Blog 58. Online Auction – No contract, no caveatable interest.

Maverick Signs Pty Ltd v Cetinkaya & Anor [2022] VSC 27, Ierodiaconou AsJ (4 February 2022) is a standard offer and acceptance case, interesting because arising from an online auction. The facts were –

  • The plaintiff appointed an agent, whose employee was Falconer, to sell its land. The first defendant (the caveator) deposed that on 14 August 2021 he asked Falconer if he could purchase the land for $1.25m. with a 6 month settlement.
  • On 9 September an auction using the online platform AuctionNow occurred.  The Terms and Conditions of the platform included:

In Schedule 1:

“11. The User may upload approved amendments to the contract through the Site and such amendments must include written evidence from the vendor of their legal representative accepting such alterations to the contract…”

In Schedule 3, that the following procedure applied to a User who placed a Successful Bid:

“1. The contract for purchase and sale of the Property will be sent to you electronically by the Vendor as soon as practicable after the close of the Auction.
2. The User must sign the contract for sale and purchase of the Property via the electronic software, docusign or in any other manner agreed to between the User and Agreement immediately after the Auction.

4. The deposit being 10% of the purchase price or such other amount agreed to in writing by the Vendor prior to the close of the auction, will need to be paid as directed by the Vendor or Vendors [sic] Agent as soon as practicable after the close of the Auction.

  • In a subsequent County Court proceeding the caveator pleaded that Falconer stated: at the commencement of the auction, in effect, that unless the vendor or bidder refused to sign the contract following the auction, the auctioneer must not accept any bid or offer made after the property had been knocked down to the successful bidder; during the auction, that the land was “on the market”; at the end of the auction, that the land had been sold to bidder number 6.
  • The caveator made the winning bid of $1.25m. At 1.16pm he received an automated email from AuctionNow stating that the property had sold for $1.25m.
  • The caveator deposed that at 1.20pm Falconer congratulated him on the purchase and said that the contract would be sent shortly. The caveator deposed, and the vendor disputed, that: he reminded Falconer of a previous discussion concerning changing the settlement date; Falconer said he would get the vendor to agree to the settlement terms and that part-payment of the deposit would not be an issue provided the balance was paid shortly thereafter.
  • At 1.31pm the caveator received an email from the agent with a link to an unsigned copy of the contract and a section 32 Statement.
  • The caveator deposed, and the vendor disputed, that at 1.41pm Falconer said that the vendor had accepted the amendments to the contract and to make the amendments on the contract and get it back to him as soon as possible.
  • The caveator deposed that at 2.21pm Falconer said to him that he needed the contract returned to which the caveator replied that he needed access to his computer and printer to make the agreed amendments and would be at his office shortly upon which he would provide the amended contract.
  • At 2.55pm the caveator received an email with a link to the contract.
  • At 3.00pm the caveator texted Falconer that he was restarting his computer.
  • The caveator deposed that at 3.17pm he rang Falconer saying that he was having issues with his printer and would provide a signed copy shortly, with Falconer replying that he had no issue with this.
  • The caveator deposed that he orally requested Falconer and then Falconer’s employer to provide trust account details to enable part-payment of the deposit, without response.
  • At 3.38pm the caveator paid $12,500, being part-payment of the deposit, by EFT.
  • At 3.40pm the caveator received an email which said that the contract was void.
  • Meanwhile the vendor had entered a contract of sale with a third party, the deposit being paid at 3:49pm.
  • At 3.58pm the caveator emailed the agent’s office, attaching a contract with a price of $1.25m., stating that the attachment was as discussed with Falconer and requesting an executed copy. The attachment contained handwritten amendments, which the vendor deposed were unauthorized: making the deposit not payable “on acceptance of this offer” but “payable by bank cheque of which $12,500 has been paid by EFT.  Fee (sic) attached receipt”; and altering settlement from 11 October 2021 to 8 March 2022.
  • The caveator caveated alleging the existence of a contract of sale and issued a County Court proceeding for specific performance. The vendor applied under the Transfer of Land Act s. 90(3) for removal of the caveat.

Ierodiaconou AsJ held –

  1. There was no serious question to be tried. There was no written evidence that vendor accepted alterations to the contract of sale.  The caveator was not assisted by the provision in the AuctionNow terms that payment of the deposit was required ‘as soon as practicable’ after the auction – this was subject to the subsequent written contract of sale.  And even if the change in settlement date had been accepted by Falconer’s earlier alleged representation, this representation was overtaken by the written contract of sale and the caveator’s agreement to the AuctionNow terms including Schedule 1 Item 11.  [40], [43], [44], [46]-[49].
  2. Even if the caveator had established a serious question to be tried, the balance of convenience was against him, there being an executed contract of sale between the vendor and the third party with which the caveat interfered. [53]

       Philip H. Barton

          Owen Dixon Chambers West

        Tuesday, June 21, 2022

Leave a Reply