IVI Pty Ltd v Baycrown Pty Ltd

[1] On 3 December 2004, after a trial, a declaration was made that a contract in writing dated 23 October 2002 between the plaintiff, IVI Pty Ltd ("IVI"), and the defendant, Baycrown Pty Ltd ("Baycrown"), for the purchase of certain land known as Day's Farm, was a valid contract binding on Baycrown, the vendor. Baycrown's appeal from that judgment, heard on 1 June 2005, was dismissed with costs on 10 June 2005.

[2] The issue at trial centred on whether there was a concluded contract between the parties. Baycrown's case was that the offer to sell the property had been withdrawn before its acceptance:

(a) by an email sent on 23 October 2002 by Baycrown's then solicitor, Mr Johanson, to Mr Martinez of Cleary Hoare, solicitors;

(b) alternatively, by an oral communication of the withdrawal to Mr Moss (an officer of IVI) by Mr Gahan (a real estate agent appointed by Baycrown to sell the property) who had been copied on the email.

[3] The witnesses called by IVI at the trial were Mr Moss, Mr Martinez and Ms Scholten (a director of IVI). The witnesses called by Baycrown were Mr Van Asperen (a director of Baycrown), Mr Gahan and Mr Johanson. The facts as found at trial, and accepted by the Court of Appeal are set out in paragraphs 11 - 23 of the judgment of Keane JA of that Court with whom the other members of the Court agreed. For present purposes it is sufficient to summarise them as follows.

(a) On 22 October 2002, after a meeting with Mr Moss, Ms Scholten and Mr Gahan, Mr Van Asperen signed a proposed contract, on behalf of Baycrown, for the sale of the property, the purchaser being specified as IVI "as trustee for the IVI Trust and/or Nominees". The document was not then signed by the purchaser. Mr Moss indicated that it would be signed the following day.

(b) On the morning of 23 October 2002, Mr Moss called both Mr Van Asperen and Mr Gahan and made a number of inquiries concerning the potential for subdivision of the property. On the same day, at approximately 5.22 pm, Mr Van Asperen called Mr Johanson and instructed him to withdraw the offer. Mr Johanson sent an email at 5.30 pm to Mr Martinez and to Mr Gahan purporting to withdraw the offer. Cleary Hoare became aware of the email at 8.46 am on 24 October 2002, when its email co-ordinator forwarded the unopened email to Mr Martinez' terminal. Mr Martinez was not in his office that day and had made no arrangements for perusal of his emails while he was away. He did not read the email until the following day, 25 October 2002.

(c) At 11.00 am on 24 October 2002, Mr Gahan called Mr Van Asperen, it seems told Mr Gahan that Baycrown's offer had been withdrawn. Following this conversation, at approximately 2.00 pm on the same day, Mr Gahan spoke to Mr Moss and told him that Baycrown was "wanting to pull out of the contract", that "he thought the vendor wanted to withdraw" and that "the Dutchman is thinking of pulling out of the contract".

(d) At 3.25 pm on 24 October 2002, Mr Moss faxed a letter to Baycrown purporting to accept its offer and notifying it that Cleary Hoare were not acting for IVI in relation to the contract. IVI did not actually learn of the contents of the email sent by Mr Johanson to Mr Martinez on 23 October 2002 until after the letter of 24 October 2002 from Mr Moss had been faxed to Baycrown.

[4] As to the first aspect of Baycrown's case concerning the effectiveness of the purported revocation of the offer by email, the finding at trial, which was upheld on appeal, was that Cleary Hoare did not have actual or ostensible authority to receive communication of the withdrawal of the offer on IVI's behalf. As to the second aspect of Baycrown's case, the finding at trial, also upheld on appeal, was that there had been no oral communication of the revocation of the offer during the conversation between Mr Gahan and Mr Moss on 24 October 2002.

[5] On 19 April 2005, after judgment and prior to the appeal, an originating application for specific performance of the contract was brought against Baycrown by IVI and Norfolk Estates Pty Ltd ("Norfolk"). In these proceedings, which are pending, it is contended that the contract was entered into by IVI as agent for Norfolk as undisclosed principal, pursuant to an "authority to enter nominee contract" dated 23 October 2002. The authority is exhibited to an affidavit in support of those proceedings.

