Fox), and “unfairness” in “onerous” terms of the option deed, demanding that he be released from the deed.

A distracting feature of these proceedings is a great disparity in the “contract price” for the plaintiff’s property provided for in the option deed ($2.2 million, payable up to 19.5 months in the future) and the market value of the property (between $3.25 million and $3.4 million or thereabouts) at the time the option deed was made; but, important though the fact of disparity is commercially, the volatility of the market in which the parties negotiated their deal, and the course of events, invite caution against attributing legal significance to it.

A substantial question in the proceedings is whether the plaintiff simply made a bad deal and must be left to endure it.

The plaintiff was at all material times the registered proprietor of residential land known as 7 Canberra Avenue, St Leonards. He lived there with his brother, not far from his elderly mother (resident in a home unit owned by him at 2 Canberra Avenue), for whose care he bore a primary responsibility.

He bought the property, as his personal residence, in April 2013 for $1.77 million.

In December 2014 Lane Cove Council published a report, commissioned by the Council, entitled “St Leonards South Strategy Precinct Report”. It proposed that the area in which the plaintiff’s property was located be rezoned from “low” to “high” density residential land.

The report followed a process of consultation with the public that involved meetings held in mid-September 2014. The prospect that land in the vicinity of the plaintiff’s property would be rezoned was, at and from about that time, in the public domain. It was known to the parties to these proceedings: to the plaintiff, as a resident, in comparatively general terms; to the defendants, in the commercial setting in which they operated, in a more professional, studied way.

On 26 September 2014 the plaintiff received an unsolicited telephone call, at work, from Mr Fox, in the interests of the first defendant (engaged in land development under the direction of Mr Antoine Bechara as its managing director) interested in acquiring the plaintiff’s property. The plaintiff gave Mr Fox his email address.

On 1 October 2014 Mr Fox sent the plaintiff an email containing an offer by the first defendant to purchase the plaintiff’s property for $2 million on terms that: (a) there be an expeditious exchange of contracts; (b) a 5% deposit be paid; (c) so much of the deposit as represented 2% of the purchase price be released to the plaintiff, as vendor, on exchange of contracts, with the balance of the deposit (representing 3% of the purchase price) released 12 months after exchange; and (d) settlement of the contract be deferred until 18 months after exchange.

The course of events between 26 September 2014 (when Mr Fox first made contact with the plaintiff) and 16 October 2014 (when the option deed was made) requires close attention, as do events immediately before and following that period. However, a focal point in the parties’ disputation is the option deed itself, essential terms of which must be noted at an early stage, not only for their own significance, but to facilitate a contrast between those terms and the initial offer conveyed to the plaintiff via email on 1 October 2014.

Between 26 September 2014 and 16 October 2014 the defendants, with close cooperation between Messrs Fox and Bechara, pursued a course calculated to cultivate the plaintiff as a vendor; to persuade him that he could trust Mr Fox to deal with him fairly in the context of proposals for redevelopment of his property and his neighbour’s property, 9 Canberra Avenue; to condition him to believe that the second defendant was offering him a special opportunity for profit; and, hopefully, to keep him isolated from other land owners with whom, in combination, he might be more demanding of a higher price for his property.

Through Mr Fox’s disciplined efforts, the defendants conditioned the plaintiff to believe that the second defendant needed his assistance (with less than the full, customary 10% deposit on exchange of contracts, and deferred terms for payment of the balance of the purchase price, so as to facilitate management of the second defendant’s cash flow); that the second defendant only reluctantly, but at the plaintiff’s request, increased his offer from $2 million to $2.2 million; and that, if the plaintiff did not quickly accept the second defendant’s terms, he would miss out on a unique opportunity for profit in a development project of substance.

Having only recently purchased his property for $1.77 million, the plaintiff was susceptible to a belief that a sale at a price of $2.2 million or thereabouts was at the limits of what could be achieved. The defendants did not disabuse him of that belief, although, as between themselves, Messrs Fox and Bechara can reasonably be inferred to have held a belief that the market value of the plaintiff’s property was substantially in excess of $2.2 million: possibly as high as $2.8 million (the amount bid by an associate of the first defendant, with Mr Bechara in tow, at an auction sale of 9 Canberra Avenue) or $3.2 million (the amount the first defendant offered the plaintiff’s rear neighbour, the owner of 4 Holdsworth Avenue).

On 16 October 2014 the plaintiff (represented by his conveyancer) and the first defendant (represented by its solicitors) exchanged counterparts of the option deed, entitled “Put and Call Option Agreement”, prepared by the first defendant’s solicitors, the terms of which included provisions to the following effect:

Expert valuers retained by the parties for the purpose of these proceedings were unable to reach agreement on the open market value of the plaintiff’s property as at 16 October 2014; but their competing valuations can reasonably be taken as providing a reliable range of values for the property between $3.25 million and $3.4 million.

Nothing of significance turns on the difference between the valuers. The valuation range they have defined is, on any view, over $1 million in excess of the “contract price” of $2.2 million specified in the option deed. The disparity between the contract price and the market value is implicitly greater than the arithmetical difference between the contract price and the property’s value because the terms of the option deed, whilst binding the plaintiff immediately in his enjoyment of the property, enabled the first defendant to defer payment of the contract price for up to 19.5 months, or thereabouts, after the date of the deed (16 October 2014).

The fact of disparity between contract price and market value is not, of itself, a ground upon which the plaintiff is entitled to be relieved of any obligation he has under the option deed. That much is common ground between the parties, and correctly so.

Quite apart from the law’s recognition of the freedom of parties to make a bad bargain, and its predisposition not to remake private agreements, each of the formal valuations of the property prepared for the purpose of the proceedings took into account a fact not known at the time the option deed was exchanged: On 23 October 2014 (7 days after the date of the option deed) the property known as 9 Canberra Avenue adjoining that of the plaintiff sold at public auction for $3.343 million.

A fair inference from the whole of the evidence is that the plaintiff had no idea on 16 October 2014 that $2.2 million was a million dollars less than his property may be worth – even if he suspected that it might have been worth more than $2.2 million, perhaps as much as $2.7 million (the price at which 12 Holdsworth Avenue had apparently sold).

On 23 October 2014 the plaintiff, by an email addressed to the solicitors for the first defendant, sought to be released from the option deed. No such release was granted.

These proceedings were commenced by a statement of claim filed on 14 May 2015.

An interlocutory agreement has been made between the parties the effect of which is that (without admissions by any party) the option entitlement claimed by the first defendant has been extended pending the outcome of the proceedings: Transcript, page 2. The precise terms of the agreement are not before the Court.

The first defendant’s position has been protected, pending the determination of the proceedings, by Caveat Number AI996234.

As pleaded, the plaintiff’s case relies primarily upon five statutory “causes of action”, earlier identified by reference to particular sections of the Australian Consumer Law (more particularly, Schedule 2 to the Competition and Consumer Act 2010 Cth) and the Contracts Review Act 1980.

Insofar as sections 18, 20, 21 and 30 of the Australian Consumer Law proscribe conduct “in trade or commerce”, there is no dispute but that the conduct of which the plaintiff complains (if established) occurred “in trade or commerce”. The first defendant was a property developer; the second defendant, a real estate agent. Their dealings with the plaintiff were, from their perspective, quintessentially commercial in character.

Insofar as the plaintiff claims relief under the Australian Consumer Law, his case is that the proscriptions for which sections 18, 20, 21 and 30 of the Law provide were contravened by the second defendant and that (within the meaning of section 2 of the Law) the first defendant was “involved” in each contravention because: (a) it aided, abetted, counselled or procured the contravention; (b) it was directly or indirectly, knowingly concerned in, or party to, the contravention; or (c) it conspired with the second defendant to effect the contravention.

It is common ground that: (a) in all its dealings with the plaintiff, the second defendant was the duly authorised agent of the first defendant; and (b) Messrs Bechara and Fox were, respectively, the authorised representatives, and moving minds, of the first and second defendants.

Each of the plaintiff’s alleged “causes of action” has a common substratum that includes an allegation that the second defendant (by Mr Fox) made false representations to the plaintiff; namely:

The first representations are said to have been made by an email dated 3 October 2014 addressed by Mr Fox to the plaintiff.

The second representations are said to have been made by Mr Fox to the plaintiff orally, shortly after that email, on the same day, in a telephone call made by Mr Fox to the plaintiff.

In submissions, the plaintiff articulated what his counsel described as a “third representation” said to have been made by Mr Fox to the plaintiff in a telephone conversation between the two men on 7 October 2014. That representation was said to have been in support of the second defendant’s proposal, on 7 October 2014, that there be a “put and call option” rather than an immediate “contract for sale”. It was said to have been in response to a question by the plaintiff as to what was meant by the proposal for an “option”. The representation said to have been made is that an option (simply) is a form of transaction so that a buyer does not have to pay stamp duty upfront.

