Intent Over Ink: When Can An Unsigned Deed Bind Parties

The Supreme Court of Victoria ruled that parties were bound by a settlement deed sent unsigned by the defendants' solicitor and subsequently executed by the plaintiffs’ solicitor, even though the defendants ultimately refused to sign.

The Court assessed objective intention and communication history and found that the parties arrived at an agreement despite the absence of formal execution.

In issue

• Whether a deed of settlement, sent unsigned by the defendants’ solicitor to the plaintiffs’ solicitor and subsequently signed by the plaintiffs, created a binding agreement despite the defendants’ later refusal to sign, in the context of a mediation conference held two months earlier and ongoing negotiations.

The background

The case arose from related proprietary estoppel proceedings in the context of a family dispute. In 2023, Mrs Papanastassis Jnr, acting in her personal capacity and as executrix of her late husband’s estate, along with her children Ellie and Alex (the plaintiffs), alleged that Mr Papanastassis Snr, her late husband, and two associated corporate entities (the defendants), had promised them ownership of family businesses and properties in exchange for years of unpaid work.

A mediation conference was attended by the parties in the related proceedings on 12 February 2025. In advance of that mediation, the parties to those proceedings signed a pre-mediation agreement which expressly provided that no binding settlement could take effect unless written terms were signed by all necessary parties. Crucially, Ellie and Alex were not parties to those related proceedings, did not attend the mediation, and did not sign the pre-mediation agreement.

The mediation did not result in a final agreement, but negotiations continued shortly after. On 18 February 2025, the defendants’ solicitor sent a draft deed proposing a settlement of $8.5 million to Ellie and Alex collectively (the deed). The next day, Ellie and Alex engaged their own solicitor for independent legal advice, and on the same day, they indicated their willingness to execute the deed to the defendants’ solicitor, subject to certain minor amendments addressing the dates of payment and removal of security interests. Notably, on 1 April 2025, consent orders were lodged with the Court stating that the parties 'believe they have reached agreement "in principle",' subject to finalising terms of settlement.

After further back and forth, on 22 April 2025, the defendants’ solicitor sent a revised deed to the plaintiffs’ solicitor and indicated that the defendants had an appointment booked with the solicitor to execute that deed two days later. The plaintiffs executed the revised deed on 24 April 2025 and returned it to the defendants’ solicitor, requesting countersignature and the filing of consent orders. However, the defendants delayed signing, citing concerns and seeking further advice. By 11 June 2025, the defendants formally confirmed that they now refused to sign the deed.

The decision at trial

At trial, the defendants argued that the deed in question was not binding, as the pre-mediation agreement explicitly required a deed to be signed by all necessary parties for a binding settlement to arise. However, the Court found that this requirement was not determinative, particularly as Ellie and Alex, key beneficiaries to the settlement, were not parties to that agreement.

The Court applied an objective test to ascertain the parties’ intention, examining their conduct, correspondence, and the broader commercial context. In doing so, the Court relied on the principles of contract formation established in Masters v Cameron (1954) 91 CLR 353 and found that the parties’ conduct demonstrated a clear and objective intention to be bound. The defendants’ solicitor were found to have acted with ostensible authority to bind their clients, and the plaintiffs reasonably relied on their communications as an indication of a concluded agreement. The parties’ communications, particularly the defendants' solicitor's confirmation that the deed would be signed on 22 April 2025, confirmed an agreement to the deed’s terms without further negotiation.

The Court therefore held that the terms of the deed were sufficiently complete and certain to constitute a binding agreement to settle the related proceedings, and the defendants’ conduct objectively demonstrated their intent to be bound. The Court therefore ruled that the deed was enforceable and ordered the defendants to pay the plaintiffs’ costs on a standard basis.

Implications for you

Litigants and practitioners should note that binding settlements can arise from exchanged drafts or unexecuted deeds where the parties’ correspondence and conduct support an objective intention to be bound, especially following 'in principle' agreements being reached in the context of settlement negotiations.

Even in circumstances where pre-settlement agreements explicitly state that settlements must be reduced to writing, such provisions may not always be enforceable if key third parties are not privy to same. In the context of insurance and family law disputes, this serves as a reminder of the importance of ensuring that all relevant beneficiaries are explicitly named in agreements where formal execution is intended to be a condition of enforceability. Without such clarity, there is a risk that a binding agreement may be found to exist even in the absence of formal execution.

Papanastassis v Papanastassis [2026] VSC 302

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