[6] On 30 August 2005, Baycrown filed the present application for an order pursuant to r 668 UCPR that the judgment be set aside on the basis of fresh evidence and that the within proceedings be reheard with the proceedings for specific performance. In bringing the application, Baycrown does not seek to have the judgment set aside on the ground of fraud and makes no allegation of fraud. The fresh evidence relied upon is the emergence, after judgment, of three new factual circumstances, being:

(a) the written authority which showed that IVI contracted as agent for an undisclosed principal;

(b) the bringing of the proceedings for specific performance;

(c) evidence said to show collaboration between witnesses as to the evidence to be given at trial.

[7] In respect of the first matter relied upon as fresh evidence, it was contended that, contrary to r 18 UCPR, the proceedings brought by IVI "were not conducted as a representative action (as agent)", as they ought to have been, but were "instituted and maintained on the basis that IVI was the purchaser and proper plaintiff". It was said that, as a consequence, the proceedings miscarried because Baycrown, being unaware of the true purchaser, did not have the opportunity to "explore" the critical issue of the effectiveness of the communication of the withdrawal of the offer with the principal, Norfolk, as opposed to the agent, IVI. In particular, it was unable to explore:

(a) whether Cleary Hoare, having received Mr Johanson's email withdrawing the offer, advised Norfolk of its receipt;

(b) whether Cleary Hoare as the solicitors for Norfolk or otherwise had authority to receive the email withdrawing the offer;

(c) whether Mr Gahan had informed Norfolk of the revocation of the offer.

[8] As to the second matter relied on as a new factual circumstance, it was contended that the bringing of the proceedings for specific performance demonstrated that the declaration made in favour of IVI had no utility, because IVI was not the true purchaser, and that, had the existence of the undisclosed principal been known at trial, the declaration would not have been made. It was submitted that the specific performance proceedings are the appropriate forum to consider the new matters identified in the application as they would provide for finality of the issues between the parties.

[9] The third matter relied upon as a basis for setting aside the judgment, the evidence said to amount to collaboration between witnesses as to the evidence to be given at trial, was primarily relied upon as going to the credibility of Mr Moss and Mr Gahan as to their evidence concerning the purported oral revocation.

[10] I observe that Baycrown's solicitors were aware of each of the three circumstances relied upon in the present application as fresh evidence when the appeal was heard on 1 June 2005[1], but no application was made on that occasion to set aside the judgment on the basis of any of those matters. There was no satisfactory explanation for that failure.

[11] IVI brings a cross-application seeking an order that Baycrown's application be stayed, firstly, on the ground that Baycrown has commenced and is prosecuting concurrent proceedings in the High Court of Australia and secondly, on the ground that IVI has failed to adduce evidence sufficient to permit its application to set aside the judgment to proceed.

IVI's application for a stay because of the existence of concurrent proceedings in the High Court

[12] On 7 July 2005, Baycrown filed an application in the High Court for special leave to appeal from the decision of the Court of Appeal on the basis of errors of law in upholding the decision at first instance as to the ineffectiveness of the purported revocation of the offer by Baycrown. Baycrown also contends in that application that there was a miscarriage of justice because of the non-disclosure of the authority given by Norfolk to IVI. The consequences said to flow from that are those raised in the present application.

[13] On behalf of IVI it was argued that Baycrown's application ought to be stayed as an abuse of process, given that the first two matters of "fresh evidence" relied upon in the present application are also raised in the special leave application and that the relief sought in the two proceedings is substantially the same. In this regard, IVI pointed to the relief sought by Baycrown in its special leave application, which includes an "order setting aside the orders of the Supreme Court of Queensland" and an order "that the matter be remitted for re-opening and further trial". IVI submitted that in those circumstances this Court ought to strike out or stay the second proceeding, as "a defendant should not be harassed by a plaintiff seeking the same relief in two proceedings". Particular reliance was placed on McHenry v Lewis[2], Henry v Henry[3] and Moore v Inglis[4].

[14] Baycrown on the other hand contended that the present application was a discrete proceeding from the application to the High Court for special leave to appeal, seeking relief pursuant to r 668 of the UCPR to which the High Court did not have resort. Further, it was said that the tests applicable to the two applications are different. It was submitted that prima facie, the application ought to be brought before the trial judge and that, if the application had not been brought, the High Court may have inquired, on the hearing of the special leave application, why no application had been made to the trial court for reopening of the decision on the basis of the "newly" emerged facts. Baycrown emphasized that the present application raised the matter of the evidence of collaboration of witnesses, which is not raised in the special leave application. The effect of granting a stay, it was argued, would be to bar the defendant from pursuing one of two independent forms of relief available in different jurisdictions.

