JOHN KOUTSOUKOS v JONATHAN GRANT BLAIKIE [2024] SADC 44

Applicant: JOHN KOUTSOUKOS Counsel: MR D RIGGALL - Solicitor: PACE LEGAL Respondent: JONATHAN GRANT BLAIKIE Counsel: MR A MAIK - Solicitor: CAMENA LEGAL Hearing Date/s: 02/02/2024, 16/02/2024, 20/02/2024, 21/02/2024 File No/s: CIV-23-014835 B DISTRICT COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. KOUTSOUKOS v BLAIKIE [2024] SADC 44 Judgment of his Honour Judge Slattery 5 April 2024 REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - FORM AND CONTENT OF CAVEAT - NATURE OF ESTATE OR INTEREST CLAIMED The applicant claims for orders for specific performance of a contract in writing signed by the respondent for the sale and purchase of land described in Certificate of Title Register Book Volume 6254, Folio 577 which is situated adjacent to the Northern Expressway. In 2015, the land was rezoned so that, with the necessary consents and permissions, it could be subdivided for domestic housing. In the period between 2008 and 2014, the applicant assisted the respondent as an agent in the process of rezoning of the land. In the period from 2014 until November 2023, the respondent received and considered offers from a range of potential purchasers for the land. In 2014, the respondent accepted an offer of $2.25 million for the land but a contract did not eventuate. The respondent negotiated with offerors about each of the offers received for the land including one received in November 2023. On 29 August 2023, a creditor of the respondent obtained an order from the Supreme Court for payment by the respondent of the sum of $900,000 plus costs of the action. The judgment creditor moved the Court for a warrant of sale of the property. At that time, there were other creditors secured upon the property who were owed approximately $600,000. In total, the land was now bound to creditors in the amount of about $1.6 million. The respondent sought to treat with the applicant and then executed a contract of sale to the applicant of the land for a purchase price of $3.5 million dollars subject to due diligence conditions. The contract between the parties is dated 18 September 2023. The essential terms of the contract were: sale price of $3.5 million dollars; settlement date of 17 July 2025 subject to completion of due diligence within 180 days; upon completion of due diligence and the confirmation of the contract or upon confirmation of a contract separately by failure of the applicant to notify the completion of due -- 1 of 71 -- diligence within the 180-day period, a deposit of $5,000 was payable. The contract was otherwise subject to the standard Real Estate Institute of South Australia terms and conditions. Following the execution of the contract and by letter dated 28 December 2023, the applicant gave notice in writing to the respondent of the satisfactory completion by him of his due diligence, that the contract was unconditional and that settlement would take place on 17 July 2025. He proffered the amount of deposit for payment to the respondent. The respondent refused to accept the deposit, rejected the applicant’s contention that the contract subsisted, that he would settle on 17 July 2025 or that it cast any obligations upon him. Alternatively, the respondent contends that: if he executed the contract, his signature was procured in circumstances of unconscionability and that his judgment was overborne by the applicant; that the applicant was the respondent’s agent and the procuring of his signature upon the contract was an occasion of breach of fiduciary duty as an agent; that the execution of the contract by the respondent was procured by the misleading conduct of the applicant; that the alleged contract was rescinded following an act of repudiation by the applicant. Held: 1. The contract of 18 September 2023 is a valid and enforceable contract executed by the parties thereto as persons at arm’s length having agreed upon its terms. 2. The respondent did not execute the contract in circumstances of unconscionability where his judgment was overborne. At the time of execution, the respondent was of sound mind and was able to exercise his own commercial judgment freely and voluntarily. Although he was 75 years of age, he was commercially very astute and experienced and during his life, he had been involved in multiple transactions for the sale, purchase, subdivision and letting of real property. 3. As at 18 September 2023, the applicant was not the agent of the respondent and owed no fiduciary duties to him. Since 2014 and up until the date of the contract, the respondent had to the exclusion of the applicant, separately been fielding and negotiating offers from a range of offerors for the purchase of the property. There was no fiduciary duty owed to the respondent that was breached. 4. There was no misleading conduct on the part of the applicant towards the respondent. The applicant did not represent to the respondent that the contract was merely a holding exercise to defeat the warrant for sale of the land of a judgment creditor. 5. On 28 December 2023, the applicant informed the respondent of the successful completion of his due diligence. The applicant proffered to the respondent the amount of $5,000 for the deposit in accordance with the terms of the contract. The respondent refused to accept the deposit. The applicant has not thereby committed any form of repudiatory action upon which the respondent may rely. 6. The letter of rescission of the respondent of 15 December 2023 was not effective and was of no legal consequence. It mistakenly referred to the wrong contract and was factually erroneous in that the applicant had not committed any repudiatory act upon which the respondent may rely to treat the contract as rescinded. 7. The applicant has satisfied all of the terms and conditions of the contract. Orders that the contract be specifically enforced. Declarations and orders accordingly. 8. The Court will hear the parties further in relation to costs, and ancillary and consequential orders. Real Property Act 1886 (SA), referred to. Baumgartner v Baumgartner (1987) 164 CLR 137; Muschinski v Dodds (1985) 160 CLR 583; Blomley v Ryan (1956) 99 CLR 362; Commercial Bank of Australia Ltd v Amadio and Anor (1983) 151 CLR 446; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 at 314 ; Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142 ; -- 2 of 71 -- Hely – Hutchinson v Brayhead Ltd [1968] 1 QB 549; Cadd v Cadd (1909) 9 CLR 171; Meehan v Jones (1982) 149 CLR 571, considered. -- 3 of 71 -- -- 4 of 71 -- KOUTSOUKOS v BLAIKIE [2024] SADC 44 Introduction 1 In this action the applicant, Mr John Koutsoukos (the applicant), sues the respondent, Mr Jonathan Grant Blaikie (the respondent), for orders for specific performance and ancillary relief connected with a claim for a declaration of the validity of a contract dated 18 September 2023 (Tender Book Exhibit P2, from page 1) (the contract) for the sale and purchase of land at Riverbank Road, Angle Vale. The applicant seeks orders for specific performance of that contract. The contract discloses an earlier date of 17 July 2023; that date is significant as it is the date from when the settlement date of the contract is to be calculated and nothing turns on the difference between those two dates. The land comprises about 35,000 m² in an area that was formerly disposed as a chicken farming business (in multiple sheds). It has now been rezoned and is available for redevelopment with permission. It was formerly zoned ‘rural’. 2 There were a number of special conditions attached to the contract. One of them is a due diligence condition allowing a maximum of 180 days, during which the applicant could satisfy himself about the suitability of the land for development. At that time, the land was largely in a broad acre form with some improvements. 3 Under the contract, upon notification of the completion of the due diligence or upon the expiry of 180 days from the date of the contract and where the purchaser has not notified the respondent in writing that the due diligence is not satisfied, the contract became unconditional and a deposit of $5,000 was due and payable. Settlement was required to take place within two years of the date of the signing of the contract; in this instance, two years from 17 July 2023 even though the contract is otherwise dated 18 September 2023. 4 The applicant lodged a caveat to protect the contract in the usual course as a purchaser. The caveat was warned by the respondent. An application for extension of time to remove the caveat was heard before Chief Judge Evans in this Court on and from 5 January 2024, and there was an extension of time granted for the removal of the caveat. An order was made for an urgent trial of this action. 5 At that hearing before the Chief Judge, the respondent informed the Chief Judge that a refinance proposal in the amount of $2 million was pending and that the presence of the applicant's caveat put that arrangement in jeopardy. It was alleged that this refinance proposal was connected with an intention of the respondent to develop the land personally. 6 I have had regard to the whole of the evidence in this matter. I have also had regard to the whole of the evidence before the Chief Judge and to the oral evidence given by the respondent before me. I am satisfied and I find that this submission could not be sustained on any basis. I am satisfied that at no time was there a -- 5 of 71 -- [2024] SADC 44 2 refinance proposal in the amount of $2 million on foot for the benefit of the respondent at that time. I am also satisfied that this submission put to the Chief Judge was unsustainable and was without any credibility. 7 The identified urgency of the need for the trial surrounded a debt owed to a judgment creditor, Mr Charles Chelliah. Mr Chelliah had obtained a judgment against the respondent personally of almost $900,000, inclusive of interest plus costs, given by Judge Bochner on 29 August 2023. The hearing of the application in respect of that judgment before her Honour had occurred in April and May of 2023. 8 The respondent lodged an appeal against that judgment. Doyle J in the Supreme Court made an order for security for costs on that appeal. This order for security was not complied with and the appeal lapsed. The urgency now is that Mr Chelliah intends to execute upon the judgment that he has obtained. It is estimated that costs may be in the amount of up to $100,000 or more. The principal debt to Mr Chelliah has been outstanding for a very long time. 9 This trial was heard over a two-day period on 20 and 21 February 2024. The parties relied for their evidence-in-chief substantially upon the affidavit evidence that had been filed in Court since December 2023. I made orders for the filing of Points of Claim and Points of Defence. I am satisfied that these pleadings properly identify the causes of action and the defences upon which the parties rely. The evidence at trial comprised the affidavit material, as well as viva voce evidence. 10 Exhibit P2 is the parties' tender book. It includes a number of the exhibits to the affidavits of the applicant, such as Exhibits JK11, JK12, JK14, JK15, JK16 and JK17 to the affidavit of the applicant sworn 19 January 2024 (Exhibit P2, document 6). Exhibit P4 is the affidavit of the applicant of 28 December 2023 filed in support of the application for extension of time for the removal of the caveat. Exhibit P5 is a further affidavit of the applicant of 19 January 2024 tendered in evidence. Exhibit P6 is a further affidavit of the applicant of 8 February 2024, tendered in evidence. These documents were admitted to evidence without objection. 11 Exhibit D8 is an affidavit of the respondent of 5 February 2024; Exhibit D9 is an affidavit of the respondent of 18 February 2024; Exhibit P10 is an email from Mr Adam Squires to the respondent of 25 February 2022. In evidence there are a number of other emails passing between the respondent, the applicant and other persons, which comprise Exhibits P11, P12 and P13. Exhibit P14 is a warrant of sale of the subject property in favour of Charles Rajaratnam Chelliah dated 6 October 2023. These documents were also tendered in evidence without objection. 12 The applicant seeks an order for declarations that the contract executed on 18 September 2023 bearing a commencement date of 17 July 2023 is a valid and enforceable contract, and that orders for specific performance of it should be made. -- 6 of 71 -- [2024] SADC 44 3 The contention of the respondent is that the contract is not valid; that it was executed in circumstances of unconscionable conduct or breach of fiduciary duty; that it has been terminated; and he seeks orders for the removal of the caveat. Result 13 For reasons that follow, I am satisfied that none of the defences raised by the respondent are established. I am satisfied that there has been no breach of fiduciary duty as pleaded and I am satisfied that there is no evidence of any unconscionable conduct on the part of the applicant. I am satisfied and I find that the respondent is a highly experienced person in matters of real estate transactions; he understood the transaction he was entering on 18 September 2023; he was a willing participant in the transaction; and he understood he was conveying to the applicant his beneficial interest in the land by the contract. The completion of the contract was dependent upon the fulfillment of a due diligence special condition for the benefit of the applicant. I find that the alleged termination has not occurred. The alleged letter of termination referred to the wrong contract and was ineffective. I find that there was no ground available to the respondent to terminate the contract. 14 I have reviewed all of the evidence that has been led in the trial. I have taken into account the whole of the evidence, including the documentary evidence, the viva voce evidence, and the other exhibits. I have made my assessments of the witnesses without necessarily delving into each aspect of the evidence given by them. In any event, I have taken into account the whole of the evidence before me in reaching my conclusion. 15 Based upon the affidavit and other evidence (which is not challenged) the applicant seeks the following orders :- The Applicant Claims:- 28.1 A declaration that the Applicant has a valid contract over the land comprised in Certificate of Title Registered Book Volume 6254 folio 577 for the purchase of the land. 28.2 Consequential orders to give effect to such declaration including an order for specific performance of the contract. 28.3 Orders providing for costs. 16 The applicant contends that there exists between the parties an enforceable contract for the benefit of the applicant for the purchase of the property. I find, for the reasons set out hereunder, that the applicant is entitled to these orders. Preliminary findings of fact 17 I make the following preliminary findings of fact. As a result of the development along the Northern Expressway corridor, a significant portion of land has now become available to be rezoned. It was once rural land; it was in general broadacre land used for primary production. Following rezoning, it may now -- 7 of 71 -- [2024] SADC 44 4 become available for potential redevelopment as domestic housing with the advantage of the adjacent expressway. 18 The land is heavily encumbered as follows:- The land 5. The land is subject to: 5.1 mortgage 10539249 in favour of AMP Bank limited in respect of a debt. 5.2 mortgage 11968077 in favour of Sue Marshall. 5.3 caveat number 12029220 in favour of Charles Chelliah in respect of an unregistered mortgage. 5.4 order of Court 12837545 in favour of PMG Geological Services Pty Ltd. 5.5 caveat 13418462 in favour of Commission of State Taxation. 5.6 caveat 14166368 in favour of the Applicant in respect of his claim pursuant to the contract. 5.7 caveat 14179309 in favour of Renewable Industries Group Pty Ltd. 19 The final caveat lodged by Renewable Industries Group Pty Ltd (RIM) claims an interest as caveator or as a party which allegedly has contributed to the maintenance and improvement of this property. This appears to claim an interest in equity akin to that recognised in the decisions of the High Court in Baumgartner v Baumgartner 1 and Muschinski v Dodds.2 In such a claim, the moving party must be able to prove the expenditure of capital, effort or both to an asset with the expectation (ordinarily arising out of an agreement or understanding) of benefit usually following a promise made in a fiduciary or equitable setting, and which would be an occasion of unconscionability for the promisor to depart from such a promise. Although I am not asked to express any view upon this caveat, I consider that it is unsustainable. I disclose my reasons for forming that view later in this judgment. A background to the development of the land 20 It is not in contest between the parties that from 2007, the State Government of South Australia undertook a review of the planning of the land adjacent to the township of Angle Vale as part of an initiative to provide more residential land along the Northern Expressway corridor. It had the potential to significantly increase the value of the land for the benefit of the respondent. It is also not in contest that between 2008 and 2012, the applicant assisted the respondent, at his request, to promote the rezoning of the land; the applicant attended more than 200 meetings with the respondent, with council, at public fora, and with other local 1 (1987) 164 CLR 137. 2 (1985) 160 CLR 583. -- 8 of 71 -- [2024] SADC 44 5 landowner groups. He also prepared written submissions on behalf of the respondent to help achieve the rezoning of the land. Ultimately the land was rezoned in 2015. 21 In that background I accept, and it is not put seriously in contention, that the applicant has known the respondent for a very long period of time. I accept that he has assisted the respondent deal with local and State government authorities about the rezoning of the land, the compulsory acquisition of a portion of the land, and with issues arising from time to time about the land, including at least 200 meetings connected with the rezoning. 22 He has, through his own corporate entities and personally, also made offers to the respondent to purchase the land. This occurred during 2023. He has had a long history of involvement with the respondent and in connection with the land. 23 In cross-examination, the applicant said that all of the assistance given by him to the respondent was based upon (my words) altruistic intentions. And he did not expect any benefit. I am unable to accept that evidence and I am satisfied that the intention of the applicant was to place himself in the best position to purchase the property if it became available. He did this by giving many years of assistance to the respondent and, as I have said, before August 2023 he made offers to the respondent to purchase the property. These were rejected. In 2023, he was not in a relationship of principal and agent or in any other form of fiduciary relationship with the respondent. He and the respondent were at ‘arm’s length’ as a potential vendor and purchaser. The respondent rejected the first offer of the applicant and maintained that he would develop the land. Nothing said or done by the applicant in any way adversely affected that situation. The respondent fielded and entered negotiations about other offers from third parties without input from the applicant. No duty of honesty or disclosure arose between them. An assessment of the evidence of the applicant and the respondent 24 Although I have not accepted this aspect of the applicant's evidence, that finding does not affect my assessment of the overall credibility of his evidence, which I accept. In contrast, I am unable to accept any of the evidence of the respondent unless it was corroborated by other independent evidence which is objectively verifiable and proved. In the course of cross-examination, a series of propositions were put to the respondent that he had deliberately lied in his evidence. This was appropriate in light of the earlier cross-examination of the respondent and the obvious inconsistencies with his evidence and other objectively proven facts. The respondent denied that he had lied. 25 It is not necessary for me to make any findings specifically about whether the respondent was deliberately and consciously lying. It is sufficient for me to say that the evidence of the respondent was not credible, it simply cannot be believed, and at times, in my opinion, appeared to be contrived to suit the then current purpose and attitude of the respondent. -- 9 of 71 -- [2024] SADC 44 6 The offers connected with the land 26 Paragraph 10 of the Points of Claim (FDN 23) provides:- ‘On 17 July 2023 the Applicant met with the Respondent and put an offer in writing to purchase the land for a price of $3.5 million upon the terms and conditions set out in the contract.’ 