Heyward v Appello Pty Ltd - [2024] FedCFamC2G 371

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Heyward v Appello Pty Ltd [2024] FedCFamC2G 371

File number(s): BRG 246 of 2022

Judgment of: JUDGE EGAN

Date of judgment: 26 April 2024

Catchwords: CONSUMER LAW – agreement for the development and release of an online dating app – where Second Respondent was a director of the First Respondent – where the Second Respondent made false or misleading representations to the First Applicant on behalf of the First Respondent as to both past and future matters – where representations were false or misleading - where the First Applicant suffered loss and damage as a result – where damages appropriate on a no-transaction basis – where an alternative claim under s. 238 of the ACL not pleaded and agitated at a stage too late in the proceedings – declarations and orders consistent with the orders of the Court to be forwarded to Judge’s Chambers.

Legislation:
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss. 139 and 140.

Australian Consumer Law ss. 2, 4, 18, 236 and 238.

Cases cited:
AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.

Babstock Pty Ltd v Laurel Star Pty Ltd (No. 5) [2024] QCA 3

Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222

Dessent v Commonwealth of Australia (1977) 51 ALJR 482

Finucane v NSW Egg Corporation (1988) 80 ALR 486

Johnson v Perez (1988) 166 CLR 351

Jones v Dunkel (1959) 101 CLR 298

McKellar v Container Terminal Management Services (1999) FCA 1101 at 26

Murdoch v Lake [2014] QCA 216 at [18] – [21] per P Lyons J.

Murphy v Overton Investments Pty Ltd [2004] HCA 3

Rapid Roofing Pty Ltd v Natalise Pty Ltd (2007) 2 Qd. R 335 at [80] – [81] per Keane JA.

Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496

Division: Division 2 General Federal Law

Number of paragraphs: 83

Date of last submission/s: 2 April 2024

Date of hearing: 25, 26, 27, 28 September 2023, 23 November 2023, 13 December 2023 and 13 February 2024

Place: Brisbane

Counsel for the Applicant: Mr D. Savage KC and Mr R. Read

Solicitor for the Applicant Ms L. Pearce, MPD Law

Counsel for the Respondent: Mr G. Coveney

Solicitor for the Respondent: Mr D. Bycroft, Merton Lawyers

ORDERS

<BRG246 of 2022>

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
EVA ROSE HEYWARD

First Applicant

HEYWARD INDUSTRIES PTY LTD ACN 653 831 559

Second Applicant

AND:
APPELLO PTY LTD ABN 42 627 437 316 ACN 627 437 316

First Respondent

CAMERON WOODFORD

Second Respondent

ORDER MADE BY:

JUDGE EGAN

DATE OF ORDER:

26 APRIL 2024

IT IS NOTED THAT:
No Orders Made
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE EGAN
INTRODUCTION

