Federal Court of Australia

Appello Pty Ltd v Heyward [2025] FCA 190

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellants pay the respondents’ costs of and incidental to the appeal in a lump sum, to be fixed by a registrar if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LOGAN J:

1    After a trial which occupied seven sitting days divided between an initial period of four days in late September 2023 followed by episodic single day continuations in: late November 2023; mid-December 2023; and mid-February 2024; the Federal Circuit and Family Court of Australia (Division 2) (Circuit Court) gave judgment on 26 April 2024 in a proceeding instituted by Ms Eve Heyward and a related company against Appello Pty Ltd (Appello) and its director, Mr Christopher Woodford: Heyward v Appello Pty Ltd [2024] FedCFamC2G 371 (primary judgment). The proceedings concerned the alleged breach of the Australian Consumer Law (ACL) (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) in relation to a contract for services with respect to the building, and facilitating the release of a functioning mobile phone dating application, the “Eye Contact | Real Life Dating App” (App).

2    Formal orders giving effect to the reasons for judgment published on 26 April 2024 were perfected on 9 May 2024. By these Mr Woodford and Appello were found to have contravened s 18 of the ACL by, in trade or commerce, on 26 August 2021, making representations to Ms Heyward that were misleading or deceptive, or likely to mislead or deceive. Mr Woodford and Appello were found liable to pay damages to Ms Heyward pursuant to s 236 of the ACL in respect of loss caused by the contraventions. The Circuit Court assessed that loss to be a total amount of $75,290.

3    Mr Woodford and Appello have appealed against the orders made by the Circuit Court on 9 May 2024. The grounds of appeal are as follows:

1.    That the learned trial judge erred in rejecting the consistent evidence of both the First Respondent [Ms Heyward] and the Second Appellant [Mr Woodford] as to the persons who were present at the meeting between them on 26 August 2021 and, as a consequence, failed to properly consider whether an adverse Jones v Dunkel inference should be drawn against the Respondents for their failure to call Robin Lee Heyward and Lara Anning as witnesses.

2.     That the learned trial judge erred by failing to determine:

(a)    what the First Respondent would have done if she did not rely upon the oral representations; and

(b)    what loss was actually caused by such reliance on the part of the First Respondent.

3.    That the learned trial judge failed to properly identify any loss that was caused to the First Respondent by any reliance upon the truth of the oral representations.

4.    That the learned trial judge erred in finding that the ‘Eye Contact | Real Life Dating App’ (App) was, on 22 December 2021, or on the date of trial, worthless, in the face of the First Respondent’s evidence that she spent $12,400.00 to repair and rectify the App and it was thereupon fully operational, approved as functional by both Apple and Google and it was revenue making, in the absence of any evidence as to the value of the App or the services provided by the First Appellant.

5.    That the learned trial judge failed to properly determine whether the loss that he awarded, namely all amounts that the First Respondent had expended to develop and release the App, was caused by the breaches of the Australian Consumer Law, and did not apply the correct legal principles, in finding that the first respondent had suffered $75,290.00 in damages pursuant to section 236 of the Australian Consumer Law.

6.     That the learned trial judge, having determined that the First Respondent had acted to mitigate her loss by successfully completing then releasing the App to the general public, erred in awarding her the loss that she had thereby avoided, namely the sum of $62,890 paid to the Appellants and $12,400 paid to Groovy Web for the App which was thereby made functional and released onto the Apple platform and the Google Play platform on 12 May 2022.

4    Obviously enough, understanding these grounds requires some explanation of the issues, the evidence given at trial and, in particular, who were Robin Lee Heyward and Lara Anning and what was “Groovy Web”?

5    By her further amended statement of claim, Ms Heyward alleged that on 26 August 2021, she entered into an agreement with Appello which was partly oral, partly written and partly implied. Insofar as the agreement was alleged to be oral, Ms Heyward alleged that the terms were agreed in a face-to-face meeting between her and Mr Woodford on 26 August 2021. Insofar as the agreement was in writing, Ms Heyward alleged it was found in a service agreement of that date made between her and Appello. Insofar as a term of the agreement between her and Appello was said to be implied, it was alleged that it was a necessary implication that Appello would exercise all reasonable care, diligence and skill in the provision of the services under the agreement.