27 It is not in contention that this offer was made by the applicant and was refused. Paragraph 11 of the Points of Claim (FDN 23) provides:- ‘The Respondent declined to sell the land to the Applicant upon the terms set out in the contract saying words to the effect that he had offers coming in from other parties and wished to consider those offers before committing himself.’ 28 None of these matters are in dispute. Separate from any dealing with the applicant, the respondent actively sought out purchasers for the property and defended the claim of Mr Chelliah. He had legal advice through the whole of this time. He was never in an inferior bargaining position, for the reasons that are developed later in these reasons. The applicant did not owe him any form of fiduciary duty. 29 I am satisfied that on the evidence, there were other interested parties who were said to be interested in purchasing the land. For example, a Gabriel Haidar made an offer in the following form:-3 ‘12.1 A written expression of interest at a price of $2.8 million with a due diligence period of 18 months from a potential purchaser Gabriel Haidar.’ 30 It is appropriate to assess the content of this offer which is set out in full in JK11 of Exhibit P5 (pages 12-13). At page 15 of JK11 there is a letter from Scammell & Co Solicitors addressed to the respondent, dated 28 April 2023. After introducing the firm of solicitors as acting for Mr Haidar, the solicitors inform the respondent that they wish to advise that their client anticipates that he would be agreeable to sale terms, including the following:-4 3 Applicant’s Points of Claim (FDN 23), [12.1]. 4 JK11 of Exhibit P5. -- 10 of 71 -- [2024] SADC 44 7 31 The proffered purchase price is $2.8 million. Settlement will not occur until after the satisfaction of the special conditions, including a due diligence period of 18 months. In the interim, access must be provided to the property. The agreement is subject to the relevant approvals as a condition precedent. There is a reference -- 11 of 71 -- [2024] SADC 44 8 in this offer to loose materials and debris upon the property. It is not in contest on the evidence that the respondent has stored at the property a significant number of cars (about 100), many car bodies and an amount of other debris. It is implicit on the evidence that it would take substantial effort and time to remove this material. 32 In the context of the case at bar, important points of reference in this letter are the periods in which steps are proposed to be taken. They are very long; for example, the due diligence period is 18 months. This gives some illustration of the commercial requirements for contracts of this nature and is an example of the form of commercial terms that may be proffered by parties connected with undertaking a development of this nature. 33 Of equal and perhaps greater importance was the offer by an entity called ‘Accord’, which is a fund managing business. In a letter of 17 May 2023 addressed to the respondent, Accord provides a term sheet. It introduces itself and informs the respondent that it operates as a fund management and property development business. It is pleased to present its key term sheet for the purchase of the property. It is attached and is in the following terms:- 5 5 JK-12 of Exhibit P5. -- 12 of 71 -- [2024] SADC 44 9 -- 13 of 71 -- [2024] SADC 44 10 -- 14 of 71 -- [2024] SADC 44 11 34 This key term sheet is set out at page 17 of the exhibit and it identifies: the developer; the proposed purchase price of $3 million; and the deposit of $30,000 payable 14 days from all parties signing a land sale contract. The deposit is to be refunded if there is no settlement. The completion of the contract, which is determinative of the payment of the purchase price and which is also connected to the terms of the contract and the deposit, is conditional upon the following: due diligence which requires the purchaser to be satisfied in its absolute discretion with its due diligence, investigations within 60 days of the date of the contract, and special conditions being satisfied or waived within 12 months of the due diligence condition being satisfied. These include: first, the purchaser obtaining planning approval on terms and conditions acceptable to the purchaser in his absolute discretion for the proposed development of the property; second, the purchaser entering into an agreement to lease the property on terms acceptable to the purchaser; third, the purchaser conducting environmental investigations to satisfy itself that the property is suitable for the intended use; and fourth, the purchaser will have the option to extend the call option period for an additional two months. The offer is in the form of a negotiation for the grant by the respondent of what is commonly called a put and call option. 35 Settlement is defined in the term sheet as occurring within 60 days from the date the purchaser notifies the vendor in writing that the last of the special conditions have been satisfied or waived. There are other terms which do not require discussion. -- 15 of 71 -- [2024] SADC 44 12 36 Similar to the offer of Mr Haidar, it is apparent that when this offer for this type of asset is reviewed preparatory to the formation of a commercial contract, it is customary for there to be very long lead-up periods from the time of the execution of a binding contract to the time of settlement, during which the parties are to make their own investigations about their decision and proceed (or not) as the case may be. These are part and parcel of the commercial context in which these issues are required to be considered. 37 In relation to the term sheet, there is a clause entitled 'Binding Terms', it provides that whilst Accord is intending upon conducting bona fide negotiations, it will not be taken to have entered into a legally binding commitment in respect of the purchase of the property unless and until a contract has been duly executed by all parties. The parties do not intend to be bound by the term sheet apart from exceptional matters of exclusivity and confidentiality. This term sheet was never signed by the respondent. The case of the applicant 38 The applicant's case is that on or about 31 August 2023, the respondent informed the applicant that he was negotiating with potential purchasers in the range of $3-3.5 million. The respondent denies this assertion, but in evidence the respondent did not strenuously maintain this denial. I think the allegation is correct, although I have seen no evidence of any (other) offer of $3.5 million. 39 At the end of August 2023, very dramatic changes in the circumstances affecting the respondent occurred. I am satisfied that between August and September 2023, a number of quite deleterious ‘seismic’ shifts happened to the fortunes of the respondent. 40 I have earlier mentioned Mr Charles Chelliah. On 29 August 2023, Mr Chelliah obtained a judgment from Judge Bochner in the Supreme Court on his claim in debt against the respondent in the amount of $570,000 plus $300,000 of interest plus costs. The trial of that action occurred in April and May of 2023. On the evidence there has been no assessment of the costs, and the appeal against the decision has lapsed for the reasons that I earlier identified (the decision by Doyle J to order security for costs,6 and the respondent failed to provide the security). Mr Chelliah has proceeded to pursue his rights as a judgment creditor of the respondent, and upon his pursuit of the land to discharge the debt. Taking into account the costs payable by the respondent in that action, Mr Chelliah now likely seeks repayment of between $900,000 and $1,000,000 which I am satisfied the respondent is unable to pay. 41 The effect of this judgment against the respondent became the genesis of a very high level of activity on the part of the respondent in around September 2023. 6 Blaikie v Chelliah [2023] SASCA 143. -- 16 of 71 -- [2024] SADC 44 13 42 I accept the evidence of the applicant that the respondent had been under considerable pressure to discharge the Chelliah debt since at least June 2023. After the completion of the hearing before Judge Bochner, I am satisfied that despite their earlier more cordial relationship, Mr Chelliah was pressing the respondent very rigorously for payment of a very large amount owed to him. By this time, the respondent owed but had failed to pay the Chelliah debt over a period of about ten or so years. This explains the very high level of interest within the judgment of Judge Bochner. 43 The respondent spoke to the applicant about the Chelliah judgment in about June 2023 and the respondent informed the applicant that he wanted to keep fighting against it. He was concerned about the imminence of the judgment, the amount of debt that he could not pay, and the severe commercial consequences of such developments. At that time, the applicant warned the respondent that Mr Chelliah would seek a warrant of sale over the Angle Vale property and sell it if the respondent continued to keep (unsuccessfully) fighting the debt claim. The respondent told the applicant that he wanted to find a funder to pay out his mortgages and judgment debts and that he might be able to procure first mortgage funding but it would be conditional upon a funder being satisfied that the loan could be paid back within a certain time frame. The applicant informed the respondent that no bank or financial institution will lend to a 75-year-old man with no income and a bad credit rating. 44 The applicant then informed the respondent that only private funders would consider refinancing and that construction and development finance would be much more difficult to obtain for the respondent because conditions would need to be met. The applicant informed the respondent that he could only achieve this by partnering with a land developer with a proven track record of obtaining access to funding. As an example, Accord is such an entity. Mr Haidar is not known to fall into that category. 45 The respondent asked the applicant to help refinance his debts and judgments with a private non-bank lender so that he can continue to stay on the Angle Vale property. He said that he wished to remain at Angle Vale, where he was living, for at least two years whilst the development progressed. It was at that time that the applicant offered to develop the Angle Vale property and accommodate the respondent's desire to remain there. That would only occur if a contract was signed on similar or better terms than the Accord contract and allow the applicant to perform his due diligence to determine the best outcome. 46 The respondent then told the applicant that he would give consideration to this and discuss it further. There was a number of further conversations at the end of June 2023 between the parties. The applicant told the respondent that he needed a six-month due diligence period with a two-year settlement period and he was prepared to pay $3.5 million. I am satisfied that in or about mid July 2023, the applicant prepared a standard Real Estate Institute of South Australia commercial contract for sale and purchase of the property. The contract was taken to the -- 17 of 71 -- [2024] SADC 44 14 respondent at the Angle Vale property late in the afternoon of 17 July 2023. The respondent refused to sign that contract and stated that he had offers coming in for the sale of the property from other parties and he wanted to see what those offers would be. I have earlier canvassed some of those offers. 47 I am satisfied that the respondent said to the applicant that he expected to sign another contract and was likely to do so. Then in August 2023, the respondent told the applicant that he had received further offers to buy the Angle Vale property from a number of entities, namely, Harcourts Real Estate through an agent Simon De Wit for $3 million, from an Indian backed consortium for $3.5 million with conditions and, from Bruce MacDonald Real Estate, an agent from G & Q Real Estate, which had Chinese clients ready and willing to offer between $3 million and $3.5 million. 48 In discussions between the applicant and the respondent from June 2023, it became apparent that the Chelliah proceedings had become a matter of considerable concern to the respondent, who was by then pursuing the possibility of selling the land. 49 At that time, the respondent was living in a house on the property and he had stored there a quantity of equipment in various stages of disuse. There were about 100 cars and car bodies on the property. The respondent was 75 years of age and he was not in receipt of any regular income. His credit rating was impacted by the Chelliah litigation and there were significant challenges in securing funding from anyone but a third tier lender at a very high interest rate. Also, the respondent understood that finding an alternative block to move to under the threat of forced sale under the Supreme Court warrant was a significant risk for him. 50 I am also satisfied, in the background of these facts, that the respondent had previously investigated selling the land in the period between 2004 and 2017. For example, at the end of 2013, the applicant became aware that the respondent had not yet repaid the Chelliah loan and, on 1 November 2013, Mr Chelliah had lodged a caveat over the land in respect of an unregistered mortgage to which I have earlier made reference. I am also satisfied that the respondent then engaged Smallacombe Burnside as selling agents for the land on 29 March 2014. 51 On or about 1 September 2014, Assured Lanser Communities offered to purchase the land for $300,000 plus 12.5% of the value of gross sales. This offer therefore required a rezoning of the land and the acceptance of a proposed Land Management Agreement. On 14 November 2017, ATEK offered to purchase the land for $2.25 million on particular conditions. The respondent replied to the offer of ATEK through his conveyancer, Carrington Conveyancers, on 16 November 2017. He said then that he was prepared to sell the land for $2.25 million but wished to negotiate the conditions. 52 Of importance here is that the respondent agreed to sell the land. A copy of the Carrington Conveyancers response to ATEK is in evidence in Exhibit JK17. I -- 18 of 71 -- [2024] SADC 44 15 am also satisfied that in 2017, the respondent discussed the ATEK investment offer with the applicant and asked the applicant if he was interested in purchasing the property at the same price but with a longer settlement. At the time, and because of other more pressing commitments and commercial deals, the applicant could not proceed with that purchase and did not take up that opportunity. The Chelliah proceeding 53 It follows the applicant knew at least from that time, between 2004 to 2017, the respondent had an intention and was willing to sell the property, and he was prepared to sell the property to the applicant rather than another purchaser. In evidence, an assertion was made by the respondent that the Chelliah proceeding was a matter of discussion between the parties, including whether or not a contract of sale would impact upon the Chelliah proceedings. The approach allegedly discussed was that if a ‘faux’ contract was prepared in the name of the applicant then it could somehow delay or circumscribe the effect and impact of the Chelliah proceedings. I do not accept that evidence. It was not strongly put in the case before me and I reject it. 54 I am satisfied on the evidence that the purpose of the applicant and the understanding of the respondent when the applicant proffered the contract for sale and purchase of the land in September 2023, was that the applicant bound himself to an offer to purchase the land for $3.5 million. 55 I am also satisfied that the applicant and the respondent had a meeting with Mr Chelliah and his adviser, Mr Joe Assisi, in the morning of 15 September 2023. 56 At that meeting, Mr Chelliah informed the respondent that he was now serious about selling up the respondent and that legal steps would be taken immediately to enforce the judgment debt against the property. At that meeting Mr Chelliah and his adviser gave all the parties present to understand and they left the respondent in absolutely no doubt of their view of the respondent’s very poor legal, financial and personal position. Mr Chelliah and his adviser took a very aggressive approach at that meeting. Patience with the respondent had ended. The parties were informed that the respondent had exhausted the patience of Mr Chelliah. 57 Following that meeting, which took place over lunch at a restaurant near the InterContinental Hotel in North Terrace, the applicant and the respondent went to the office of the solicitor, Mr Jelbert, in Compton Street, Adelaide. At that meeting there was a discussion about the prospects of dealing with Mr Chelliah's claim. In the course of that meeting the applicant made known to Mr Jelbert that Mr Chelliah was serious about selling up the land and something had to be done urgently. The respondent reportedly talked about his desire to develop the property for a profit. He wrongly assumed the unlimited forbearance of Mr Chelliah, which was not a probability. 58 In the course of that meeting, Mr Jelbert introduced the prospect of a Mr De Angelis as a developer who might be able to help. Following that meeting, the -- 19 of 71 -- [2024] SADC 44 16 applicant sent to Mr Jelbert a text message at about 3.30 p.m. asking him for the contact details for Mr De Angelis. At that time, the applicant was aware of Mr De Angelis. They had met many years prior to that time and his belief was that Mr De Angelis would not be in a position to assist the respondent. The applicant subsequently ascertained from a search of the Bankruptcy Register that Mr De Angelis had been bankrupt on four occasions and was last discharged from bankruptcy on 17 October 2023, after the date of the discussion with Mr Jelbert who introduced him to the respondent. 59 There was also concern at the time that the respondent would be in a position where the property might be sold on a forced sale under a warrant of sale in support of the judgment and that he would then have to leave the property in a much shorter timeframe than previously discussed. I am satisfied that, as a result of the occurrence of all of these matters, the applicant quite hurriedly prepared a form of contract, which is document 1 in Exhibit P2. He drew the contract in the background that the respondent was aware that: a forced sale would be the worst case scenario financially and would minimise any return he got from the property; the best case for him was to enter into a private contract of sale with the highest bidder on the best terms to ensure he maximised his return from the property; there was no real prospect of the respondent being involved as a proprietor in any redevelopment of the land because of his state of penury; and Mr Chelliah was no longer prepared to indulge him as he wanted his money. 