The defendants complain, correctly, that this “third representation” is not expressly, or specifically, pleaded in the statement of claim. The plaintiff responds that, although not expressly or specifically pleaded, it falls within the framework of an allegation (in paragraph 10 of the statement of claim) that, at no time prior to the plaintiff signing the option deed, did the second defendant “advise or explain the terms of the option deed to [him]”.

Having elected to plead a case by reference, expressly, to “two representations” specifically pleaded as “false and/or misleading”, the plaintiff cannot complain if the defendants object (as they do) to characterisation of a contextual allegation as a “third representation” not specifically pleaded (as are the first and second representations) to be false or misleading.

No objection was taken to evidence, or cross examination, relating to Mr Fox’s pithy description of an option or, perhaps more accurately, a rationale for an option. However, that evidence cannot be elevated into an unarticulated allegation of “misleading and deceptive conduct” (referable to the Australian Consumer Law, section 18) or an unarticulated allegation of a “false or misleading representation” (Australian Consumer Law, section 30).

The evidence, and the allegation in paragraph 10 of the statement of claim to which it is said to have been material, does, however, fall within the ambit of the case sought to be made by the plaintiff under the rubric of “unconscionable conduct” (Australian Consumer Law, sections 20 and 21) and his claim for relief under the Contracts Review Act.

Further clarification of the plaintiff’s case is called for in relation to his bare pleading, in the context of section 20 of the Australian Consumer Law, that he was “under a special disability in dealing with the second defendant”.

Section 20 provides as follows:

The scope and operation of section 21 (read with section 22 of the Australian Consumer Law) can be addressed in their place. By express provision found in section 21(4)(a), section 21 “is not limited by the unwritten law relating to unconscionable conduct”.

The plaintiff’s specific allegation of a “special disability” is intended, aspirationally, to bring him within the operation of equitable principles governing what, in former times, was generally described as a “catching bargain”, a term explained in PW Young, C Croft and ML Smith, On Equity (Lawbook Co, Australia, 2009) at paragraphs [5.220] and [5.290] and used in Meagher, Gummow and Lehane’s Equity: Doctrine and Remedies (LexisNexis Butterworths, Australia, 5th ed, 2015) as a chapter heading (currently, chapter 26).

In modern times, the territory occupied by equitable principles governing a “catching bargain” is generally marked out in Australia by reference to cases such as Bromley v Ryan (1956) 99 CLR 362, Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 474, Louth v Diprose (1992) 175 CLR 621, Bridgewater v Leahy (1998) 194 CLR 457 at 479 and Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Limited (2003) 214 CLR 51 at 74 and 76-77.

The jurisdiction is not constrained by any formulaic description of it, but the following observation taken from Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 474 can be taken as both representative and authoritative:

The plaintiff’s case as pleaded, particularised and addressed in the evidence does not sit comfortably with this, or any comparable, formulation of equitable principles relating to “unconscionable conduct” dependent upon a finding of “special disability” or, as it is sometimes described, “special disadvantage”.

There is, in the plaintiff’s case, the flavour of a “catching bargain” insofar as, I find, he can reasonably be characterised as naive, gullible and trusting (but, perhaps, a victim of his own hubris) and he was placed under commercial pressure to exchange contracts without delay.

Nevertheless, he cannot easily be said to have suffered any physical, intellectual, educational or social disability. In September-October 2014 he held down a responsible job as a credit manager, on a base salary of $124,000. On his own admission, he was in a sound financial position, repaying the mortgage debt and outgoings on his property without difficulty. He was able to manage his own affairs. He was ostensibly literate, numerate and articulate, although ponderous in presentation.

He evidently lived a sheltered life with his brother and mother close at hand. His judgement was, in the current controversy, demonstrably poor, grounded in misplaced trust of the defendants and an overly optimistic expectation of reciprocity in fair play; but, given time for reflection, he appears generally to have been able to make judgements as to his own best interests. All things considered, he can fairly be characterised as an unsophisticated person.

I am not prepared to hold that, in his dealings with the second defendant, he operated under a “special disability” of a kind sufficient to attract the operation of equitable principles governing catching bargains. It follows that the plaintiff’s claims for relief based upon section 20 of the Australian Consumer Law must be dismissed.

His case can, more appropriately, in any event, be advanced as a claim for relief under the Contracts Review Act, paying due regard to the factors enumerated in section 9 of that Act, particularly sections 9(2)(h), (i), (j) and (l). Those provisions require the Court to consider, inter alia, whether or not and when the plaintiff obtained independent legal or other expert advice; the extent (if any) to which the provisions of the option deed and their legal and practical effect were accurately explained to the plaintiff; whether the plaintiff understood the provisions of the option deed and their effect; whether any unfair pressure or unfair tactics were exerted on or used against the plaintiff by the defendants; and the commercial or other setting, purpose and effect of the option deed. That case falls squarely within the case pleaded, particularised and debated at trial.

An assessment of the evidence, including questions of credit and the availability of inferences under Jones v Dunkel (1959) 101 CLR 298, depends upon an appreciation of the forensic context in which these adversarial proceedings have been fought.

The Defendants’ Common Interest. By his statement of claim, the plaintiff sued both defendants. Each defendant filed a defence. Neither filed a cross claim. Whether they have a private arrangement between themselves as to distribution of the commercial burden of the proceedings is not known. They have made common cause against the plaintiff in their conduct of the proceedings.

Cross Examination of Mr Fox. That fact is relevant in the present context insofar as, and I am inclined to think only insofar as, the plaintiff contends that it should be taken into account upon an assessment of evidence given by Mr Fox, in cross examination by counsel for the first defendant, without prior notice to the plaintiff’s lawyers, about the course of negotiations between the defendants and the plaintiff’s neighbour in 9 Canberra Avenue.

The same, “new” evidence of which the plaintiff complained (namely, evidence of an oral offer of $2 million made by Mr Fox to Mr Sam Sarzentich, the owner of 9 Canberra Avenue, on 1 October 2014) might have been given by Mr Fox in chief with the leave of the Court. Nothing of decisive significance attaches to the fact that it emerged for the first time in cross examination by a party in the same interest as Mr Fox’s company; but, equally, the fact that it did emerge that way can be weighed in the balance when assessing whether Mr Fox’s evidence on the point should be accepted.

The order in which Mr Fox was cross examined on behalf of other parties was agreed so as to accommodate the defendants’ common interest. Mr Fox was cross examined, first, by counsel for the first defendant; then, by counsel for the plaintiff. No submission was made that unfairness attended that procedural expedient or that the plaintiff did not have a full opportunity to test Mr Fox’s evidence by reason of its course.

Mr Bechara’s Unavailability. Potentially of greater significance is the course of evidence adduced on behalf of the first defendant.

Shortly before the final hearing, the first defendant gave the plaintiff notice that: (a) its principal, Mr Bechara, would not be in attendance at the hearing for the purpose of cross examination on his affidavit long before served; and (b) it proposed to read, in substitution for Mr Bechara’s affidavit, an affidavit recently sworn by its financial controller, Mr Lee.

At the time of the final hearing Mr Bechara is said to have been in the United States of America attending a family wedding.

As it transpired, Mr Lee had been employed by the first defendant long enough to verify company records, to describe the first defendant’s business activities, and to give evidence about Mr Bechara’s whereabouts; but not so long as to have any personal knowledge of material, primary facts or to explain the absence of particular records alleged by the plaintiff to be of significance. The plaintiff’s cross examination of him was, as it was bound to be, of limited utility in terms of advancing the narrative of what occurred in or about the critical period in September – October 2014. He did not join the first defendant’s employ until 28 October 2014. In all things internal to the first defendant, he was at all times totally subordinated to Mr Bechara. Mr Bechara ran his own show.

Counsel exchanged debating points about whether Mr Bechara’s absence was explained sufficiently to preclude the drawing of any inference arising from his absence, by reference to Jones v Dunkel, having regard, inter alia, to the absence of any application by any party for evidence to be taken from him via video link.

That debate did not displace the fact that Mr Bechara, evidently, chose to prioritise a family wedding over his personal participation in the hearing. In my opinion, his absence was attended by an explanation insufficient to preclude the drawing of a Jones v Dunkel inference, if otherwise available.

That said, a Jones v Dunkel inference cannot be drawn at large or for the purpose of filling gaps in an opponent’s case.