[15] It is apparent that the issues raised in Baycrown's present application, insofar as they relate to the discovery of the authority from Norfolk, the issue of whether IVI was the "true plaintiff" and the bringing of the specific performance application, are squarely raised in the special leave application. They centre on the doctrine of the undisclosed principal; the issues of whether an undisclosed principal is a party to the contract made on its behalf or whether it merely has a right to intervene, and whether the agent of an undisclosed principal is a nominal plaintiff only.

[16] The basis of Baycrown's contentions, both in the present application and the special leave application, is that the contract entered into by IVI on behalf of Norfolk, as the undisclosed principal, was that of the principal. This contention was premised on the view expressed in Keighley Maxsted & Co v Durant[5] (also relied upon in the special leave application) that the contract entered into by the agent is in truth that of the undisclosed principal. It is a view that has been subject to criticism[6], whereas the alternative view, that the contract is that of the agent, but that the undisclosed principal has a right to intervene, is well accepted.[7] Baycrown's contentions are also based on the decision of Abu Dhabi National Tanker Co v Product Star Shipping Co.[8] It was there ordered that proceedings brought by an agent on a contract be stayed, until documents in its principal's possession were disclosed, it being held that the agent was merely a nominal plaintiff with no interest in the proceedings, the real plaintiff being the principal. The decision of Wills & Co v Baddeley[9], on which it was based, concerned an action brought by an agent for a disclosed principal and thus held to be a nominal plaintiff with no interest in the contract. Insofar as the view was expressed in Abu Dhabi that the agent of an undisclosed principal is a nominal plaintiff with no interest in the contract, it has been doubted.[10] These decisions are also specifically raised in the special leave application.[11]

[17] In my view the extensive overlap between the special leave application and the present application, insofar as it concerns the issue relating to the non disclosure at trial of the existence of undisclosed principal, favours the grant of a stay of the application insofar as it relates to that ground and the ancillary ground relating to the institution of the specific performance application. In that regard, I accept IVI's submissions that it is an abuse of process to commence the present proceeding when a proceeding is already pending in relation to those issues and in circumstances where similar relief is sought.

Stay of Baycrown's application insofar as it relates to the grounds going to the fresh evidence of the existence of the undisclosed principal and the institution of the specific performance proceedings

[18] However, in my view, Baycrown's application, insofar as it relates to the issues of the undisclosed principal, r 18 UCPR and the bringing of the specific performance proceedings, also fails on the alternate arguments put forward by IVI. I accept IVI's submissions that the lack of merit in Baycrown's application reinforces the conclusion that it ought to be stayed insofar as it rests on the "fresh evidence" concerning the authority from IVI and the institution of the specific performance proceedings. Even if it were found in Baycrown's favour that there was an obligation on IVI to disclose the authority from Norfolk and, by virtue of r 18 UCPR, to specify that the within proceedings were brought in a representative capacity, it does not appear to me that the "fresh evidence" relied on can be sufficient to warrant the orders sought under r 668.

[19] In addition, the failure by Baycrown to raise the "fresh evidence" before the Court of Appeal and to offer a satisfactory explanation for that failure is a significant matter that weighs against the exercise of the discretion in its favour.

[20] Rule 668 of the UCPR, which is based on Order 45 r 1 of the Rules of the Supreme Court, is peculiar to Queensland.[12] It is in the following terms:

(a) facts arise after an order is made entitling the person against whom the order is made to be relieved from it; or

(b) facts are discovered after an order is made that, if discovered in time, would have entitled the person against whom the order is made to an order or decision in the person's favour or to a different order.

(2) On application by the person mentioned in sub-rule (1), the court may stay enforcement of the order against the person or give other appropriate relief.

(3) Without limiting sub-rule (2), the court may do one or more of the following -

(a) direct the proceedings to be taken, and the questions or issue of fact to be tried or decided, and the inquiries to be made, as the court considers just;

(c) make an order directing entry of satisfaction of the judgment to be made."

[21] While it is appropriate to apply an expansive notion of "entitlement" for the purposes of r 668[13], I nevertheless accept the submissions made on behalf of IVI that the principles which have been developed over the centuries to cater for the different categories of cases in which a final order may be set aside remain relevant for the purposes of the discretion under r 668 and that the distinction recognised in the authorities between what is needed to be shown in an "ordinary case of fresh evidence" as opposed to one based on malpractice or fraud also remains pertinent.

