Bishop v Taylor [1968] HCA 68; (1968) 118 CLR 518; Foody v Horewood [2007] VSCA 130, discussed.

Mr M Wise KC with Mr B Petrie for the first and second respondents

No appearances for the third and fourth respondents

Department of Energy, Environment and Climate Action for the fourth respondent

1. On 3 October 2018, Dr Jill Bell and Dr Roger Bell (the 'Bells') entered into a contract to purchase an apartment from Knight 34 Langdon Road Pty Ltd ('Knight'), a company now controlled by Ms Rosie Wolman.[1] Some four and half years later, the contract remains unperformed. On 26 August 2022, an associate justice of this Court made orders for specific performance of the contract of sale. The orders were later stayed by consent pending the outcome of this application for leave to appeal.
2. The question before this Court is whether the applicants (Knight and Ms Wolman) ought to be permitted to adduce further evidence as the basis for setting aside the orders of the judge. The further evidence is said to show that the Bells were not ready, willing and able to perform their obligations under the contract of sale at the date of the hearing before the judge on 19 July 2022.
3. There was little or no merit in the application. Following the hearing of the application for leave to appeal, the Court stated its view that the application for leave to appeal should be dismissed. The parties then agreed on a form of order, which the Court made on 16 February 2023. The application for leave to adduce the further evidence was dismissed and the application for leave to appeal was refused. These are our reasons for making those orders.

1. The apartment in issue was one of two apartments constructed on a single block of land (the 'Bell apartment').[2] Knight was the special purpose vehicle for the development of the two dwellings on the land, being the agent of two joint venturers, Ms Wolman and Ronan Kavallero.[3] Ms Wolman was to receive the other apartment (the 'Wolman apartment') under the joint venture agreement. On 3 October 2018, Knight and the Bells entered into an off-the-plan contract of sale in relation to the Bell apartment.
2. During late 2018 and 2019, several variations to the layout and finishes of the Bell apartment were agreed and paid for by the Bells.[4] By late 2020, the apartment was largely complete. However, the Bells considered that they had not agreed to some of the variations that had been made, and alleged that there were defects in the construction of the apartment.[5] On 27 November 2020, the Bells instituted a proceeding against Knight and Mr Kavallero for breach of the contract of sale.[6] On 16 December 2020, Ms Wolman lodged a caveat over the property (the 'first Wolman caveat'), which she later admitted had no basis.
3. On 16 April 2021, the Bells, Knight and the other parties to the proceeding at that stage (which did not include Ms Wolman, who had not then been joined)[7] entered into a settlement agreement.[8] That agreement provided for the rectification of certain defects, completion of the contract of sale, and mutual releases. It provided a new date for settlement in the following terms:

Provided that Mr Lawrence and Mr Blumenthal are satisfied that all Remaining Defects have been rectified to their satisfaction, and provided further that the Defendants have otherwise complied with each and every term of paragraph 2 of this Deed, the Bells will thereafter promptly settle the Property within 14 days or as soon after as is reasonably practicable ...[9]

1. The total payable by the Bells to Knight at settlement is $3,528,000 (inclusive of a $350,000 deposit held as funds in Court and transferred to the National Australia Bank Ltd ('NAB')).[10]
2. In July 2021, Ms Wolman took control of Knight, appointing herself sole director.
3. In the period between May 2021 and September 2021, the Bells attempted to complete settlement, in accordance with the settlement agreement, on at least 12 separate occasions. On each occasion that the Bells attempted settlement, they tendered the full purchase price and the Bells' financier, Westpac Bank ('Westpac'), prepared a new mortgage to be registered over the title of the Bell apartment. However, since Ms Wolman took control of Knight, it has not completed the settlement and has not authorised the transfer of the title of the Bell apartment to the Bells.
4. On 4 May 2022, the Bells sought summary enforcement of the deed of settlement, including orders for specific performance of the contract of sale. The application was heard on 19 July 2022. On 26 August 2022, the judge made the orders sought by the Bells, and granted liberty to apply. Order 3 required the parties to do all things necessary to settle the contract of sale - including payment of the purchase price - within 21 days (ie by 16 September 2022) ('order 3').
5. On 12 September 2022, the Bells applied to vary order 3 to extend the time by which settlement of the contract of sale was to occur, from 16 September to 3 October 2022. In support of that application, their solicitor, Stephen Hume, swore an affidavit on 14 September 2022 (the 'First Hume affidavit'). Mr Hume relevantly deposed that Dr Bell had two options available to him to obtain funding for settlement:

(a) funding from Westpac, in circumstances where Westpac was 'in the process of finalising its internal arrangements for finance to fund completion of the contract of sale', which was expected to be completed by 3 October 2022; and > > (b) alternatively, funds in a term deposit with Westpac plus additional finance from an identified close friend, which Mr Hume deposed Dr Bell 'had access to', 'had made arrangements for', and which were 'in the process of being transferred' to the Bells' solicitors' trust account.

6. Mr Hume said that Dr Bell had 'a strong preference to fund completion of the contract of sale utilising the loan facilities from Westpac', and that he was 'extremely reluctant' to put his friend 'to the substantial inconvenience of providing private funding on an unsecured basis to assist in completing the contract of sale in circumstances where Westpac's funding is expected to be provided by 3 October 2022'.
7. The First Hume affidavit is part of the further evidence on which the applicants seek to rely, and is set out in greater detail below.
8. The applicants opposed the Bells' application to vary order 3. They contended that the Bells' application for an extension of time to settle and the terms of the First Hume affidavit indicated that the Bells 'may not have been ready, willing and able to settle on the date on which the application for specific performance was heard', namely 19 July 2022.
9. On 15 September 2022, the judge varied order 3 so as to extend the time for settlement of the contract of sale to 23 September 2022. However, on the application of the applicants, her Honour stayed the operation of order 3 until 22 September 2022, to allow time for them to seek leave to appeal. On 20 September 2022, she made further orders extending the time for settlement to 6 October 2022 and staying order 3 until 3 October 2022.[11]
10. Notwithstanding their request for an extension of time in which to complete the purchase, the Bells proffered the purchase price on 16 September 2022 by loading the funds into the PEXA Workspace, and were ready to complete the contract of sale in accordance with the original orders of 26 August 2022. The Bells' solicitor wrote to Knight's solicitors to propose that settlement proceed, notwithstanding the stay of order 3. Knight rejected this proposal and settlement did not occur. Further affidavits were then sworn by the parties' solicitors, referring to correspondence passing between the parties.
11. It is necessary to set out some further detail concerning the factual background to the application for leave to appeal. In regard to the nature of the joint venture and development of the Bell and Wolman apartments, the parties agreed the following facts:

The Joint Venture Agreement

1. On 20 September 2016, the Second Applicant (Ms Wolman) and Mr Ronan Kavallero as her joint venture partner, entered into a joint venture agreement (JVA) for the development of two properties:

(a) unit 1, 34 Langdon Road, Caulfield (Bell Apartment);

(b) unit 2, 34 Langdon Road, Caulfield (Wolman Apartment).

