Federal Court of Australia

Quarter Turn Pty Ltd v Reinteractive Pty Ltd (No 5) [2026] FCA 102

ORDERS

THE COURT ORDERS THAT:

1. The documents within the folder marked “MFI 9” be admitted into evidence as Exhibit A2.

2. Pursuant to s 136 of the Evidence Act 1995 (Cth) the:

(a) invoices rendered by SFDC Australia Pty Ltd (Salesforce) and Comet CX Pty Ltd to the applicant; and

(b) bank statements recording transfers from the applicant to Salesforce and Comet CX in payment of such invoices,

within Exhibit A2 may not be used in any wasted expenditure claim advanced by the applicant in this proceeding.

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

REASONS FOR JUDGMENT

GOODMAN J:

1 In this proceeding the applicant contends that the respondent engaged in misleading or deceptive conduct, and acted in breach of contract, with respect to work undertaken or to be undertaken by the respondent on behalf of the applicant.

2 These reasons for judgment address an objection by the respondent to the tender of documents in a folder marked as MFI 9, being:

(1) invoices from SFDC Australia Pty Limited (Salesforce) addressed to the applicant;

(2) invoices from the respondent to the applicant;

(3) invoices from Comet CX Pty Ltd to the applicant; and

(4) Commonwealth Bank of Australia bank statements addressed to the applicant recording transfers of funds from the applicant to each of Salesforce, the respondent and Comet CX.

3 The applicant contends that the documents it seeks to tender are relevant to the following issues in the proceeding:

(1) the applicant’s claim that by reason of the respondent’s conduct, the applicant has lost a valuable commercial opportunity to exploit an application in respect of which it had engaged the respondent to undertake particular work (loss of opportunity claim). The invoices and bank statements are said to be relevant to the loss of opportunity claim in two ways – first, as evidence of the financial capacity of the applicant to pursue the contended lost opportunity; and secondly, as an integer in the calculation of the value of that opportunity; and

(2) the applicant’s claim for expenditure incurred by the applicant as a result of its entry into the contract (wasted expenditure claim).

4 The respondent accepts that the loss of opportunity claim is available to the applicant but disputes that the wasted expenditure claim is available to the applicant. That dispute lies at the heart of the objection.

5 The objection is taken pursuant to s 136 of the Evidence Act 1995 (Cth), which provides the Court with a discretion to limit the use to be made of evidence if there is a danger that a particular use might, relevantly, “be unfairly prejudicial to a party”. The respondent seeks an order to the effect that the documents in MFI 9 be admitted on the basis that they not be used for the purposes of the wasted expenditure claim.

6 Thus, it is necessary to consider whether there is a danger that the use of the evidence in MFI 9 might be unfairly prejudicial to the respondent; and if so, whether the discretion conferred by s 136 of the Evidence Act ought be exercised so as to limit the use that might be made of that evidence.

7 In order to consider the first of these questions it is necessary to set out, at some length, the relevant procedural history, much of which is set out in an affidavit of Mr Stephen Morrissey, the solicitor for the respondent. That evidence was unchallenged on this application.

8 On 1 May 2023, the solicitor for the applicant sent a letter of demand to the solicitor for the respondent, alleging that as a result of the respondent’s conduct, the applicant had suffered financial loss in the amount of $798,428 (part of which comprised $282,563 paid by the applicant to the respondent). The letter of demand also stated that “additional loss arises based on forecast profit and loss of business opportunity” .

9 On 26 May 2023, the solicitor for the respondent sought particulars of the allegations made in the 1 May 2023 letter including with respect to the alleged loss.

10 On 23 June 2023, the solicitor for the applicant responded to the 26 May 2023 letter, refusing to provide the particulars sought and indicating that particulars would only be provided after service of a statement of claim.