This counsel of caution is required, not only because of the plaintiff’s loud complaints about the absence of Mr Bechara, but because his submissions bordered upon an invitation to the Court to construct a case against the defendants based on the “failure” of the defendants to call a variety of witnesses who, the plaintiff alleged, could have thrown light on the nature and quality of the defendants’ conduct had they been called. I decline to travel that path.

One does not need much forensic guile to understand that Mr Bechara’s absence (and Mr Lee’s substitution for him) placed the plaintiff at disadvantage in denying to counsel for the plaintiff an opportunity: (a) to explore the knowledge and motivation of the first defendant through a critical examination of its moving mind; and (b) to test the evidence of Mr Fox by measuring it against evidence from Mr Bechara.

Mr Bechara’s absence limited the plaintiff’s opportunities to explore the defendants’ knowledge about the state of the market, and their strategies for inducing the plaintiff to enter a contract with the first defendant on terms favourable to the first defendant. Given that any personal contact between the plaintiff and the defendants was confined to the plaintiff’s telephone and email contact with Mr Fox, Mr Bechara’s absence made more difficult the task of the plaintiff in proving (for the purpose of sections 2, 232(1)(e), 237(1) and 243 of the Australian Consumer Law) that the first defendant was “involved” in any contravention of the Australian Consumer Law found to have been committed by the second defendant.

The defendants were under no obligation, either to the plaintiff or to the Court, to call Mr Bechara and, whatever be their proper outcome, the proceedings must be determined on the evidence before the Court.

Three witnesses were cross examined at the final hearing: the plaintiff, Mr Lee and Mr Fox, in that order. Mr Fox, as the representative of the second defendant, was present throughout the evidence of the other two - a debating point made against him by counsel for the plaintiff, not to be made in derogation of the right of the second defendant to be present in court.

Mr Lee. No question arises as to Mr Lee’s credit. His involvement in the case was, in all respects, too peripheral for that. He gave no evidence of substance beyond description of the first defendant’s business and verification of business records.

The plaintiff and Mr Fox. The plaintiff and Mr Fox presented their evidence as two very different types of person. As has been noted, the plaintiff was ponderous and unsophisticated. Mr Fox was more disciplined, more street-wise. What they had in common, though, was an apparent consciousness of their interest in the outcome of the proceedings. This is not, necessarily, to be held against them upon an assessment of their honesty. It is natural enough for witnesses personally engaged in litigation of consequence. Nevertheless, it is a factor to be borne in mind on an assessment of each witness’s reliability.

The plaintiff. In substantially similar terms, counsel for the defendants heavily criticised the plaintiff’s credit. Both submitted that he was not a “satisfactory” witness. Indeed, he was not.

The plaintiff was cross examined at length by senior counsel for the first defendant. The cross examination was effective insofar as it exposed the plaintiff as an unsatisfactory witness, but counter-productive insofar as it highlighted personal qualities of the plaintiff noticed in this judgment upon a consideration of whether he could be said to have suffered from a “special disability” for the purpose of an application of equitable principles.

He appeared to me to suffer from a form of hubris in that he conveyed a stubborn, misplaced pride in his ability to transact business.

One example of this is the misleading nature of emails he sent to Mr Fox (respectively, on 2 and 14 October 2014) in which, fairly read, he may be taken to have suggested that he had obtained independent advice when the reality was otherwise. He had not obtained “external advice” as suggested; he had simply obtained an ASIC search on the first defendant via a colleague. He had not obtained legal advice as suggested; he had merely obtained a quotation for a conveyancer’s fees. He had not consulted real estate agents as suggested; he had merely examined two brochures. He appears to have felt a need to impress Mr Fox with a doubtful display of competence. I doubt that Mr Fox was deceived.

The plaintiff’s evidence, in cross examination, was equally patchy, prone to inconsistencies manifesting a want of real sophistication and a tendency: (a) to anticipate the effect of answers; and (b) to try to advance what he perceived to be his own cause.

With all his blemishes exposed by cross examination, I do not attribute to the plaintiff deliberate dishonesty. On closer examination of the course of events, his evidence acquires a cogency not apparent at first blush.

Making full allowance for volatility in a new market for residential land emerging from a prospective rezoning, an experienced, professional real estate agent such as Mr Fox would not have shared the plaintiff’s self-estimate of competency. The bottom line is that, as Mr Fox probably knew or suspected, the plaintiff had no idea of the true value of his property, or of the importance of securing timely, proper, professional advice. Confirmation of that can be found, for example, in the defendants’ studied, reluctant acquiescence in an increase of the prospective contract price for the plaintiff’s property from $2 million to $2.2. million; Mr Fox’s identification of a conveyancer (not a solicitor) from whom the plaintiff might obtain advice; the defendants’ belated substitution of an option for an immediate conveyance in negotations, no small matter in itself or in context; the need for Mr Fox to offer to the plaintiff any form of explanation of what an option entailed; the plaintiff’s willingness to entertain any proposal, let alone an option agreement, for a deferred purchase of his property; and Mr Fox’s perception that the plaintiff could be (as he was) rushed into an exchange of contracts. Mr Fox deliberately cultivated the plaintiff’s trust, and correctly assessed that he had secured it.

Mr Fox. Mr Fox was no more deliberately dishonest than the plaintiff in presentation of his evidence. However, without an independent recollection of primary facts and without contemporaneous written records of his conversations with the plaintiff, his evidence necessarily entailed a process of reconstruction in which, not unnaturally, he was influenced by personal partisanship.

Four illustrations of his conduct offer an insight into Mr Fox’s predisposition.

The first relates to negotiations between Messrs Bechara and Fox for the first defendant’s retention of the second defendant as an agent. The prospective principal and agent negotiated the terms of their companies’ relationship between 25 September 2014 (when Mr Fox put a fee proposal to Mr Bechara) and 2 October 2014 (when Mr Fox received a signed copy of an Agency Agreement following an oral agreement as to terms made on 1 October 2014).

Mr Fox was quite prepared to act upon a prospective retainer in circumstances in which continuing negotiations for the second defendant’s remuneration included a proposal that the agent receive a “performance fee” of 25% plus GST of total savings achieved below an average purchase price of $3.5 million. That proposal was not, in the ultimate, accepted by the first defendant, but its promotion by Mr Fox illustrates his perception both of the market in which he was operating and his role in performance of a retainer on behalf of the first defendant. He was a player, not a detached professional.

The second illustration is an email addressed by Mr Fox to the first defendant’s solicitor (Ms Shanna Kruger of HWL Ebsworth) on 16 October 2014, at 11.54am, in the following terms (copied, inter alia, to Mr Bechara):

This email was written contemporaneously with endeavours by Mr Fox and the first defendant’s solicitor to effect an exchange of contracts with the plaintiff through the plaintiff’s conveyancer. Implicitly, it illustrates a consciousness that no real estate agent was involved in advising the plaintiff. Explicitly, it illustrates a consciousness on the part of Mr Fox that negotiations with the plaintiff had reached an advanced stage and that, as he perceived the defendants’ strategy, it was important to isolate prospective vendors from each other so as to contain their expectations and thus to limit their bargaining power. In his oral evidence he confirmed the importance of such containment to the defendants’ strategy.

The third illustration is an email Mr Fox addressed to Mr Bechara on 11 December 2014. Referring there to the possibility that the first defendant might purchase two adjoining properties nearby the plaintiff’s property, Mr Fox advanced the following proposal:

In context, as Mr Fox agreed in cross examination, the word “conditioning” embodied the idea of adjusting the prospective vendors’ expectations downward to something more “realistic”.

Although this email was written after the plaintiff’s execution of an option deed had been procured through Mr Fox’s efforts, it is sufficiently proximate in time and circumstance to provide an insight into how Mr Fox approached his role vis-a-vis the plaintiff. It does not sit well with a “generic letter”, promising generosity, he distributed to landowners (other than the plaintiff) at about the time he commenced courting the plaintiff in late September 2014.

He evidently saw himself as “conditioning” the plaintiff to accept terms less favourable than those which, but for his intervention, the plaintiff might have expected. In his performance of that role he identified himself, intimately, with Mr Bechara’s commercial objectives and demonstrated a preparedness to put aside concerns about conflicts between professional duty and personal interest. True, in his dealings with the plaintiff he was the disclosed agent of the first defendant; but he actively cultivated the trust of the plaintiff, encouraging in the plaintiff a belief that he (the plaintiff) could rely upon him to ensure that the plaintiff was dealt with fairly. It may be that he was assisted in this by the absence of any face-to-face contact between the two men, and the plaintiff’s (naïve) preparedness to do business on that basis.