The First Applicant (Heyward) was a thirty-six (36) year old woman living in Brisbane as at the date of the filing of the Further Amended Statement of Claim on 25 September 2023.
The Second Applicant was a company of which the First Applicant and her husband, Robin Heyward, were directors. The Second Applicant (‘Heyward Industries’) was registered on 20 September 2021.
The First Respondent (‘Appello’) was a company of which the Second Respondent (Woodford) was a director.
By a Further Amended Statement of Claim (FASOC) filed by leave on 25 September 2023, Heyward claimed that on 26 August 2021, Heyward had entered into a contractual agreement with Appello which was partly oral, partly written and partly implied. Insofar as the agreement was oral, it was alleged by Heyward that the terms were as agreed to in a conversation held in person between her and Woodford on 26 August 2021. Insofar as the agreement was written, it was alleged by Heyward that it was as set out in a written service agreement. Insofar as the agreement was claimed by Heyward to have been implied, it was asserted that the agreement was for the provision of professional services which, by operation of law, required there to be implied into the agreement that Appello would exercise all reasonable care, diligence and skill in the provision of the services.
It was pleaded on behalf of Heyward that Appello and Woodford had:
(a)breached the terms of a service agreement entered into between her and Appello;
(b)made representations as to future matters which were misleading because such representations had been made without reasonable grounds.
The Respondents denied the above allegations in a defence filed on 21 October 2022.
It is not in question that on 19 August 2021, Heyward first met via telephone with Woodford for the purpose of discussing whether Woodford could build, and facilitate the release of, a functioning mobile phone dating application (app) to be named ‘Eye Contact – Real Life Dating’.
In her cross-examination, Heyward described how there were two (2) telephone call meetings on 19 August 2021. The first telephone call was between Heyward and Woodford. It was during that short telephone call that Heyward asked Woodford to sign a non-disclosure agreement before any further discussions took place. It transpired that Woodford prepared the non-disclosure agreement, and that he had forwarded a signed copy of it to Heyward. After Heyward had received it, there was a second telephone call of slightly longer duration on that day between Heyward and Woodford.
Heyward said in cross examination that a third meeting took place between her and Woodford on 26 August 2021. There is a dispute between the parties as to whether those present at the third meeting via telephone included Heyward’s husband and one Lara Anning – a then potential investor –as well as Woodford, or whether Heyward’s husband and Lara Anning were only present during the first meeting via telephone on 19 August 2021. [1] The context in which evidence was given by Heyward about that issue, either in her affidavits or during cross-examination, was important.
[1] Cross-examination of Heyward at T of 27 September 2023 at p. 19.22 - .27.
Heyward’s affidavit evidence as to how her conversations with Woodford had progressed, concerning the proposed app, were as set out in [4] – [31] of her affidavit filed on 17 June 2022 as follows:
4.On the 19th August 2021 I met with Mr Cameron Woodford to discuss hiring his company Appello Software Pty Ltd to build and release my app Eye Contact.
5.During my meeting with Mr Woodford, we also had in attendance via virtual meeting, Lara Anning, a potential investor, and my husband Robin Heyward. Ms Anning was linked in via video on skype and Mr Heyward via speaker on my phone.
6.The meeting began by my introducing the general concept of the app which is a dating app in which people can check into public locations similar to how we did with Covid. Users could then choose to talk to other users checked into the same location.
7.Mr Woodford thought the idea was brilliant and that he'd worked on dating apps before. He said the idea was unique and he'd never heard of it being done before. He told me about a dating app he had done previously, and he showed me some screens from it. He also showed me where his project managers had told the client to change certain things and the client agreed, just as colours and layout.
8.Mr Woodford explained that first his company would create a prototype for me to sign off on which would take approximately 3 weeks and then the developers would begin the build. Mr Woodford said we could go through all the specific details regarding the app during the prototype phase.
9.I immediately objected to waiting till the prototype phase to discuss these details as I explained that I needed an exact quote on the build before I was to sign anything. I explained that my budget was limited so I was looking around to better understand the market and see what was possible financially.
10.Mr Woodford asked if I knew exactly what I wanted in the app, which I replied that I did. Mr Woodford said then in this case we could go through the details there and then and he could give me a definite price range which he could guarantee we would be able to stay in.