[22] This is consistent with the approach taken by Thomas J (as he then was) in Breen v Lambert[14] in respect to O 45 r 1. His Honour thus considered in relation to that rule that it remained a relevant consideration that "no reasonable diligence" on the part of the applicant would have enabled the fresh evidence relied on by it to have been procured.[15] His Honour approached the exercise of the discretion[16], having regard to the principles that influence courts of appeal in deciding whether or not to interfere with a judgment, when it was alleged that relevant evidence existed which was available but not discovered before trial. His Honour referred to authority where the test applied was whether the evidence if given at trial "would probably have an important influence on the result of the case, although it need not be decisive".[17] However, in Commonwealth Bank of Australia Ltd v Quade[18], a more stringent rule was stated as to the circumstances in which an appellate court is justified in setting aside a judgment in an ordinary case of fresh evidence.[19] The High Court there held that the decisions in Orr v Holmes[20] and Wollongong Corporation v Cowan[21] established that what is required to be shown is that "it is reasonably clear that the fresh evidence would have produced an opposite verdict".

[23] Where the unavailability of evidence results from malpractice or misconduct on the part of a successful party, a different position is taken as discussed in Commonwealth Bank of Australia Ltd v Quade.[22] In such a case, it is not necessary to show that it is "reasonably clear" that an opposite result would have been produced, although "if it does not appear that there is at least a real possibility that that would have been so", the judgment will generally not be set aside.

[24] The authorities demonstrate that fraud cases stand on a different footing to other fresh evidence cases.[23] A judgment may be set aside on the ground that it is tainted by fraud, even though the evidence of the fraud is not such as to be probably conclusive of the issues at trial.[24] The court's conclusion that the judgment was obtained by fraud is sufficient to justify setting it aside.[25] However, it has been said that, other than in exceptional cases, perjury alone will not ordinarily be a sufficient ground for the setting aside of a judgment.[26] There is an evidential onus on the party seeking to impugn a judgment on the basis of fraud to demonstrate fresh evidence which raises a reasonable probability of the fraud alleged being established. A failure to discharge that onus will result in the application to set aside the judgment being struck out or stayed as an abuse of process. [27]

The grounds raising the evidence of the undisclosed principal and the specific performance proceedings

[25] I accept the force in IVI's contention that it is far from clear that the existence of Norfolk as principal could not have been discovered by Baycrown by the use of reasonable diligence. In any event, there was evidence given at the trial of the involvement of "QM" or a "QM associated company" (although not specifically Norfolk) and of Mr Russell, a director of Norfolk and QM Properties. Baycrown stated that Norfolk was a company in the Queensland Properties Group[28], which appears to be a reference to QM Properties. Contrary to Baycrown's contention that "the indication was always that IVI was the purchaser", the evidence called by Baycrown itself revealed that Mr Gahan was aware that, if IVI concluded a contract, it would nominate "QM or some QM company as the purchaser under the contract". There was also evidence that, at the conclusion of the meeting on 22 October 2002, Mr Moss told Mr Van Asperen that "he also had to discuss [the proposed contract] with QM Properties" and Mr Martinez gave evidence as to a "joint venture agreement" between IVI and "QM or some QM associated company". His evidence was that the "basic term" of the agreement was that "the property would be acquired in IVI's name and the purchaser would be IVI or nominee, the intention being that one of the QM companies would be the nominee of IVI".

[26] But even if it is accepted that the existence of the undisclosed principal was not discoverable by reasonable diligence, it is difficult to see how that fact, if adduced at trial, would have "entitled" Baycrown to an order or decision in its favour or to a different order.

[27] In this regard, I consider that the non disclosure of Norfolk's authority to IVI ought not to be approached as one involving "malpractice" or "misconduct" on the part of IVI. I form that view given the lack of direct authority on the application of r 18 UCPR in a case such as the present and the support for IVI's position. IVI's contentions as to its obligations of disclosure find support in the view expressed in Bowstead & Reynolds on Agency[29] that, generally "the contract being that of the agent, he is under no duty when suing or sued to disclose the existence of his principal", such an agent being personally liable and entitled.[30] They are also supported by authority that a party is not entitled to interrogate another party for the purpose of ascertaining whether the other is acting for an undisclosed principal.[31] In addition, there is authority that, while the agent of an undisclosed principal is liable to account to the principal in respect of a successful claim, such an agent, in suing on the contract, does not do so as trustee for the principal.[32] The matter is thus to be approached having regard to the principles applying in an ordinary case of fresh evidence.