60 In those circumstances, the applicant decided he would put again to the respondent a contract in the same amount and largely in the same terms as had been offered in July 2023, about 8 weeks earlier. Once prepared, he then made arrangements to attend upon the respondent to see if he would consider it and if he agreed to sign it. 61 I am satisfied that the applicant made this decision and took these steps for a number of reasons. First, if the execution upon the judgment had proceeded, he knew the respondent would be put off the property in short order and he would lose the time and opportunity needed to manage and arrange his affairs to leave in an orderly fashion. Second, the process under a warrant of sale requires a Court official to sell or arrange for the sale of the property and the respondent loses control of the process of sale. Third, although the process of sale used may be by public auction, the only interest of Mr Chelliah was to achieve a sale price sufficient after the discharge of the secured creditors to discharge the debt of Mr Chelliah. Fourth and as a consequence of the first three matters, the sale of the property without the Land Management Agreement (LMA) may not achieve the optimum value for the land compared to the position if an LMA exists and it risks the prospect of a shortfall. This would lead to further claims against the respondent from unsatisfied creditors in the event of such a shortfall. Finally, such a scenario leaves the respondent with nothing from his many years of property investments and sales. -- 20 of 71 -- [2024] SADC 44 17 The execution of the contract 62 I am, therefore, satisfied of the following matters: on 18 September 2023 at about 2 p.m, the applicant met with a Mr Geoff Stamoulis at 340 Diment Road, Burton. The purpose of the meeting was to discuss various business matters and at that meeting, the applicant showed Mr Stamoulis a copy of the unsigned contract of 17 July 2023. He said to Mr Stamoulis that he was going to see the respondent at Angle Vale to get the contract signed. He arrived at the Angle Vale property at about 4.30 p.m. He had a meeting with the respondent outside the front of his house. It was in the vicinity of his vehicle. At that meeting, the contract was presented by the applicant to the respondent. Together, they read through the terms of the contract. Particular reference was made to the due diligence provision recorded there by the applicant. In the course of that meeting the applicant explained that it was largely the same contract that they had previously discussed on 17 July 2023. 63 I am satisfied on the evidence that at that meeting the respondent read over the document. I am satisfied that he was then very familiar with such documents derived from his very long history of involvement in property transactions of a very broad range of property assets. He had also seen a form of offer like this before from the applicant. I am also satisfied that in executing this contract the applicant personally bound himself, and he intended to bind himself to the contract. 64 After the discussion between the applicant and the respondent, the respondent indicated his willingness to sign the document. The parties went through each page of the document. On each page the parties put their initials. The respondent initialled each page of the contract, using the pen supplied to him by the applicant before signing the execution page. As the parties went through the document, the applicant turned the pages for initialling and therefore, it took some time for this process to be completed, as it was a 15-page document. 65 I am also satisfied that all of these events occurred at the property on 18 September 2023. I find that the applicant signed and initialled the contract on the corner of an open wooden pallet crate, which was an uneven surface. The respondent then arranged for the execution of the contract to be witnessed and for each of the documents to be initialled by the witnesses. The applicant told the respondent that he would take the contract with him and hold on to it and get a copy to him later. The applicant told the respondent that he would immediately commence spending time and money as part of his due diligence process. He then returned to the office of Mr Stamoulis who executed the contract as a witness. 66 I accept the evidence of the applicant that his state of mind, as at 18 September 2023 and following, was that the respondent was satisfied that the contract was his best option, particularly in regard to the risks inherent in the Chelliah claim, the Chelliah judgment and the appeal. He was aware of the immediacy of the threat presented by this claim of Mr Chelliah. I am also satisfied that the commercial terms of the contract constituted significant benefits to the -- 21 of 71 -- [2024] SADC 44 18 respondent. The purchase price of $3.5 million was in addition to the compensation for the section of land payable to him and which had already been compulsorily acquired. The applicant considered that to be of a value in the order of $1.5 million; the respondent thought it was of a value of $2 million. I am satisfied, for the reasons already set out, that the offer of $3.5 million was well in excess of the best offer from Accord which was in the amount of $3 million but on much less advantageous terms as I have set out. It was not a settled contractual offer and was subject to a number of conditions that needed to be satisfied before Accord would enter into a contractually binding obligation. The contract executed with the applicant was much more straightforward and so the commercial risks accepted by the applicant were far greater. I am also satisfied that this arrangement was suitable to the respondent because he then had time to remove his collection of cars and other materials in an orderly fashion. 67 The evidence satisfies me that after the execution of that contract, the applicant set about completing the due diligence process as quickly as possible. He correctly thought that it was in his commercial interests to do so. He knew that the inquiries in relation to land development were lengthy, time-consuming and very costly. The work he undertook included the following: he conferred with the Playford Council and its planning department; he conferred with the Department of Infrastructure and Transport; he conferred with the stormwater engineers; he conferred with SA Water and especially the major land projects team and received water and sewer location plans; he then retained and conferred with traffic engineering consultants; he retained and conferred with environmental consultants and engineers; he made inquiries with the Environmental Protection Agency; he retained and conferred with civil construction contractors, with civil earthworks and earthmoving contractors and with town planners; he had conferences with SA Power Networks in relation to the provision of power to the site; he retained and conferred with surveyors and with Lands Titles Office personnel; and he conferred with local real estate agents to determine the value of developing residential lands and he conferred with commercial real estate agents to determine the potential end value of commercial land use. 68 Separately, he retained and conferred with RSA Lawyers and Gary Taplin Valuers; he conferred with first and second mortgagees and other judgment creditors regarding the discharge of outstanding debts and liabilities; he conferred with banks and financial institutions and private lenders for project finance; and he conferred with licensed valuers in relation to information to be provided to the banks and other lenders. The respondent’s attempts to sell the land 69 In his evidence, the respondent continuously reiterated that it was only his intention to develop the land himself and thus he would never sell the land. He continuously made reference to his desire to enter into a joint venture with another -- 22 of 71 -- [2024] SADC 44 19 developer. Two in particular stand out. The first by a group called ATEK, however this was an offer made in 2017 in the following terms:-7 7 Exhibit P6, Sixth Affidavit of John Koutsoukos made on 8 February 2024 (FDN 19), 24-25. -- 23 of 71 -- [2024] SADC 44 20 70 Another related deal was proposed by the Renewal Group controlled by Mr De Angelis. I am satisfied that Mr De Angelis was very recently discharged from his fourth bankruptcy. Exhibit P3 discloses that he had been bankrupt in 1977, 1997, 2007 and 2020. He was not discharged from his fourth bankruptcy until 17 October 2023. I have earlier said that I would discuss in detail the proposal associated with Mr De Angelis which is also called the ‘Rimel offer’. This proposal is connected with and is the foundation of the fourth caveat on the title of the land to which I have earlier made mention. Although the issue of the sustainability of that caveat is not a matter for my decision here, it is apparent on the evidence that there are a large number of peculiar features about this Rimel offer that require comment. It is appropriate that I set out those matters here before continuing to canvass the evidence which informs my decision. 71 A proposed joint venture between the respondent and Rimel SA Pty Ltd (Rimel) is Exhibit P1. The agreement is executed by the respondent and Rimel SA -- 24 of 71 -- [2024] SADC 44 21 Pty Ltd on 22 November 2023. The Rimel contract discloses all of the work to date performed by the respondent and the project is described:- AGREEMENT 1. TERM This Agreement commences on the date it is fully executed and shall continue until, in the opinion of the Developer, the Project is completed unless determined earlier as set out herein. (“the Term”) The Project commences on the Commencement Date, which shall be the date on which the first draw-down of funding for the Project occurs and by either of the Landholder and/or the Developer. 2. THE PROJECT This Agreement covers the development of the Property pursuant to the Preliminary Subdivision Plan or any subsequent amendment update variation to the Preliminary Plan of Subdivision as may be agreed in writing between the parties from time to time or as maybe required by any Government, semi-government, planning agency, authority or utilities entity during the course of the Project and the sale of each and all of the subsequent subdivided blocks of land. (“the Project”) 2.1 Project Plant & Equipment Plant and equipment purchased by any party hereto in relation to any Project shall become the property of the Developer. 2.2 Project Completion The Project will be completed when the Developer advises the Landholder it is completed, but in any event not prior to: the subdivided blocks of land being sold or otherwise allocated or, the budget allocated for the Project being fully expended on the Project and the Developer notifying each of the parties that it no longer wishes to provide funds for that particular project, Whichever first occurs. 72 Therefore, the project comprises the conditions for the development and the sale of the property. The developer owns all of the plant and equipment used within the development. The project will be completed under clause 2.2: 'When the developer advises the landholder -' (Mr Blaikie) that, ' it is completed, but in any event not prior to the subdivided blocks of land being sold or otherwise allocated or, the budget allocated for the project being fully expended on the -- 25 of 71 -- [2024] SADC 44 22 project and the developer notifying each of the parties that it no longer wishes to provide funds for that particular project, whichever first occurs.' 73 There is no information as to what happens if the respondent is informed that the contracting party no longer wishes to provide funds. 74 Clause 5 of the agreement discloses that there is project planning and that matters are in train. 5. PROJECT PLANNING The parties hereto shall forthwith develop a plan with a view to co-ordinating the commencement of the Project and facilitate the efficient, economic and successful conclusion of the Project: (“Project Plan”) 5.1 Project Plan Preparation The Project Plan shall be initially prepared by the Project Manager and shall include: A commencement date for each aspect of the Project, details for: Surveying, Civil engineering, Planning approvals Road works Utilities installation Work that is to be carried out, including but not limited to: An estimated time for each aspect of the Project A budget for each aspect the Project An estimate of the gross return from the sale of subsequent blocks of land monitor as the Project progresses, Details of each contractor and subcontractor, the nature of their work, quotes obtained The Project Plan may be amended from time to time pursuant to the procedures set out herein. The Developer shall give notice in writing to the Landholder within fourteen (14) day of any amendment to the Project Plan which may affect the overall budget by more than $50,000.00. Should the Landowner disagree with the amendment to the Project Plan he shall give notice in writing to the Developer within fourteen (14) day of receipt of the amended -- 26 of 71 -- [2024] SADC 44 23 Project Plan setting out fully those parts of the Project Plan that he disagrees with where upon: The Developer and the landowner shall meet with in a period of fourteen (14) days with a view to resolving the disagreement, which meeting may be way of telephone hookup, but if such meeting is to be face to face then it shall be held on the Property unless agreed by the parties. If the disagreement is not resolved within thirty (30) days of the date of the Landholder giving notice to the Developer then the Developer at its option may withdraw from the Project where upon the Landholder giving notice to the Developer then the Developer at its option may withdraw from the Project where upon the Landholder will refund to the Developer all money paid by the Developer in relation to the Project plus all sums that would have been due to the Developer had all subdivided blocks in the Project been sold at their asking price and the Landholder may at its option obtain finance from or enter into an agreement with any other party in relation to the Project. 75 The matters that are said to be ‘in train’ include: ‘surveying, civil engineering, planning approvals and roadworks as well as utilities installation.’ These include ‘[w]ork that is to be carried out, including but not limited to an estimate of time for each aspect of the project, a budget, an estimate of the gross return from the sale, details of each contractor and subcontractors and the nature of their works and quote obtained.’ Under this clause: the project plan may be amended from time to time pursuant to the procedures set out and the developer shall give notice in writing to the landholder (here the respondent) of any amendment to the project plan which may affect the overall budget by more than $50,000. If the landholder disagrees with the amendment to the project plan, he must give notice in writing to the developer within 14 days setting out those parts of the project plan that he disagrees with. In those circumstances, there shall be a meeting between the developer and the landholder with a view to resolving the disagreement, which may be held by telephone or any other meeting of the parties. 76 Under the same clause, if any disagreement is not resolved within 30 days of the date of the landholder giving notice to the developer, then the developer at its option, may withdraw from the project whereupon the landholder will refund to the developer all money paid by the developer in relation to the project plus all sums that would have been due to the developer had all subdivided blocks in the project been sold at their asking price, and the landholder may at its option, obtain finance from, or enter into any agreement with any other party in relation to the project. 77 Thus, if there is a disagreement between the developer and the respondent, the developer may withdraw and claim from the respondent the profit which it would otherwise have made if all of the subject subdivided blocks in the project had been sold at their asking price. There is no evidence of what the asking price may be. That is an extraordinarily onerous term. If it is implemented, the inevitable result is that the developer would seize the whole of the land and leave the respondent bereft. There is no evidence before me of anything done by the caveator -- 27 of 71 -- [2024] SADC 44 24 that is connected to the claims under the caveat lodged. On balance, this is most likely to be the case because of the preliminary nature of this agreement and the other evidence before the Court. 78 Then in clause 6.2 of the agreement and following, the respondent undertakes to do the following:- 6.2 Supreme Court Action The Landholder will do what is necessary and follow what legal advice may be given to him by his current retained solicitors and pay such moneys as may be necessary to limit any detrimental impact of the Supreme Court Action Project. 6.3 Contamination The Landlord is solely responsible for the cost of removal, rehabilitation refurbishment or other necessary action to be taken in relation to any contaminated soil or other item on the Property. The Developer may assist in such remedial action but the cost of such will be separate and not a cost of the Project. 7. UNDERTAKINGS OF THE DEVELOPER 7.1 Commencement of Works The Developer shall commence the works on the Project pursuant to the Project Plan and shall carry out such works in a professional and competent manner, including but not limited to engaging, Surveyors, Civil marketers, builders, and such other trades people as may be require at the sole discretion to the Developer to undertake, carryout and complete the Project. 7.2 Provide Minutes of any Licensee The Developer shall cause to be taken and provide to the Landholder within seven (7) days of the receipt or preparation of same by the Developer the minutes of all meetings it has with any third party in relation to any licence, other authorisations and permits for the Project or any matter incidental thereto. 7.3 Compliance with Laws The Developer shall at all times ensure that the Landholder and the Developer comply with all laws and regulations which apply to the Project. 7.4 Notification of Progress The Developer shall inform the Landholder and keep him updated as to the progress of the development of the Project at least on a monthly basis. 7.5 Standards to be Used The Developer commits to implement all operations in strict accordance with normal professional practices and with all precautions required for the protection of the environment and respect of the ecology as part of the expense of the Project and in particular the Developer shall adhere to best current practice in relation to the Project. -- 28 of 71 -- [2024] SADC 44 25 7.6 Use of Funds The Developer may at its sole discretion use the Project Funds as the Developer sees fit. 79 Referring to clause 7 and the content of the caveat, there is no evidence of the start of work and so the basis of the caveat is most likely unsustainable. 80 The Supreme Court action referred to in this agreement is the claim by Mr Chelliah. It has not been resolved. The detrimental impact has not been lessened. The respondent’s position is fraught. The respondent is plainly in breach of this clause. For the reasons earlier outlined, he suffered the judgment of Judge Bochner and his appeal has lapsed. 81 On any view, the Rimel contract is a very bad deal for the respondent, and I will develop other aspects of this deal as part of my decision later in these reasons. There is no evidence before me of anything done by the caveator sufficient to sustain this caveat. The evidence suggests that this caveat has been used as a form of device to avoid obligations to the applicant, however, I am not in a position where I may make any finding on that contention. 