AGC (Advances) Ltd v McWhirter
Supreme Court of New South Wales (1977) 1 BLR 9454
P put a property up for sale at auction subject to a reserve. The highest bid of $70,000 was below this reserve. P then instructed the auctioneer to withdraw the reserve and a bid of $70,500 was made by D. P did not accept the bid (they had concerns about D's ability to pay). The property was then knocked down to the earlier $70,000 bidder. D claimed a contract had been formed when they made the highest bid.
Bidders at auctions make offers that may or may not be accepted. Withdrawal of a reserve does not change this - it does not constitute a definite offer to sell to the highest bidder; an auction is merely an invitation to treat.