The fourth illustration relates to Mr Fox’s representations to the plaintiff about the state of the market and the first defendant’s dissembling reluctance to increase from $2 million to $2.2 million the price it was prepared to pay for 7 Canberra Avenue.

The defendants’ endeavours to buy the property known as 4 Holdsworth Avenue (the neighbouring property immediately to the rear of 7 Canberra Avenue) early in October 2014 demonstrate a ready acceptance that that range of price was below market or, at least, at the very bottom of the market.

On 1 October 2014 Mr Fox, by email, submitted an unsolicited offer on the part of the first defendant to purchase 4 Holdsworth Avenue for “$2,100,000, 18 month settlement, 2% deposit released”. An initial offer of that order appears to have been the defendants’ common, opening gambit. In this case, the immediate response by the offeree, the next morning, was: “Thank you for your email but we are not interested in selling, and certainly not on such unfavourable terms.” Undeterred, by another email Mr Fox unsuccessfully invited the offeree to “advise what terms/price will change your mind to sell?”

On 15 October 2014, at 3.13pm, at the very same time the first defendant (through Mr Fox and its solicitors) was pressing the plaintiff for an exchange of contracts, Mr Fox wrote a third email to the owner of 4 Holdsworth Avenue:

Absent a response, he followed that up with another email on 21 October 2014: “Was $3.2M of interest to you?”

That elicited a same-day response: “It is certainly of more interest that [sic] your first offer but we are not interested to sell.”

The evidence does not disclose any rational foundation for setting a price of $3.2 million for 4 Holdsworth Avenue whilst insisting that $2.2 million was a fair market price for 7 Canberra Avenue, save for expediency in paying no more than an amount for which a particular vendor could be induced to sell.

On the other hand, Mr Fox’s email correspondence with the first defendant demonstrates that the defendants saw a strategic connection in their attempts to purchase 7 and 9 Canberra Avenue and 4 Holdsworth Avenue as a block. That, and considerations of timing in coordinating their negotiations with several land owners, may, to some extent, explain divergences in offers made on different properties.

Mr Fox’s calculated approach to his professional duties counsels caution against ready acceptance of his reconstruction of events as reliable.

In about late September 2014 Mr Fox commenced doorknocking properties in the vicinity of the plaintiff’s property (defined by a block of residences bounded by Canberra Avenue, Holdsworth Avenue and Marshall Avenue in St Leonards) leaving generic letters at some of the properties inviting landowners to call him if interested in selling their property.

The generic letter (a copy of which dated 25 September 2014 is in evidence) was in the following terms:

The plaintiff did not receive a copy of this letter. His introduction to Mr Fox came via his neighbour, Mr Sarzentich.

On Wednesday, 24 September 2014, at 11.54am, the owner of 9 Canberra Avenue (Mr Sarzentich) sent Mr Fox an email in the following terms:

Mr Fox described this “offer” of $2.2 million as an offer to sell made by Mr Sarzentich to the first defendant, not an offer by the first defendant (or some other party) to buy Mr Sarzentich’s property at that price. I accept this characterisation of the offer.

On the afternoon of Friday, 26 September 2014, at about 4.30pm, Mr Fox called the plaintiff at work. They had a conversation to the following effect:

On Wednesday, 1 October 2014, at 9.47pm, Mr Fox sent an email to the plaintiff in the following terms:

In the afternoon of Thursday, 2 October 2014, at about 3.09pm, the defendants formally entered a “Buyers Agency Agreement” according to which the first defendant retained the second defendant, for a period of 12 months commencing on 1 September 2014, to identify and recommend potential properties for purchase, to negotiate the purchase of property and to bid at auctions, if instructed to do so. The Agreement identified as prospective targets properties in the area bounded by Canberra Avenue, Marshall Avenue and Berry Road, including properties in Holdsworth Avenue, which dissects land lying between Berry Road and Canberra Avenue.

The Agreement recorded that the “approximate price range in which the Principal [the first defendant] wishes to acquire” property was between $2 million and $4.5 million for each property.

The Agreement provided for the second defendant to be remunerated by way of a “buying fee” calculated as a percentage of the total purchase price including GST, if any, of each property purchased. The agent’s commission, as it was, was payable at the rate of 1.25% plus GST (1.375%), half of which was expressed to be payable “on exchange of option or contract” and half “on settlement”.

Mr Bechara opted for this fee arrangement rather than an alternative earlier proposed by Mr Fox (evidenced by Exhibit P19) based upon a “Base Fee” coupled with a “Performance Fee”. The structure of that commission arrangement was set out in an annexure to a draft Agency Agreement. That schedule was in the following terms:

In the afternoon on 2 October 2014, at about 3.04pm, the plaintiff obtained (via a work colleague) a “company search” of the first defendant from the register maintained by the Australian Securities and Investments Commission. It disclosed that the company was incorporated in February 2006, and that Mr Bechara was the company’s sole shareholder, director and secretary. The company was, in the vernacular, a “one dollar company”, with one share issued at a par value of $1.00.

On 2 October 2014, at 4.08pm, the plaintiff sent an email to Mr Fox in response to Mr Fox’s email of 1 October 2014. In his email the plaintiff wrote:

The “response” to which the text of the email referred took the form of annotations to Mr Fox’s original email. Against the proposed purchase price of $2 million, the plaintiff wrote “OK”. Against the proposal for an “18 month settlement” he also wrote “OK”. Against the proposal for a 5% deposit with 2% released on exchange and 3% 12 months after exchange, he wrote: “ACCEPT 5% DEPOSIT INSTEAD OF THE STANDARD 10% HOWEVER THIS 5% TO BE PAID ON EXCHANGE. CANNOT ACCEPT PAYMENT OF DEPOSIT OF ONLY 2% GIVEN RISK OF DEFAULT OF COUNTERPARTY WHICH APPEARS TO BE A $1 COMPANY.”

Against Mr Fox’s proposal for an expeditious exchange of contracts, the plaintiff wrote: “OK, VENDOR [sic] PREPARES CONTRACT FOR SALE. PLEASE ADVISE”.

The following day, Friday, 3 October 2014, at 5.28pm, the plaintiff sent a further email to Mr Fox responding to Mr Fox’s original email. It was in the following terms:

Shortly after that email, at 5.46pm, Mr Fox sent an email to the plaintiff responding to the first of the plaintiff’s emails that day. It was in the following terms:

Shortly after that email communication, Mr Fox telephoned the plaintiff. They had a conversation to the following effect:

On Tuesday 7 October 2014, at about 1.30pm, Mr Fox telephoned the plaintiff at work. They had a conversation to the following effect:

That evening, 7 October 2014, at 6.53pm, the plaintiff sent an email to Mr Fox in the following terms:

Mr Fox responded to that email later the same evening (7 October 2014), at 9.26pm, in the following terms:

By an email sent on the evening of Wednesday, 8 October 2014, at 8.05pm, the plaintiff informed Mr Fox of the contact details of his conveyancer, “Vittoria.”

Later that same evening, at 11.26pm, Mr Fox sent an email to that conveyancer (copied to the plaintiff) in the following terms:

The sales advice referred to the plaintiff as “vendor “ and to the first defendant (and/or nominee) as “purchaser”, identified the parties’ “solicitors” and recorded the following substantive details:

The inconsistency in specification of the “sale price” appears in the original document.

The “typo” was corrected in a follow-up email sent by Mr Fox to the conveyancer (and copied to the plaintiff) during the morning of Friday, 10 October 2014, at 11.16am.

Very shortly thereafter, at 11.19am, the conveyancer, Ms De Martino, sent an emailed reply to Mr Fox (copied to the plaintiff) in which she simply recorded that she did not act for the plaintiff “with respect to this matter”.

At 11.37am the plaintiff responded with an email addressed to the conveyancer (“Vittoria” or “VDM” ), copied to Mr Fox, in the following terms:

That evening (Friday, 10 October 2014), at 10.31pm, Mr Fox recommended “a solicitor” (in fact, a conveyancer) to the plaintiff, observing that he had “used her personally and she is very thorough and reasonably priced” and noting that he looked forward to hearing from the plaintiff “next week”. The subject heading for the email remained “Re: Sales advise for purchase of 7 Canberra Ave”.

At 11.47am on Tuesday 14 October 2014 the plaintiff sent an email to Mr Fox in the following terms:

In fact, the plaintiff had not obtained an advice (only a quote of fees) from VJ Tait and Associates.

Nor, in fact, had he contacted two real estate agents. He had only perused two real estate brochures.