82 One of the terms of the proposed Rimel joint venture relates to finance. The term of the offer is subject to finance. An offer of finance has been made dated 16 October 2023 (Exhibit P7). The terms are:- -- 29 of 71 -- [2024] SADC 44 26 -- 30 of 71 -- [2024] SADC 44 27 -- 31 of 71 -- [2024] SADC 44 28 83 The amount of the proposed funding is $1,800,000. Interest at a rate of 15% per annum is charged and payable in advance. A higher rate of 30% is charged on default. Personal guarantees and indemnities by all directors are required. The borrower is required to pay the cost of the preparation of loan documentation, professional fees and other expenses in the amount of $5,500 and also to pay an establishment fee to Bellevue Finance in the amount of $33,000. These fees plus 12 month’s interest in advance and management payments totalling $269,000 are to be deducted from the loan amount. This leaves a loan amount of $1.571 million. The offer is then subject to Bellevue Finance's credit assessment and it is subject to other terms and conditions such as: the total combined mortgages not exceeding 65% of value, a satisfactory outcome evaluation; an agreement that as Bellevue Finance requires, there should be a revaluation; and lenders' solicitors to conduct -- 32 of 71 -- [2024] SADC 44 29 and confirm due diligence over the contract of sale and being satisfied of the contract and the security given in relation to the contract of sale. 84 There are other terms. The document reserves the right to withdraw or amend this indicative offer at any time and the formal offer may take the form of a loan agreement entered into between the parties. It then states:- 'Furthermore, by accepting this indicative offer, you hereby charge your interest in any real property as set out above with the due payment of all monies, costs and fees that are payable and acknowledge that this charge irrevocably creates an estate or an interest in the real property entitling Bellevue Finance to lodge a caveat on the title.' The charges upon the land 85 The evidence satisfies me that at least $1.6 million is required to discharge the AMP Bank debt as first mortgagee, the debt of Ms Marshall as second mortgagee, the debt of Mr Chelliah as the judgment creditor and then the other creditors. After payment of the fees and other expenses and the discharge of these secured and judgment creditors, there will be no funds for development which would require the availability of a separate large amount of capital. The respondent estimated this to be several hundred thousand dollars; I think that is a gross underestimate, although it is not possible to make any accurate estimate of these costs based upon the evidence. It is possible to say with confidence that the balance of about two hundred thousand dollars would be insufficient to fund the required work. So much is obvious from the terms of the offer made by other interested parties, especially Accord, which contains many pre-contractual steps to be completed before a commitment to a final contract. In my opinion, it is apparent that this proposal is not sustainable. So much is also obvious from the evidence given by the applicant about the work he has done to date. The interest rates and the fees structures are extraordinarily punitive, so also are the terms, including the irrevocable creation of an estate or interest in the real property merely by the execution of the documents. Conclusion: the respondent was incapable of developing the land 86 I do not accept the evidence of the respondent that it was always his intention to develop the property and so he would never have entered into a contract of this nature with the applicant. I accept that over the years he has convinced himself that this is something he should do but such hopes, in my opinion, are mere gossamer and are transparently unreal. The impetus for this contract with the applicant was the pressure of the Chelliah debt; quite understandably Mr Chelliah was fed up and he would wait no longer. 87 I am satisfied at the time of the execution of the contract, the respondent completely understood the document he was executing was a contract for sale of land to which he bound himself and I am satisfied that he is not an unsophisticated person in property matters. -- 33 of 71 -- [2024] SADC 44 30 88 I refer to the respondent affidavit of 18 February 2024 ((FDN22) Exhibit D9) read into evidence and about which he was cross-examined. He has been involved in about 30 real property transactions, including sales, purchases, leases and other transactions connected with land. It is appropriate that I survey the evidence given by the respondent in relation to a number of matters. At the end of his cross- examination, a series of propositions was put to him that he had lied in his evidence. I will deal with those matters later in these reasons. I have earlier indicated that I am not prepared to accept the evidence given by the respondent as credible. The following discussion explains the basis upon which I have made that finding. I have made that assessment based upon the overall effect and credibility of the evidence given by the respondent. 89 The respondent said in cross-examination that although he had an email address of [email protected], he did not have an email or a computer. He was asked whether he had a computer and then he volunteered that he had an email address but it was not [email protected]. He said he only had a computer at the very early stages of owning the Angle Vale property, but he then said that he never sent or received emails. As far as he knew, he did not have a computer.8 I am unable to accept this evidence. Exhibits P10-P13 are emails which have been admitted into evidence without objection. Exhibit P10 is an email from Adam Squires to the respondent of 25 February 2022. Exhibit P11 is an email Mr Blaikie to John Koutsoukos of 21 March 2021. Exhibit P12 is an email from Mr Blaikie to John Koutsoukos of 20 March 2021 and Exhibit P13 is an email from Mr Koutsoukos to Mr Blaikie of 10 August 2016. This evidence of the respondent is therefore demonstrably incorrect. 90 The respondent was then cross-examined about submissions that were made before Chief Judge Evans on the application to extend time for the removal of the caveat heard by his Honour on 5 January 2024. He agreed that in the hearing before the Chief Judge and on his instructions, his counsel informed his Honour that the respondent needed to move quickly as he was contracted to draw down a facility of $2 million dollars.9 The respondent said that he had been somewhere in Kent Town to organise some finance but had never received any paperwork. He did not know whether he was going to borrow that money. It was all over his head. It was then put to him that what was said to the Chief Judge was not true. The respondent could only answer that he had seen someone about finance, he did not have any paperwork, he did not know if the money was to be drawn down and he does not know the source of this information.10 This evidence, and the other evidence of the respondent satisfies me that what was said to the Chief Judge on 5 January 2024 was not accurate. It was also demonstrably incorrect. That information could only have come from the respondent. There is no credibility in the explanations given to me by the respondent. 8 T102.24; T103.22. 9 T106.10. 10 T106.31-T107.31. -- 34 of 71 -- [2024] SADC 44 31 91 The respondent was then asked how long it would take to do the subdivision at Angle Vale.11 He said that he would need to get the caveats off the title and he would need to execute a Land Management Agreement (LMA). He said that he was told that initially this would take about 18 months. It would take 6 months to get the approval and 12 months to do the other work necessary. Despite the land being rezoned since 2015, nothing has happened in relation to any subdivision in the eight years since. The respondent was challenged that in almost 9 years, nothing had occurred and there was no prospect of him achieving his desired goal for the land. He said, ‘No, not yet’.12 That answer is not consistent with the view put forward by the respondent about the subdivision of his land. 92 The respondent was then taken to the judgment against him of Judge Bochner of 29 August 2023. He knew that the judgment was for the amount of $570,000 and that the order for payment of interest was in the amount of $300,000.13 The respondent accepted that the judgment was in the amount of $870,000 plus costs. His view was that he did not accept the judgment. He also knew that there was a further $24,000 to be paid to Mr Chelliah taking the amount owed by him to almost $900,000. He was aware that the total debt was in the order of $900,000 but he does not ‘accept it’.14 He is also aware that he is required to pay Mr Chelliah’s costs but he does not accept that judgment. He says it is all ‘not true’. He does not accept the reality of the situation and thinks that the decision of the Supreme Court is not fair or accurate.15 He confirmed that the debt to AMP Bank as first mortgagee is about $300,000. The debt to the second mortgagee, Sue Marshall is in the order of $150,000. The debt to Mr Chelliah is in the amount of $900,000 plus costs. He knows that before executing any Land Management Agreement, he would have to deal with judgment and the mortgages.16 He is demonstrably incapable of so doing. 93 He was then taken to the letter from Bellevue Finance (Exhibit P7) that sets out the requirements for the interest rate and the fees associated with the provision of finance by Bellevue Finance. 94 The respondent said that he became aware that Mr De Angelis had been a bankrupt in first discussions with Mr Jelbert and Mr De Angelis in October 2023. He did not know that Mr De Angelis had not then been discharged from his fourth bankruptcy. Mr De Angelis told him that he would make about $15 million gross from the development.17 He gave the respondent no basis for this estimate. The respondent said he always thought that he would make only about $6 million from the development.18 He gave no basis for this estimate. 11 T108.26. 12 T108.36. 13 T109.19. 14 T109.30. 15 T112.21. 16 T112.32- T113.12. 17 T115.16. 18 T115.28. -- 35 of 71 -- [2024] SADC 44 32 95 He was then shown Exhibit P1 at page 14, the contract for sale and purchase of land dated 18 September 2023. The respondent volunteered that he might recognise the document but does not think that he read the whole document.19 He admitted that the offer of $3.5 million dollars was a fair and reasonable amount to accept.20 He was able to form his own judgment about the value of the $3.5 million offer.21 He recognised the document at Exhibit P1, from page 1. He recognised that it was a commercial contract and it had the emblem ‘REISA’ on it. He then volunteered that he did not know that this acronym stood for the Real Estate Institute of South Australia. He denied ever seeing contracts in that form in the past.22 I am unable to accept that evidence. As I have earlier said, in his evidence, and in his own affidavit he refers to many contracts for the sale of his homes in Toorak Gadens, Hawthorn, Ashbourne, Strathalbyn and Croydon Park, all of which were purchased and sold upon his instructions. He agreed that he had also sold three properties belonging to his mother. He said that he did not read the sale contract for those houses. He subdivided a property in Woodville North and sold the subdivided properties for the highest possible price. He also bought and sold three commercial properties in Wingfield.23 96 I have earlier expressed a view that I am satisfied that the respondent is very experienced in purchases and sales of domestic real property, of three commercial properties at Wingfield and with the purchase and the subdivision of a domestic property. I am satisfied on the evidence that the respondent sold at least thirteen properties, both residential and commercial, prior to his purchase of the Angle Vale property. 97 In his evidence, the respondent agreed that his initials were at the bottom corner of each page of the contract, Exhibit P1, but he cannot now recall whether he looked at any of the words above the point at which he initialled those pages. He thought that the contract was different from what he had seen before, however, I am satisfied that he has previously been involved in executing contracts for both the sale and the purchase of real property and commercial properties. He said that he did not realise that he was signing a sale contract.24 I am unable to accept that evidence. The document was plainly a sale and purchase contract. He had seen its form only about 8 weeks earlier. He also denied that he had seen an earlier form of this document on 17 July 2023 when it was brought to him by the applicant. He recalls having a conversation with the applicant about the sale of the property but then refusing that offer. He saw that the document that was given to him was a purchase contract and that he refused to sign it.25 The contract that he is referring to, namely of 17 July 2023, is in largely identical terms and is an identical form to 19 T116.10. 20 T116.33. 21 T117.8. 22 T118.3. 23 T118.7-T118.38. 24 T120.14. 25 T121.10. -- 36 of 71 -- [2024] SADC 44 33 the contract that he signed on 18 September 2023. I am therefore unable to accept that evidence on that basis. 98 One of the reasons that he proffered about why he would not execute the contract was that he wanted to see what other offers were around in relation to the land. He said he was never intending to sell it. That was despite the fact that he was willing to sell the land in 2010 and in the years afterwards. He denied any intention to sell the land in 2014 and 2017. For the reasons that follow I am unable to accept that evidence; I think it is untrue. 99 I am unable to accept the evidence of the respondent that he did not realise he was signing a form of contract for the sale and purchase of land. He had already had a discussion with the applicant in July 2023, and the applicant had presented to him a contract in almost identical form, which he had refused. He understood then that the document proffered to him by the applicant was a contract for the sale and purchase of his land. He then said that he was only willing to sell the land in 2010, but not in 2014 or 2017.26 It is difficult to make any sense of this evidence and it has no credibility. 100 The respondent said that the applicant put the September contract to him on the basis that it would resolve the Chelliah debt. That debt was incurred when the respondent purchased a block of land in Hallett in the mid north of South Australia. He also borrowed money from Ms Sue Marshall for that purchase. There is no evidence of what happened to that land or why for example, security was not taken over that land by Mr Chelliah and Ms Marshall. In relation to the subject contract, the following exchange took place in the cross examination of the respondent:- 27 Q You've initialled it and you've signed it but you did not read it. A No, because it was presented to me - if we do this contract it will solve the Chelliah thing. Q Can I just bite at that if I might. In a sense, of course, it would solve the Chelliah thing because once Chelliah had a certain time for the sale of the property, he knew that after 13 long years he would finally get paid. A This was never presented at a sales document. Q It wasn't presented in any other way though, was it. A It was just presented as a contract. 101 In the evidence, the respondent eventually agreed that the document was presented as a contract. And it is clear from this evidence that at the time, the respondent was aware of the pressure being brought to bear upon him and his resources by the claim of Mr Chelliah. 26 T121.17. 27 T123.1. -- 37 of 71 -- [2024] SADC 44 34 102 Perhaps having realised his error, the respondent then purported to reject his liability to Mr Chelliah. The following exchange took place in relation to the judgment of Judge Bochner:- 28 Q Go to para.3, first paragraph. In the second sentence her Honour's reported the evidence that you approached Mr Chelliah to lend to you $150,000. You accept that. A No. Q You don't accept that. A No. Q You reject that, thank you. XXN Q In 2010 did you in fact borrow $150,000 from Mr Chelliah. A No. Q Did you tell Mr Chelliah that you were looking to sell the land at Angle Vale in 2010. A Once the government rezoned I was prepared to sale, I was going to move on. Q And you told Mr Chelliah that you expected to double your money in that process. A Yes. Q And you told him that if you doubled your money he should be able to double his money as well. A Yes, I gave him 100% interest, that's what you do if you've got a friend. Q Then next goes to para.4, you signed a loan agreement with Mr Chelliah. 103 Separately in his evidence, the respondent purported to deny any liability to Mr Chelliah because he transferred valuable cars to him purportedly in satisfaction of his liability. There is no evidence about the alleged value of a vehicle said to have been given by the respondent to Mr Chelliah in alleged discharge of this debt. It is known that Mr Chelliah had bought some of these cars in 2011 for $160,000.29 There is no evidence that he did not pay for these cars. So much is obvious from the judgment of Judge Bochner. The respondent was then asked further questions in relation to the debt owed to Mr Chelliah.30 Q I understand your position my question though was do you accept that Mr Chelliah continued to press between 2011 and 2023 for what he said he was entitled to. 28 T126.15. 29 T127.33. 30 T129.22. -- 38 of 71 -- [2024] SADC 44 35 A The money had already been paid back. I'm not going to pay him twice. Q I accept that, I understand that. HIS HONOUR Q Listen to the question please. HIS HONOUR: Put the question again. XXN Q I'm asking you to accept that irrespective of what you thought, Mr Chelliah was in fact telling you 'I want to be paid my money'. A Well, he's wrong. Q But he was doing that. A He's wrong. A Paragraph 4? Q Yes, in February 2011, you signed a loan agreement with Mr Chelliah. A Where's that, I can't see that? Q Paragraph, the words 'In February 2011 the parties signed a loan agreement'. A That's para.2, there's a 4 on the side. HIS HONOUR: If you need to approach the witness you may Mr Riggall. XXN Q You've found that now, Mr Blaikie. A Yeah, I see those little numbers. Q The little numbers but in February 2011 you signed a loan agreement with Mr Chelliah. A Yeah. Q And you told him that you would repay the $300,000 on or before 15 November 2011. A Yeah well, it wasn't, it was only 135 he lent. Q True, but the repayment was to be by 15 November 2011. A Yes. Q And you intended to finance that repayment by selling that property for a profit. A No. -- 39 of 71 -- [2024] SADC 44 36 Q You didn't repay him by 15 November 2011, did you. A I gave him an S2 Bentley to sell which he sold and I said you take 25 just give me the seven and then by Charles's, what he said in the Court case, he said that he bought the four motor vehicles that he asked me for security, he said he bought the four motor vehicles off me for 160, so 160 and 25 meant that I had paid him what he lent plus 50,000 of the interest already at that stage. 104 In the context of those answers, the respondent then denied considering selling the land in the period between 2011 and 2023 in order to repay the debt to Mr Chelliah.31 I reject that evidence. It is without any credibility. He agreed that he signed the authority to search,32 but he cannot recall Mr Chelliah pressing for repayment of the debt. That is demonstrably not true. That was because, in his mind, he had already repaid the debt.33 He then gave the following evidence:- 34 Q Mr Chelliah had lodged a caveat on 1 November 2013. A Yeah. Q And you'd never challenged that caveat. A I had already paid money by then in '11. Q In fact that's not quite true, is it. In 2014 Mr Chelliah was pressing vigorously for the debt and you agreed to enter into a new loan agreement recording the terms of the debt outstanding at that time with Mr Chelliah, didn't you. A I know he came in, yeah, did some paperwork and so on but in Charles's own words in the Court he said he bought those cars off me in 2011. Q I understand that but my question is - A And that money went to paying off what he had lent me. Q So let me try my question again. In November 2014 Mr Chelliah produced a further loan agreement for you to sign recording the terms of the debt that at that time as Mr Chelliah claimed it to be. A Yeah, as he saw it, yeah. Q And you signed that. A Yeah. Q That ultimately was the deed relied upon by Judge Bochner to identify the true indebtedness between you and Mr Chelliah, wasn't it. 31 T130.17. 