6    On an appeal such as the present, the Court’s role is to conduct a “real review” both of the evidence and of the reasons of the trial judge: Fox v Percy (2003) 214 CLR 118, at [25] per Gleeson CJ, Gummow and Kirby JJ. The end to which this review is directed is “to determine whether the judge has erred in fact or law” and “If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings”: Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679, at [43] (the Court). In the latter case, the High Court added, also at [43], this important caveat:

But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by ‘incontrovertible facts or uncontested testimony’, or they are ‘glaringly improbable’ or ‘contrary to compelling inferences’.

[citations omitted]

7    A written service agreement dated 26 August 2021 between Ms Heyward and Appello was in evidence at trial. Although that agreement contains clauses that modifications thereof are only to be in writing signed by a party or an authorised representative (clause 21) and indicating that this written agreement constitutes the entire agreement, expressly stating that “there is no representation, warranty, collateral agreement or condition affecting this Agreement” (clause 23), nothing was made of these in relation to the relevance of what was alleged to have been said on 26 August 2021.

8    A separate “Design & Prototype Agreement” prepared on 20 August 2021 but not signed by Ms Heyward or on behalf of Appello until 26 or 27 August 2021 was also in evidence.

9    Notably, the Design & Prototype Agreement” records, on its front page, that it was prepared for “Eva, Robin & Lee”. The “Design & Prototype Agreement” was sent to Ms Heyward by Mr Woodford under cover of an email of 20 August 2021, which commenced:

“Hi Eva and Robin It was great meeting you both yesterday, and we would love to work with you on your app concept. As promised, I’ve attached a design & prototype proposal, which will be for the full design and prototype phase of your project. …”.

10    Mr Woodford also made reference in this note to a website (providing the link) containing information about the obtaining of grants in respect of the design of software.

11    The learned primary judge found (primary judgment, at [13]) that the annotation “Eva, Robin & Lee” was a reference to Ms Heyward, her husband, Mr Robin Heyward and one Lara Anning. On the evidence, Ms Anning was a Tasmanian resident and in August 2021 but not thereafter a potential investor in the App. There was no suggestion in the oral evidence, and none in the documentary evidence, that a person by the name of “Lee” ever had any involvement in any discussion concerning the App. It was common ground that there had been telephone conversations between Ms Heyward and Mr Woodford on 19 August 2021.

12    On 20 August 2021, Ms Heyward sent an email to Mr Woodford in these terms:

Hi Cameron

Thanks for sending that through. I am very keen to go ahead and hopefully make something pretty special with your team!

As I mentioned over the phone, it’s a big project and huge commitment for me so I’d like to catch up in person before I sign off. Are you free on Monday or Tuesday to meet? If you don’t have offices available I’m happy to meet at a coffee shop somewhere. If you can bring the paperwork with you, we can sign there and then and I can do the transfer.

Kind regards,

Eva

13    This note was obviously responsive to Mr Woodford’s having sent to her earlier that day under cover of the email mentioned above the “Design & Prototype Agreement”. Inferentially from it, the two had had an earlier telephone conversation and, as at 20 August 2021, Ms Heyward had not signed any contract documents or otherwise made any agreement with Appello via Mr Woodford.

14    In her initial affidavit evidence in chief, Ms Heyward placed her husband and Ms Anning as participants in but not physical attendees at a meeting she had in person with Mr Woodford on 19 August 2021 (affidavit filed on 17 June 2022, at [4]). Mr Heyward was said to have participated via Ms Heyward’s speaker phone function from their car while minding their baby. Ms Anning was supposed to have participated via the Skype audio-visual platform. This affidavit was prepared at a time when Ms Heyward was acting on her own behalf in the Circuit Court.