2. Under the terms of the JVA:

(a) Ms Wolman and Mr Kavallero are described as the 'Joint Venturers';

(b) the First Applicant (Knight 34) is the agent of the Joint Venturers;

(c) Ms Wolman was to make certain capital contributions; and

(d) at the conclusion of the development project and after the subdivision of the property, Ms Wolman is to receive the Wolman Apartment.

The parties varied the JVA on 16 August 2018 pursuant to which Ms Wolman agreed to bring forward certain payments under the JVA. The joint venture parties also agreed upon a minimum sale price for the Bell Apartment of $3.25m.

NAB's financing of the property development

1. The development of the Bell Apartment and the Wolman Apartment was partly funded by a loan given by National Australia Bank Ltd (NAB) to Knight 34, which was initially secured by a single mortgage (NAB Mortgage) registered over the undivided property.
2. The property was subdivided into the Bell Apartment and the Wolman Apartment. The NAB Mortgage was consequently registered against the title for each of the Bell Apartment and the Wolman Apartment.
3. The balance owing to NAB under the NAB Mortgage at the time of judgment at first instance was in excess of $4.3M (NAB Debt).

1. On 26 August 2022, the judge made orders effecting the enforcement of the settlement agreement. As already noted, order 3 required the parties to do all things necessary to settle the contract of sale - including payment of the purchase price - within 21 days of the orders (ie by 16 September 2022). Her Honour made the following relevant findings:

(a) there was no dispute that the Bells were ready, willing and able to complete the purchase of the apartment at all relevant times and that the 12 separate attempts to settle had failed because of Ms Wolman's caveat, and because the applicants had financially linked settlement of the Bell Apartment with the Wolman Apartment;[12] > > (b) the practical reality was that settlement could not occur unless the applicants reached agreement with NAB or accepted that the mortgage registered with NAB over the Wolman Apartment would have to remain in place to secure the outstanding balance of the NAB loan facility;[13] > > (c) it was reasonable for the Bells to conclude that continuing to attempt to effect settlement through conventional means 'would be a waste of time and money';[14] > > (d) the Bells were ready, willing and able to complete their obligations under the settlement agreement and 'no suggestion was made to the contrary';[15] > > (e) the only executory obligations of the parties under the settlement agreement is the transfer of the Bell Apartment and the payment of the purchase price;[16] and > > (f) no further evidence was required for the judge to draw the conclusions she did in support of the enforcement of the settlement agreement. In making this finding, her Honour said she had the benefit of 'fully developed pleadings, voluminous evidence, and comprehensive and considered submissions'.[17]

2. Her Honour later made orders on 15 September 2022 varying order 3, and staying the operation of her orders pending any further application for a stay and/or an application for leave to appeal. She made further orders to the same effect on 20 September 2022. On that day, her Honour observed as follows:

In order to find that there was no arguable ground of appeal, I'd need to be satisfied that any application to adduce fresh evidence would be doomed to failure, or that as matters stand, I would not have departed from my view that the plaintiffs were ready, willing and able to complete their obligations under the settlement agreement. I am not so satisfied in the absence of any evidence regarding the plaintiff's position at the relevant time, being around the time of the hearing of the application. Even accepting the approach or consistently what I might ... describe as a pragmatic approach which is taken by the authorities in that regard - I will leave the rest to my written reasons ...

1. The applicants' sole basis for seeking leave to appeal the judge's orders and the costs orders[18] is the discovery of what they characterise as 'fresh evidence', as disclosed in two affidavits:

(a) the First Hume affidavit; and > > (b) an affidavit sworn by David Welner dated 19 September 2022 (the 'Welner affidavit').

The applicants seek leave to adduce this 'fresh evidence' in support of their application pursuant to r 64.13 of the Supreme Court (General Civil Procedure) Rules 2015.

1. As mentioned earlier, the First Hume affidavit was filed in support of the Bells' application to extend the time for performance of the contract of sale. Mr Hume relevantly deposed as follows:

6. I am informed by Roger Bell and believe that:

(a) He is currently overseas and returns to Australia on 17 September 2022.

(b) He has two options to fund completion of the sale of the Property.

Option A

(c) He has arranged for finance from Westpac of $1.7m to fund payment of the balance of the contract price. He also has access to funds held by Westpac on term deposit of approximately $1.9m, which is sufficient to enable him to complete the contract. He had previously entered into unconditional loan documents with Westpac to fund settlement of the property which was attempted in the period from May 2021 to September 2021. (The attempts to settle the contract, with Westpac participating in and loading funds into the PEXA settlement workspace, is outlined in paragraphs 19 to 101 of Roger's affidavit affirmed on 22 April 2022.)

(d) Due to delays by the vendor in settling the contract of sale since May 2021, Westpac has needed to obtain a revaluation of the Property and to re-document the loan facilities (to reflect movements in base interest rates since May 2021). Westpac's valuer was only able to access the Property on Monday 12 September 2022.

(e) Westpac is in the process of finalising its internal arrangements for finance to fund completion of the contract of sale for the Property and expects that it will be in a position to settle the loan facilities and advance funding by 3 October 2022 at the latest.

(f) His strong preference is to fund completion of the contract of sale utilising the loan facilities from Westpac.

Option B

(g) Alternatively, he has funds sitting in a term deposit account with Westpac, which operate as security for commercial loan facilities provided by Westpac to his family trust company, Grain Coast Pty Ltd atf for the Bell Family Trust. Westpac is prepared to release up to $1,728,000 of those funds immediately to assist in funding completion of the contract of sale, subject to receipt of an undertaking from him and Jill Bell that they will provide a mortgage over the Property in favour of Westpac following settlement. They have received and provided to Westpac a copy of that undertaking and Westpac expects to be in a position to release the term deposit funds in the next few days, that is, by 16 September 2022.