11.I then went into exactly how I wanted the app to look and function. I described in great detail the wireframes I would expect to create in the prototype. We discussed people would sign up with their phone number and receive a code, then create their profile. This was a profile page, which included basic info about the person, interests, and a short bio of themselves. Once complete, there was to be two pages, one, a location map, and the other the chat page.
12.The map would be designed to have people check into nearby locations. I said ideally, I would like locations to be accessible for both public place check ins and also a radius around a person (for example if they were at a bus stop). Once checked in to a location, people can see others checked into the same location and start chats.
13.The chat function 1 described was to be a standard chat, which could be started by clicking on a user's profile to "start chat". Users could then chat back and forth. Users could delete and block users. The sending of photos and videos was not expected or discussed.
14.One additional feature was discussed which was the creation of a daily security question for users which they could opt to use for an added level of privacy and security.
15.We then discussed the monetary side of the app and how it would generate revenue. I said I wanted to charge a subscription to people who want to use over 5 different chats a day. He suggested around the $8 mark a month was good and I agreed. I said it would be good to offer discounts for 3 and 6 month subscriptions as is standard with most apps. We then discussed what the users would get in addition to the subscription such as highlighted profiles.
16.I then showed him an animated logo that I had designed which I asked him to use as inspiration to create a more professional logo we would use. I talked about colours I liked and compared them to other colours other dating apps are using.
17.We then discussed in detail the costs. I was very honest and upfront and said that I was funding the app from my husband and my personal savings. I explained that we have 4 children and a business which has struggled through covid so 1 was looking at different developers to find one that could work within our budget as I could not under any circumstances exceed it.
18.I asked Mr Woodford to provide me with a quote was for the project, I used the term quote with purpose as I understand the difference between a quote and an estimate. Mr Woodford said the quote would be between $30,000- $50,000, but he would expect that it would be closer to $30,000 given the simplicity of the app. Mr Woodford said the app was very simple and he had coded for a similar app before so he knew exactly what was involved in the build. He then explained that I would be billed at $80 per hour and all the work would be logged on a website he showed me on his laptop. Both Mr Woodford and myself used the term QUOTE during this verbal agreement of a contract.
19.He then said to make sure I had $10,000 - $20,000 for marketing once the app was launched. I replied that as he had assured me that the build would not exceed $50,000.00, I would be able to achieve his suggested marketing budget as I had accounted for marketing costs . He assured me that it would be within the range he had just quoted me and reiterated that he would expect it would be closer to the $30,000.
20.Mr Cameron then went on to say that he was certain 1 would be eligible for a government grant and he could help me apply for the grants as he had just done one with another client who he stated "got the money within a couple of weeks". He said many of his clients got grants, they were easy to achieve, but you had to start work on the app and have something to show the government before they would consider you. He said once you could show that you have invested a substantial amount of money they would approve the grant. He said they give back 40% of what you spent.
21.When I looked into grants, I found there was no such grant possible. There was one for the IT sector but it was for new and unique projects and did not pay until after the end of financial year 2022, I spoke to a specialist in the area and he said app development was not an area the grants applied to unless you can prove it is new technology which Eye Contact is not and none of Mr Woodfords apps are either. I concluded from this discussion, Mr Woodford was entirely fraudulent in his assertions regarding the grants.
22.Lara Anning, asked him about these grants and if she could apply for one herself as an investor. Mr Woodford said he would send an email with all the grant information and different options. He then discussed an organisations who specifically do grants for investors. Lara then asked if he thought it was a good project and did he recommend that she invest. He said yes he did.
23.Mr Woodford then showed/explained wireframes and showed me current projects he was working on. I later considered and flagged with him that I didn't want my own project used in this to demonstrate his work whilst still being developed, as this is a breach of IP privacy.
24.I explained to him that I wanted to go with an Australian development company as opposed to an offshore company as going offshore came with risks such as lower quality production and I wanted to support Australian business.