15    In her further affidavit evidence in chief (affidavit filed on 28 August 2023), prepared after she had engaged solicitors, Ms Heyward referred to two meetings via telephone with Mr Woodford on 19 August 2021 and a face-to-face meeting with him in Brisbane on 26 August 2021. In this affidavit, Ms Heyward does not mention the presence at either meeting, via remote means or otherwise, of either her husband or Ms Anning. She does, however, state (at [12]-[13]) that the following exchange occurred during the second telephone meeting on 19 August 2021:

12.    During the second phone meeting on the 19 August 2021, I briefly explained the App in more detail and the terms on which I would agree to hire his company, that being:

(a)    That my price range to build and release the app was strictly limited to a maximum of $50,000.00 and I would not be moving forward with a build if I could not be guaranteed this limited budget;

(b)    An approximate date of early December to release the App on both Google and Apple platforms;

(c)    That the entire design and development was to be built entirely in Australia;

(d)    The point of difference of the app being a check in feature using geolocation.

13.    Mr Woodford said my terms were acceptable and suggested that we have another phone meeting when we had more time to go into the detail of the Apps functionality, branding and design. I said as it was such a large commitment, I would feel more comfortable meeting him in person to discuss the App and I asked if I could come to his office. He stated he did not have an office anymore, due to COVID. He then said he could hire a meeting room in the city so we could meet in person. We agreed to meet on 26 August 2021.

16    Mr Woodford denied he said such things.

17    During Ms Heyward’s cross-examination, the following exchange occurred, prompted by evidence in chief she had given about the availability of grants for software having been raised at an initial conversation with Mr Woodford:

HIS HONOUR: Well, what was it? Who raised the question of grants first? Was it Ms Anning or was it Mr Woodford?---Mr - - -

Or was it you?---Mr Woodford over the phone conversation said that they were going – when I was discussing my fixed budget – he said, well, it’s good to know that there are grants - - -

When you say the phone conversation - - -?---Yes.

- - - what do you mean? The very first phone conversation?---On the 19th, we spoke twice over the phone. I believe - - -

Yes. And who was listening – no one was listening in there?---My husband was 15 there.

Was he listening in with Ms Anning?---No. Ms Anning wasn’t there until the 26th, and the – virtually, when I was meeting Mr Woodford in person.

So you say that Ms Anning was part of the meeting virtually with your husband - - -?---Yes.

- - - on the 26th?---Well, they weren’t in the same location. They both phoned in from - - - 25

All right. So Mr Woodford must have known that he was not only meeting personally with you but he was also online with Ms Anning and your husband?---Correct.

Yes.

MR COVENEY: Thanks, your Honour. Ms Heyward, wasn’t it the case that, in fact, you make an inquiry about whether you could apply for government grants in respect of the app?---No. Not – on what day do you mean? 35

This is – well, let me just get the timings as I understand them.

HIS HONOUR: So Ms Anning participated in the conversation on 26 August?---Yes, she did.

And did your husband?---Not very much, no.

Well, he either did or he didn’t?---I – he might have said hello, but he didn’t really input anything of relevance.

[Mr Coveney was counsel for the appellants, then respondents, at trial]

18    In his affidavit evidence in chief, Mr Woodford did not mention either Mr Heyward or Ms Anning as having been present via any medium on 26 August 2021. Their presence either on 19 August 2021 or 26 August 2021 was not put to him.

19    A text message to Mr Woodford on 8 December 2021 from Ms Heyward included the following statements by her:

We made a verbal agreement in our first meeting which was witnessed by two others. You quoted me 30-50k and said it would likely be closer to 30k as it’s an easy build. I said I would ideally like a release date of 1stDecember, to which you said would be possible if I put down triple the deposit. Which is did and we shook hands on the agreement. That is a legally binding contract.

It is now the 8th of December, the app is not complete, not submitted to the App Store and has no subscription feature which is the only way of it making money. The billing is now over double what you quoted. I’m sorry but I will not and frankly cannot pay anymore until you start to deliver at least part of our agreement.