Later that day (14 October 2014), at 2.57pm, Mr Fox emailed the plaintiff:

That evening, at about 7.30pm, the plaintiff and Mr Fox had a telephone conversation to the following effect:

Immediately after this conversation (at 7.49pm) the plaintiff sent an email to Mr Fox and Vanessa Tait (his new conveyancer) in the following terms (omitting the contact details of V.J. Tait Associates):

During the morning of the following day (Wednesday, 15 October 2014), at 11.11am, Mr Fox sent Ms Tait an email in the following terms:

The edited form of the email in evidence does not disclose whether the email was copied to the plaintiff. I infer, from what followed, that it was.

A short time later on 15 October 2014, at 11.36am, the plaintiff sent an email to Mr Fox and Ms Tate (copied to the first defendant’s solicitors) in the following terms:

At 12.05pm on 15 October 2014 Mr Fox sent an email to the plaintiff, Ms Tait and the first defendant’s solicitors in the following terms:

The email concluded with a direction to the first defendant’s solicitors:

At 12.11pm on 15 October 2014 the plaintiff sent an email to Mr John Poole, solicitor, in the following terms:

At 11.34am on 15 October 2014 Ms Tait sent an email to Mr Fox (copied to the plaintiff and the solicitors for the first defendant) in terms which, so far as they are in evidence, included the following:

In an email forming part of a chain with Ms Tate’s email of 11.34am on 15 October 2014, the solicitors for the first defendant (at 12.37pm the same day) sent an email to Ms Tait (copied to Mr Fox, but not the plaintiff) in the following terms:

At 5.34pm on 15 October 2016 Ms Tait sent an email to the first defendant’s solicitors (copied to the plaintiff and Mr Fox) in the following terms:

The plaintiff concedes that he met with Ms Tait on the afternoon of 15 October 2014 but denies that Ms Tait’s correspondence was sent to the first defendant’s solicitors with his knowledge. He said he read the email upon his arrival home that evening.

Ms Tait’s correspondence (entitled “Coplin Sale to Al Maha Pty Ltd, Property: 7 Canberra Ave, ST LEONARDS) “required” 11 specific changes to the draft option deed and six specific changes to the draft contract. It concluded in the following terms:

At 5.43pm on 15 October 2014 Mr Fox sent an email to Ms Tait (copied to the plaintiff), in response to an email inquiry made by her at 5.36pm, in which he confirmed that he was acting as a buyer’s agent and that, therefore, “there is no fee obligation” between the plaintiff and the first defendant. The subject heading for the email was “RE: Coplin Sale to Al Maha Pty Limited”.

At 6.15pm on 15 October 2014 Mr Fox sent to Ms Tait (and copied to the plaintiff and the first defendant’s solicitors) an email in the following terms:

At 9.43am on Thursday 16 October 2014 the first defendant’s solicitors sent an email (entitled “Subject: RE: Coplin Sale to Al Maha Pty Limited”) to Ms Tait (not copied to either the plaintiff or Mr Fox) attaching amended documents, concluding with the following statement:

At 11.04am on Thursday, 16 October 2014 Ms Tate sent an email to the first defendant’s solicitors (copied to the plaintiff) in the following terms:

At 3.01pm on 16 October 2014 Ms Tait sent an email to the plaintiff in the following terms:

At about 4.30pm on 16 October 2014 the plaintiff attended the office of Ms Tait for about 20 minutes. In that time, he initialled each page and signed the Option Deed.

The plaintiff says that he signed the Option Deed expecting that it would not be exchanged until the following day, allowing him time still to obtain legal advice from his solicitor, Mr Poole. He says that he left Ms Tait’s office believing that the deed would be exchanged the following day, Friday, 17 October 2014. I accept that evidence as truth.

In fact, the Option Deed was exchanged, and dated that very same day, Thursday 16 October 2014, no later than 6.08pm (the time at which, by email, the first defendant’s solicitor reported the fact of exchange). Ironically, the deed bears a certificate under section 66ZF of the Conveyancing Act 1919 NSW, signed by the solicitor for the first defendant, waving any “cooling off period” otherwise attaching to the call option for the first defendant’s purchase of the plaintiff’s property. In reality, it was the plaintiff, not the first defendant, who was in need of a cooling off period.

Precisely how, when and by whom on behalf of the parties counterparts of the Option Deed were exchanged on 16 October 2014 is not explained by the evidence.

Ms Kruger signed the section 66ZF certificate on behalf of the first defendant. Whether she attended an exchange of documents with Ms Tait, or whether each woman arranged for someone else to attend on their behalf, is not disclosed by the evidence.

No party adduced evidence from HWL Ebsworth Lawyers or VJ Tait Associates to explain precisely what happened. No party adduced evidence to explain the absence of such evidence.

Nor did any party adduce evidence from the office of Mr Poole (to whom the plaintiff sent an apparently unanswered email at 12.11pm on 15 October 2014) and no evidence was adduced to explain his absence.

As far as the evidence goes, the plaintiff appears to have made no connection with Mr Poole until Thursday, 23 October 2014.

At 7.51pm on Friday 17 October 2014 Mr Fox sent the plaintiff an email in the following terms:

On Monday, 20 October 2014, VJ Tait Associates sent a letter to the plaintiff (apparently via email) in the following terms:

At 4.53am on Thursday, 23 October 2014, the plaintiff sent an email to Ms Tait in the following terms:

At 9.55am on 23 October 2014 the plaintiff sent an email to Ms Tait in the following terms:

At 10.09am on 23 October 2014 the plaintiff sent an email to Mr Poole in the following terms:

By that email, the plaintiff sent to Mr Poole a copy of his email of 9.55am to Ms Tait.

At 11.08am on 23 October 2014 Ms Tait replied to the email (of 9.55am) addressed to her in the following terms:

At 11.11am on 23 October 2014 the plaintiff sent an email to Mr Poole in the following terms:

At 11.33am on 23 October 2014 the plaintiff sent an email to Ms Kruger and Mr Poole (copied to two colleagues of Ms Kruger, and to Ms Tait) in the following terms:

Ms Kruger forwarded the plaintiff’s email to the first defendant and Mr Fox at 11.40am on 23 October 2014.

The auction sale of 9 Canberra Avenue commenced at about 5.00pm on 23 October 2014 according to auctioneer’s notes subpoenaed (from Blunts Real Estate of Lane Cove) for the purpose of these proceedings. Before that time, the plaintiff had communicated his request to be released from the Option Deed, lending force to his evidence that his desire to be released from the Deed was not related to the outcome of his neighbour’s auction.

A consideration of the circumstances in which 9 Canberra Avenue was sold at auction is necessary because that sale bears upon: (a) the market value of 7 Canberra Avenue and reasonable pre-auction estimates of its value; (b) an assessment of the expectations and conduct of the defendants; and (c) whether or not, as the plaintiff alleges, Mr Fox falsely represented to him that the first defendant’s offer to purchase 7 Canberra Avenue for $2 million was “the same as the offer [made by the first defendant] for the adjoining property at 9 Canberra Avenue”.

A starting point is Mr Sarzentich’s email of 24 September 2014 (11.54am) to Mr Fox, earlier reproduced. In that email Mr Sarzentich offered to sell his property to the first defendant for $2.2 million, with a delayed settlement if required.

From that email, one may take two points. First, independently of the defendants Mr Sarzentich had initiated a process of sale; on his own motion, he was in the market as a seller. Secondly, he said that he had already made arrangements to go, and he was about to go, to market; in the ordinary course of practice in NSW, that would generally mean that he had already retained a solicitor to prepare a contract and a real estate agent to market the property on the basis of that contract.

Mr Sarzentich’s determination to sell his property, and his state of readiness in moving in that direction, may have been a consequence of the recent death of his partner, formerly a joint tenant of his property, and factors associated with administration of her estate.

From documents produced on subpoena by Mr Sarzentich’s real estate agent (Blunts Real Estate), we now know that Mr Sarzentich signed a “Sales inspection report and auction agency agreement” on 20 September 2014 which recommended a sale by auction based upon a contract prepared by Mr Sarzentich’s solicitors. That report contained the following entry:

On the day of the auction (23 October 2014) Mr Sarzentich set a reserve price for his property at $2.3 million.

The documentary record in evidence relating to dealings between the defendants and Mr Sarzentich is probably not complete. For that reason, alone, it needs to be treated with an element of reserve.

Nevertheless, a picture emerges of negotiation manoeuvers on both sides of a prospective transaction.

As at 5.15pm on Wednesday, 8 October 2014 the defendants believed that, subject to an exchange of contracts, to be effected through solicitors, Mr Fox had negotiated with Mr Sarzentich an agreement that the first defendant would purchase 9 Canberra Avenue (via an 18 month put and call option) for $2.1 million.