25.I asked questions to ensure his company was Australian such as about his staff, who they were and how many would be working on the project. He said they were all Australian based, mostly in Sydney. He said there would be 8 to 12 developers on the project. He said that he had a busy office in Sydney, that he used to have an office in Brisbane but due to covid he closed it. He said they do have offices in London and Switzerland as well but the Australian one would be doing my project. I said I was trying to avoid the horror stories of offshoring the work to third world countries and he agreed. He said that his company had fixed so many dodgy jobs from offshore companies. I realised at a later date that this entire conversation was fraudulent. Mr Woodford has no offices in the locations he stated. He has no listed mailing address, only a large residential apartment building in South Brisbane and a large general commercial building in Sydney. My entire development team were off shored in Eastern Europe.
26.Mr Woodford then explained that to begin I would have to pay a retainer of 50 hrs to do the prototype. He said the prototype would not exceed 50 hrs.
27.We then discussed a timeframe to complete the app and I said that I was really hoping to have the app completed by the 1st December to take advantage of the Christmas season.
28.I explained that the marketing strategy and budget would need to be concentrated on the first couple of weeks of release. This was due to the app functioning well when lots of people are using it at the same time and checking into the same locations. The Christmas party season would present the ideal time for this. Mr Woodford agreed and said that a long term marketing strategy would jeopardize the apps success for the reasons I had stated exactly.
29.I asked if that was a possible timeframe. He said that the time frame was definitely achievable as it's just a matter of having more people working on it at the same time. He said to do this, I would have to pay triple the deposit which equalled 150 hrs. I explained that was fine as the deposit amount only affected the percentage of the total amount paid upfront, not the total amount already agreed upon.
30.I then stated that based on the quote he had given me of $30,000 to $50,000, the project was within my budget but I could not go over $50,000. I also reiterated that I was glad that he was able to complete the project in the agreed timeframe and had experience in the type of app I wanted to develop. I read the contract, agreed, shook hands and signed the contract. (Annexure EH-1).
31.The next day I received the prototype service agreement with request for the upfront deposit (Annexure EH-2) and a link to the grants which Mr Woodford had said I would be able to receive. (Annexure EH-3).
Heyward further particularised what she claimed had occurred during the 26 August 2021 meeting in her second affidavit filed on 28 August 2023. [2] The Court accepts Heyward’s evidence that Woodford represented to her that she would be entitled to a grant in respect of the project. Why else would he have sent to Heyward a link concerning government grants when he emailed Heyward and her husband on 30 August 2021. [3]
[2] [16] – [35] of the Heyward affidavit filed on 28 August 2023.
[3] See Annexure EH-3 to the affidavit of Heyward filed on 17 June 2022 (1^st Heyward affidavit) and Exhibit
It transpired that two (2) written agreements were subsequently executed on or about 26 or 27 August 2021, namely:
(c)A Service Agreement between Heyward and the First Respondent (Appello) dated 26 August 2021; [4]
(d)A Design & Prototype Agreement – preparation date of 20 August 2021. [5]
[4] Annexure EH-1) to the first Heyward affidavit.
[5] Annexure EH-2 to the 1^st Heyward affidavit.
The Design & Prototype Agreement document, on its front page, was recorded as having been prepared for “Eva, Robin & Lee”, Robin being a reference to Heyward’s husband, whose name was Robin Heyward, with the reference to Lee probably being a misspelt reference to Lara Anning. Why else would there be a reference to three names for whom the document was prepared. The document contained a non-disclosure provision. The person present via telephone at the 19 August 2021 meeting identified by Heyward in her affidavit was “Lara Anning”. As found, the fact that Ms Anning’s name did not appear on the front page of the Design & Prototype Agreement was a probable error.
In his affidavit filed on 11 September 2023, Woodford at [6] – [15] inclusive relevantly affirmed as follows:
6. In 2014 I obtained a qualification in engineering from TAFE.
7.In 2016, I graduated from the Australian Institute of Business & Technology with a bachelor’s degree in business and technology.
8.Since 2016 to present I have worked exclusively in the technology sector specifically in the design and development of mobile phone applications (apps).
9.In 2017 while working in the United Kingdom I was involved in creating, funding and developing a dating app called ‘Now’. Now went live on the Apple App and Google Play Stores in or about 2017.
10.In 2017 it was voted ‘Best new dating app’ by the UK Dating Awards and was commercially successful.
11.Since 2015 I have assisted in developing more than 140 apps and software programs that have been launched on the Apple App and Google Play Stores.
Appello Pty Ltd
12.In March 2017, I founded Appello Pty Ltd (Appello) in Sydney, Australia.
13.Appello is a digital consultancy & development company, which specialises in app, software and website development.
14.Appello is an Australian-based company, but we find and employ the highest quality app developers available anywhere in the world. This means we often employ people or engage contractors from other countries to work alongside our Australian team.
15.We have approximately 50 staff, most of whom work remotely in Australia and from around the world.