[28] What Baycrown in fact contended was that, had the fact of the existence of the undisclosed principal been known, it would have "explored" certain issues as between Baycrown and Norfolk. These issues of further "exploration" concern whether the revocation was effectively communicated to or so as to bind Norfolk and are premised on the view that Norfolk is the true purchaser and party to the contract. A difficulty confronting Baycrown, as to the relevance of the matters of further exploration, is how, given that the offer was made to IVI, a revocation of the offer communicated to Norfolk could have been effective to withdraw it. That however is a matter which touches on the issues raised in the special leave application. But in any event, an examination of each of the matters of further exploration reveals that they are either of no, or of only highly speculative value in respect of the critical issue of the effectiveness of the revocation of the offer.

[29] As to the first matter that it is said Baycrown would have explored, that is, whether Cleary Hoare advised Norfolk of the revocation email before the acceptance of the offer on 24 October 2002, the evidence at trial clearly excluded that event as a possibility. The evidence was that neither Mr Martinez, nor anyone else from Cleary Hoare, opened the revocation email until 25 October 2002, the day after the acceptance of the offer.

[30] The second matter that it is said could have been explored was whether Cleary Hoare, as the solicitors for Norfolk or otherwise, had authority to receive the email withdrawing the offer so as to bind Norfolk. Given that Baycrown contended that it did not know of Norfolk's existence, it could hardly allege a holding out by Norfolk as to Cleary Hoare's ostensible authority to receive the revocation email. The "exploration" could only have concerned Cleary Hoare's actual authority. However, there is no evidence to suggest even a real likelihood that Cleary Hoare had instructions of any type from Norfolk or indeed QM Properties or any QM Properties related company in respect of the contract, let alone actual authority to receive the revocation email.

[31] The evidence at trial was that on 23 October 2002 the "position of the lawyers" was discussed by "IVI and QM" and that "QM's attitude", with which IVI agreed, was "that IVI should use QM's solicitors". Quinn & Scattini were mentioned in that regard. Mr Martinez' evidence was that he told Mr Moss "that QM were calling the shots" and "would most likely be referring matters to their own solicitors" which "meant that they would be appointing their own solicitors to act for the purchaser". Mr Martinez was notified on 24 October 2002 that "QM's solicitors" had been appointed to act for the purchaser in the transaction. IVI's letter of acceptance of 24 October 2002 specified that Cleary Hoare were not acting for the purchaser and that Quinn & Scattini had been appointed to act for the purchaser. Baycrown's reliance on evidence that Mr Russell gave instructions to Quinn & Scattini is thus beside the point. It is not the instructions given to and authority of Quinn & Scattini that are in issue, but those of Cleary Hoare. Baycrown also emphasised evidence that Mr Russell was in communication with and attended meetings with Messrs Moss, Gahan, Martinez and others before the contract was concluded. That evidence largely concerned meetings about the joint venture and does not in my view advance the matter of Cleary Hoare's authority.

[32] The third matter that it is said could have been explored had Baycrown been aware at trial of the existence of the undisclosed principal was whether Mr Gahan had informed a representative of Norfolk that Mr Van Asperen had withdrawn the offer. There was evidence that, on 24 October at 11.21 pm, that is, after the offer was accepted, Mr Gahan faxed a letter addressed to Mr Moss in which he stated that Mr Van Asperen had told him that "he had withdrawn the offer via an email". That fax was sent to Mr Moss c/o QM Properties' offices and it appears that Mr Russell phoned Mr Moss about it on 25 October 2002. However, if Mr Gahan, as Baycrown's agent, had informed Norfolk of the purported revocation, then it can hardly be contended that Norfolk's existence was a fact that was not known to Baycrown, nor one that could have been discovered with reasonable diligence. In any event, no evidence was adduced by Baycrown in support of its application as to whether it had approached Mr Gahan or as to what, if any, communication he had had with Mr Russell or anyone else from Norfolk about the purported revocation of the offer. What, if anything, Mr Gahan might say about the matter is entirely speculative.

[33] Finally, I cannot see how the commencement of the specific performance proceedings assists Baycrown and entitles it to be relieved of the order made. There is authority that an agent for an undisclosed principal is entitled to sue for specific performance[33], although the intervention of the undisclosed principal ordinarily puts an end to the agent's right of action.[34] The lack of merit in this ground also supports the grant of the stay.