20    The primary judge’s inference that the “Lee” mentioned in Mr Woodford’s email of 20 August 2021 was in fact Ms Anning has already been mentioned. His Honour’s further conclusion was that Ms Heyward was mistaken both in her text of 8 December 2021 and in the oral evidence which she gave in cross-examination as to the presence of her husband and Ms Anning at the meeting on 26 August 2021, as opposed to the telephone meetings of 19 August 2021. This mistake, coupled with a conclusion that the representations as to completion time and cost only occurred at the 26 August 2021 meeting were explanatory of why neither of them was called as a witness and why no inference adverse to the applicants’ case should be drawn from their absence. It is desirable to set out his Honour’s reasoning (primary judgment, at [28]-[31]) in detail:

28    On balance, the Court finds that the contemporaneous documentary evidence, the contents of the Design and Prototype Agreement, and the email evidence of 26 August 2021 relied upon by the applicants as referred to above, supports the applicants’ contention that Heyward was mistaken, both in her evidence during cross-examination, and in her text of 8 December 2021, as to who was present at the 26 August 2021 meeting with Woodford. It is not uncommon for a witness unfamiliar with Court procedures, or whilst under cross-examination, or when called upon to remember things, to make mistakes, especially when recalling dates and times, whilst in a stressful environment. Further, the Court considers it unlikely that Woodford would not have acknowledged the presence of Heyward’s husband and Ms Anning at the 26 August 2021 meeting in his 26 August 2021 email to Heyward, sent that very same day, had they both been present at that meeting. That was particularly so in circumstances where it has never been disputed that Lara Anning asked about possible grants being available when she was remotely dialled into the one meeting which she attended via telephone. A further matter of significance in relation to this issue was the fact that in his affidavit evidence, Woodford made no mention of anyone else being present during the 26 August 2021 meeting with him apart from Heyward.

29    The Court finds that the most likely explanation for the non-calling of Heyward’s husband and Ms Anning at trial was that they only attended remotely via telephone at the first meeting, on 19 August 2021, when non-critical issues only peripheral to the applicant’s claims were discussed. In such circumstances, though they each might be considered to have been in Heyward’s camp, Heyward’s husband and Ms Anning were not people who reasonably would have been expected to have been called on behalf of the applicants at trial, because any evidence they might have given would not have been germane to the real credit issues in dispute.

30    It is also of significance that at the time of the drafting and execution of Heyward’s first affidavit, Heyward referred to her husband and Ms Anning as having first had contact with Woodford remotely via telephone on 19 August 2021.

31    No adverse inference will therefore be drawn by reason of the non-calling by Heyward of Heyward’s husband and Ms Anning as witnesses.

[footnote references omitted]

21    The emails of 20 August 2021 and the annotating of the “Design & Prototype Agreement” occurred at a time when neither Ms Heyward nor Mr Woodford could have had any apprehension that their relationship would end in the disappointment voiced by Ms Heyward in her text of 8 December 2021. The 20 August 2021 emails and the annotation were, truly, transactionally contemporaneous. In the absence of any reason to think that an element of contrivance attended their wording (and none is present), that makes them particularly persuasive bases for finding facts, including the drawing of inferences. Coupled with an absence of any reference by Mr Woodford to either Mr Heyward or Ms Anning in his returning the signed service agreement and initial invoice to Ms Heyward under cover of his email of 26 August 2021 – “Hi Eva It was really great meeting you today. …” - it is inferentially more likely than not that neither Mr Heyward nor Ms Anning were present remotely on 26 August 2021. Instead, it is inferentially more likely than not that these two were present by remote means during a telephone conversation which occurred on 19 August 2021. That is more likely than not the later of the two calls that day, given that it was preceded by the non-disclosure agreement. Further, Mr Woodford’s provision of the website link relating to grants offers some corroboration of Ms Heyward’s recollection that Ms Anning had inquired about grants during the telephone discussion with Mr Woodford.

22    I find nothing glaringly improbable about the conclusion of the learned primary judge that “Lee” was Ms Anning and that she and Mr Heyward participated by remote means during a telephone conversation between Ms Heyward and Mr Woodford on 19 August 2021. To the contrary, on my own review of the evidence, I reach a like conclusion for like reasons. The references which Ms Heyward made in her evidence, and in the text of 8 December 2021 were mistaken.