11 On 19 January 2024, the applicant filed:

(1) an originating application which included a prayer for: “Damages for breach of contract, including loss of profits”; and

(2) a concise statement, which included:

34.    … QT has suffered loss and damage, being the loss of profits, brand value, goodwill and commercial opportunity that would otherwise have been available to QT had Reinteractive provided QT with a working or launchable version of the QT Marketplace App in the week beginning 19 December 2022, and/or a completed version of the QT Marketplace App in the week beginning 30 January 2023.

12 On 13 February 2024, the solicitor for the respondent requested particulars of the concise statement, including:

8.    As to paragraph [34] of the Concise Statement, please provide:

8.1    details of the alleged ‘loss of profits’, including details of how the alleged loss of profit was calculated;

8.2    details of the alleged lost ‘brand value’, including how the alleged loss of brand value was calculated;

8.3    details of ‘goodwill’, including how the alleged loss to goodwill was calculated;

8.4    details of the ‘commercial opportunity that would otherwise have been available to QT had Reinteractive provided QT with a working or launchable version of the QT Marketplace App in the week beginning 19 December 2022, and/or a completed version of the QT Marketplace App in the week beginning 30 January 2023’; and

8.5    copies of any documents (e.g. timesheets, contracts, financial statements, invoices, business records) which are said to support the alleged loss.

(emphasis in original)

13 On 20 February 2024, the solicitor for the applicant responded:

This is not a request for particulars. Details of our client’s loss and damage will be addressed in evidence, including expert evidence. Our client intends to adduce expert evidence that will detail the lost profits, brand value, goodwill, and commercial opportunity that our client has lost.

14 When Mr Morrissey read the 20 February 2024 letter and paragraph [34] of the applicant’s concise statement, he understood that the applicant was alleging that its loss and damage comprised losses of: (1) profits; (2) brand value; (3) goodwill; and (4) commercial opportunity.

15 He did not at that time, nor did he at any stage prior to the first day of the trial (10 February 2026), understand the applicant to have been making a wasted expenditure claim.

16 On 25 June 2024, the applicant served an expert report of Dr Brent Coker. Dr Coker’s report addressed the loss of opportunity claim. It did not address a wasted expenditure claim.

17 On 11 July 2024, the solicitor for the respondent wrote to the solicitor for the applicant stating that none of the concise statement, Dr Coker’s report and the 1 May 2023 letter contained sufficient information to allow the respondent to understand the claim against it.

18 On 8 August 2024, the solicitor for the applicant wrote to the solicitor for the respondent:

We refer to your client’s request for further and better particulars, namely quantum.

Our client brings a loss of commercial opportunity case. The heads of loss that are sought by our client are loss of potential profits, and estimated brand value. These are dealt with in the expert report of Dr Coker that was provided to you on or about 25 June 2024…

19 The 8 August 2024 letter solidified Mr Morrissey’s understanding as described at [14] above.

20 The respondent prepared its lay and expert evidence in response to the applicant’s loss of opportunity claim based upon the concise statement and the subsequent exchange of correspondence described above. That evidence included an expert report from Mr John Dowell, who responded to Dr Coker’s report. The respondent did not prepare any evidence in response to a wasted expenditure claim.

21 On 9 April 2025, the applicant filed an amended concise statement. Paragraph [34] of the amended concise statement is in the following form:

…QT has suffered loss and damage, being the loss of profits, brand value, goodwill and commercial opportunity that would otherwise have been available to QT had Reinteractive provided QT with a working or launchable version of the QT Marketplace App in the week beginning 19 December 2022, and/or a completed version of the QT Marketplace App in the week beginning 30 January 2023, and/or within a reasonable time.

22 Mr Morrissey’s evidence is that if the applicant had amended paragraph [34] at this time to expand the ambit of its heads of loss to include a wasted expenditure claim, then the respondent would not have objected at that time, subject to having an opportunity to serve evidence in response to such a claim.

23 On 13 October 2025, I made orders:

(1) allowing the respondent to amend its amended concise statement in response so as to include, in broad terms, a contention that the applicant would have suffered the loss and damage that it had alleged in paragraph [34] of the amended concise statement in any event because of, inter alia, its lack of financial resources and capability and experience in the relevant business; and

(2) allowing the applicant the opportunity to file any further evidence limited to addressing the amendment and documents produced by the respondent under discovery.