(h) In addition, he has access to and has made arrangements for additional finance from a close friend named Michael Lawrence of up to $1,700,000 to fund payment of the balance of the contract price. These funds are in the process of being transferred by Mr Lawrence to K&L Gates' trust account.

(i) With the deposit funds of $350,000 already released to NAB (the mortgagee of the Property), the term deposit funds available in his Westpac account of $1,728,000 and finance from Mr Lawrence of $1,700,000, he has funding to complete the purchase of the Property (and to fund stamp duty on the sale, estimated to be $229,001.00) by Friday 16 September 2022, if required.

(j) He is extremely reluctant to put Mr Lawrence to the substantial inconvenience of providing private funding on an unsecured basis to assist in completing the contract of sale in circumstances where Westpac's funding is expected to be provided by 3 October 2022.

1. In addition, Mr Hume described the Bells' attempts, between 1 and 9 September 2022, to arrange an inspection of the property, which he asserted they were entitled to undertake under the terms of the contract of sale. This included evidence that Westpac had requested an inspection to assess the condition of the property, and that 'Westpac required access to conduct a valuation that was required as part of the Bells' financing arrangements and that this process takes time'. Mr Hume also said that on 9 September 2022 he informed Mr Welner, by email, that 'given the delays in obtaining access to the Property by its valuer, it was probable that Westpac would need a short extension of time beyond 16 September to finalise funding for settlement'.
2. Mr Hume further deposed that, on 11 September 2022, he received a letter from Mr Welner alleging that the Bells were not ready, willing and able to perform the settlement agreement. Mr Hume said that 'for reasons noted in this affidavit, that is not the case'.

1. The Welner affidavit was filed in support of the applicants' application for a stay of the orders made on 15 September 2022 by the judge. In that affidavit, Mr Welner set out some of the background to the proceeding. Relevantly, he exhibited to his affidavit correspondence passing between him and Mr Hume on 16 September. That correspondence included the following:

(a) An email from Mr Hume to Mr Welner at 11:06 am:

As to the suggestions made by you to the Court yesterday (both orally and in written submissions) that Ms Wolman intends to seek a further stay of the orders of 26 August and 15 September in the Practice Court and leave to appeal the judgment of Associate Justice Daly on the basis of:

• so called 'new evidence' that 'the plaintiffs are not able to settle due to a lack of clear funds'; and

• 'misleading representations' made to the Court that they were ready willing and able to settle the property,

we make the following observations:

1. The authorities require that the plaintiff be ready, willing and able to perform its obligations under the contract when performance falls due. This '... does not demand that a purchaser should always have the purchase price in his pocket; all that is necessary is readiness and willingness to perform the contract according to its terms' (Bishop v Taylor [1968] HCA 68; (1968) 118 CLR 518).
2. The settlement agreement requires settlement as soon as reasonably practicable after our clients representatives are satisfied that the Remaining Defects have been rectified and that Knight 34 has otherwise complied with paragraph 2 of the Deed. This only occurred yesterday once your client fixed the pool fence.
3. The timetable for settlement reflected in the Court's orders of 26 August 2022 required settlement by today.
4. Settlement funds are loaded into PEXA by the plaintiffs and our clients are ready, willing and able to settle immediately, ie on the date that performance is required by the original court orders of 26 August 2022 (which were made to give effect to the settlement agreement).

5. Your clients' misplaced allegation that the plaintiffs were not ready willing and able to perform the settlement agreement (at the time that performance falls due under that agreement) is unsupported by any evidence. Our clients have had access to funding which has been drawn down in time to facilitate performance on the date that it is required.

1. Your allegation that the Court was misled by the plaintiffs is fanciful and rejected. We suggest you closely read the pleadings filed in the proceeding, the evidence adduced to the Court by the plaintiffs in the original hearing and the reasons of Her Honour before making irresponsible allegations of that nature.
2. We would also encourage you to review the requirements for leave to appeal, particularly out of time, including the necessity to establish that an appeal has a 'real prospect of success'. In view of the matters raised in our clients submissions yesterday, that test will not be satisfied.

(b) An email from Mr Welner in response, at 11:13 am:

I refer to the following extract:

'We confirm that funds sufficient to settle the sale of the property and pay applicable duty have been transferred to our trust account and have been uploaded as source funds into the PEXA workspace in order to complete settlement of the property. Accordingly, our clients are ready to settle.'

We consider that to be an admission that your client is only ready to settle, as of the date and time of your email - being Friday, 16 September 2022 11:06 AM.

(c) An email from Mr Hume to Mr Welner in response, at 11:24 am, relevantly stating '[i]t is confirmation that our client is ready to settle on the date that performance is due, and no more than that'.

(d) An email from Mr Welner to Mr Hume in response, at 1:50 pm, requesting 'a trust statement showing clear funds for settlement' and that Mr Hume 'verify them as source funds in PEXA in tender of settlement'.

(e) A further email from Mr Welner to Mr Hume, at 2:00 pm, stating '[p]lease also confirm your client had at least a valid conditional approval for settlement finance, on 12 July 2022'.

(f) An email from Mr Hume to Mr Welner in response, at 3:34pm:

The Court has already found that the plaintiffs were at all relevant times ready, willing and able to perform their obligations under the settlement agreement; para [115] of the Reasons. No suggestion to the contrary was made by your client in the matter.

The Court is functus officio on that question and it is not open to your client to try and revisit the Court's judgment, which is presumably the point of your email.

Self-evidently the plaintiffs are ready willing and able to perform the settlement agreement and the contract of sale; the settlement funds of $3,420,000 are loaded in PEXA and our clients are ready to complete.

(g) An email from Mr Welner to Mr Hume in response, at 4:22 pm:

The question was raised because it will assist me in advising my client on any prospects on appeal.

That line of query is raised based on the arguments raised by Mr Petrie yesterday, about your client showing that they were ready, willing and able to settle the Property at all times, and particularly when making the application for specific performance.

If you are able to provide me with confirmation of the requested conditional approval valid at 12 July 2022 which had not been revoked, I would very likely accept that your client had sufficient capacity to settle when filing their submissions.