23    However, as was submitted for the appellants, that conclusion is not explanatory of a failure to call either or each of Ms Anning and Mr Heyward, given that Ms Heyward in her affidavit of 28 August 2023 placed them as participants in a telephone conversation with Mr Woodford on 19 August 2021 during which she stated he agreed with particular conditions (as detailed in the above-quoted excerpt) she specified for her proceeding to agreement, a position she said he had maintained at their face-to-face meeting on 26 August 2021.

24    I was pressed in submissions for the appellants that the reasoning of the primary judge did not just ignore this feature of Ms Heyward’s evidence but also failed as a consequence of ignoring this feature, to apply Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel), at 308, 312, 320-321. The appellant argued that the ignoring of that feature of Ms Heyward’s evidence, and failing to apply Jones v Dunkel affected the primary judge’s assessment of relative credibility as between Ms Heyward and Mr Woodford in relation to what was said on 19 and 26 August 2021, given the failure of Ms Heyward to call Ms Anning and Mr Heyward. It was put that it is open to infer that Ms Heyward had not called these witnesses because she knew (or feared) that the evidence they would give would not assist her case. It was also put that Ms Heyward had not displaced that potential “inference by evidence” that she had not called these witnesses through providing a substitute or alternative reason.

25    The contemporary understanding of the so-called “rule in Jones v Dunkel” is encapsulated in the following passage in the joint judgment of Heydon, Crennan and Bell JJ in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 (Kuhl v Zurich), at [63]-[64], referred to with approval in Berry v CCL Secure Pty Ltd (2020) 271 CLR 151, at [59] (Bell, Keane and Nettle JJ):

63.    The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party’s case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn. These principles have been extended from instances where a witness has not been called at all to instances where a witness has been called but not questioned on particular topics. Where counsel for a party has refrained from asking a witness whom that party has called particular questions on an issue, the court will be less likely to draw inferences favourable to that party from other evidence in relation to that issue. That problem did not arise here. The plaintiff’s counsel did ask the plaintiff relevant questions.

64.    The rule in Jones v Dunkel permits an inference, not that evidence not called by a party would have been adverse to the party, but that it would not have assisted the party. But the conclusion by the trial judge that the plaintiff – a party-witness – deliberately withheld evidence reflected a stronger reaction. It operated as a finding that there had been an admission. It could be inferred that the evidence was withheld, in breach of the witness’s duty to tell the whole truth in answer to the question, because the plaintiff was conscious that success in the litigation would be rendered impossible or less likely if the material withheld were revealed. Depending on the circumstances, when a party lies, or destroys or conceals evidence, or attempts to destroy or conceal evidence, or suborns witnesses, or calls testimony known to be false, or fails to comply with court orders for the production of evidence (like subpoenas or orders to answer interrogatories), or misleads persons in authority about who the party is, or flees, the conduct can be variously described as an implied admission or circumstantial evidence permitting an adverse inference. The position must be the same where there is a failure of a party-witness to comply with the duty of a witness to tell the whole truth. There is a reason why failure to call a witness or failure to ask a particular question of a witness supports the possible inference that the witness’s evidence would not have assisted the party, while failure of a party-witness to tell the whole truth may support an inference that the party suppressed evidence which would have been damaging to the party-witness. A litigant has no duty to call particular witnesses or to procure that any witnesses called by that litigant are asked particular questions. A litigant who enters the witness box, on the other hand, is under a positive duty to tell the whole truth in answer to the questions asked.

[footnote references omitted]

26    Of the appellants’ submission it must first be observed that neither Mr Heyward nor Ms Anning was a party to the litigation. This qualitative distinction in the impact of any application of the “rule in Jones v Dunkel”, evident in the passage from Kuhl v Zurich quoted, was well-made in the submissions put on behalf of Ms Heyward. Moreover, Mr Heyward’s absence from the witness box was not entirely unexplained. Be it on 19 August or 26 August 2021, he was, on Ms Heyward’s unchallenged evidence, in the car looking after his and Ms Heyward’s baby and had not really taken part in any conversation with Mr Woodford. Further, Ms Anning’s involvement was transient. At most, a failure to call either or each of these persons permits an inference to be drawn that their evidence would not have assisted Ms Heyward’s case. But in light of the explanation given about Mr Heyward, I doubt that there is scope for the drawing even of that inference. Ms Anning’s transient, preliminary involvement also makes for a doubtful basis for drawing such an inference in relation to an event some three years prior to trial.

