The deposit is your money, held on trust until settlement.
The case that I mentioned is Commissioner of Taxation v Park [2012] FCAFC 122
Article about it here
http://www.13wentworthselbornechambers.com.au/pdfs/ato1.pdf
Wow, reading that summary the result actually went the opposite way to my expectation. I kind of agree with the fact that having a fully encumbered property means the mortgagees needed to have been asked permission for the sale... the flow on will be interesting.