I wonder what period of time transpired between this alleged "contract" being formed, and you're mate then arranging annual leave through work, plane tickets, hotels, and car transporters, before flying up there to hand over the cash for the deal.

something about the whole thing sounds fishy to me - I mean I could half understand this bloke selling the car to someone else to get the cash quicker, but if he was going to get the money the next day from your mate anyway, as you claim, it just doesn't make much sense to me. But then again, it doesn't make any sense to me that a seller of a vehicle would refuse a holding deposit either, unless he felt it was going to take an inordinate amount of time for your mate to make these arrangements to collect the car and the seller did not want to be bound to turn down any other offers in the interim. If that was the case, as common sense would suggest, then the only contract would have the caveat that if another buyer came along with the cash, the car would not be held.

In any civil action your mate brings, there is no burden of proof, it is heard on the basis of the most plausible scenario. And I doubt any reasonable person would believe the car was to be held in good faith if there was no holding deposit paid. And as I just said, if the seller turned down the deposit, as you claim, its clear that he did not want to be bound, and therefore no contract was actually formed except in the perception of your mate. Simple misunderstandings or miscommunications happen everyday...