32 Tab 6, Exhibit P2: T130.37. 33 T131.7. 34 T131.8 et seq. -- 40 of 71 -- [2024] SADC 44 37 A I've got no idea what she took her things from, she obviously didn't take that he had been paid 160 in 2011. Q So you accept that you signed the 2014 agreement, today, with Mr Chelliah. You accept you signed it. A Yeah. Q And you told her Honour you had signed it without reading it. A Well, I didn't go all through it with him. HIS HONOUR Q You signed it without reading it, is that right. A Yeah, probably would have been. XXN Q You told her Honour that you shouldn't be bound by the terms of it. A Because he'd already been paid. 105 When he was challenged about this evidence, the respondent said that he considered the terms of the contract to be irrelevant because Mr Chelliah had already been paid. The thrust of the evidence of the respondent was that he did not read contracts before he signed them as a general rule and in this particular instance, he did not read the document because in his mind, he had already repaid the Chelliah debt. He then said:- 35 Q Now as I understand what you're saying to me you agree that you signed all of those documents, you also are telling me you didn't read them before you signed them but as far as you're concerned, you signed them on the basis that in your mind you'd already repaid the debt. A Yes. Q So whatever was said - let me finish - whatever was said in those documents was irrelevant because in your mind you had already repaid the debt, is that correct. A Yes, and it says he lent me another 20,000, that's never happened. XXN Q Mr Chelliah, I suggest, continued to press for repayment after May of 2014. A Well, obviously he did because he drew up these documents that are false. 106 I am unable to accept this evidence. I consider that it is without any credibility. It is fanciful. 35 T133.1. -- 41 of 71 -- [2024] SADC 44 38 107 The respondent did recall receiving an offer on 14 November 2017 for the sale and purchase of the land in the amount of $2.25 million dollars. He knew that at the time, Mr Chelliah was pressing to be paid his debt.36 Even so, the respondent continued to repeat the fact that he never intended to sell the properties.37 I am unable to accept that evidence. I am satisfied that from at least 2014, the respondent was making a number of attempts to procure deals to sell the property. He was aware of the offer of 14 November 2017 of $2.25 million dollars. He was not prepared to sell it at the time and he was also aware that he would need at least six months to sell the property because of the rubbish upon it.38 108 In relation to that offer, the respondent denied any knowledge of ATEK.39 I am not prepared to accept that evidence. I think it is without any credibility. Then later, the respondent agreed that he went to the offices of ATEK at Flinders Park. He had a meeting at that office. His evidence was that he told ATEK that he was not going to sell.40 I am again not prepared to accept that evidence. That is because in exhibit P2 at page 36, there is an email from Ryan Edwards of Carrington Conveyancers, the firm acting on behalf of the respondent, directed to ATEK. Initially, the respondent said that he did not know who Ryan Edwards was.41 I reject that evidence. I am satisfied that Mr Ryan Edwards was the conveyancer for the respondent. 109 The respondent then gave the following evidence:- 42 Q I put to you that as at November 2017 you had at least your written word, your signed agreement to pay Mr Chelliah an amount of money. A Yeah, those things that he did afterwards, yeah. Q And your intention, however, was not on your written word to Chelliah by paying the amount of money that you'd agreed by signing a document to pay him, that's your evidence. A Well, as far as I'm concerned that was rubbish. HIS HONOUR Q So that's a yes, you didn't ever intend to honour your obligations under that agreement. A I had paid him already, so therefore that agreement is null and void as far as I'm concerned. Q But you didn't intend to honour the terms of the agreement, is that right. 36 T134.34. 37 T134.32-.38. 38 T135.5-.17. 39 T135.26. 40 T136.5. 41 T136.29. 42 T139.11. -- 42 of 71 -- [2024] SADC 44 39 A Not in what he had written, no. HIS HONOUR: Next proposition. XXN Q Are you man of your word, Mr Blaikie. A Yes, I am. Q And so if you give your written promise to do something, do you consider yourself bound by that written promise or not. A Charles and I were friends and had been for quite sometime. Whenever he'd come to Adelaide I'd give him one of my cars so he could go to rallies and things like that. When we were asked about rezoning in '10 Charles were actually at my place when the people from the government came and he said 'I'll lend you the money’, he offered to lend me the money. Q Mr Blaikie, can I stop you there because it's not responsive to my question. My question I think was if you give your written promise to someone do you consider you're bound by your word or not. A Not when he'd already been paid. Q And in fact I'll ask this question in the future as well, when you gave your written promise to Mr Koutsoukos to sell him the land for $3.5 million you didn't intend to be bound by your written promise. A I didn't know that he had a selling agreement, I was not aware of that, I rejected him three times before. Q Yes, I'll come back to that. So staying with p.37 for a moment, then I put it to you that the truth of the matter was that you were as at 15 November 2017 prepared to sell it for $2.25 million but you wanted to negotiate the terms. A No, never wanted to sell. Q And your evidence before his Honour today is not truthful evidence because as you set out in the letter of Mr Edwards, you were prepared to sell at that price at that time. A I wasn't, I was never prepared to sell. 110 I have earlier referred to the correspondence from ATEK. I have analysed that letter and the document speaks for itself. I am satisfied from this evidence of the intention of the respondent to enter into a binding agreement to sell the land if the correct terms could be resolved. When confronted with that correspondence, the respondent then denied any knowledge of people at Carrington Conveyancers, or who Mr Ryan Edwards was at that time.43 Referring then to the letter from 43 T142.2. -- 43 of 71 -- [2024] SADC 44 40 Carrington Conveyancers, I asked the respondent whether he thought the letter was wrong.44 Q So, letter is wrong, is that what you're saying. A Well, I don't think it ever went any further than that. Q Is the letter wrong, yes or no. A Well, I never intended to sell my property. Q Is the letter wrong. A Well, in that case it is, isn't it? Because I never intended to sell. 111 Having earlier denied any knowledge of Carrington Conveyancers, the respondent then agreed that he was familiar with the firm, he had used the firm in the past and if he was selling the land, that was the firm he would have engaged.45 Despite the denials of the respondent that nothing ever went ahead after the initial discussions with ATEK, and the letter of 15 November 2017 (Exhibit P2, page 37),46 I am satisfied that the exchange of letters discloses a very obvious willingness of the respondent to sell the land at the time. The respondent was aware that ATEK were pushing for a sale but he was not. The following exchange then occurred between the respondent and the applicant’s counsel:- 47 Q That is the truth of the matter was, as I put earlier, that you intention as at November 2017 was to sell the land. A No, it wasn't. Q And it was you who raised the subject by going personally to see the accountants to discuss selling the land. A They approached me, then I went back and saw them and I said I was not interested in selling the land. Q I'm suggesting to you that that's false, because in fact you engaged your conveyancer, Mr Edwards, to write to the accountants setting out the terms upon the price that you would sell for. A No, I didn't. Q And in relation not the document at p.34 that was brought to your intention by Mr Edwards. A Page 34? 44 T143.1. 45 T143.26. 46 T144.16. 47 T145.4. -- 44 of 71 -- [2024] SADC 44 41 Q The document we're were just talking about a moment ago, the email from Mr Ali to Mr Edwards in which they set out what should be in the sales contract. You were shown that email. A Yeah. Q And we don't have any documents after that email, but I suggest that as at 17 November 2017 you were given a set of terms and conditions to go into a standard real estate contract for sale and purchase of the land. A But I never went ahead with it. 112 The respondent was aware of the offer from Gabriel Haidar. He was one of the many people asking about the property.48 The respondent thinks that $2.8 million dollars was probably the highest offer received for the land.49 He was also aware that the letter specified the due diligence approval period of 18 months. He was not surprised by that.50 I accept this evidence of the respondent. As I have earlier said in these reasons, the process of first obtaining a Land Management Agreement and then the relevant approvals takes a very long time. It is an intense and expensive process. 113 The respondent was aware that an offer had been made by Accord in a term sheet.51 He could not say how many discussions he had with Accord prior to that letter of 17 May 2023.52 He then denied that he was canvassing the market to see how much money he could achieve from the sale of the land.53 Then in answer to questions from me he said the following:-54 A Yeah, $3 million purchase price. Q Would this be the case, that you told Accord that you already had an offer of 2.8 for the property from Haidar at that time, he having sent his offer on 28 April 2023. A Well, I may have said I've had a better offer than that whatever. A Or you need to better the offer. A Yeah, but like I said, I was never intending to sell my land. Q I want to put to you that it seems to me on the papers that an inference clearly arises that you told Accord what Haidar offered to you and said if you're going to make an offer you better make it better than 2.8 million, would that be about right. A I never went ahead with anything. 48 T146.32. 49 T148.3. 50 T154.14. 51 T153.33. 52 T152.17. 53 T153.13. 54 T154.11. -- 45 of 71 -- [2024] SADC 44 42 Q I didn't ask you that question and I've told you before I don't want to hear that answer again. I need you to answer the question that I put to you. The inference arises that you told Accord that you got the offer from Haidar of 2.8 and if they're going to put an offer they'd need to do better than that, that would be about right wouldn't it. A Probably yeah, probably. 114 He did not know whether the offer of Accord of $3 million dollars was the highest offer he had received to that time.55 He cannot recall ever discussing the Accord offer or any offer, particularly with his solicitor, Mr Jelbert prior to 17 May 2023.56 That is despite the fact that in the Chelliah matter there was a hearing before her Honour Judge Bocher on 18 April 2023 and then a further day of hearing on 8 May 2023. Mr Jelbert was his counsel. The respondent agreed that this would have been a tough time in his life and then he was being cross-examined about the Chelliah debt. At the same time, he was receiving offers to sell the land for a very substantial amount of money and at a profit to him.57 Mr Jelbert was acting for him as his solicitor and counsel in the hearing before Judge Bochner on 18 April 2023 and the Accord offer was presented on the 17 May 2023 but the respondent denies discussing that offer with his solicitor.58 Although I do not need to make any particular finding about that evidence, I would not otherwise find it credible. However, I will leave it to one side. 115 In relation to the contract that he signed with the applicant, the respondent initially denied that he was trying to distance himself from the documents that he had executed but which did not suit his case.59 He then said that he was not very familiar with sales documents; he had seen only a few. He puts his trust in the agent to explain everything to him.60 He doubted that he had ever read previous sales contracts before he signed them. He trusted his agent to explain everything to him.61 He was fairly confident that he had shown the applicant the offer for $2.8 million from Mr Haidar and the term sheet for $3 million from Accord. He agreed that the sales contract from page 1 of Exhibit P2 was first brought to him on 17 July 2023 at his home at Angle Vale.62 He then alleged that that document was put in front of him as a ‘contract to stop Chelliah’. However, he did not sign the document on 17 July 2023. It was signed in September 2023. When he signed the document, he agreed that the applicant turned the pages. He said that this happened so that he would not see what was on the pages. He alleged that the applicant did not explain the contract terms to him.63 55 T155.18; T155.28. 56 T157.6. 57 T158.14. 58 T159.9. 59 T159.26. 60 T160.16. 61 T161.8. 62 T166.38. 63 T168.21. -- 46 of 71 -- [2024] SADC 44 43 116 I am satisfied that by 29 August 2023, the date of the judgment of Judge Bochner, no progress had been made by the respondent in subdividing his land. The respondent gave the following evidence on that topic.64 A Because originally I - the plans that I put in to subdivide, I had blocks around the external of the property and when they compulsory acquired my land, they told me I couldn't have any blocks on the external of my property so that put a kibosh on being able to develop quickly and so what I have to wait for is for them to pay me my compensation which then give me the money so that I can then go ahead and redevelop. Q How long has the compensation case been going. A '20 I think it was, they compulsory acquired my land. Q Why hasn't that been resolved. A I don't know why it hasn't been resolved. Q So as at 29 August 2023, nothing was looking like happening quickly on the development front, would you agree with that. A At that stage probably not, yeah. Q And nothing looked like it was happening quickly on the compensation front. A Well, I hadn't heard anything. Q But something was happening very quickly on the Chelliah front, wasn't it. A Yeah, which is not correct. I don't see how $135 could go to nearly a million. Q In any event, as at 29 - HIS HONOUR Q I want to be quite clear about that. You were very aware, by that stage, that you were facing a debt to Chelliah of about a million dollars after - plus costs, including costs. A Yeah. 117 The respondent agreed that when the contract of sale, from page 1 of Exhibit P2, was brought to him at this home, he can recall looking at it.65 He can recall signing the document. He said that he did not know he was then signing a sales contract.66 When he was shown the contract, and it was put to him that it was plainly a sales contract, he dissembled and said it was a commercial contract. That 64 T168.38. 65 T174.7-.31. 66 T175.3-T175.8. -- 47 of 71 -- [2024] SADC 44 44 is what he saw when he was presented with it. He signed it on that basis. He was told that it was to ‘short-shift, Charles’.67 He then gave the following evidence:- 68 Q Are you saying that this whole concept of a commercial contract was something that was completely new to you. A Yeah. Never seen it before. Q Just came completely out of the blue, something that you've just never, never seen before. A I'd never seen, seen it as a commercial contract. I've seen, you know, ordinary house contracts, but I've never seen one with, as I said, commercial contract. 118 The respondent confirmed that he had seen commercial contracts previously.69 He had also sold commercial properties in the past.70 119 In his own mind, the respondent calculated that if he did the development with Mr De Angelis (Rimel) he would achieve a profit of about $6 million from the development of the site. He had a meeting with Mr De Angelis. After that meeting, he said he found out about the sale contract.71 I reject this evidence as it is without any credibility. The respondent continually repeated that he did not know that the document he signed with the applicant was a sales contract. He alleged that the applicant never told him that he wanted to buy his land.72 120 That evidence is inconsistent with the earlier evidence he gave that in July 2023, the applicant put before him a contract for sale and purchase of the land which he rejected. I am satisfied that at all material times he knew that the applicant wished to purchase the land. I think this evidence is untrue and I reject it completely. 121 Under the De Angelis proposal, he knew that there was to be a financier who would handle money side of the transaction. Therefore, he understood that a form of security would be taken over the land.73 In the following evidence, the respondent feigned ignorance about the cost to him of the deal being proffered by the financier.74 Q But seriously, don't you accept that after 12 months your position would be, if this offer were taken up, your position would be totally diabolical. You would be paying 30% interest potentially to the lender and you'd have no money to do the development. No $4.5 million or whatever thing you've calculated. How do you do it. 67 T176.36. 68 T177.9. 69 T178.23. 70 T179.20. 71 T185.34. 72 T186.22. 73 T187.28. 74 T188.8. -- 48 of 71 -- [2024] SADC 44 45 A When the three of us went to the meeting with the developer - not the developer, with the financier, he said it will take six months to get the thing through and he said in the other six months, we'll have blocks that can be sold off the plan. Q But that's just totally unrealistic, isn't it. A I don't know. 122 I am unable to accept the evidence given by the respondent that he did not know the terms of the offer put to him under the De Angelis proposal and in particular that he was potentially exposed to paying 30% interest to a lender. 123 The respondent again gave evidence that he did not read the land and subdivision development agreement (Exhibit P1).75 The following exchange occurred in cross examination:- 76 Q Do you consider yourself bound by this document. A I haven't read it. Q And until you read it, you don't consider yourself bound by it, is that it. A Well I don't know what's even in this. HIS HONOUR Q So if you don't like what's in there, you don't consider yourself bound by it, is that right. A Well, I don't know. I'll speak to Scott once I've - Q No, answer my question, please. It's not a question of speaking to your solicitor, but from your mind, my understanding of your mindset is that if you read a document later that you've signed and you don't like its contents, you would not consider yourself bound by it, is that correct. A Well, I would query it, put it that way. Q Well, query or not bound. What would you do. A I would want to discuss the situation. Q Right and if the discussions failed, would you treat yourself as not bound by the document. A Well - Q That must be so, mustn't it. A Yeah, probably. 75 T189.8. 76 T190.17. -- 49 of 71 -- [2024] SADC 44 46 124 The respondent agreed in his answer to questions from me that he had the habit of signing documents intending later to discuss their contents. If the discussions failed, he would treat himself as not being bound by the document although in the usual course, he could not say what the outcome of a successful negotiation might be. 125 A series of propositions were then put to the respondent that he had lied in his evidence. This was after the proposition was put to him, that he did not consider himself bound by a contract signed by him if, later, he did not like the terms of the document.77 At T191, the respondent says that whether or not he is to be bound by the document depends upon how it has been signed. If he sells the land, the agent does all of the work. He signs the documents and they get the deposit. They do the conveyancing. He agreed that he did not make a payment to Mr Chelliah because he did not think it was a fair bargain because he had already paid back the money that he had borrowed from Mr Chelliah. He would not accept it because he did not consider himself bound to pay back interest on money which he said he had already paid back. He therefore did not consider himself bound by any documents concerning the Chelliah debt.78 Thus, the respondent did not accept the judgment of Judge Bochner, did not think that the Chelliah loan document was a true reflection of the position, did not make payment as required by the judgment and thought that he was not bound by it even though he has not sought to set it aside. 