24 On that day, the respondent filed a further amended concise statement in response.

25 On 28 November 2025, the applicant filed an affidavit of one of its directors, Mr Kok An Andric Liew, in which he addressed the amendment made to the amended concise statement in response concerning the applicant’s financial resources and capability. That evidence included some schedules that he had prepared and which he contended recorded expenditure incurred, and paid for, by the applicant.

26 On 25 January 2026, the applicant’s written opening submissions were filed. Those submissions, to the extent that they addressed the question of loss, focused upon the applicant’s claim for damages for lost opportunity. Those submissions did contain a line “[i]n the present case, [the applicant] seeks loss of bargain (or ‘expectation’) damages; in the alternative, reliance damages”. There was no explanation of the “reliance damages”.

27 On 2 February 2026, the respondent’s written opening submissions were filed. Those submissions, to the extent that they addressed the question of loss, also focused upon the applicant’s claim for damages for lost opportunity; and did so by reference to paragraph [34] of the applicant’s amended concise statement.

28 On 8 February 2026, the applicant’s written opening submissions in reply were filed. These submissions addressed the respondent’s written opening submissions; and did not develop the submission in the applicant’s opening written submissions in chief that the applicant sought “in the alternative, reliance damages”.

29 At a time which is not clear on the evidence, the solicitor for the respondent notified the solicitor for the applicant of objections to evidence, including objections to the evidence of Mr Liew described at [25] above.

30 On 9 February 2026 (the day before the commencement of the hearing) at 9:32pm, the solicitor for the applicant wrote to the solicitor for the respondent:

We refer to the affidavit of Andric Liew sworn 28 November 2025 and your client’s objections to Tabs 2 - 4.

Please see a link to the relevant bank statements and invoices. We will tender the same at hearing:

…

31 On 10 February 2026, and during his opening address, counsel for the applicant submitted “… if your Honour is not satisfied with our expectation loss, there is evidence of the reliance loss”. After some further submissions, I invited counsel for the applicant to identify where the evidence relevant to the “reliance loss” aspect of the applicant’s case might be found. I was directed to the evidence of Mr Liew described at [25] above.

32 On 11 February 2026, Mr Liew’s affidavit filed on 28 November 2025 was read. I rejected the evidence described in paragraph [25] in so far as it was tendered as evidence of the underlying facts.

33 On 12 February 2026, and after Mr Liew and the other director of the applicant, Mr Brett Earl, had completed their evidence, counsel for the applicant sought to tender the documents in MFI 9.

34 Against that background, I return to the question of whether there is a danger that a particular use of the evidence in MFI 9 might be unfairly prejudicial to the respondent.

35 Mr Morrissey’s evidence is that if the wasted expenditure claim had been identified in the concise statement, or any of the subsequent correspondence regarding the applicant’s alleged loss, or the amended concise statement, then the respondent would have taken a different approach in the proceeding, including:

(1) briefing an appropriately qualified expert – possibly but not necessarily Mr Dowell – to assess the reasonableness of the expenditure alleged to have been incurred by the applicant in reliance on the respondent’s conduct;

(2) obtaining further lay evidence or instructions (likely from the respondent’s principal lay witness, Mr Kane Hooper) to address whether or not the alleged expenditure had any nexus with the contract between the parties;

(3) instructing an appropriately qualified expert – possibly but not necessarily Mr Dowell – to address the further question of whether the applicant’s alleged expenditure would have been recovered but for the respondent’s alleged breach of contract;

(4) obtaining further evidence to address whether the expenditure incurred by the applicant resulted from its own unreasonable or improvident conduct; and

(5) seeking further security for costs associated with assessing the reasonableness of, and responding to, the applicant’s wasted expenditure claim. Mr Morrissey considers those costs would have been significant given the nature of the lay and expert evidence described in sub­paragraphs (1) to (4) above, as well as the nature of the cross-examination which would be required if the expenditure claim were to be allowed and the evidence is admitted.