As to his evidence concerning what transpired in his dealings with Heyward between 19 August 2021 and 27 August 2021, in Woodford’s affidavit filed on 11 September 2023 at [21] – [41] inclusive he affirmed as follows:
21.Our initial contact with Ms Heyward was no different to most potential clients who seek Appello’s services.
22.In or about 19 August 2021, during initial telephone calls we generally discussed Ms Heyward’s idea for a dating app which she was unable to explain in any detail other than to say it was related to meeting people and making eye contact in real life. At that stage she told me that she was just ‘shopping around’ with different software companies.
23.I explained what services Appello offered as a software company, my experience with the technology industry in general and we brainstormed some ideas for Ms Heyward’s app.
Initial Email Correspondence
24.On 20 August 2021, I sent an email to Ms Heyward which attached the proposed Design & Prototype Agreement and stated:
“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. It requires a 50h deposit to begin and will take roughly 5 weeks to complete.
Here is a link to grants you can apply for during the design phase:
me know if you have any questions or when you would like to kick things off.
Kind regards,
Cameron.”
At page 24 to 29 of CW-1 is a true copy of the email to Ms Heyward dated 20 August 2021, along with the Design & Prototype Agreement.
25.The Design & Prototype Agreement requested Ms Heyward make payment of $8,000.00 as a deposit for the ‘design phase’ of the project which represented 100 hours of work billed at $80 per hour.
26.The Design & Prototype Agreement states that, if Appello billed past 100 hours for the design phase, then the additional hours would not be charged to Ms Heyward.
27.Mrs Heyward did not agree to or sign the Design & Prototype Agreement as, on 20 August 2021, Ms Heyward sent me an email stating:
“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.”
At page 24 of CW-1 is a true copy of the email from Ms Heyward dated 20 August 2021.
Initial Meeting in Person with Ms Heyward
28.In or about 26 August 2021, I met with Ms Heyward in person for the first time.
29.We conducted a further brainstorming session regarding her dating app idea and she advised me that she was still ‘shopping around’ for a software company that suited her needs.
30.The meeting commenced by me introducing myself and my background in app development.
31.As Ms Heyward has no formal training in software development or the creation of mobile phone applications, she was unable to explain with any precision exactly how the app was to work. She simply had general ideas on colours, different pages for the app and the way in which users could use COVID style ‘check in’ at certain locations and see other users that had also checked in to that same location. The app would then allow users to send messages to each other. Ms Heyward told me that she wanted the dating app to be called ‘Eye Contact – Real Life Dating’ (App).
32.I am aware that it is alleged that, sometime prior to the signing of the Services Agreement, I said to Ms Heyward words to the effect that her App project would cost in the order of $30,000.00 in fees payable to Appello with an upper estimate of $50,000.00. I deny that such words were said, because I instead said words to the effect that:
(a)dating apps can cost about $50,000.00 to build but this really depends on the features and detail required as each app is different;
(b)we will not know an accurate final price until we complete the design and prototype phase; and
(c)after that phase is complete, we will provide you with our estimate on the total cost to develop the App.
33.Ms Heyward also alleges that I said words to the effect that the project would be completed by 1 December 2021 in time for the Christmas marketing period. I also deny that such words were said, because:
(a) I never provided a certain completion date; and
(b) I instead said words to the effect that completing the app by the Christmas party season was “achievable”.
34.Ms Heyward alleges that I said that I was practiced in creating apps of the type Ms Heyward proposed. I deny this because I instead said words to the effect that:
(a) I have developed dating apps in the past; and
(b)I will show you one that I have built for a company in the United Kingdom (referring to the ‘Now’ dating app as deposed to above).
35.Ms Heyward alleges that I said that the app could be designed with a geographic location function and still be marketable for a subscription of $8.00 per month. I deny this because words to the effect of the following were spoken:
(a)while discussing the general concept of the app, Ms Heyward said words to the effect that “I want to charge a subscription to people”;