126 He could not say, for example, that he decided to walk away from the contract that he had made with the applicant because he thought he got a better offer from Mr De Angelis. He suggested that he had always wanted to develop the land and that was the reason why he walked away.79 However, I am satisfied that this is not truthful evidence because he had entered into negotiations with prospective purchasers and negotiated terms of contracts with them several times in the past ten years. 127 He was asked questions about Mr Ryan Edwards from the firm Carrington Conveyancers and his involvement with ATEK. He initially attempted to repeat his denials of any knowledge of the existence of Ryan Edwards. He then suggested that he could now recall who Ryan Edwards was, having being reminded.80 He accepted that Mr Ryan Edwards had written to TEK Financial Services on 15 November 2017 (Exhibit JK 17, Tender Book Exhibit P2 at page 37). This letter is dated 15 November 2017 and addressed to TEK Financial Services, attention Mr Ali. After identifying the property, the letter reads as follows:- ‘I write to advise that we act on behalf of Mr Jonathan Grant Blaikie and we are in receipt of your letter dated 14 November 2017. 77 T191-T201. 78 T192.2. 79 T192.30. 80 T193.36. -- 50 of 71 -- [2024] SADC 44 47 After speaking with my client he is prepared to accept the proposal price in the amount of $2,250,000 … however the conditions as detailed will need to be negotiated between the parties as they differ from what was previously discussed. In order to prepare a contract we require the proposed settlement date and confirmation of the deposit amount payable. On receipt of this information from you we will forward the contracts to you…yours sincerely.’ 128 It was put to the respondent that it was a lie for him to give evidence that Mr Edwards was not authorised by him to write that letter. After saying he never accepted it, he then said that he did not think that he had asked anyone to accept it for him. It never went ahead. That’s the truth.81 I am unable to accept that evidence as credible. I do not think it is true. 129 The respondent then confirmed that when he signs contacts and he reads them after the event and does not like what they contain, he does not consider himself bound by them. He thought that that would be the case if, in his mind, they were totally wrong. He does not read contacts because he takes some time to read them.82 130 The respondent agreed that when he said at paragraph 13 of his affidavit that he could not recall signing the contact, that was untrue.83 He denied actively seeking out negotiations for the purchase of the land. He agreed that all of the people with whom he was dealing had made offers but he had not accepted any of them. He said he did not want to sell his property. He also said that the prospective purchasers kept communicating with him in writing after he had told them that he was not interested. He said that he did receive letters from prospective purchasers but he did not reply to them.84 The respondent is bound by the contract 131 In the end, the respondent said that he does clearly remember signing the contract when it was brought to him by the applicant. He denied knowing what it was but agreed that he had seen such real estate contracts before. However, he thought that he did not understand it was a sales contract. He denied telling a lie and that he knew exactly what the contract was about. He denied deciding to renege on the contact with the applicant just as he had done with Mr Chelliah and his loan agreement from May 2014.85 I am unable to accept any of the these denials. They are without any credibility. It was suggested to him that he was prepared to say anything that came into his head that might assist his case not to be bound by a contract that he knew he had signed. He denied that he knew it was a sales contract. He denied understanding that if he sold the land for $3.5 million, that would have resolved the Chelliah debt and would leave him with an amount of money left over. 81 T194.16. 82 T196.9. 83 T189.19. 84 T199.19. 85 T200.38. -- 51 of 71 -- [2024] SADC 44 48 He kept repeating that he was not interested in selling the land only developing it.86 I am unable to accept any of that evidence because it has no credibility. The pleaded Amadio defence 132 In his pleading, the respondent separately attempts to raise an Amadio defence that his judgment was overborne. 133 This occurred presumably at the time of him signing the contract, which he must have accepted as signed by him for the purposes of the plea. Paragraph 15(h) of the Points of Defence provides:- i. The applicant owed a fiduciary duty to the respondent. Particulars of the fiduciary duty The respondent refers to paragraphs 8, 11, 14 and 15 above and says further that by virtue of the matters stated therein the applicant owed a fiduciary duty to the respondent to act honestly and in good faith. ii. The applicant breached his fiduciary duty to the respondent. Particulars of the breach of the fiduciary duty The applicant: 1. knew that the respondent did not want to sell the land but wanted to develop the land; 2. knew that the respondent had rejected all offers made to purchase the land as a result of his stated desire not to sell the land but to develop it; 3. notwithstanding the above, prepared the Contract without the respondent’s request, without consulting with the respondent and without the respondent’s knowledge or consent; 4. included unfair terms in the Contract being: a. a deposit of only $5,000 notwithstanding a purchase price of $3,500,000.00; and b. a settlement period of some two years from the date of the Contract. 5. did not disclose the nature of the Contract to the respondent at the time of requesting the respondent sign it; 6. did not disclose the terms of the Contract to the respondent at the time of requesting the respondent to sign it, including but not limited to the purchase price, deposit amount or the settlement period; 7. knew, by reason of his relationship with the respondent and the disclosures made by the respondent to the applicant, that had the applicant 86 T201.36. -- 52 of 71 -- [2024] SADC 44 49 disclosed the nature of the Contract or its terms to the respondent, that the respondent might not have agreed to it or signed it; 8. misrepresented the nature and terms of the Contract as alleged above. (i) Further and/or in the alternative, by reason of the matters set out herein, the applicant engaged in unconscionable conduct. Particulars of unconscionable conduct i. The respondent refers to paragraphs 8, 11, 14 and 15 above. ii. Applicant is not, and was not at any material time, of advanced age, failing health, impaired faculties or financial need. iii. By reason of the aforesaid: 1. the applicant was, in comparison to the respondent, in a position of advantage in dealing with the respondent; and 2. the respondent was, in comparison to the applicant, in a position of disadvantage in dealing with the applicant. iv. The applicant knew, or ought to have known that he was, in comparison to the respondent, in a position of advantage in dealing with him. v. By procuring the respondent’s signature to the Contract in the circumstances as alleged above, the applicant: 1. took advantage of the respondent’s confidence and reliance on the applicant; and 2. deprived the respondent of the ability to make a judgment as to what was in the respondent’s interests. 134 The ‘Amadio defence’ is available when there are circumstances where equity will interfere with unconscionable conduct and unfair terms. Equity may give relief under the unconscionability principle where, for example, there has been an inequality of bargaining power in a particular case under particular circumstances; that statement is merely one way in which the relevance of unconscionability as a basis for relief may be described. The jurisdiction of equity is not limited, because, for example, equity would not recognise in the application of principle that there is a particular confined specie of equitable fraud. Nor may it be said that there is a particular limited circumstances in which the principle of equity may be applied. To maintain such a position would be to unfairly and improperly confine the principle. Also, equity does not recognise there is some equivalence of transaction in which it would or would not interfere. It is always a question of fact having regard to such things as the amount of the consideration or a particular disadvantage, or the particular circumstances in which a person finds himself or herself. -- 53 of 71 -- [2024] SADC 44 50 135 In that background, it is appropriate to discuss the development of the principles which inform the Amadio decision. In the usual course, this discussion also requires a discussion of the High Court decision of Blomley v Ryan.87 I now turn to that decision. 136 The decision at first instance in the High Court was given by Taylor J. The appeal to the full bench of the High Court was from his Honour’s decision. 137 In his decision, Taylor J summarised the facts and in particular his Honour said from page 370, that the defendant, Ryan, was an owner of a property of some 3,700 acres under a settlement lease. He had worked on the property for a number of years. He was about 79 years of age. He had some help, but one of those persons that assisted him, a man named Turner, was an alcoholic like Mr Ryan. 138 In a moment of very doubtful sobriety, Mr Ryan made enquiries of the local Dalgety agent about whether the lease could be sold at a price which he stipulated. A buyer, a Mr EF Blomley was identified. During 1953, Mr Ryan indicated that he would sell the lease of the property at particular times. It was alleged by the plaintiff, Blomley, that on 22 April 1953, the parties agreed to the terms of a contract for sale and purchase of the lease. This sale contract had particular terms including a delayed payment of the full purchase price. That price was at a very substantial undervalue (as must have been known by the agent (Stemm)). At the time, Mr Ryan was 79 years of age and in a poor general physical condition. The defendant alleged that for a number of days prior to the date of the contract, he had been in a drunken stupor where he had not eaten properly, slept properly and had survived on alcohol. Much of this had been consumed with Turner. Ryan was a significant alcoholic and embarked upon drinking regularly over many days. They were described as occurring at frequent intervals. Taylor J was satisfied that his level of alcoholism was such that after a few drinks he would be reduced to a state of stupidity and perhaps even total incapacity.88 Taylor J held at [367] as follows:- ‘There is, I should think, no doubt that on many occasions during his bouts of drinking the defendant lost all capacity to transact even the simplest business matters although at other times during this period he temporarily recovered from his excesses sufficiently to exercise those impaired faculties which were the legacy of his advanced years and habits. Between these two states there must, of course, have been many occasions when it was difficult or even impossible to determine the degree of understanding enjoyed by the defendant or, indeed, to say precisely when he commenced to emerge from a state of total incapacity.’ 139 The evidence before Taylor J was that from at least 21 April 1953, the day before the contract was signed, Mr Ryan was on an ‘significant bender’. He was observed by shearing contractors to have slept little, to have drunk much, and to have eaten almost nothing. Taylor J found that the Dalgety’s agent (Mr Stemm), Blomley and Blomley’s son in law Doran came to Ryan’s property at about 3 pm on Monday 20 April. At the time Ryan was lying on his bed and in the previous 87 (1956) 99 CLR 362. 88 Ibid 366-367. -- 54 of 71 -- [2024] SADC 44 51 evening, he had drunk himself into a state of insensibility. Notwithstanding, he had recommenced drinking with Turner the next morning. At 7 am, he was lying sprawled across his bed and at 8 am or 9 am, he had more to drink. He had not undressed during the night. He appeared not to have undressed for several days prior to that time. 140 Blomley and those with Blomley on the day gave evidence that Ryan appeared to be of capacity and not affected by alcohol. Soon afterwards, Ryan is alleged to have given instructions for the preparation of a contract. 141 Taylor J accepted (at page 373) that if in any way, Ryan had recovered from his drinking, he would have refused to have executed the contract for the sale of the property for £25,000 or to sell upon terms comparable with those contained in the agreement. That price undervalued the property by around £10,000. 142 Taylor J held (at page 373) that Ryan had no advice and when he saw the solicitor, Rogers, his condition was probably no better or worse than he had been at times when he had been observed by others, including his solicitors. The solicitor gave evidence that he had no knowledge of the value of the property and he was ignorant of the fact that it was being sold at an undervalue.89 Taylor J then made the following findings:- ‘I think it probable that at the time of the execution of the agreement the defendant had so far temporarily regained his senses as to enable him to appreciate the purpose of his visit to Rogers office and the nature of the transaction under discussion. At that time he was probably capable of understanding the general purport of the instrument which he was asked to and in fact did execute. It was not a complicated dealing and was not, I think, beyond the understanding and comprehension of the defendant at that time. But whilst I feel this is the proper conclusion upon the evidence, I am satisfied that at no time was his participation in the transaction accompanied by any reasonably intelligent consent to it. At the best his failing mental equipment left him at a distinct disadvantage in negotiating with the agent and Bromley and when there is added to this the fact that the negotiations and the execution of the agreement took place in the course of one of his periodical drinking bouts an explanation may be found for his consent to sell the property for a figure some £8,000 or £9,000 pounds below its real value... On the day before the agreement was signed the defendant was in no condition to negotiate intelligently for the sale of his property; his condition must have been known to both Bromley and the agent and if it be the fact that on that day he simply and immediately nominated the sum of £25,000 pounds as his price for the property this must have surprised both of them… The agent knew that day that Ryan was in no condition to negotiate intelligently and it is reasonably clear to me that unless the deal was concluded quickly, it was quite likely that it would not have concluded at all…’.90 143 Blomley unsuccessfully appealed to the Full Court against the decision of Taylor J at first instance. At 405, Fullagar J held:- ‘…The circumstances adversely affecting a party, which may induce a Court of equity either to refuse it or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, 89 Ibid 373-374. 90 Ibid 374-375. -- 55 of 71 -- [2024] SADC 44 52 infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage viz a vis the other. It does not appear to be essential in all cases that the party at a disadvantage should suffer loss or detriment by the bargain… But inadequacy of consideration while never of itself a ground for resisting enforcement, will often be a specially important element in cases of this type. It may be important in either, or both of two ways – firstly as supporting the inference that a person of disadvantage existed, and secondly as tending to show that an unfair use was made of the occasion.’ 144 Mr Ryan succeeded in holding the judgment of Taylor J at first instance before the Full Court. 145 The High Court decision in Commercial Bank of Australia Ltd v Amadio and Anor91 concerned Mr and Mrs Amadio, senior. They were elderly and were unfamiliar with written English. Their son Vincenzo was the Managing Director of a building company that was involved in a joint venture with a finance company wholly owned by the Commercial Bank of Australia Ltd. The building company had an overdraft which it had exceeded regularly. The bank knew that the building company was insolvent and from time to time it selectively dishonoured cheques drawn on the account of the builder. The account was closed on 18 March 1977. It was reopened on 24 March 1977 with a temporarily increased overdraft limit of $270,000, which was granted on the condition that it would be cleared by successive stages within a short time. It was also required to be secured by a mortgage over property. That property was owned by Mr and Mrs Amadio senior. 146 Vincenzo approached his parents about granting a mortgage over their property and he told them that the mortgage would be limited to $50,000 and would only be in place for six months. On that basis, they agreed to execute the mortgage. The mortgage was executed on 25 March 1977 at the home of Mr and Mrs Amadio and in the presence of the bank manager who took the mortgage documents to their home. They executed the documents in his presence. Mr and Mrs Amadio were Italian immigrants, they were of advanced years and they had limited knowledge of the English language. The mortgage contained a form of guarantee which was unlimited. Whilst the documents were being executed, Mr Amadio senior said that the mortgage was limited for six months, but the bank manager said it was not so limited. The manager was also aware that the transaction was improvident from the point of view of Mr and Mrs Amadio but they received no independent advice about it. The bank manager was also aware that if the building company was to continue, Vincenzo had to obtain his parents signature upon the documents in order to have the benefit of this increased overdraft. 147 Mr and Mrs Amadio received no benefit from the transaction and the bank received complete coverage from the mortgage of their property for the overdraft given to the building company. 91 (1983) 151 CLR 447. -- 56 of 71 -- [2024] SADC 44 53 148 The bank succeeded at first instance before Wells J, but on appeal to the Full Court of the Supreme Court the bank failed. After canvassing the relevant facts and the authorities, Gibbs CJ held at page 459 as follows:- ‘In my opinion it should not be held that his was the case of an unconscientious bargain of the kind which equity would set aside, even in the absence of fraud, misrepresentation or other undue influence. Of course, the bank and the respondents did not meet on equal terms but that circumstance alone does not call for the intervention of equity… A transaction will be unconscientious within the meaning of the relevant equitable principles only if the party seeking to enforce the transaction has taken unfair advantage of its own superior bargaining power, or of the position of disadvantage in which the other party was placed. The principle of equity applies ‘whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need, or other circumstances effect his ability to conserve his own interests, and the other party unconsciously takes advantage of the opportunity thus placed in his hands: Blomley v Ryan per Kitto J at 415. 