If not, but your client and Mr Lawrence both had their respective portions of cash similarly available, like this week, that would also likely heavily figure.

However, if you come back to me, as you have below, seeking to avoid such an answer, I will only be able to infer that neither form of capacity was available.

It would only assist your clients, for you to provide me what I have requested above.

1. Mr Welner also deposed that as at the time of swearing his affidavit he had not received from Mr Hume 'the evidence requested by [Mr Welner's] email of Friday 16 September 2022 4:22PM'. We note in passing that Mr Welner's affidavit was sworn on Monday 19 September 2022, so no business days had passed between him sending the email of 4:22 pm and swearing his affidavit on 19 September 2022.[19] He also said that on 16 September 2022, at 2:39 pm, Mr Hume had confirmed 'that the source funds to settle the property were in his firm's trust account, by provision of the requested trust statement, and evidence that such funds were verified in PEXA'.
2. At the hearing of the application for leave to appeal, the applicants also sought leave to rely on an email from Mr Hume to Mr Welner sent at 3:03 pm on 19 September, which was Mr Hume's response to Mr Welner's 4:22 pm email. In that email, Mr Hume said as follows:

I was on a plane and unable to respond to your email by 6pm on Friday.

It is apparent that you are trying to re-open and re-litigate by correspondence an issue that has already been determined by Her Honour Associate Justice Daly in her judgment of 26 August 2022.

Her Honour has already found that the plaintiffs were ready, willing and able to complete the settlement agreement. That finding was made on the basis of the evidence adduced at the hearing and was not challenged by your client. Her Honour's reasoning discloses no error.

The precise composition of our clients funding arrangements is therefore irrelevant. For the record, our clients have always had access to funding, bank and private, and their own term deposit reserves, to fund payment of the purchase price for the property. That is best exemplified by the fact that the purchase price was loaded into PEXA and the plaintiffs were ready willing and able to complete the contract on the date that settlement was required.

All rights are reserved, including to pursue indemnity costs in connection with your clients further application for a stay and any application for leave to appeal.

1. In response to the applicants' application, the Bells sought to rely upon an affidavit of Mr Hume dated 24 October 2022 (the 'Second Hume affidavit'). Mr Hume deposed as follows:

1. Having read the evidence that the Applicants seek to rely on it is my view that that evidence could and would have been met by the [Bells], among other things, adducing responsive evidence to the contrary. That evidence would have included, at least:

(a) evidence of the [Bells'] financial position and capacity to fund settlement of the purchase price at all times from a combination of their own personal cash resources (of up to approximately $1.9m) and from loan funds available from Westpac and / or a friend of theirs, Michael Lawrence), including the matters the subject of my affidavits of 14 and 19 September 2022; > > (b) evidence from David Hodge of Westpac Bank as to the availability at all relevant times of a loan of approximately $1.72m from Westpac, the substance of which is deposed to in an affidavit sworn by him on 21 October 2022, a copy of which is at page 39 of the Exhibit Bundle SPH1; and > > (c) evidence from Michael Lawrence as to his having informed Roger Bell of his readiness at all relevant times to provide a loan of approximately $1.7m, the substance of which is deposed to in an affidavit sworn by him on 7 October 2022, a copy of which is at page 150 of the Exhibit Bundle SPH1.

9. In paragraph 8 of my affidavit of 19 September 2022, I deposed that:

(a) K&L Gates received into its trust account on 16 September 2022 the sum of $3,420,000 on behalf of the Applicants for the purposes of settling the Contract of Sale (and exhibited relevant trust receipts);

(b) those sums were received by K&L Gates from Mr Lawrence (to the extent of $1,700,000) and from Westpac (to the extent of $1,720,000);

(c) on 16 September 2022, the sum of $3,420,000 was loaded by K&L Gates into the PEXA workspace created for the purposes of settling the sale of the Bell Apartment; and

(d) the Bells were ready, willing and able to settle the Contract of Sale on 16 September 2022 in accordance with the orders of AsJ Daly made on 26 August 2022.

1. The Second Hume affidavit referred to an affidavit of Mr Hodge[20] sworn on 21 October 2022 (the 'Hodge affidavit'), in which he deposed that:

10. In April 2022:

(a) I had a further telephone conversation with Roger during which:

(i) He told me he and Jill would be making an application to the Court for orders to enforce the contract of sale and would be proceeding with funding from Westpac to complete the purchase of the Property; and

(ii) I told Roger that Westpac retained a credit appetite to support the funding request for a loan of $1,7000,000, subject to obtaining a further valuation of the Property and normal prudential verification.

(b) Roger subsequently resubmitted financial information to Westpac in relation to the loan.

11. Given:

(a) Westpac had documented a loan facility for $1,700,000 to the Bells on two prior occasions in May 2021 and November 2021; and

(b) there had been no relevant change in the Bells' financial position since then, subject to receipt of a further valuation of the Property disclosing a value broadly consistent with the purchase price of $3,500,000, I continued at all times to support provision by Westpac of a loan of $1,700,000 to the Bells and expected that Westpac would provide a loan to them for that sum.

1. Had an updated valuation of the Property demonstrated that the value of the Property had fallen for any reason, then this would simply have impacted the Loan to Valuation ratio (LVR) at which Westpac was prepared to lend funds (that is Westpac would have provided the loan at a higher LVR). However, a change in valuation of the Property would not have impacted Westpac's credit appetite to provide the funding.

13. On 27 August 2022, I received an email from Roger in which he:

(a) notified me that he had been successful in the litigation and that settlement could proceed; and

(b) requested that ... their loan be in order in time for settlement (which the attached orders specified as Friday 16 September 2022).