(b)in response, I said words to the effect that “perhaps around the $8 mark could work”;
(c)Ms Heyward then said, “it would be good to offer discounts for 3 and 6 month subscriptions as is standard with most apps”; and
(d)I responded that “I cannot give you advice on subscription models for the app”.
36.Ms Heyward alleges that I told her she would be eligible for a government grant for the app. I deny this because the conversation proceeded with words to the effect of:
(a)Ms Heyward was enquiring whether she could apply for any government grants for the app; and
(b)I said words to the effect that “some startups in Australia can apply for government grants, however you should take advice and look into whether you are eligible.”
37.At no point during the meeting with Ms Heyward did I guarantee or promise anything to Ms Heyward as her idea for the app was far too uncertain for me to understand exactly what she wished to develop. Also in my experience, app ideas change many times during the design and development phase and therefore, initial or fixed quotes for an app are never realistic.
38.After the meeting with Eva, I sent her a follow up email confirming I enjoyed our brainstorming session regarding her Eye Contact Dating app idea and we could aim for a release in December.
39.During the brainstorming session the dating app Eva had discussed with me seemed much more complicated than the simple app she had described over the phone.
40.A services agreement that had been signed by both parties for the development of the App (Service Agreement) was later emailed to her along with an invoice for the initial deposit payment.
At page 30 to 36 of CW-1 is a true copy of the Services Agreement dated 26 August 2021.
41.Payment of this amount was agreed by the parties in the Service Agreement and payment of the invoice for that amount was made on 27 August 2021.
At page 45 of Annexure SM-1 to the Shoghik Affidavit is a true copy of INV-00935.
At trial, Senior Counsel for the applicants confirmed that the quantum of the claim was in the amount of $75,290.00 – being the amount of $62,890.00 paid to Appello for the provision of services, together with the amount of $12,400.00 paid to a different web developer called “Groovy Web” after Heyward’s relationship with Appello and Woodford had soured. A claim was also made for interest and costs.
Issues of Credibility
In this case, the Court was required to weigh up and consider different versions of factual events. The versions of relevant events given by Heyward were at odds with the versions of events given by Woodford.
The principles governing how a court ought to assess a witness’s credibility were recently considered by Wigney J in Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496at [307] – [309] where His Honour said:
“[307]Witness demeanour is one consideration which may assist a judge to resolve conflicting evidence. Sometimes the demeanour of a witness while giving evidence about contentious issues may provide insight into whether the evidence given by the witness is either honest and reliable, or dishonest or unreliable. Signs that may indicate dishonesty or unreliability include evasiveness, nervousness, an apparent unwillingness on the part of the witness to make appropriate or obvious concessions and even, in some circumstances, overconfidence.
[308]Even where a witness displays such traits when giving evidence, however, some caution must generally be exercised. That is because a witness may, for example, appear nervous or evasive for reasons that have nothing whatsoever to do with the honesty or reliability of their evidence. Other witnesses may be able to give evidence in an appropriately confident and direct manner and yet their evidence may be found to have been unreliable or, worse still, dishonest. Witness reliability is not always a reliable signpost. Indeed, judges have often cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability based solely or mainly on the appearance of witnesses. Scientific research has also cast doubt on the ability of judges to tell truth from falsehood accurately on the basis of such appearances: see Fox v Percy (2003) 214 CLR 118 at [30]-[31] and the cases there cited.
[309]Aside from demeanour, there are other factors or considerations which may assist a judge in determining the credibility of a witness and the reliability of his or her evidence. Those considerations include: whether the witness has previously given an account of the events in question and, if so, whether that previous account is consistent or inconsistent with the evidence given by the witness; the plausibility and apparent logic of the events described by the witness; and the consistency of the account of the events described as compared with other objectively established events. Such considerations often turn out to be a much surer guide to the reliability of the evidence given by a witness about disputed events. As Atkin LJ observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”) (1924) 20 Ll L Rep 140 at 152; cited in Fox v Percy at [30]:
... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.”
The Court respectfully had regard to the content of Justice Wigney’s judgment in Rush when assessing the credibility of each of the witnesses who gave evidence at the hearing of this trial.
Jones v Dunkell
The task of assessing credibility in this case was somewhat complicated, however, by the alleged failure on the part of the applicants to adduce evidence from two (2) witnesses, whom it was submitted by Counsel for the respondents, might reasonably have been expected to have been called by the applicant on the question of what representations (relating either to past or future matters) were made by Woodford during the meeting held on 26 August 2021. [6] Those two (2) people were said to be Heyward’s husband, and Lara Anning. It was submitted by Counsel for the respondents that both were present at the 26 August 2021 meeting via either telephone or remotely, and that both would have ordinarily and reasonably have been considered as being in the Heyward “camp”. Why then, asked Counsel for the respondents, was no evidence adduced from them at trial? Should the Court draw an adverse inference by reason of the failure of the applicants to call them?
[6] [51] of Respondent’s written submissions filed on 26 February 2024.
It was first submitted on behalf of the applicants in written submissions filed on 22 March 2024 that the first meeting which occurred with Woodford was on 19 August 2021, and that that was where Heyward, Heyward’s husband, and Lara Anning were all connected with him by telephone or remotely via video. It was further submitted by Senior Counsel for the applicants that the only critical representations which were made by Woodford to Heyward were so made during the course of a later face-to-face meeting held on 26 August 2021, and that only Heyward and Woodford were present during such meeting. The Court notes that there was support for such submission by reference to [4] – [5] of Heyward’s first affidavit (as referred to above) where Heyward deposed that both her husband and Ms Anning were online/telephone participants to only the initial meeting between Heyward and Woodford. It was accepted by both parties that the first meeting contact was via telephone on 19 August 2021.
Having read those written submissions made on behalf of the applicants, the Court caused part of the transcript of the applicant’s cross-examination on 27 September 2023 to be forwarded to Mr Savage, Senior Counsel for the applicants, together with an email dated 25 March 2024, the contents of which was follows:
“Dear Mr Savage
His Honour thanks you for your submission delivered by email on 22 March 2024 re Jones v Dunkel issues.
As to those submissions:
1.His Honour did not believe that there was any dispute between the parties that there were two (2) telephone conversations between Heyward and Woodford on 19 August 2021 and that there was another in-person meeting on 26 August 2021.
2.Having regard to the evidence of Ms Heyward at Day 2, T p. 12 – 14, particularly T p. 12.40 – 46 and at T p. 14.6 - .45, His Honour asks whether the applicant continues to assert that only Ms Heyward and Mr Woodford were present at the 26 August 2021 meeting, or that Mr Heyward and Ms Anning were also present at that meeting virtually?
His Honour has raised that issue in the light of the submission at [4] of the applicant’s Jones v Dunkel submissions that Ms Heyward must have been mistaken when giving evidence in cross-examination as to both her husband and Ms Anning being present virtually at the 26 August 2021 meeting. A copy of pp. 12 – 14 of the Transcript on Day 2 is attached.
Please advise as to when the applicant will be able to raise this issue prior to Chambers being provided with the respondents’ reply submissions.
Kind regards
Ashwin Ranchigoda
Deputy Associate to His Honour Judge Egan
Federal Circuit and Family Court of Australia
p. (07) 3052 4152 | e. [email protected] | w. >
The response received from Mr Savage to such email was a submission dated 26 March 2024 which relevantly provided as follows:
“Associate to his Honour Judge Egan
Federal Circuit and Family Court of Australia
BY EMAIL:   [email protected]
Cc      Lisa Pearce   [email protected]
Daniel Bycroft [email protected]
Bob Reed   [email protected]
Riley Bouveng [email protected]
Gary Coveney [email protected]
Dear Associate,
Heyward & Anor v Appello & Anor
I refer to your email to me of 25 March 2024 and respond as follows.