The ground raising new evidence that witnesses collaborated as to their evidence

[34] As mentioned, Baycrown also relied on evidence said to be evidence of collaboration as a further ground for the setting aside of the judgment. That ground is not raised in the special leave application.

[35] The evidence said to show collaboration consisted of various entries in the Cost Statement filed on 14 February 2005 by Quinn & Scattini, who acted as IVI's solicitors at the trial and a Summary of Costs document of Cleary Hoare of October 2002, both of which were exhibited to an affidavit of Mr Van Asperen. Baycrown contended that entries in those documents indicated there was pre-trial communication and collaboration between the witnesses Mr Moss and Mr Gahan with respect to what those witnesses' versions would be. It was also contended that there was pre-trial communication between Mr Moss and Mr Martinez as to the evidence to be given at trial, or at least that Mr Moss' evidence was given against the background of having been provided with a draft of Mr Martinez' statement.

[36] The entries in Quinn & Scattini's Costs Statement indicated that on 21 July 2004 Quinn & Scattini interviewed Mr Gahan and compiled a draft statement. On that day, they also attended on Mr Martinez and other potential witnesses for the purposes of obtaining statements. It appears that on 22 July 2004, Mr Moss' draft statement was compiled and forwarded to him for "amendment, execution and return" and that he was also then provided with an extract from the drafts of Mr Gahan and Mr Martinez. A further entry indicates that, also on that day, the solicitors sent Mr Gahan his statement for "amendment/approval, execution and return". An entry for 27 July 2004 indicates that the solicitors received an email from Mr Moss "attaching suggested corrections" to Mr Gahan's statement, "commenting on other statements provided" and advising he would forward his statement. On 30 July 2004, Mr Moss was emailed "finalised statements" as requested that day. Also on that day, Mr Gahan emailed the solicitors advising that he had executed his statement and that it would be sent to them, which it was. On 2 August 2004, the solicitors emailed Mr Moss an amended statement of Mr Martinez and requested "amendment/approval" of Mr Moss' statement. On 3 August 2004, the solicitors emailed Mr Martinez a "further amended statement, incorporating suggested changes, requesting execution and return". Prior to trial, the witness statements were sent Mr Russell.

[37] Baycrown contended that the new evidence so affected the credibility of Mr Moss and Mr Gahan that, had it been available at trial, the finding that the withdrawal of the offer was not communicated to Mr Moss by Mr Gahan prior to its acceptance would not have been made. As mentioned, the finding at trial was that it was likely that Mr Van Asperen did inform Mr Gahan that he had withdrawn the offer. The critical question however was whether Mr Gahan communicated the withdrawal to Mr Moss.

[38] In support of its contention that the outcome on that issue would have been different if the fresh evidence had been known at trial, Baycrown pointed to the discrepancy between Mr Gahan's oral evidence and other documentary evidence. The oral evidence of Mr Gahan and Mr Moss was that Mr Gahan told Mr Moss that "he thought the vendor wanted to withdraw" or was "thinking about pulling out of the contract". The documentary evidence on which Baycrown placed emphasis concerned a fax from Mr Gahan to Mr Moss sent on 24 October 2002 at 11.30 pm, after the offer was accepted, in which Mr Gahan stated that Mr Van Asperen had told him that he had "withdrawn the offer" and an affidavit sworn by Mr Gahan on 7 November 2002, on behalf of IVI, in caveat proceedings, in similar terms. However, while those documents indicated what Mr Gahan had been told by Mr Van Asperen, they did not disclose what Mr Gahan then told Mr Moss in their conversation on 24 October 2002. In any event, both the fax and the affidavit were known to Baycrown before Mr Gahan gave evidence, but Baycrown did not direct Mr Gahan to the statement in either document that Mr Van Asperen had withdrawn the offer and the evidence Mr Gahan gave as to his conversation with Mr Moss was in accordance with senior counsel's opening of his evidence.

[39] Baycrown submitted that it ought to be inferred that the corrections made by Mr Moss related to the conversation on 24 October 2002 and that the variation between the written evidence and Mr Gahan's evidence at trial was only explainable in terms of collusion. Mr Gahan, however, had a strong motive for not immediately disclosing to Mr Moss that the offer had in fact been withdrawn, in the form of a $250,000 commission that he stood to receive if the contract proceeded.