That such an agreement was made (subject to an exchange of contracts) is not controversial. The course of any negotiations leading to the agreement is controversial having regard to the absence of a documentary record of it. There is in evidence no written communication between the first defendant and Mr Fox, between Mr Fox and Mr Sarzentich, or otherwise, demonstrating how Mr Sarzentich’s offer to sell for $2.2 million became an agreement on price of $2.1 million.

In cross-examination by senior counsel for the first defendant, Mr Fox filled the gap by deposing (for the first time) to an oral offer made by him to Mr Sarzentich on 1 October 2014 for $2 million, leaving space for vendor and purchaser subsequently to “split the difference” at $2.1 million.

For several reasons, I accept Mr Fox’s evidence as more probable than not. First, $2 million marked the bottom end of the price range contemplated by the Messrs Fox and Bechara when they negotiated the Agency Agreement that governed their companies’ relationship; that Agreement was agreed orally on 1 October 2014, documented on 2 October 2014. Secondly, the first defendant’s opening offer for the purchase of other properties in the area appears to have been pitched at $2 million or $2.1 million, leaving room for the first defendant to negotiate upwards if need be. Thirdly, accepting that Mr Sarzentich opened negotiations with a figure of $2.2 million, there has to be some explanation for his subsequent agreement to accept $2.1 million; a counter offer of $2 million, compromised at $2.1 million, is plausible. Fourthly, the plaintiff’s account of his conversation with Mr Fox on 3 October 2014 is predicated upon an acknowledgement by Mr Fox that Mr Fox had, in fact, made an offer on 9 Canberra Avenue at that time. Fifthly, in my assessment, the course taken by Mr Fox’s evidence does not significantly weigh against these factors.

By an email sent at 4.28pm on Wednesday, 15 October 2014 Mr Serzentich’s solicitor advised the first defendant’s solicitors that he would be unable, because of work commitments, to attend to a review of their draft put and call option, or to advise his client Mr Sarzentich, until after the coming weekend. Mr Sarzentich hastened slowly.

At 2.14pm on 20 October 2014 the solicitors for Mr Sarzentich (McCauley Peters & Cripps) sent an email to the first defendant’s solicitor (Ms Kruger of HWL Ebsworth) in the following terms:

At 2.20pm on 20 October 2014 McCauley Peters & Cripps forwarded a copy of that email to Mr Fox “for information”, without comment.

At 8.10am on 21 October 2014 Mr Fox sent an email to Mr Sarzentich (copied to Mr Sarzentich’s solicitors) in the following terms:

At 12.42pm on 21 October 2014 Mr Sarzentich’s solicitor emailed Mr Fox to foreshadow that an offer to sell 9 Canberra Avenue to the first defendant was about to be communicated to the first defendant’s solicitor, subject to contracts for an outright sale being exchanged by 5.00pm on 22 October 2014.

At 12.47pm on 21 October 2014 Mr Sarzentich’s solicitors sent to the first defendant’s solicitor (Ms Kruger) a copy of a contract.

At 1.19pm on 21 October 2014, as a part of the same email chain, Ms Kruger sent an email to the first defendant (copied to Mr Fox and others) in the following terms:

That email was forwarded by an officer of the first defendant to Mr Bechara at 1.33pm on 21 October 2014.

Whether the defendants responded, pre-auction, to Mr Sarzentich’s overtures is not disclosed by the evidence. What is revealed by the subpoenaed auction records is that Mr Bechara personally attended the auction, and an associate actively bidded at the auction on behalf of the first defendant up to $2.8 million.

The plaintiff’s claims for relief under section 18 of the Australian Consumer Law (which proscribes misleading and deceptive conduct) and section 30 (which proscribes false or misleading representations) must fail on the facts.

Each of the plaintiff’s claims depends upon proof that the first and second representations pleaded in the statement of claim were false.

I accept that the representations were made as alleged, but not that they were false.

That the statements described in the statement of claim as “the first representations” were made is evident from the terms of the email sent by Mr Fox to the plaintiff at 5.46am on 3 October 2014.

The essential feature of those statements was that the first defendant was a substantial company doing significant developments, including developments in Homebush and Newtown.

As at 3 October 2014 the first defendant was planning a development at Homebush (which ultimately included 221 residential units and six commercial premises) and undertaking a development at Newtown (which comprised 203 units), a total of 424 units and six commercial premises.

Read fairly, Mr Fox’s email referred to “400 units” in Homebush and Newtown, not merely “400 units” in Homebush alone. In any event, the primary point made by the email (and correctly so) was that the first defendant was “a substantial company doing some significant developments”.

The plaintiff attached no particular significance to the number of units the subject of the first defendant’s developments when he executed the option deed. If (contrary to my finding) the “first representations” involved any misstatement, the plaintiff cannot build a case based upon them because he did not rely upon them.

The “second representations” pleaded in the statement of claim comprised two statements, both of which I accept were made by Mr Fox in a telephone conversation between him and the plaintiff on 3 October 2014, and both of which were true, not false.

The first defendant was interested in purchasing the plaintiff’s property in order to amalgamate it with adjoining properties that it was interested in purchasing on Canberra Avenue as part of a new development, albeit a development in prospect.

The first defendant’s offer of 1 October 2014 to purchase the plaintiff’s property for $2 million (with a delayed settlement) was, in substance, the same as an offer made to Mr Sarzentich at about the same time.

In presentation of his case the plaintiff presented the first limb of the second representations as, essentially, contextual for the second limb. Of the two limbs, only the second (bearing upon the price to be paid for the plaintiff’s property by the first defendant) could have had any material significance for decisions the plaintiff was called upon to make.

The statement of claim does not plead a future representation, or a warranty in any form, that any offer made by the first defendant for Mr Sarzentich’s property would be accompanied by a comparable offer for the plaintiff’s. If the plaintiff ever believed otherwise, he had no reasonable ground for doing so.

For reasons earlier given, I have found as a fact that (contrary to the plaintiff’s contentions) Mr Fox did make an offer to Mr Sarzentich in terms sufficient to justify his statement to the plaintiff that the offer made to the plaintiff at about the same time was “the same” as the offer for Mr Sarzentich’s property.

The plaintiff’s claims for relief under section 21 of the Australian Consumer Law (which proscribes “conduct that is, in all the circumstances, unconscionable”, and calls attention in section 22 to a number of factors to which the Court may have regard in determining whether there has been a contravention of section 21) must also fail.

Accepting that the concept of “unconscionability” is wider than might operate under the general law, that an exhaustive definition of its field of operation is not to be attempted, and that a finding of unconscionability can be made without attributing impropriety to a party alleged to have contravened section 21 (PT Limited v Spuds Surf Chatswood Pty Limited [2013] NSWCA 446 at [93]-[111]), it is nevertheless difficult, in the commercial setting of the current proceedings, to characterise the first defendant’s conduct as “against conscience”. That is because, having negotiated an agreement with the plaintiff, he was not directly involved in the process in which the terms of the option deed were drafted, negotiated and settled by others (namely, a solicitor acting on behalf of the first defendant and a conveyancer acting on behalf of the plaintiff).

Even if, as I find, that Mr Fox applied commercial pressure to the plaintiff in order to rush him into an exchange of contracts, it is difficult to attribute the character of “unconscionability” to his “conduct” in these circumstances, notwithstanding that (in all the circumstances) the option deed may correctly be characterised as “unjust”.

If an element of “moral obloquy” is required for a finding of “unconscionability”, it is here absent. If it is not required, Mr Fox’s remove from the process of exchange nevertheless deprives his conduct of the character of “unconscionability” in its particular commercial setting. See, generally, Baxt, “Unconscionability: High Court emphasies Moral Obloquy in Obiter Dicta Statements” (2016) 90 ALJ 870.

Although the respective fields of operation of section 21 of the Australian Consumer Law and sections 7 and 9 of the Contracts Review Act might overlap, they are not the same. The former has at its centre proscribed (unconscionable) conduct. The latter is centred upon the question “whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made”, having regard to factors enumerated in the legislation.

The plaintiff’s case fits more readily into the framework of the Contracts Review Act than it does any of the pleaded provisions of the Australian Consumer Law.

Having found against the plaintiff’s contentions that that the second defendant contravened the Australian Consumer Law, there is no need to dwell upon the factual matrix of his allegation that the first defendant was (within the meaning of section 2 of the Australian Consumer Law) “involved” in a contravention.

I have little doubt that whatever Mr Fox did, or did not do, in his dealings with the plaintiff was done, or not done, in close consultation with Mr Bechara. Each man was the embodiment of his company’s mind and was authorised to act on behalf of his company. The second defendant, in all things, acted within its authority on behalf of the first defendant.