27    What is clear is that the absence of Mr Heyward and Ms Anning from the witness box does not permit the drawing of an inference that their evidence would have been adverse to Ms Heyward’s case. It certainly does not operate as an admission by Ms Heyward that her evidence as to what Mr Woodford stated was false.

28    The primary judge had an advantage which I do not enjoy. He had the opportunity to observe Ms Heyward and Mr Woodford; on any view the primary participants in the controversial conversations, during their oral evidence and in the context of the trial. His Honour plainly formed an adverse view of Mr Woodford’s credibility, for reasons which he set out at length in his reasons for judgment under the heading, “The Lack of Credibility of Woodford” (primary judgment, at [45]-[71]). On my own review of the evidence, especially that referred to by the primary judge in this part of his reasons, and particularly the answers given at trial by Mr Woodford under cross-examination, I see no reason to depart from the conclusions of the primary judge. To the contrary, I share his Honour’s views.

29    Further, and as the primary judge likewise reasoned (primary judgment, at [41]-[43]), a spreadsheet (Exhibit 3, an enlarged version of Annexure EH-4 to Ms Heyward’s first affidavit) provided to Ms Heyward by Appello’s engaged project manager, Jibek Bazarkulova, does offer some corroboration of Ms Heyward’s account of the conversations in that it records an envisaged project length of 2.5 to 3 months.

30    Thus, the appellants’ Jones v Dunkel ground ultimately leads nowhere. Even taking into account that rule, as explained in Kuhl v Zurich, my own review of the evidence supports the conclusion reached by the primary judge that Ms Heyward’s account as to what Mr Woodward stated to her should be accepted. She was not obliged to prove this to demonstration, only on the balance of probabilities: s 140(1), Evidence Act 1995 (Cth).

31    The remaining grounds of appeal, which go to damages, can, as was put on behalf of Ms Heyward, conveniently be considered together.

32    The primary judge concluded that on 22 December 2021, when the App failed it was not functional, and that it remained so up to the date of trial. His Honour concluded that it had no commercial value. Given these findings, his Honour concluded (primary judgment, at [77]) that:

… the appropriate measure of loss on the part of Heyward, in such circumstances, was the amount which she had paid out to Appello in seeking to have developed a functioning app, together with the reasonable costs associated with attempting to investigate whether what had in fact been provided was capable of being resurrected and made good.

33    The amounts concerned, which were not in themselves controversial were $62,890 paid by Ms Heyward to Appello for the provision of its services, and $12,400 subsequently paid by Ms Heyward to “Groovy Web”, a website developer, to investigate and endeavour to rectify the lack of functionality.

34    As was correctly put on behalf of Ms Heyward, the determination and assessment of damages under the statutory cause of action presently found in s 236 of the ACL is not to be assimilated either as to causation (Marks v GIO Australia Holdings (1998)196 CLR 494, at 509 [34], 512 [40]: Murphy v Overton Investments (2004) 216 CLR 388, at [44]) or measure (Wardley v Western Australia (1992) 175 CLR 514, at 526) with tort or contract law. The learned primary judge treated this as a “no transaction” case (primary judgment, at [74]). Consistent with this, his Honour calculated an overall sum that would place Ms Heyward in the same position in which she would have been had she not entered into the agreement with Appello. Mr Woodford’s personal liability flowed from his being a person involved in Appello’s contravention of s 18 of the ACL. That approach was correct in principle: Wyzenbeek v Australasian Marine Imports (in liq) (2019) 272 FCR 373 (Wyzenbeek), at [106]-[107]. It entails the awarding of a consequential sum to restore, insofar as money can, the status quo prior to the contravention.