36 Subject to one qualification, I accept Mr Morrissey’s evidence which, as noted above, was unchallenged.

37 The qualification relates to the extent to which the respondent would be prejudiced by the acceptance into evidence on an unlimited basis of the invoices rendered by the respondent and of the bank statements recording payment of such invoices.

38 I accept that part of the work that one might expect to be undertaken in responding to a wasted expenditure claim – particularly where the applicant’s task in discharging its legal burden of proof may be facilitated by an assumption or inference in the applicant’s favour that had the contract been performed the applicant would have recovered expenditure reasonably incurred in anticipation of, or reliance upon the performance of the contract, which assumption or inference the respondent may seek to rebut – is work relevant to testing whether: (1) the expenditure said to have been wasted was reasonably incurred in anticipation of or in reliance upon the performance of the contractual obligation alleged to have been breached; and (2) such expenditure was a consequence of unreasonable or improvident actions of the applicant: see, e.g., Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17; (2024) 281 CLR 39 at 76 [61] and 92 ([120] to [121]) (Edelman, Steward, Gleeson and Beech-Jones JJ).

39 I also accept, with respect to Salesforce and Comet CX, that the respondent would be prejudiced if it were unable to undertake such work because of the lateness of the wasted expenses claim with respect to such expenses.

40 However, I am not satisfied that there would be sufficient prejudice to the respondent if the applicant were allowed now to pursue a wasted expenditure claim with respect to the amounts that it paid to the respondent. In particular, I have difficulty in understanding how the respondent could ultimately contend that the payments made to it to satisfy invoices that it had rendered were not reasonably incurred in reliance upon its performance of its contractual obligations, or were in some way the result of unreasonable or improvident conduct on the part of the applicant.

41 Thus, with respect to the invoices and bank statements concerning Salesforce and Comet CX (but not those concerning the respondent) there is a danger that the use of that evidence for the purposes of wasted expenditure claim might be unfairly prejudicial to the respondent.

42 It follows that the Court’s discretion conferred by s 136 of the Evidence Act is enlivened with respect to the invoices and bank statements concerning Salesforce and Comet CX. I turn now to consider how that discretion ought be exercised.

43 The prejudice identified by Mr Morrissey is a powerful factor in favour of the exercise of the discretion in the manner sought by the respondent.

44 Counsel for the applicant submitted that: (1) it has always been open to the applicant to pursue a claim for wasted expenditure, in circumstances where, as the High Court of Australia has explained – see, e.g., Cessnock City Council at 90 to 92 ([117] to [120]) – there is only one measure of consequential losses for a breach of contract, being a measure that provides a sum of money that places the applicant in the same situation as if the contract had been performed; and that an applicant is not required to make an election between “expectation” and “reliance” losses; and (2) the applicant has always pursued a claim for wasted expenditure.

45 The first of these contentions is readily accepted.

46 However, I do not accept the second contention. True it is that the relief sought in the applicant’s originating application is expressed in broad terms. However, it is necessary to take into account how the proceeding has been conducted. In particular:

(1) paragraph [34] of the applicant’s concise statement (and amended concise statement) identified the loss and damage sought as “being the loss of profits, brand value, goodwill and commercial opportunity that would otherwise have been available to [the applicant]… (emphasis added)”;

(2) on 20 February 2024, the solicitor for the applicant stated that “[o]ur client intends to adduce expert evidence that will detail the lost profits, brand value, goodwill, and commercial opportunity that our client has lost”; and

(3) on 8 August 2024, the solicitor for the applicant stated “[o]ur client brings a loss of commercial opportunity case. The heads of loss that are sought by our client are loss of potential profits, and estimated brand value…”.