1. I then arranged for a further valuation of the Property to be obtained. Final loan documentation was not able to be prepared, issued or executed by 15 September 2022.
2. On 15 September 2022, the day before settlement of the contract of sale, Westpac provided an overdraft facility of $1,720,000 to Roger's family trust company, Grancoast Pty Ltd to enable the Bells to complete the purchase of the Property. The overdraft facility was provided subject to provision of an undertaking by the Bells to provide a mortgage over the Property in favour of Westpac following settlement. That undertaking was provided by the Bells to Westpac on 15 September 2022 and is at page 72 of DH-1. A copy of the bank account statement showing the draw down of funds under the overdraft is at page 74 of DH-1.
3. On 16 September 2022, Westpac transferred the sum of $1,720,000 into the trust account of the Bell's solicitors, K&L Gates, to enable settlement to proceed. A copy of the payment receipt is contained at page 76 of exhibit bundle DH-1.
4. On 21 September 2022, Westpac received an updated valuation of the Property for mortgage lending purposes. A copy of this valuation is contained at pages 78 to 87 of exhibit bundle DH-1. Westpac has subsequently issued formal loan offer documents for a facility for $1,700,000 with a 4-year fixed interest rate of 4.99% p.a. A copy of the facility agreement is at page 88 of exhibit bundle DH-1 ...

1. The Second Hume affidavit also exhibited an affidavit sworn by Mr Lawrence dated 7 October 2022 (the 'Lawrence affidavit'),[21] in which he deposed that:

(a) he is a close personal friend of the Bells; > > (b) he has assisted the Bells in relation to their dispute with the applicants and he was aware of the key events in the proceedings; > > (c) he assisted Dr Bell in negotiations for a settlement with the builder and Knight, and assisted the Bells by regularly inspecting the property.

2. Importantly for present purposes, he said as follows:

8. At all times since at least April 2021:

(a) I have had access to funds in excess of $3.5m and have had the financial capacity to fund the purchase price of the Property if called upon; and

(b) I have been prepared to provide funds to Roger, including for the entire purchase price, should he ever need them, to settle the contract of sale for the Property.

...

1. About this time, in April 2022, I had a conversation with Roger and Philip Weinman (a friend of Roger and mine) on the telephone during which:

(a) Roger said that in order to settle the Property he had access to funding from Westpac and to his own funds, but that his funds were in term deposit accounts with Westpac, which he might need access to at reasonably short notice;

(b) I said to Roger that I was prepared to loan him and Jill whatever they needed to complete the contract of sale for the Property on an unsecured basis;

(c) I said to Roger that I could loan funds to him on short notice, and probably quicker than Westpac could, if he ever needed to settle the contract of sale quickly;

(d) Philip Weinman said to Roger that he was also prepared to provide a loan to Roger and Jill to enable them to complete the purchase of the Property on short notice should they ever need it;

(e) Philip and I each said to Roger that between us we would lend him whatever sum was needed to complete the purchase of the Property at settlement;

(f) Roger said that the purchase price of the property was $3.5m (which I already knew) and that if he ever needed Philip and I to loan funds to him on short notice, that would be approximately $1,600,000 to $1,700,000 from each of us. Both Philip and I said that we would be happy to lend him this amount.

1. Between April 2022 up to the date of swearing this affidavit, I have remained ready to loan Roger and Jill the purchase price for the Property, if that sum was required, either by myself or together with Philip Weinman, to enable them to complete the sale contract.

...

1. On approximately 13 September 2022, Stephen Hume of K&L Gates, Roger and Jill's solicitor, told me that:

(a) the documentation for Westpac's funding was not being processed as expeditiously as Roger and Jill had expected, but Westpac was nevertheless proposing to release funds to Roger of approximately $1,728,000;

(b) Roger therefore required a short term loan from me of up to $1,700,000 to settle the contract;

(c) that sum could be transferred to K&L Gates' trust account (the details of which were provided to me by Mr Hume).

1. On 15 September 2022, I transferred the sum of $1,700,000 into K&L Gates' Trust Account. A copy of the payment receipt is now produced, shown to me and marked 'ML-1'.

1. The applicants made the following written submissions.
2. First, they submitted that, although the relevant affidavits on which they sought to rely were produced after the hearing before the judge, the evidence relates to 'matters in existence at and before the hearing', because 'it goes to the readiness and ability or otherwise of the Bells to settle' the contract of sale at the date of the hearing.
3. Secondly, they submitted that the fresh evidence is credible, being contained in an affidavit of the Bells' solicitor. Thirdly, they submitted that it could not have been obtained with reasonable diligence, because the Bells' 'readiness, willingness and ability to meet their obligations under the Settlement Agreement was a matter entirely within their own knowledge'.
4. Fourthly, they argued that there is a 'high probability' that the result would have been different had the fresh evidence been received on the application to enforce the settlement agreement. In particular, the applicants submitted as follows:

The affidavit material ... demonstrates that it was not correct that the [Bells] were at all relevant times, ready, willing and able to complete their obligations under the Settlement Agreement. On the contrary, at the time of the hearing of the application before the primary judge, it now appears that the [Bells] did not have sufficient funds of their own to complete the settlement, nor any unconditional offer of finance from a financier. It appears that at that time, the [Bells] did not have even a current conditional offer of finance from Westpac, or if they did, it was an offer that was subject to Westpac conducting a valuation of the Property - which had not been obtained - and to its redocumenting the loan documents and finalizing its internal arrangements, which was expected to take a number of weeks.

...

The fact that in the result, the [Bells] were able to obtain funding of $1.7 million from a friend on an unsecured basis to enable settlement to occur by the date specified in the 26 August 2022 orders, being 21 days after those orders were made, is not sufficient to make good their having failed to disclose the true position as to their readiness and ability to settle the Property at the time of the hearing of the application, nor their having invited the primary judge to make orders on what is now revealed to be an incorrect basis.

1. The applicants pointed to the following passage in the judge's reasons where her Honour set out the principles applicable to determining whether summary enforcement of the settlement agreement was appropriate:

[I]t would generally be inappropriate to summarily enforce a settlement agreement if there was a real prospect that the other party ... could mount a viable defence based upon ordinary contractual or equitable principles. In such cases, generally only a full trial would be appropriate.[22]

1. The applicants contended that the fresh evidence 'shows that there was a real prospect that applicants could mount a viable defence based upon ordinary equitable principles, namely that there was at least substantial doubt as to whether the Bells were then able to perform their essential obligation of payment at settlement'.
2. The applicants also contended that the Bells 'did not have clean hands when coming to the Court to have their application determined, and ought now [to] be disentitled to any relief by way of specific performance'. In particular, they said, 'specific performance may be refused if a plaintiff is shown to have materially misled the Court'. They submitted that:

By making submissions to the Court to the effect that the primary judge should determine the [Bells'] application on the basis that there was no doubt as to the [Bells'] readiness and ability to perform their obligations should specific performance be granted, the [Bells] misled the Court and permitted it to proceed on an incorrect basis.