35    His Honour’s conclusion that Ms Heyward would not have entered into the agreement but for the representations made by Mr Woodford was certainly open on the evidence. That is confirmed by my own review of Ms Heyward’s evidence. It is clear she relied upon what Mr Woodford stated to her about by when the App would be available and cost. She had an entrepreneurial idea about a dating app but limited capital and needed the assurance she would be able to “monetise” the App by December in order to proceed to engage Appello and deploy that limited capital in that engagement. Mr Woodford’s representations provided that assurance. Against this background, the appellants’ submission that the primary judge should have considered counterfactuals (and, even it were otherwise none were pleaded) must be rejected. Ms Heyward was not required to prove that there were other courses of action open: Wyzenbeek, at [93].

36    In the absence of error by the primary judge in concluding that the App was worthless both in principle and amount, the damages award is entirely unremarkable. The component in respect of the Groovy Web expenditure recognised, appropriately, an endeavour which Ms Heyward had made to mitigate her loss.

37    That the App did not work as at 22 December 2021 was supported by Ms Heyward’s evidence as to her endeavours with it up to then – “the geo location feature was not working whatsoever making the app entirely redundant even if the txt issue was fixed” (her first affidavit, [67] and see also as to absence of functionality exhibits EH23 to EH26 to this affidavit). She was not cross-examined on this. Ms Heyward’s evidence as to the App’s then lack of functionality was corroborated by the expert evidence of Groovy Web’s Mr Krunal Panchal who identified that, as at 24 January 2022, there were these issues with the App:

(a)    The App was stuck on Get Started with Phone number screen; and

(b)    The source code was not commented, making it difficult to understand what the program was doing or what the developer who coded the program was trying to achieve.

(c)    The App Source Code Repository had no README file, which is a standard practice for developers to document the project setup.

38    Mr Panchal was not challenged about this in cross-examination.

39    Appello’s Chief Project Officer, Mr Shoghik Mkrtchyan gave evidence. Notably, in investigating the App in September 2023 just prior to making his affidavit evidence in chief, he identified exactly the same problems as Ms Heyward had in December 2021. He stated (at [35]-[37):

35.    Just prior to affirming this affidavit, on 7 September 2023, I downloaded the App from the Apple App Store and tried to create an account.

36.    The App then prompted me to enter my phone number to receive a code. I did so and pressed the ‘continue’ button however, I was not sent an automatic text message with a code to login to the app.

37.    This is the same issue Ms Heyward claimed she was experiencing …

40    The primary judge observed of Groovy Web’s work (primary judgment, at [68]), that it was “designed to enable the app to be functional and released onto the Apple platform and the Google Play platform on 12 May 2022” (emphasis added). That is not a conclusion that the App did then work, merely descriptive of one aspect of Groovy Web’s engagement. If the appellant’s position was that the lack of functionality identified in September 2023 was the result of work undertaken by Groovy Web, it was incumbent upon them to put this to Mr Panchal. As it is, on my review of the evidence, the symmetry between the bases of lack of functionality in December 2021 and in September 2023 makes it more likely than not that the App was indeed, as the primary judge found, always worthless.

41    Further, as to evidence as to acceptance by Apple’s “App Store” and Google, there was some evidence at trial that the App was accepted by the App Store in December 2021 (resulting in “1-star ratings” – Ms Heyward’s first affidavit, at [66]-[73]), but no evidence that it was accepted by Google until May 2022 (Mr Mkrtchyan). Further and in any event, the point made for Ms Heyward in submissions is sound, “there was no evidence as to the parameters for acceptance adopted by Apple or Google, let alone any evidence that they were aware of, or had measured the app against, the functionality required by Ms Heyward in her dealings with the second appellant Mr Woodford”.

42    In short, there was evidence at trial to support a conclusion that, on the balance of probabilities the App for which Ms Heyward contracted with Appello following Mr Woodford’s representations to her was worthless.

43    For these reasons, the appeal should be dismissed, with costs.

Associate:    

Dated:    14 March 2025