47 It is well-established that the purpose of pleadings and particulars provided by one party is to identify the case to be met by the other party or parties. As Allsop J (as his Honour then was) explained in the oft-cited passage of White v Overland [2001] FCA 1333 at [4]:

… However, by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are.  Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly.  Even if something has been said, where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said.  Litigation is not a game.  It is a costly and stressful, though necessary, evil.  To paraphrase Roscoe Pound from “The Causes of Popular Dissatisfaction with the Administration of Justice” (1906) 29 ABA Rep 395, 404-406, the “sporting theory of justice” and any behavioural manifestation of it should be seen as a survival, or better, a relic, of the days when a lawsuit was a fight between two clans: cf Jackamara v Krakouer (1998) 195 CLR 516 at 526-527 per Gummow and Hayne JJ.  Representatives do not owe duties to the other side’s client.  They owe duties to their own client.  But no one’s interests are advanced by litigation proceeding on assumptions which are seen or suspected to be false.  This is very much the case when an issue, if it is to be propounded, might endanger the instructions of those acting for the other side.  In saying this I need make no reference to the well-known responsibility of the Crown and emanations of the Crown to act at all times as model litigants beyond referring to what was said by the Full Court of this Court in Scott v Handley [1999] FCA 404 at [43] ff.  I would expect no less than that which I have indicated of bitterly competitive commercial parties in the hardest fought of cases.  In the long run, the only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone.

(emphasis in original)

48 See also Wyzenbeek v Australasian Marine Imports Pty Ltd [2017] FCA 1460 at [60] to [63] (Derrington J) and the authorities there cited.

49 Even taking into account the fact that concise statements are not strictly pleadings, a fair reading of the concise statement and the amended concise statement, particularly when construed in the context of the correspondence providing particulars is that the damages sought by the applicant were for its loss of opportunity claim and not for a wasted expenditure claim. In this regard, I do not accept the submission made by counsel for the applicant that it was not sufficiently clear from the correspondence that the applicant did not pursue a wasted expenditure claim.

50 Accepting, of course, that each case turns upon its peculiar facts and procedural history, I note that in OzEcom v Hudson Investment Group [2007] NSWSC 1441, the plaintiff was prevented from pursuing a wasted expenditure claim against one of the defendants in circumstances where, on the view taken by Justice McDougall of the procedural history of that case including the pleadings and particulars provided, that the plaintiff’s case against that defendant did not extend to the recovery of wasted expenditure (at [32] to [45]).

51 Counsel for the applicant made a related submission that the solicitor for the respondent ought to have realised that it remained open to the applicant to pursue a wasted expenditure claim. As noted above, account must be taken of the manner in which the proceeding has been conducted and in particular the concise statement and the subsequent correspondence and when those matters are considered the submission cannot be accepted. Further, as also noted above, Mr Morrissey’s evidence as to his understanding of the case propounded by the applicant was not challenged, and (subject to the qualification discussed above) I accept it.

52 Counsel for the applicant called in aid a decision of the Court of Appeal of the Supreme Court of Queensland in Zahedpur v Idameneo (No 123) Pty Ltd [2016] QCA 134 (Philippides and McMurdo JJA, and Bond J). Counsel submitted that this decision was an instance in which the Court allowed a party to prove a wasted expenditure claim despite running a claim based upon lost profits at first instance. In my view, this decision does not assist the applicant. The present application is at a prior stage of the proceeding, namely the admission of evidence. The question for determination is whether the evidence in MFI 9 concerning Salesforce and Comet CX ought be excluded as a matter of discretion in circumstances where I am satisfied that there is a danger of the evidence being unfairly prejudicial to the respondent. In Zahedpur, no such question of exclusion of evidence arose for consideration and indeed the evidence at first instance in that case included evidence of the kind to which the respondent takes objection in the present case.

53 For the above reasons, I am satisfied that the discretion conferred upon the Court by s 136 of the Evidence Act should be exercised so as to prohibit the use in any wasted expenditure claim by the applicant of the evidence in MFI 9 of: (1) the invoices rendered by Salesforce and Comet CX to the applicant; and (2) the bank statements recording transfers from the applicant to Salesforce and Comet CX in payment of such invoices. I will make orders accordingly.

Associate:

Dated:    16 February 2026