149 Gibbs CJ held that the bank should fail because of its failure to disclose to the Amadios matters which it ought to have disclosed. 150 At page 461, Mason J held as follows:- ‘Historically, Courts have exercised jurisdiction to set aside contracts and other dealings on a variety of equitable grounds. They include fraud, misrepresentation, breach of fiduciary duty, undue influence and unconscionable conduct. In one sense they all constitute species of unconscionable conduct on the part of the party who stands to receive a benefit under a transaction which, in the eye of equity, cannot be enforced because to do so would be inconsistent with equity and good conscience. But relief on the ground of ‘unconscionable conduct’ is usually taken to refer to the class of case in which a party makes unconscious use of his superior position or bargaining power to the determinant of a party who suffers from some special disability or is placed in some special situation of disadvantage eg, catching a bargain with an expectant heir or an unfair contract made by taking advantage of a person who is seriously affected by intoxicating drink. Although unconscionable conduct in this narrower sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former, the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and the other party unconsciously taking advantage of this position.’ 151 At page 467, Mason J held as follows:- ‘As we have seen, if A having actual knowledge that B occupies a situation of special disadvantage in relation to an intended transaction, so that B cannot make a judgment as to what is in his own interests, takes unfair advantage of his ‘A’s’ superior bargaining power or position by entering into that transaction, his conduct in so doing is unconscionable. And if, instead of having actual knowledge of that situation, A is aware is the possibility that situation may exist or is aware of facts that would raise that possibility in the mind of any reasonable person, the result will be the same’. 152 Deane J, with whom Wilson J agreed, at page 474 held as follows:- -- 57 of 71 -- [2024] SADC 44 54 ‘The jurisdiction of Courts of equity to relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heir’s had dealt with their expectations without being adequately protected, against the pressure put upon them by their poverty…the jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or ‘unconscientious’ that he procure, or accept the weaker party’s ascent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable.’ 153 His Honour then went on to say on the same page as follows:- ‘The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related. The two doctrines are, however, distinct. Undue influence, like common law duress, looks to the quality of the consent or ascent of the weaker party… unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purpose of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogued.’ The Amadio defence fails 154 Through his counsel, Mr Maik, who very thoroughly and competently put to me everything that could be put on his behalf the respondent did not seriously press the Amadio defence. Even so, it is necessary to conclude upon this pleaded defence in light of the evidence. It is not sufficient that I merely reject the evidence of the respondent. The respondent is a sophisticated participant in real estate transactions of various types over a very long period of time both as a vendor and a purchaser, as lessee and as lessor. 155 I have also found that he is a person who is almost completely without credit. 156 It is necessary that I be satisfied that in some way the applicant was in a superior position to the respondent or had superior bargaining power. The evidence discloses that neither of these qualities were enjoyed by the applicant, nor did those things exist. The applicant and the respondent were dealing at ‘arm’s length’ in relation to their bargaining positions. The respondent was fielding offers from a number of potential purchasers and he had no difficulty understanding the terms of the offers and deciding to accept or reject them. I have earlier surveyed these offers, all of which contained terms that for one reason or another were not satisfactory to the respondent. In the main, they were quite unsuitable to someone in the respondent’s position. As I have also shown, many of them contained terms that were quite disadvantageous to the respondent. 157 They were rejected by him. -- 58 of 71 -- [2024] SADC 44 55 158 The applicant is not and has never been in a superior position to the respondent, which is not the same as superior bargaining power. A superior position may arise in many circumstances, including as described by Fullagar J in Blomley v Ryan. The respondent did not suffer from poverty, sickness, incapacity of mobility or mind, from the adverse effects of taking drugs or alcohol, or a lack of assistance or necessary explanation. 159 I am satisfied that the respondent was fully aware that on 18 September 2023 he was signing a contract for sale and purchase of the land for a purchase price of $3.5 million. He knew that was the highest price he had been offered for the land in the open market; and it was an offer well above the asking offer and upon terms that were much more favourable to the respondent vendor. 160 In evidence the respondent said that the contract (which he understood he was signing) was merely a ruse to distract or somehow delay Mr Chelliah. This I have found is an untenable proposition without any credibility for many reasons. 161 The Chelliah debt was a certain, it could not now be contested and it was being vigorously pursued. The respondent owed this money for many years and it was attracting an interest charge. The debt was now calculable following an inter parties action to recover the debt. The trial of that action required a hearing of two days in Court and then a judgment from Judge Bochner. The process for a warrant of sale based upon this judgment had formally commenced. Thus, the process of the sale of the property would be taken out of the hands of the respondent completely. The only way to avoid that happening was to sell the property and pay the debt. The alternative was to suffer the sale and deal with the proceeds after discharge of costs, costs orders, other mortgages and interest and claimants who maintain a claim on the assets of the respondent. It was not challenged before me that an arm’s length sale of the property controlled by vendor and purchaser would provide the best return to the respondent in respect of a claim upon this asset. 162 It was not possible to defeat Mr Chelliah by creating a form of bogus contract with the applicant. Such a contract could only be effective if it was genuine and that it genuinely provided a basis of settlement upon which Mr Chelliah could rely for payment of his debt. That was the contract that the respondent entered with the applicant. I reject the version put forward by the respondent based upon the commercial reality of the situation and plain commercial common sense. I also reject this version on that basis that I find the evidence of the respondent was not credible. 163 In giving his evidence, it became clear that if the respondent could not deny the plain facts put to him in a question, he feigned ignorance. If he thought that an assertion suited his purpose, he proffered it regardless of its accuracy and if he could think of nothing better to say, he made up a story that was fanciful at best. I do not accept his version as truthful. Nothing done by the applicant in any way overbore his judgment. He was not in a position of special disadvantage, he had the capacity to make a judgment about what was in his own best interests, and on -- 59 of 71 -- [2024] SADC 44 56 no account did the applicant act unconscionably toward him. The applicant was not aware of the possibility that he was in a position of superior bargaining power or that he was in some way in a superior position to the respondent. These things did not exist. The respondent was in charge of his own affairs and was cogent of the facts. 164 I am satisfied that the respondent bound himself to the contract he executed because it guaranteed to him a significant return on his investment in the land. The Chelliah debt had to be paid and in that respect, he faced what is colloquially described as ‘Hobson's choice’, ie, he had no choice at all. I am, therefore, satisfied that his evidence that this was a holding exercise against Mr Chelliah also cannot be accepted as credible. The other defences raised by the respondent 165 I also reject other aspects of his defence. In paragraph 15(a) of the respondent’s Points of Defence, he pleads that the applicant did not prepare the contract at his request. That fact was not proved and I would reject it, in any event. The contract he signed was the applicant’s offer to him which he accepted and for the same reason, the fact that he thinks he did not request the preparation of the contract is not relevant. He then pleads that the applicant prepared the contract without his knowledge or consent. That is not proved. At a number of levels it may be probative if the respondent had requested the preparation of the contract or did not know about its preparation. An awareness of these matters may suggest that, in doing so, he was attempting to construct an artifice against Mr Chelliah or in some way to propitiate him and distract him from his intended course. He does not admit signing the contract, however, I am satisfied that he did and he did so freely and with full knowledge. He then pleads that if he signed the contract, he did so pursuant to false representations that the contract was only a stopping mechanism in relation to Mr Chelliah. I consider that this pleading is not correct and I reject it for the reasons I have explained. 166 The respondent then pleads that he was of advanced age, failing health and impaired faculties and in financial need. I accept that he was 75 years of age. Having seen him give evidence, I do not accept, that he was of failing health or impaired faculties. He was in financial need and that was the driver of the contract. That need, as he knew, was of his own making. It was his decision to put Mr Chelliah to proof before Judge Bochner, to undertake a two-day trial and suffer a judgment. He was completely unsuccessful due in a large part to the lack of credibility of his evidence. He appears not to be able to accept a version of events separate (or different) from the one created in his own mind. He was able to give evidence in a forceful and robust way. He answered every question put to him and his responses, though flawed, were direct and timely. He did not appear confused or unable to understand the process in which he was involved. He had erroneously come to the Court to tell a story that was not true. -- 60 of 71 -- [2024] SADC 44 57 167 The respondent then pleads that the applicant was at all material times aware or ought to have been aware of his condition. He was certainly aware of his age, however, the other matters are of no significance for the reasons I have given. He then pleads that there is a fiduciary duty between the applicant and the respondent. In my opinion, there was no fiduciary duty but if there was it was not breached. For example, in relation to the particulars of fiduciary duty, it is pleaded that the applicant knew that the respondent did not want to sell the land but wanted to develop it. The applicant accepts that may once have been the case, however, that was not the case at the time the contract was executed. It is irrelevant. It is then pleaded that the applicant knew that the respondent had rejected all offers made to purchase the land. That is not true. He may have rejected recent offers but he had formerly accepted the ATEK offer and he purports now to accept the Rimel offer which is decidedly disadvantageous for him. I am not asked to be the arbiter of that discussion because, before me, the essential issue is that very soon after signing the subject contract he negotiated with Rimel. This is all in the context where, on his own evidence, he signs contracts and then later decides if he will be bound by such contracts. That is contrary to the well settled law of Australia.92 The offer put by the applicant is better, in any event. He also had no capacity to develop it. 168 It is then pleaded that, despite knowing all of these things, the contract was prepared without his request. In my opinion, that is not true but it is also irrelevant. The contract was presented to him as an offer which he could accept or reject. It was his decision to accept. It is then pleaded the contract contains unfair terms. In my opinion, it does not. I say something later in relation to the amount of the deposit, the purchase price and the settlement date. In my opinion, in light of all of the evidence, these are merely commercial matters decided and agreed between parties. 169 It is then pleaded that the applicant did not disclose the nature of the contract to the respondent at the time of requesting him to sign it. I reject that evidence, I think it is untrue. I am satisfied the respondent knew and understood what he was signing. He then pleads that he did not disclose the terms of the contract. I reject that pleading, it is also untrue and I am satisfied that the respondent read and signed the contract willingly. It is then pleaded that, by reason of the applicant’s relationship with the respondent and if full disclosure about the contract was made by the applicant so that the respondent fully understood the nature of the contract and its terms, the respondent would not have signed that document. In my opinion, that is an unsustainable assertion based on the evidence. It is not true, all for the same reasons. The alleged agency of the applicant 170 I have earlier discussed the alleged agency of the applicant pleaded within the respondent Points of Defence. There is no evidence that the applicant had any 92 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165. -- 61 of 71 -- [2024] SADC 44 58 form of authority under a contract of agency with the respondent. I think it is quite implicit that from 2007, when he was attending meetings on behalf of the respondent, there was some from of implied agency. The issue was the rezoning of the property (and the area). The applicant did not own the land and the question was always for the decision of the respondent. The applicant had an interest in the rezoning of the land because he wanted to purchase the land, made several attempts to do so and was rebuffed. However, it could not actually be said that at the time the respondent rejected the July 2023 offer of the applicant, there was any form of agency relationship as may have existed from 2007 to 2014 connected with the rezoning of the land. The negotiation that took place in 2023 about the land was between two arm’s length parties wherein the respondent rejected the offer of the applicant before, and at the time, he continued to field and consider offers from other prospective purchasers, as he had done since 2014. There is no evidence or suggestion that the respondent involved the applicant in this decision making process, whether in 2014 or anytime up to 2023. The applicant was excluded because he was also a potential purchaser. Therefore, at best, the respondent could only contend that an implied agency arose between he and the applicant in the period from 2007 to 2014. This contention does not arise on the facts and it is not supported by authority. 171 In the text, ‘Law of Agency’93 the learned author Professor G E Dal Pont discusses implied agency at [4.7] and what follows is a summary of the text as stated by the learned author. The learned author said that:- ‘Parties do not need to use specific language of agency in order for the relationship they enter to be an agency relationship. Such a relationship arises by inference. This can occur even if the parties do not appreciate that the agency relationship has been created. The objective test is whether the conduct of the parties is reflected within the legal concepts of agency’.94 172 Thus in terms of intention, the parties may by the arrangements made between themselves, manifest an intention to create an agency relationship ‘…according to the ordinary usages of mankind…’.95 173 In Bonette v Woolworths Ltd Jordan CJ said:- ‘Evidence that a person is purporting to do acts on behalf of a principal in some capacity in such circumstances that the knowledge and approval of the principal may fairly be inferred is evidence that the principal has authorised him to act in the particular capacity. If there is evidence justifying such an inference, it justifies the further inference that the person has authority to do so such acts as would be done, as a matter of ordinary business practice, by a person acting in a capacity’.96 93 LexisNexis Butterworths, 2nd ed, 2008. 94 Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 314 per Lindgren J. 95 G E Dal Pont, Law of Agency (Lexis Nexis Butterworths, 2nd ed, 2008 [4.7]. 96 Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142, 150 (Jordan CJ); see also Hely – Hutchinson v Brayhead Ltd [1968] 1 QB 549. -- 62 of 71 -- [2024] SADC 44 59 174 At [4.8] the learned author says:- ‘The Court’s approach in the context of a claim for commission by an alleged agent, is illustrated by the High Courts decision in Dolphin v Harrison, San Miguel Pty Ltd.97 The plaintiff who had in the past dealt with the defendant, wrote the following to the defendant:- ‘The writer is under the impression that he heard somewhere that you are inclined to sell your business. If such is the case we should be glad to hear from you stating what amount you require for same and any particulars that are likely to help us to make a sale. We have an inquiry for a small brewery and shall be glad to hear from you on the subject.’ The defendant wrote in reply: ‘In reference to sale of brewery I want £2,500 net for the business. If I can’t get that I don’t sell. The only reason for selling I am getting too old, if I was 20 years younger I would not think of selling. Any further particulars you can have by applying.’ The plaintiff alleged that this correspondence established a contract that the defendant would employ the plaintiff as agent to introduce a purchaser and pay commission if the plaintiff did so. The High Court rejected this contention. Griffith CJ, with whom Barton and O’Connor JJ concurred, held that the defendant’s response had negatived the idea that the defendant was employing the plaintiff to sell on commission.98 His Honour then observed99:- ‘Now it is suggested that, as the plaintiffs were the means of introducing [ the purchaser] to the defendant, and as [the purchaser] made a contract for the sale of the brewery, that there was a liability on the part of the defendant to pay commission to the plaintiff. If there was a promise by the defendant to pay commission to the plaintiff’s for finding a purchaser, that is, no doubt, quite right. It would not matter in that case what price the defendant accepted from the [purchaser] because the services had been rendered by the plaintiffs to the defendant. But it is quite clear that there was no such contract between the plaintiff’s and the defendant…I think it is impossible to find any promise by the defendant to pay commission for the introduction of a purchaser by the plaintiffs.’ 175 At [4.9] the learned author says:- ‘Another example, though in the context of a plaintiff alleging that the defendant had purchased property as his agent, is Cadd v Cadd.100 The evidence showed that in a conversation between the parties, who were brothers, the words ‘I’ll buy the place for you’ and ‘you can have it as soon as you pay me what you owe me’ were used. The High Court held that, of themselves, those words were not sufficient to establish an implied agency; the phrases were open to more than one meaning, only one of which connoted an intention to constitute the defendant as the plaintiff’s agent.101 In this respect Isaacs J remarked102: If the employment were one of agency it would be remarkable that the agent should stipulate as to when his principal might have his own property, even though he were able to pay for it beforehand. It is not an unreasonable stipulation for the true owner, speaking to a struggling brother who he as wiling to befriend, and telling him that 97 (1911) 13 CLR 271. 