[40] Moreover, while the evidence relied upon as showing collaboration between Mr Moss and Mr Gahan indicates that Mr Moss saw Mr Gahan's statement and made corrections to it, there is no evidence that Mr Gahan saw Mr Moss' statement, nor that the statement ultimately provided by Mr Gahan to Quinn & Scattini incorporated the corrections made by Mr Moss (there is no entry in the Costs Statement indicating that an amended statement was sent to Mr Gahan). There is no actual evidence that any corrections made by Mr Moss were adopted by Mr Gahan. There was no evidence from Mr Gahan in support of the application as to whether he was approached by anyone on behalf of IVI to vary the statement he gave to Quinn & Scattini or to adopt corrections to it.

[41] Baycrown contended that the corrections referred to as having been made by Mr Moss in the Costs Statement could only have related to the conversation between Mr Gahan and Mr Moss about Mr Van Asperen's revocation of the offer, that being the only topic of importance which was common to them. But there were other significant topics common to them in respect of which Mr Gahan's evidence varied from or did not support that of Mr Moss, for example, as to whether Mr Moss communicated an acceptance of Baycrown's offer to Mr Gahan (an allegation that was ultimately abandoned by IVI) and as to whether Mr Moss told Mr Gahan about IVI's change of solicitors. Furthermore, it was submitted on behalf of IVI, that there is no reason to suppose that corrections made by Mr Moss to Mr Gahan's statement in July 2004 might have related to the critical conversation between them on 24 October 2002. It was contended that that conversation did not become an issue in the case until the second day of the trial, 19 August 2004, when Baycrown's pleading was amended to plead the oral revocation. There is some force in that submission. What was in issue on the pleadings prior to the amendment that concerned Mr Moss and Mr Gahan was the allegation that Mr Moss had communicated an oral acceptance to Mr Gahan so as to bind Baycrown.

[42] Insofar as Baycrown's application to set aside the judgment was based on evidence of collaboration, it is of significance that it was put forward solely as a case of fresh evidence. Although, in oral submissions, it was contended that the evidence relied on "suggested" that Mr Gahan was suborned and pointed to "the prospect" of perjury[35], senior counsel expressly stated that no allegation of fraud was made.[36] In effect, Baycrown sought to insinuate a case of perjury and subornation, while apparently accepting an insufficient basis to allege such fraud. It is clear that it was quite improper for Mr Moss to have been provided with statements of other potential witnesses and that the matters raised by Baycrown do impact on Mr Moss' credibility. How they impact on the evidence given by Mr Gahan cannot be gauged without a significant degree of speculation.

[43] As regards the fresh evidence concerning Mr Moss and Mr Martinez, reliance was placed by Baycrown on the Cleary Hoare costs document which indicated that Mr Martinez received a call on 31 October 2002 from Mr Moss during which there was a discussion about the contents of an affidavit. It is not stated in the document what affidavit is being referred to. Mr Martinez provided an affidavit on 29 October 2002 in respect of caveat proceedings and Baycrown submitted that it could be inferred that Mr Martinez and Mr Moss discussed the contents of Mr Martinez's affidavit before Mr Moss swore his own affidavit in those proceedings. It was also said that the same occurred in respect of the evidence at the trial. Baycrown referred to the entries already mentioned in the Quinn & Scattini Costs Statement, indicating that in July 2004 Mr Moss was sent an extract of Mr Martinez' draft statement. Counsel for Baycrown could not indicate with any specificity what issue at trial this aspect of the fresh evidence relied upon was relevant to and the thrust of the submissions was that it impacted on Mr Moss' general credibility.

[44] In the circumstances of the present case, I am unable to conclude that the fresh evidence said to amount to collaboration forms a sufficient basis for setting aside the judgment. In my view, it is not reasonably clear that, had the fresh evidence been available at trial, a different result would have eventuated. The possibility of an injustice is an insufficient basis for setting aside a judgment, particularly when the evidence now relied upon could have been raised before the Court of Appeal. On behalf of Baycrown, much reliance was placed on Day v Perisher Blue Pty Ltd.[37] However, that was not a case where a judgment was sought to be set aside, but where an appeal was allowed because the trial judge failed to deal with evidence of a significant attack on the credibility of witnesses engaged in conferencing. As I have already stated, more stringent considerations arising out of the need for finality of litigation apply where a judgment is sought to be set aside on the basis of fresh evidence.

[45] While it is most concerning and highly inappropriate that statements of potential witnesses were provided to Mr Moss, I nevertheless consider that the application insofar as it is based on the ground of fresh evidence said to amount to collaboration should be dismissed.