The reliance by the Court on the submissions made as to the [Bells'] capacity to perform their side of the bargain was critical to establishing the [Bells'] entitlement to the relief that they sought. For the [Bells] to fail to disclose matters (notably, the absence of a binding and enforceable finance agreement) when the true position was otherwise was no trivial matter.

Had the fresh evidence been before her, the primary judge would not have found, and this Honourable Court should not find, that the [Bells] had clean hands when coming to the Court with their application. Nor would the primary judge have been, and nor should this Court be, satisfied that the [Bells] were ready, and able to complete their obligations under the contract of which they sought specific performance.

1. In oral argument, the applicants submitted that the fresh evidence demonstrated that:

(a) the Bells did not have in place an unconditional loan agreement with Westpac as at 19 July 2022; > > (b) the Bells had relied before the judge on the fact that they had previously had in place a funding arrangement with Westpac that had enabled them to proffer the necessary funds on at least 12 occasions in 2021; > > (c) reliance on that evidence would have caused the judge to assume that the Bells' arrangement with Westpac was still in place (although it was accepted that no express submission of that kind was made to the judge); > > (d) the Bells did not disclose to the judge that the arrangement with Westpac was not still in place; > > (e) the Bells did not disclose to the judge that the source of their funds was to be Mr Lawrence; > > (f) had the Bells disclosed to the judge that the source of their funds was to be Mr Lawrence, the Court may have required evidence about Mr Lawrence's ability to access funds of that kind; and > > (g) in these circumstances, the Bells had misled the Court below.

2. Whilst the applicants accepted that the First Hume affidavit alone did no more than show that in September 2022 the applicants were ready, willing and able to settle, they contended that it needed to be read in conjunction with the email correspondence between Mr Hume and Mr Welner on 16 and 19 September: taken together, they said, the material demonstrated that the Bells were not ready, willing and able to settle in July 2022. As far as we could tell, the primary basis for that submission was that Mr Welner had asked for evidence that the Bells were ready, willing and able to settle in July 2022, and Mr Hume had not provided the material sought. That silence, they submitted, justified an inference that they could not produce such evidence.
3. The applicants further contended that Mr Hodge's affidavit made good their proposition that the Bells did not have in place an unconditional - or even a conditional - funding arrangement with Westpac as at 19 July 2022.
4. As for the Lawrence affidavit, they contended that it was of 'dubious quality' because:

(a) it was vague and general in terms; > > (b) no documents were attached to it in support of the matters to which Mr Lawrence deposed; and > > (c) Mr Lawrence was a close friend of the Bells.

However, before this Court, they eschewed any suggestion that Mr Lawrence had lied in his affidavit.

1. The Bells submitted that the proposed appeal has no real prospect of success.
2. First, they contended that, in order to properly assess (a) whether the Bells misled the judge, and (b) whether the 'fresh evidence' would have procured a different result, it is necessary to first have regard to what is meant by 'ready, willing and able'. On that issue, they submitted that 'the requirement of readiness and willingness "does not demand that a purchaser should always have the purchase price in his pocket; all that is necessary is readiness and willingness to perform the contract according to its terms", that is, when performance is required by the contract'.
3. Secondly, the Bells contended that the applicants' case relies upon the proposition that the requirement to be 'ready, willing and able' to settle 'demands that a party have unconditional loan documents executed and funds immediately available for draw down at all times, including prior to the date that performance is due'. In seeking to refute that proposition, the Bells said as follows:

(a) There is no evidence (fresh or otherwise) that the Bells had a 'substantial incapacity', or had made a 'definitive resolve or decision' against tendering the purchase price at settlement. Rather, they submitted, the evidence establishes that the Bells at all times had available to them funds to complete settlement. > > (b) There was no requirement that the Bells 'have the purchase price in their pocket at all times'. The Bells had tendered the purchase price on each of the dozen occasions that settlement was attempted during 2021, as the applicants admitted. The fact that the Bells did not have the purchase price 'in their pocket' again until 16 September 2022 is irrelevant to the question of whether they were ready, willing and able. > > (c) Rather, the Bells' submitted, their ability to settle 'is to be determined by reference to their ability to perform on the date performance falls due'.[23] That had occurred on each occasion they attempted settlement in 2021, and occurred again on 16 September 2022, being the date for performance under order 3, as is made clear by the 'so-called "fresh evidence"'.

4. Thirdly, the Bells argued that the applicants did not satisfy the test for the admission of fresh evidence. In particular, they submitted that the fresh evidence 'does not, on any view, make it reasonably clear, or highly likely, that the judge would have come to a different conclusion'. They submitted as follows:

The evidence establishes that as at the date of the hearing of the application, in addition to their own funds, the Bells had 2 sources of funds available to them - loan funds from Westpac Bank and a backup source of funds by way of a loan from Mr Lawrence ... Far from demonstrating that they were not able to have the funds ready for settlement when the time for performance came, the so-called 'fresh evidence' demonstrates exactly the opposite ... And so it was that on 16 September 2022, they were ready to settle and offered to do so, but were rebuffed by Ms Wolman. Having regard to the authorities cited above regarding the meaning of 'ready, willing and able', the fresh evidence would not have altered the result. If anything, it reinforces the conclusion that the trial judge arrived at the correct view.

1. Fourthly, the Bells submitted that it is not the case that the fresh evidence 'could not possibly have been met by further evidence at the trial'. They submitted that, had the applicants challenged the proposition that the Bells were ready, willing and able to complete settlement, the Bells would have produced evidence from Mr Lawrence and from Westpac 'confirming that, in addition to their own funds, they had loan funds available to them when the time for performance arrived to enable them to settle'. In support of this submission, the Bells relied on the First and Second Hume affidavits, the latter of which exhibited the affidavits sworn by Mr Hodge and Mr Lawrence.
2. Finally, the Bells argued that the applicants had not established 'the very serious allegation they make that the Bells misled the trial judge in their submissions'.

1. It is well-established that this Court will generally refuse leave to appeal based on further evidence unless it is satisfied of three matters:[24]

(a) that, by the exercise of reasonable diligence, the evidence could not have been discovered in time to be used in the original trial; > > (b) that there is a high probability that the result would have been different had the evidence been received at trial; and > > (c) that the evidence is sufficiently credible.