98 Ibid 274. 99 Ibid 275-6. 100 (1909) 9 CLR 171. 101 Ibid 183 (Barton J) and 185 (O’Connor J). 102 Ibid 188-9. -- 63 of 71 -- [2024] SADC 44 60 when he has succeeded in clearing off a minor existing obligation he may assume a heavier one’. The purchase was conducted wholly in the name of the defendant, from which no indication of the existence of agency could be derived.103 That the parties entered into an agreement under which the plaintiff was to farm the land (as ‘cultivator’) for the defendant (as ‘proprietor’) was further evidence that the parties had not intended an agency relationship. As such, the plaintiff’s own conduct was inconsistent with his allegation’. 176 In my opinion, the conduct of the respondent which I have canvassed in detail earlier in these reasons, was inconsistent with his allegation of any form of agency on the part of the applicant. I have accepted that it was arguable that during the period from 2007 to 2014 and up to when the rezoning occurred, actions were being taken by the applicant on behalf of the respondent that fell within the description of ‘agency’. I have also found that those activities were not undertaken by the applicant with an altruistic intention. I consider that the plain common sense and commercial reality of the matter is that the respondent was taking advantage of what was done on his behalf by the applicant to improve his own financial position. That is, he readily accepted whatever was being done on his behalf by the applicant because it strengthened his own position. I am also satisfied that from about 2014 onwards, the respondent was involved in fielding and dealing with offers that were being made to him from time to time for the sale of the property due to its increased value following the rezoning and the imminent completion of the Northern Expressway. That is not a criticism of the respondent but rather a reflection of the commercial reality of their positions. By no later than that time, any concept of agency between the applicant and the respondent was at an end. The respondent continued to negotiate with prospective purchasers, other than the applicant, for the sale and development of the property. All of this conduct is completely inconsistent with his allegation of agency. That allegation, for those reasons, fails. 177 There is then a pleading of unconscionable conduct which I have already dealt with and rejected. And there is then a pleading that the contract was terminated, which I will deal with later. The contract and its enforceability 178 I turn now to the further matters for my decision, namely, whether the contract is enforceable and, if so, whether there has been any repudiation of it separately or any valid rescission of it. I have referred to the contract and the deposit paid. The amount of the deposit was $5,000. At first blush, it might be thought that this was a small amount of money in the background of the purchase price. However, the evidence before me discloses offers made under other proposed contracts for this land and under similar circumstances. On a review of these similar contracts and the commercial nature of this contract, in my opinion, it could not be said that the amount of the deposit was otherwise than within normal bounds. On this topic, the Court must be alert to and be aware of the complex 103 Ibid 181 (Barton J). -- 64 of 71 -- [2024] SADC 44 61 commercial nature of these transactions and of the Court’s duty is to uphold parties’ bargains. 179 The development of broad acre land for housing (as an example) is now a very complex, time and money consuming and difficult process. This process and these requirements have evolved over time. Consequentially, the execution of contracts involving such projects have evolved such that time and opportunity must be given to purchasers to satisfy a list of requirements, as has been done here by the applicant. The completion of these steps requires significant time and the expenditure of considerable money, resources and energy. I have earlier set out the steps taken by the applicant in the due diligence process. It was necessary for him to retain a number of professionals at his cost, to receive and consider their advice, and to receive and consider the advice of other experts and professionals connected with the subdivision of the land. 180 The terms of contracts of this nature are, therefore, ‘cut to the cloth’ of the requirements of the development. These are all matters for the commercial decision of the parties. Without more, a Court would not interfere with the bargain of the parties. I am satisfied that the parties were satisfied with their bargain and the amount of the deposit was, therefore, appropriate. The date of the contract and the settlement date 181 The settlement date in clause 8 is specified as 17 July 2025. Another condition allows for 180 days for due diligence. The date of the contract is 18 September 2023, but the settlement date is calculable from 17 July 2023. 182 Despite the submissions to the contrary, I am unable to identify any inconsistency between those dates and the operation of clause 8. It is also suggested that there is an inconsistency between the calculation of the expiry of a term of 180 days. Is it to be calculated from the September or the July date? This is an irrelevant question. The settlement date is clearly stipulated as 17 July 2025. The applicant does not and cannot complain that there should be a later settlement date of September 2025.The question does not arise because the applicant has given notice of the completion of due diligence and has bound himself to a settlement on 17 July 2025. There is also a second alternative ticked in clause 8 which provides for the settlement date to be within an unspecified time of settlement of the special conditions. I consider this to be an inoperable clause as the period is earlier specified. 183 Again, at first blush 17 July 2025 may have seemed a long time in the future but the Court is again required to recognise that people of commerce order their affairs to suit their purposes commercially. No submission was put that this settlement date was so far into the future that the contract was, thereby, rendered unenforceable. I have already canvassed the tasks that had to be completed by the applicant in the 180-day period. They are set out in paragraph 9 of the affidavit of the applicant made on 28 December 2023 which is in evidence. This is an extraordinarily large amount of work. -- 65 of 71 -- [2024] SADC 44 62 The special conditions: Finance 184 I turn then to the special condition that the contract is subject to finance. It provides as follows:- 185 A lender is not named nor the date upon which the loan is to be granted. The completed detail only specifies the amount of a loan of $2 million and a term of 15 years. 186 The case and the evidence of the applicant is that no reliance is placed upon this term. It is not in dispute that the applicant has also now given notice to the respondent that the due diligence has been completed within the 180-day period. Therefore, the date for settlement is 25 June 2025. Also, the contract is unconditional and the amount of the deposit has been tendered. -- 66 of 71 -- [2024] SADC 44 63 187 The ‘finance clause’ as it appears in the contract operates for the benefit of both the vendor and the purchaser. If a party fails to satisfy a ‘special condition’ under clause 14.2, 14.3 and 14.3.1 of the agreement, either party may terminate the agreement. A failure to satisfy a term or a breach by a party of a term is deemed an event of default under clause 14.3.2 and compensation as prescribed under clause 15 becomes payable. There are also the usual resale and damages provisions following termination. 188 The special conditions clause provides:- 14. Special Conditions 14.1 This Agreement is subject to the satisfaction of the Special Conditions (if any). 14.2 The party required to satisfy a Special Condition must use its best endeavours to do so on or before the date specified in that Special Condition (or if not specified, within twenty-one (21 days) of the date of this Agreement). 14.3 If a party fails to satisfy a Special Condition then: 14.3.1 if the party required to satisfy the Special Condition complies with clause 14.2 and such other terms and conditions as specified in the Special Condition, then either party may terminate this Agreement upon written notice to the other party; or 14.3.2 if the party required to satisfy the Special Condition fails to comply with clause 14.2 or is otherwise in breach of such other terms and conditions specified in the Special Condition, then such an event will be deemed a default under this Agreement and: (a) if the Purchaser is in default, clauses 15.3 and 15.4 will apply; or (b) if the Vendor is in default, clauses 16.1 and 16.2 will apply. 14.4 If this agreement is terminated pursuant to clause 14.3.1, then any monies paid by or on behalf of the relevant party under this Agreement shall be refund to that party. 14.5 If this Agreement is terminated pursuant to, or as a result of clause 14.3.2 then: 14.5.1 if the Purchaser is in default, clause 15.8 will apply: or 14.5.2 if the Vendor is in default, clause 16.2 will apply. 189 It is not in dispute that the finance clause is incomplete. The material in the clause does not specify: the date on or before which the named lender is to approve the loan and the commercial interest rate; and the lender is not named, although it is accepted in many commercial transactions the name of a willing lender does change. Notwithstanding clauses 14.1-14.5 and following, the terms of the contract do, in the usual course, create rights and obligations upon both parties when considering the operation of such a clause. In the usual course, the subject to finance clause provides the purchaser the means to avoid liability under a contract for sale and purchase of land. Conversely, if it is necessary to obtain a loan to make -- 67 of 71 -- [2024] SADC 44 64 that purchase, it also protects the vendor by preventing the purchaser from resiling from the contract for reasons which are not concerned with the availability of finance. That is the proper understanding of the whole of the operation of clauses 13 and 14 of this contract. 190 The decision of the High Court in Meehan v Jones concerned a contact for the sale of land on which an oil refinery had been built. 104 The contract contained a special condition:- ‘This contract is executed by the parties subject to the following:- a. The purchaser or his nominee entering into a satisfactory agreement or arrangement with Ampol Petroleum Ltd for the supply of a satisfactory quantity of crude oil…; b. The purchaser or his nominee receiving approval for finance on satisfactory terms and conditions in an amount sufficient to complete the purchase hereunder…’ 191 The contentions of the respondent were that:- (1) A contract which reserves to a party a discretion or option whether he will or will not carry out what appears to be a promise on his part is void for uncertainty; (2) The contract is expressed in language which is so obscure and incapable of any definite or precise meaning the Court is unable to attribute to the parties any particular contractual intention is void for uncertainty; and (3) There can be no concluded bargain if a vital matter has been left to the determination of one of the parties. 192 It was argued that finance on satisfactory terms and conditions was too uncertain and indefinite to admit of a precise meaning. On this argument, the Court could not decide what finance was contemplated by the contract as being satisfactory. Mason J at pages 587-588 rejected these arguments and decided that a contract for the purchase of real estate which:- ‘…contains a condition that the purchaser or his nominee received approval for such finance so that the deposit is to be refunded to the purchaser if the condition is not satisfied, there could be no doubt that ‘satisfactory’ ordinarily means satisfactory to the purchaser or his nominee. 193 At pp 589, Mason J held that:- ‘To say that clauses of this kind are void for uncertainty is to ignore the traditional doctrine that Courts should be astute to adopt the construction which will preserve the validity of the contract. Moreover, it is a draconian solution – one which is best calculated to frustrate the expectations of the parties, because in an increasing number of cases purchasers depend upon the provision of finance in order to complete. The problems of uncertainty can be avoided by drafting a clause which specifies the details of the finance to be sought, but such a clause by reason of its greater precision, may be too inflexible in its operation’. 104 (1982) 149 CLR 571. -- 68 of 71 -- [2024] SADC 44 65 194 Thus, the purchaser could decide whether the terms upon which finance was available were satisfactory. It was not necessary, to decide whether the test as to his satisfaction was subjective or objective. Irrespective, the clause is not void for uncertainty. It is necessary only for the purchaser’s obligation to act at least honestly and perhaps reasonably in considering the finance available to be satisfactory. That does not mean that, in that instance, a party had a discretion as to whether or not to perform. 195 Referring again to the contract for sale and purchase of land (Exhibit P2, page 1 et seq) I am satisfied that no lender is specified. No date upon which on or before which the lender is to approve the loan is specified. As I have described, only the amount of the loan and the term of the loan is specified. The interest rate is also not specified. 196 In my opinion, because of the failure to complete the whole detail within the subject to finance clause, there is consequently no protection from that clause to the purchaser and the clause creates no ‘road block’ for the vendor. In my opinion, the operative clauses of the contract are the quantum of the consideration, the deposit, the settlement date, and the due diligence clause. The subject to finance clause does not add to, nor detract from the respective positions of either party. It has no operative effect. It gives no protection to the purchaser and it does not detract from the position of the vendor. The alleged rescission 197 On Friday 15 December 2023, a letter was sent from the solicitors for the respondent to the applicant directly (Exhibit P2, page 75). It alleges that the applicant only purports to have a claim against the property. In the third paragraph of the letter, the author, a solicitor, refers to the fact that he has been given a contract which it is alleged, embodies terms of a contract to sell the property executed by his client. He then alleges that the document is ‘unsigned, incomplete’. He alleges that it is erroneous in essential terms and is legally defective. He then alleges that the respondent has instructed that the applicant said to the respondent words to the effect that he had signed a version of the document but had not provided the respondent with a copy. These sentences then follow:- ‘…Given your actions in relation to the property, if it is that you have a signed copy, I am instructed to give notice any contract on written terms is rescinded’. The document, at its highest, requires you and/or nominee to pay to Mr Blaikie a deposit. To date, you and/or a nominee has failed to perform on that precondition, and with that, if there is a contract, you are in breach and my client is entitled to rescind. Furthermore, in relation to the purported purchaser, it appears you have nominated a party, and with that I have extended this correspondence to the registered office of ATSTAR Capital Pty Ltd…’ 198 It is clear that the contract to which the solicitor makes reference is a contract between the respondent and ATSTAR Capital Pty Ltd. That is not the contract which is the subject of this claim. The instructions given to the solicitor by the respondent are therefore in error and so, the letter of 15 December 2023 was -- 69 of 71 -- [2024] SADC 44 66 written by the solicitor under a misapprehension of facts based upon the instructions that he had received from the respondent. The respondent has therefore mistaken the position and appears to have informed his solicitor that the contract he signed was with a purchaser called ATSTAR Pty Ltd. That is not the contract under consideration here. In those circumstances, whatever might have been the intended effect of this letter, it is not a letter which validly or otherwise rescinds the existing contract. It is of no effect. 199 A response was made to that letter by a letter from the applicant of 28 December 2023 (Exhibit P2, page 76). In that letter the applicant identifies that the contract which is referred to in the solicitor’s letter is a different contract. He then attaches a copy of the signed and witnessed contract and confirms that a copy of that signed contract was delivered to the respondent shortly after its execution. 200 He confirms that the respondent had no basis for the allegation of any breach of contract. He also confirms that he has not nominated any other party as purchaser. 201 The next paragraph of the letter reads as follows:- ‘I have now completed my Due Diligence under Special Condition (1) on page 6 of the Contract and give notice that the condition has been satisfied and I am ready, willing and able to pay the deposit of $5,000. Please instruct as to payment details.’ 202 In evidence, the applicant said that he had received no response to this letter seeking identification of the account into which the deposit should be paid. In order to preserve the position, he has paid the money into his solicitor’s trust account. All contractual conditions are satisfied 203 In those circumstances, and when reference is made to the contract, a number of things follow. First, the due diligence special condition has been satisfied. Second, that due diligence special condition has been satisfied within the period of 180 days allowed under the term of the contract. This renders otiose any discussion about the date of the contract. The date of this notice is within 180 days of the July date and the September date on the contract. The settlement date becomes 17 July 2025. The third, is that the amount of the deposit of $5,000 is due and payable. The evidence satisfies me that the purchaser has taken every step possible to enable that amount to be paid, but he was rebuffed by the respondent who has refused to identify the account into which the money is to be paid. 204 The fourth, is that the settlement date of 17 July 2025 is now the date for settlement for the contract for sale and purchase of the land at which time there will be settlement of the contract. Therefore, the contract now operates in an unconditional way, the vendor is bound by the contract as is the purchaser. In my view, the applicant could do no more than proffer the deposit when notifying the respondent that the due diligence clause was satisfied and the contract had become -- 70 of 71 -- [2024] SADC 44 67 unconditional. There was no occasion of any form of repudiatory conduct by the applicant. In those circumstances, I am satisfied that the applicant is entitled to the orders sought on the Points of Claim. 205 The Court makes orders as follows:- 1. A declaration that the Applicant Mr John Koutsoukos has a valid contract for the sale and purchase of land dated 18 September 2023 comprising the document at pages 1-15 inclusive of Exhibit P2 in respect of the land comprised in Certificate of Title Register Book Volume 6254, Folio 577. 2. An order for specific performance of the contract described in paragraph 1 hereof. 3. The Court will hear the parties further in relation to consequential orders including in relation to settlement of the contract, costs and other orders. -- 71 of 71 --