If the plaintiff has any entitlement to relief, in all the circumstances of the case, it is under the Contracts Review Act.

So far as presently material sections 7 and 9 of the Contracts Review Act are in the following terms:

Section 4(1) defines the word “Court” in terms that include the Supreme Court of New South Wales. It also provides that “‘unjust’ includes unconscionable, harsh or oppressive; and ‘injustice’ shall be construed in a corresponding manner”.

Section 6(2), which precludes a grant of relief under the Act in relation to a contract so far as it was entered into in the course of or for the purpose of a trade, business or profession carried on by the applicant for relief, has no application in the present proceedings because the plaintiff’s entry into the option deed was not in the course of or for the purpose of a trade, business or profession carried on by him.

The plaintiff’s application for Contracts Review Act relief was made within the two year limitation period for which section 16(a) of the Act provides.

The Contracts Review Act includes no definition of the word “contract”, leaving that term to the meaning it has under the general law. Although an option agreement can be analysed in terms of a grant of a property right, it also bears the character of a contract, whatever its precise juristic character (Carter v Hyde (1923) 33 CLR 115 at 122-123). No party contends otherwise.

For completeness, section 15 of the Contracts Review Act may be noticed:

No party submits that the Court cannot, or should not, have regard to the “contract” designated to come into operation upon an exercise of an option under the option deed. In any event, section 15 permits the Court to have regard, as I do, to the whole of the arrangement constituted by the option deed, including that contract

The defendants have not contended that the Court is precluded from granting relief under the Contracts Review Act in relation to the option deed because any contract attending the deed has been fully executed by the grant of property rights for value. Had they done so, section 14 of the Act would have provided a ready answer to that contention. It provides that the Court “may grant relief in accordance with [the] Act in relation to a contract notwithstanding that the contract has been fully executed.”

A classic statement of the nature, scope and operation of sections 7 and 9 of the Contracts Review Act is found in the judgment of McHugh JA in West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 620E-622B. I here extract more than the customary first paragraph because his Honour’s extended observations bear upon the present proceedings.

Although a finding of “unjust” contract may be more readily made if injustice can be attributed to a party to the contract, McHugh JA’s suggestion that proof of unfair conduct by a party is required for such a finding to be made was contested by Kirby P in Baltic Shipping Company v Dillon (1991) 2 NSWLR 1 at 20.

What is clear, though, is that the Court can have regard to circumstances which, at the time the contract was made, were not known to a party against whom relief is sought: West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 620D.

A contract is not necessarily “unjust” merely because one party (the defendant) does not insist that another party (the plaintiff) obtain independent advice whether he or she should enter the contract: West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 629 B-C; Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 at [86]; Canty v Paperlin X Australia Pty Limited [2014] NSWCA 309 at [121] and [142].

On an application for relief under section 7 of the Contracts Review Act, the Court undertakes a three-stage process: Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 at [99] and [106]; Canty v Paperlin X Australia Pty Limited [2014] NSWCA 309 at [123]. The first is to make findings of primary fact. The second requires a finding that a contract is or is not “unjust”. The third requires an exercise of the power to grant relief under the Act which may, but need not, follow from the conclusion that a contract is unjust.

The following observations of Allsop P in Provident Capital Limited v Papa (2013) 84 NSWLR 231 at 233[7] provide guidance as to the nature of the task of the Court in evaluating the “unjustness” of a contract for the purpose of the Act:

In further observations made by his Honour incidental to these general observations, but relating to the facts of the particular case then before the Court, Allsop P observed that it would be “unjust” to visit “the inadequacy of fulfilment of retainer by” a solicitor for a borrower on a lender who had not been involved in any form of predation or misleading conduct inducing the borrower to enter into an impugned transaction.

Shorn of the allegations of misleading and deceptive conduct, false or misleading representations and unconscionable conduct which I have, by this judgment, rejected, the plaintiff’s case is perhaps best summarised (in his own words) by his email complaint of 23 October 2014. In substance, that email was addressed, first, to his conveyancer, then to his solicitor and, finally, to the solicitor for the first defendant.

Insofar as that email makes statements of fact it is, in my assessment, substantially accurate.

Upon an examination of the facts of the case for the purpose of due consideration of the Contracts Review Act, the starting point is the fact that the defendants (the first defendant, through its agent the second defendant) initiated contact with the plaintiff (then settled in his home), and excited his interest in a sale of his property, before proposing a change in the structure of the transaction (from a sale to an option arrangement) and applying commercial pressure on him for a quick exchange of contracts which suited their interests but was attended by haste which was unnecessary on any other account.

The plaintiff was placed under commercial pressure by the first defendant (largely, but no only, via Mr Fox) to exchange contracts, first on 15 October 2014, then on 16 October 2014, without delay.

As a result of that pressure, the plaintiff signed his counterpart of the option deed on the afternoon of 16 October 2014, thereby (unwittingly) arming his conveyancer with a document which, in an apparent misunderstanding between him and her, she proceeded to exchange without waiting (as he expected) until at least the following day, 17 October 2014.

Because the conveyancer proceeded to an exchange of contracts when she did, the plaintiff lost an opportunity (which he had set in train and still proposed to take) to obtain legal advice from his solicitor, Mr Poole.

The plaintiff did not, in fact, obtain any legal, or other, advice on the option deed other than advice of a comparatively mechanical character from his conveyancer (shortly before contracts were exchanged) about drafting detail of the option deed. He did not obtain advice about whether he should enter a transaction structured as a reciprocal grant of options (with uncertainty attending a lengthy call option period) rather than as a sale.

He did not obtain advice as to whether, in his particular financial circumstances, it was imprudent for him to bind himself to a sale the completion of which might be deferred (against his interests) for up to 19.5 months or, at the election of the first defendant, brought on earlier than that.

Despite cross examination of the plaintiff at the final hearing of the proceedings suggestive of a contrary conclusion, the plaintiff did not understand the nature of the transaction embodied in the option deed. His understanding of the transaction was, perhaps, skewed by emails passing between Mr Fox, the first defendant’s solicitor, the plaintiff’s conveyancer and himself that consistently described the transaction as a “sale” rather than as a reciprocal grant of options. His lack of understanding can, in part, be attributed to the idea planted in his mind by Mr Fox that an option was no more than a mechanism to defer the first defendant’s obligation to pay stamp duty.

As Mr Fox could not but have known or suspected, the plaintiff was an unsophisticated man who, beneath a veneer of competency, required time to process problems and solutions.

Mr Fox having cultivated the plaintiff’s trust, and conditioned the plaintiff to believe that he was being dealt with fairly by the defendants, the defendants pressed home an advantage this conferred upon them in insisting upon an exchange of contracts without delay beyond 16 October 2014.

In doing that, the defendants knew or suspected that the plaintiff’s only adviser was a conveyancer who, as she revealed to the solicitor for the first defendant, was herself under personal pressure arising from calamities within her office.

Although the precise state of the real estate market was unknown, the defendants knew that the plaintiff had no real idea of the value of his property, and they believed that the market value of the property was substantially in excess of the $2.2 million they agreed (on deferred terms, subject to an option) to pay him.

At all material times, contrary to a belief that Mr Fox engendered in the plaintiff, the first defendant was prepared to pay substantially more for the plaintiff’s property than the $2 million initially offered and the $2.2 million later agreed.

A reason for the defendants’ haste in rushing the plaintiff to an exchange of contracts was the fear that, given time, the plaintiff might discover that he was overly conservative in his assessment of the market value of his property.

Whether or not the option deed was or was not “unjust” in the circumstances relating to it at the time it was made, within the meaning of section 7 of the Contracts Review Act, is a question that requires the Court to attend to the (non-exclusive) criteria set out in sections 9(1) and 9(2) of the Act.

The specificity of the criteria set out in section 9(2) invites initial attention, although all factors identified in section 9 must be consulted before the question of the proper characterisation of the option deed is ultimately determined. Section 9 does not prescribe a mere checklist of factors required in every case to be weighed, one against the other, in a mechanical fashion - the evaluative exercise required of the Court is broader than that, and qualitatively different - but the section provides useful guidance as to factors that may be relevant and, on that account, should be consulted, if not considered in depth.

Turning first to section 9(2), I am disinclined to attribute any finding of injustice to the factors enumerated in sections 9(2)(a)-(g) and 9(2)(k) because they have no application to the facts of the case.