2. In Foody v Horewood, Chernov JA described this as a stringent test, as emphasised by Dixon J (as his Honour then was) in Orr v Holmes, who said this:

The evidence must be so persuasive of the existence of the fact it tends to prove that a finding to the contrary, if it has been given, would, upon the materials before the court, appear to have been improbable if not unreasonable.[25]

1. Accepting for the sake of the applicants' argument that the first and third limbs have been established, the further evidence upon which the applicants seek to rely falls a long way short of satisfying the second limb.
2. Had the further evidence been received at trial, it is not at all apparent that a different result would have been produced. That is because the further evidence does not demonstrate the fact that the applicants contend it demonstrates. That is, the evidence does not demonstrate, or render it likely, that, as at 19 July 2022, the Bells were not ready, willing and able to perform their obligations under the contract of sale, namely, the payment of the purchase price.
3. That conclusion is plain on the face of the First Hume affidavit, and is further supported by the correspondence exhibited to the Welner affidavit, as well as by the Hodge and Lawrence affidavits.
4. The First Hume affidavit was filed in support of the Bells' application to vary (by extending) the time for them to comply with order 3. That is, they sought an extension of the time by which they were required to tender the purchase price from 16 September 2022 to 3 October 2022. In the affidavit, Mr Hume deposed that Dr Bell had informed him that Dr Bell had 'two options to fund completion of the sale' of the Bell apartment. Those options were identified as 'Option A' and 'Option B' and are set out at paragraph 21 above.
5. It is plain from these parts of the First Hume affidavit that, on 14 September 2022, Dr Bell would have available to him on 16 September 2022, the settlement date pursuant to the judge's orders, sufficient funds to meet his obligation to pay the purchase price for the Bell apartment. At its highest, on the applicants' case, the First Hume affidavit could be understood as supporting the proposition that Dr Bell would not have available to him on 16 September 2022 funds provided entirely by Westpac. But that is of no moment. It is equally clear that he had funds available to him from another source, namely Mr Lawrence (together with some funds that Westpac was ready to provide to him). There was, of course, no requirement that Dr Bell utilise a particular source for the funds he proposed to use for settlement, as the applicants accepted.
6. If it was necessary, that conclusion concerning the Bells' ability to pay the purchase price on 16 September 2022 is further supported by the fact that, on that date, the Bells had the full amount of the settlement funds loaded into the PEXA Workspace and were ready to complete the purchase in accordance with the judge's original orders of 26 August 2022.
7. Importantly, the First Hume affidavit contains no evidence about what funds were or were not available to the Bells on 19 July 2022, the date of the hearing before the judge, if that be relevant. Nor does it provide any basis to draw an inference that Dr Bell did not have sufficient funds available to him on that date to fulfill his obligation to pay the purchase price. Indeed, and to the contrary, because Dr Bell had sufficient funds available to him on 16 September 2022, and he had previously had funds available to him on at least 12 earlier occasions, the clear inference is that he had sufficient funds available to him on 19 July 2022.
8. The applicants accepted in oral argument that the First Hume affidavit established that the Bells had sufficient funds available to them in September 2022 and that, if that was the only fresh evidence, they would not make good their case. But, they said, the First Hume affidavit had to be read in light of the email correspondence between Mr Hume and Mr Welner that then followed. That correspondence, they said, permitted the Court to infer that the Bells had no evidence of their access to funds in July 2022 because, if they had such evidence, they would have produced it to Mr Welner when asked for it.
9. That submission has no merit.
10. First, Mr Hume responded to Mr Welner's final email by informing him that his clients 'had always had access to funding, bank and private, to fund payment of the purchase price'. That response happened within one business day of Mr Welner's request and was entirely consistent with their 12 earlier attempts to settle the purchase.
11. Secondly, even if Mr Welner was entitled to ask for evidence of the Bells' funding, there was no obligation on Mr Hume to provide such evidence to Mr Welner. The submission that this Court should infer from Mr Hume's failure to present the evidence sought that there was no such evidence is unsustainable. We observe that this submission appears to draw from Jones v Dunkel,[26] although that case was not expressly relied upon. The principle there articulated applies where there is an unexplained failure by a party to give evidence, to call witnesses or to tender documents or other evidence. In appropriate circumstances, this may lead to an inference that the uncalled evidence would not have assisted the party. However, a court is not bound to draw such an adverse inference. Moreover, where the inference is drawn, the rule cannot be used to convert conjecture into fact: the failure to call a witness or give evidence 'cannot fill gaps in the evidence, as distinct from enabling an available inference to be drawn more comfortably'.[27]
12. In the present case, we consider there was an obvious explanation for Mr Hume's decision not to provide Mr Welner with detailed evidence concerning his clients' financial arrangements. That decision falls to be assessed in light of the history of the dealings between the parties and the conduct of the proceeding, including a long history of obstructionist behaviour by Knight. In those circumstances, any reasonable practitioner may well have formed the view that engaging with Mr Welner would not be productive.
13. Further, the applicants' attempt to rely upon Mr Hume's failure to provide evidence to Mr Welner constitutes, in our opinion, an attempt to convert conjecture into fact, and to fill gaps in the evidence. We would not regard it as appropriate, or even open, to draw from Mr Hume's correspondence, the inference the applicants urge the Court to draw.
14. This analysis of the further evidence is sufficient to dispose of this application. However, it is appropriate to record that the additional evidence relied upon by the Bells in response to the application to rely on the further evidence demonstrates two matters:

(a) first, that (as anticipated by the judge) there was evidence that the Bells could have adduced had the issue of whether they were ready, willing and able to settle been raised at the hearing on 19 July 2022; and > > (b) secondly, that they had access to sufficient funds on 19 July 2022 to complete the settlement of the Bell apartment within a reasonable time.