[46] In the circumstances, I order that Baycrown's application be dismissed, except insofar as it concerns the grounds relating to r 18 UCPR and the institution of the specific performance proceedings in respect of which the application is stayed.

[1] Baycrown's solicitors were aware of the authority given by Norfolk to IVI, when in March 2005 the specific performance proceedings were commenced, and were also aware of the evidence now relied on as fresh evidence of collaboration, when in February 2005 a Costs Statement was filed by IVI's then solicitors, Quinn & Scattini.

[2] (1882) 22 Ch D 397 at 399.

[3] [1996] HCA 51; (1996) 185 CLR 571 at 591.

[4] (1976) 50 ALJR 589.

[5] [1901] AC 240 at 261.

[6] See Goodhart and Hamsom, Undisclosed Principals in Contract (1932) 4 Cam LJ 320.

[7] Siu v Eastern Insurance Co Ltd [1994] 2 AC 199 at 207; Welsh Development Agency v Export Finance Co Ltd [1992] BCLC 148 at 173, 182; CC (New South Wales) Pty Ltd v FCT (1997) 97 ATC 4,123 at 4,139. See also Bowstead & Reynolds on Agency (17th ed.), para 8-071; Chitty on Contracts (29th ed.) para 31-061.

[8] [1992] 2 All ER 20.

[9] [1892] 2 QB 324.

[10] See Bowstead & Reynolds on Agency (17th ed.) para 9-010.

[11] Applicant's Summary of Argument, paras 33 -35.

[12] KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 Qd R 13 at 20.

[13] See Rankin v Agen Biomedical Ltd [1998] QCA 282; [1999] 2 Qd R 435 at 437, adopting the dicta in KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 Qd R 13 at 20 as to O 45 r 1.

[14] Unreported, Thomas J, SC No 4547 of 1988, 16 August 1991.

[15] Breen v Lambert, unreported, Thomas J, SC No 4547 of 1988, 16 August 1991, at 22. See also Commonwealth Bank of Australia Ltd v Quade (1991) 178 CLR 134 at 141.

[16] Unreported, Thomas J, SC No 4547 of 1988, 16 August 1991 at 24, referring to Fredericks v May (1973) 47 ALJR 362 at 368 and Clarke v Japan Machines Australia Pty Ltd (1984) 1 Qd R 404 at 408.

[17] See Clarke v Japan Machines Australia Pty Ltd [1984] 1 Qd R 404 at 408, following Langdale v Danby [1982] 3 All ER 129 at 137, 138.

[18] (1991) 178 CLR 134 at 141. In McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529 at 532, 533, Barwick CJ expressed the test as being that when the fresh evidence is "taken with the evidence already given at the trial, it will in all probability be decisive of the issues between the parties in a sense opposite to that of the verdict".

[19] See the observation in Fredericks v May (1973) 47 ALJR 362 at 368.

[20] [1948] HCA 16; (1948) 76 CLR 632 at 640, 641.

[21] [1955] HCA 16; (1954) 93 CLR 435 at 444.

[23] Johns v Cosgrove [2002] QCA 157; [2002] 1 Qd R 57 at 93.

[24] McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529 per Barwick CJ at 532, 533.

[25] Jonesco v. Beard [1930] AC 298; Hip Foong Hong v H Heotia & Co [1918] UKPC 65; [1918] AC 888.

[26] Cabassi v Vila [1940] HCA 41; (1940) 64 CLR 130 at 147,148; Flower v Lloyd (1878) 10 Ch D 327; Baker v Wadsworth (1898) 67 LJQB 301;; McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529 at 544; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 539.

[27] Birch v Birch [1902] P 130 at 135, 136; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538, 539; Boughen v Abel [1987] 1 Qd R 138 at 139, 146.

[28] See Baycrown's Summary of Argument in support of the special leave application, para 9.

[30] Bowstead & Reynolds on Agency (17th ed.) para 9-012.

[31] Sebright v Hanbury [1916] 2 Ch 245; see Herson v Bernett [1955] 1 QB 98.

[32] Bowstead & Reynolds on Agency (17th ed.) para 9-013. See also Allen v F O'Hearn & Co [1937] AC 213 at 218.

[33] See Bowstead & Reynolds on Agency (17th ed.) para 9-013.

[34] See Chitty on Contracts (29th ed.) para 31-087.

[37] [2005] NSWCA 110.