I am not satisfied that there was any material inequality in bargaining power between the parties to the option deed, although the first defendant’s ready access to expert knowledge of land development, and market conditions, gave it an edge it over the plaintiff in negotiations, which did take place in the lead up to execution of the option deed. It was reasonably practicable for the plaintiff to negotiate for alteration, or rejection, of provisions of the option deed. Whether or not provisions of the option deed imposed conditions which were unreasonably difficult to comply with, or not reasonably necessary for protection of the legitimate interests of the first defendant, depends upon whether the transaction between the parties was truly intended to be a sale or a genuine option agreement; it is, by itself, too uncertain a reed on which to hang characterisation of the deed as “unjust”. There was no want of capacity in the plaintiff to protect his interests by reason of his age or the state of his physical or mental capacity. Nor does any sense of injustice arise from the relative economic circumstances, educational background or literacy of the parties. Although the option deed was expressed in legalese, neither the physical form of the deed nor the language in which it was expressed could reasonably support a finding of “unjustness”. Finally, I am not satisfied that there was anything in the parties’ conduct in relation to similar contracts, or a course of dealings, supportive of such a finding.

In my assessment, the factors which do point in the direction of a finding of “unjust contract” are those found in sections 9(2)(h)-(j) and 9(2)(l).

The plaintiff did not in fact obtain independent legal or other expert advice beyond, late in the piece, advice of a limited character obtained from his conveyancer. He did not obtain advice bearing upon the critical question whether he should enter the option deed at all, only advice about the mechanics of entry into the deed.

The provisions of the option deed and their legal and practical effect were not accurately explained to the plaintiff by any person, and the plaintiff did not in fact understand the provisions or their effect. It was with a consciousness of that deficiency that the plaintiff sought, as it happens, without success, to obtain the advice of his solicitor Mr Poole before proceeding to an exchange of contracts.

The fact that he signed the option deed in anticipation of an exchange of contracts, at the same time as he planned, and expected, to obtain legal advice from Mr Poole is indicative of the commercial pressure applied to him, and which he felt, to proceed with haste. That pressure was applied by the first defendant through its duly authorised agents, the second defendant (acting through Mr Fox) and the first defendant’s solicitor. The pressure applied was deliberate, sustained and designed to limit the plaintiff’s opportunities for reflection on where his best interests were located and the true state of the market. What the defendants did was within commercial and professional norms, and not deserving of characterisation as unconscionable. It was, nevertheless, unfair in the circumstances in which, to their knowledge, the plaintiff was placed. He was an unsophisticated man represented by a conveyancer rather than a solicitor, trusting the defendants to treat him with the same fairness with which he offered to deal with them, without a full appreciation that the price for which he had agreed to sell his property was not only below market value (or, at most, at the bottom of the range) but substantially less than the first defendant was willing to pay.

Viewed from the perspective of the defendants, the option deed was purely a commercial contract, the purpose and effect of which was to allow the first defendant to acquire the plaintiff’s property (or not), if and when convenient to the first defendant, at the lowest negotiable price. However, from the plaintiff’s perspective, the commercial flavour of the option deed was substantially qualified by its domestic implications. The property in question was his home, and that of his brother, in close proximity with the residence of his elderly mother. The financial and social implications of the option deed were equally important to the welfare of the plaintiff and his family, a reality evidenced by the terms of his email complaint of 23 October 2014.

The injunction in section 9(1) that the Court have regard to the public interest, and consequences or results arising in the event of compliance, or non-compliance, with the option deed, focuses attention on three particular aspects of the case.

First, the defendants (a property developer and a real estate agent) were the moving force towards the making of the option deed, initiating a relationship with the plaintiff (an unsophisticated, settled homeowner) by an unsolicited approach driven by a strategy of conditioning him to part with his home on terms favourable to the defendants without regard to the plaintiff’s personal circumstances.

Although I deliberately refrain from embracing any general proposition that property developers or their agents have a duty to ensure that landowners with whom they deal obtain professional advice as a precondition of their conduct of business, in the present case, it seems to me, the public interest requires that the defendants bear the risk of the transaction proposed by them going off in the event (which occurred) that the plaintiff, as the target of their endeavours, did not, in fact, obtain such independent advice as was necessary to ensure that he gave his fully informed consent to the transaction.

Secondly, although the option deed would be enforceable under the general law (governed by the objective theory of contract law), viewed from the perspective of the plaintiff’s subjective state of mind, the fact is that he did not give his fully informed consent to the deed. He executed it in the belief that, before exchange, he would have an opportunity to obtain legal advice from Mr Poole and, if he chose, either to withdraw from any further dealings with the defendants or to reopen negotiations. Through a misunderstanding with his conveyancer, having armed her with ostensible authority to exchange the option deed by holding her out as his authorised agent, the plaintiff was deprived of the opportunity to obtain the legal advice he reasonably felt necessary to protect his interests.

The public interest in requiring parties to adhere to their contracts, and to ensure that they read and understand contractual documents before signing them, is counterbalanced by a public interest in not holding a party to a contract which, all things considered, is “unjust” within the meaning of the Contracts Review Act. The fact that a contractual document is executed by a party and the circumstances in which it was executed are material (and, in some cases, likely to be decisive) but they do not necessarily tell against a finding of “unjust contract”.

Thirdly, a consequence of the option deed, if performed, would be that the plaintiff would be at risk of a forced sale of his home at a price substantially below market value.

Despite superficial appearances to the contrary, this is not simply a case of a plaintiff who made a bad deal and must, or should, be left to endure it. It is a case in which, under commercial pressure applied by the defendants, the plaintiff executed an option deed attended by both procedural and substantive injustice in circumstances in which, subjectively, he did not give his fully informed consent to the contract.

Having regard to all the circumstances of the case, particularly those adumbrated by reference to section 9(2), I find that the option deed was (within the meaning of section 7) unjust in the circumstances relating to it at the time it was made.

In making that determination I am particularly mindful of the caveat found in section 9(4); the volatility of the market for the plaintiff’s property in September-October 2014; the plaintiff’s appreciation that the contract price of $2.2 million may, possibly, have been less than market value; and his preparedness to contemplate a sale of his property at a price less than full market value if satisfied that he was being dealt with fairly.

Having found that the option deed was relevantly “unjust”, I turn attention to the Court’s discretion under section 7(1) of the Contracts Review Act, “if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result,” to grant particular relief.

In my assessment this discretion should be exercised in favour of a declaration that the option deed is wholly, and from the outset, void. The justice of the case requires such an outcome. Such an order is required for the purpose of avoiding, as far as practicable, an unjust consequence or result attending enforcement of the deed; namely, the plaintiff could be displaced from his home, required to sell it on unfavourable terms, in circumstances in which he did not, in fact, give his fully informed consent to the option deed and his execution of the deed occurred under commercial pressure applied by the defendants.

In weighing the interests of justice I note that the plaintiff’s request that he be released from the option deed was made in a timely manner and, in any event, before the first defendant had an opportunity to bid at the auction sale for 9 Canberra Avenue. Any injustice attending enforcement of the option deed against the plaintiff outweighs any injustice to the defendants in refusing to do so. At the time the plaintiff requested a release, the defendants were free of any obligation or burden arising from a purchase of other property by the first defendant, and they remained free to negotiate terms with the plaintiff as well as other land owners.

Subject to allowing the parties an opportunity to be heard as to the form of orders to be made, and costs, I propose to make the following orders in disposition of the proceedings:

In foreshadowing these orders, I assume that the plaintiff does not seek to make a claim for compensation against the first defendant, pursuant to section 74P of the Real Property Act 1900 NSW, arising from its lodgement of a caveat against the title to his land. I note, in passing, that, although a title search of 7 Canberra Avenue is in evidence, it does not include a copy of Caveat AI996234.

As presently advised, I do not apprehend any necessity for a grant of ancillary relief under section 8(Schedule 1) of the Contracts Review Act.

For completeness, I note that section 19 of the Act appears not to have been engaged because, although an option may confer a caveatable interest in land (Transfield Properties (Kent Street) Pty Ltd v Amos Aked Swift Pty Ltd (1994) 36 NSWLR 321 at 341), the option deed is not a “land instrument” (within the meaning of section 4(1) of the Act), registered under the Real Property Act 1900 NSW; no regulations appear to have been made under the Contracts Review Act in relation to unregistered “land instruments”; and a caveat is not a “dealing” within the meaning of section 3(1) of the Real Property Act 1900.

I do not know whether any order is required to ensure that the option fee of $75,000 paid to the plaintiff’s conveyancer on 16 October 2014 is duly accounted for; but I note the plaintiff’s offer, in his email complaint of 23 October 2014, to refund it to the first defendant if released from the option deed.

In any event, I remind the parties that I am not privy to the precise terms of their interlocutory agreement for extension of the purported operation of the option deed pending the determination of these proceedings. If my determination of the proceedings requires consideration of consequential orders arising from that agreement, the onus is on the parties to draw it to my attention.