15. In particular, the Lawrence affidavit makes good the latter proposition. The applicants did not seek to cross-examine Mr Lawrence. They drew the Court's attention to the fact that his affidavit was not read in the applications before us, because it was included as an exhibit to Mr Hume's reply affidavit. However, they did not seek to challenge the admissibility of the contents of Mr Lawrence's affidavit; rather, as explained above, they sought to impugn its contents, albeit without contending that Mr Lawrence had lied on oath. Had they sought to test Mr Lawrence's evidence, they would undoubtedly have been permitted to do so; principles of natural justice would demand no less.
16. Mr Lawrence's unchallenged evidence was that he has been willing and able to provide funds to Dr Bell, up to the full purchase price, since April 2021. Since that time, he has had access to funds in excess of $3.5 million and has had the financial capacity to fund the purchase price for the Bell apartment, if called upon to do so. Mr Lawrence also deposed that he had transferred $1.7 million to the trust account of the Bells' solicitors on 15 September 2022, making clear that he had access to sufficient funds at that date. The applicants' attempt to suggest that there was some doubt about whether Mr Lawrence had the means to provide funds to Dr Bell in the amount required cannot be sustained.
17. The applicants also submitted that the conversation in April 2022 between Mr Lawrence and Dr Bell, in which Mr Lawrence expressed his willingness to provide funds, was insufficiently proximate to the hearing on 19 July 2022 to be a reliable basis upon which to submit that the Bells were ready, willing and able to settle on that date. We reject that submission. As the applicants accepted, there is no rule in this regard - what is sufficiently proximate will vary according to the facts of the case. In the present case we consider that the Bells had an ample basis on which to submit that they were ready, willing and able to settle on 19 July 2022.
18. In light of the above matters, we would conclude that the Bells were, consistent with the authorities, ready, willing and able to complete the contract of sale at the time of the hearing before the judge on 19 July 2022. The suggestion that they, or their counsel, misled the Court is untenable and ought never to have been made. Having been made, it ought to have been withdrawn upon receipt of Mr Lawrence's affidavit.
19. It must follow that the further evidence does not meet the requirement that, if it had been adduced at trial, it was 'highly probable' that the result would have been different. To the contrary, it would not have made any difference to the result.
20. For completeness, we also note that we accept the Bells' submission that it is not necessary, in order for a party to be properly characterised as 'ready, willing and able' to perform a contract of sale by payment of the purchase price, to have in hand - or in their bank account - the full amount of the purchase price at the time they claim to be ready, willing and able. As Menzies J observed in Bishop v Taylor:

The requirement of readiness and willingness does not demand that a purchaser should always have the purchase price in his pocket; all that is necessary is readiness and willingness to perform the contract according to its terms.[28]

1. That is, it is only necessary for a person to have the full amount of the purchase price immediately available as at the date on which the obligation to pay falls due.[29] Thus, even if we had accepted that, on 19 July 2022, the Bells did not have immediate access to funds sufficient to pay the full purchase price for the Bell apartment, we would not have concluded that they had misled the Court by submitting that they were ready, willing and able to perform the contract of sale. In that regard, we accept the Bells' submission that '[f]ar from demonstrating that they were not able to have the funds ready for settlement when the time for performance came, the so-called "fresh evidence" demonstrates exactly the opposite'.

1. In summary, the further evidence on which the applicants seek to rely does not demonstrate that the Bells were not ready, willing and able to perform the contract of sale on 19 July 2022, or on any other date. To the contrary, it demonstrates that, as at 14 September 2022, the Bells were (as they had been so many times previously) ready, willing and able to pay the purchase price under the contract of sale, albeit that their preference was to delay the time for payment so as to avail themselves of a preferred source of funding. The fact that they were ready, willing and able to settle in September 2022 simply cannot be used to infer that they were not able to settle when they declared themselves to be so in July 2022. Further, the contents of the First Hume affidavit, either alone or in conjunction with the correspondence between Mr Hume and Mr Welner that followed, do not permit an inference as to the Bells' ability in July 2022 to obtain sufficient funds for settlement. Indeed, their capacity to settle was well demonstrated by 12 previous attempts, all frustrated by Knight's conduct.
2. For these reasons, the application for leave to appeal was refused and the application for leave to adduce the further evidence was dismissed.

[1] Dr Jill Bell entered into the contract of sale with Knight and subsequently nominated Dr Roger Bell as the purchaser. Dr Roger Bell will be referred to as 'Dr Bell' in the remainder of the judgment.

[2] Bell v Knight 34 Langdon Road Pty Ltd [2022] VSC 497, [3] (Daly AsJ) ('Reasons').

[6] That proceeding also alleged breaches of the Sale of Land Act 1962, the Building Act 1993 and the Domestic Building Contracts Act 1995, and various breaches of trust.

[7] Ms Wolman was joined as party on 7 February 2022.

[8] At this time, Mr Kavallero was in control of Knight.

[9] Mr Lawrence was a close personal friend of the Bells: see below at [29].

[10] NAB was the third respondent in the proceeding. It filed a notice of intention not to respond or contest the proceeding, as did the fourth respondent, the Registrar of Titles.

[11] We note for completeness that on 4 October 2022, a judicial registrar of this Court ordered that the date for compliance with order 3 was extended to 21 days after the date the application for leave to appeal is determined, and stayed the operation of order 3 until the application for leave to appeal is determined.

[18] Dated 26 August 2022 and 5 September 2022, respectively.

[19] Although there is no time indicated on Mr Welner's affidavit, we infer that he swore his affidavit some time prior to 12:13 pm on Monday 19 September 2022, which was the time at which the Court seal was placed on the affidavit.

[20] Of Westpac Bank: see [27] above.

[21] Although at the hearing counsel for the applicants observed that the 'proper process' for relying on this affidavit had not been observed, ultimately no objection was taken to its admission into evidence.

[24] See, eg, Foody v Horewood [2007] VSCA 130, [61] (Chernov JA, Ashley JA agreeing at [75], Neave JA agreeing at [98]); Carroll v Goff [2021] VSCA 267, [55] (Maxwell P, Kennedy and Walker JJA).

[25] [2007] VSCA 130, [61], quoting Orr v Holmes [1948] HCA 16; (1948) 76 CLR 632, 642; [1948] HCA 16.

[26] (1959) 101 CLR 298; [1959] HCA 8.

[27] Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61, [49] (Bathurst CJ, Bell P and White JA). See also Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361, 385 [64] (Heydon, Crennan and Bell JJ); [2011] HCA 11.

[28] [1968] HCA 68; (1968) 118 CLR 518, 525; [1968] HCA 68.

[29] See Bisognin v Hera Projects Pty Ltd [2018] VSCA 93, [171]-[173] (Tate JA, Kyrou JA agreeing at [216], Coghlan JA agreeing at [217]).