1.As to paragraph 1, I confirm that it is common ground between the parties that there were three meetings, 2 by telephone on 19 August 2021 and one face-to-face meeting on 26 August 2021 at which the actionable representations were made.
2.As to paragraph 2, there is evidence (as per our previous Jones v Dunkel submissions) that Ms Heyward identified two other people, her husband and a Ms Anning as being present on the telephone on the occasion of 26 August 2021. As the previous submissions highlighted, that seems to be inconsistent with the contemporaneous documentary evidence and particularly the letters Mr Woodford wrote after the meetings on 19 August and the meeting of 26 August. The inconsistency remains unexplained.
3.We accept that the evidence concerning the 26 August meeting was given by Ms Heyward in cross-examination at the trial on Day 2, particularly at those parts of the transcript to which you have referred.
4. It follows from the above that there is evidence that, if accepted, would found a finding that these two other people were on the telephone line – what they were doing is not revealed (other than Mr Heyward appears to have been looking after a young child of the couple).
5.No party before His Honour cross-examined either Ms Heyward nor Mr Woodford on the basis that these two other people participated in any way or had any significant, particular knowledge of events the subject of the trial. Nevertheless, we accept that the evidence to which you refer would support a finding that these people were on the telephone on 26 August 2021.
6.That state of affairs, (i.e. the possible finding) does not affect our previous Jones v Dunkel submissions for the following reasons. First, the matter arose only in cross-examination at the trial such that any attempt to correct the record by reference to (say) the documentary evidence would have been opposed as Counsel is not permitted to cross-examine his own witness.
7.Secondly, the Respondents in the proceedings do not themselves contend that the absent parties contributed anything or took any part in the proceedings.
8.Thirdly, this is not a matter of inference as we have earlier submitted. It is a question of direct evidence. Fourthly, even if that direct evidence was that the parties were present, there is by reason of the cases previously referred to, no basis for drawing an inference to the effect in Jones v Dunkel and if there were, there would still be, in our submission, a strong basis for deciding any issue of credibility notwithstanding any inference as to the making of the representations in favour of Ms Heyward over Mr Woodford for all of the reasons set out in our principal submission.
Please let me know if the Court requires anything further.
Yours sincerely
D A Savage KC Chambers”
The “contemporaneous documentary evidence” referred to by Mr Savage in [2] of his submissions above was an email dated 20 August 2021, sent by Woodford to Heyward, which recorded Woodford as having said that he had enjoyed meeting Heyward and her husband “yesterday” – namely on 19 August 2021. [7] That was consistent with the submission that Heyward’s husband and Anning listened in to the first telephone meeting on 19 August 2021, as opposed to the later face to face meeting between Heyward and Woodford on 26 August 2021. As referred to above, the fact that the Design and Prototype Agreement was also sent to Heyward, Heyward’s husband and probably Ms Anning on 20 August 2021 is also consistent with Heyward’s husband and Ms Anning only being present at the first telephone meeting with Woodford on 19 August 2021.
[7] See Annexure EH-3 to the Heyward affidavit filed on 17 June 2022.
In further support of the submission that Heyward’s husband and Ms Anning were only present via telephone at the first 19 August 2021 meeting, the applicant’s written submissions filed on 22 March 2024 also referred to an email sent by Woodford to Heyward on 26 August 2021, after their meeting earlier that day, where such email recorded that Woodford really enjoyed having met Heyward that day; where the email was addressed only to Heyward; and where no mention was made in the email of any other person having attended such meeting that day. [8]
[8] Exhibit 5.

By written submissions filed on behalf of the respondents, it was first erroneously submitted that there was no dispute between the parties that Heyward’s husband and Ms Anning had attended the 26 August 2021 meeting remotely, and that such meeting was the meeting at which relevant representations were alleged to have been made by Woodford. [9] Hence the significance that Counsel for the respondents placed upon the non-calling of Heyward’s husband and Anning at trial in reliance upon Jones v Dunkel principles, albeit that during her cross-examination, Heyward was at no time asked why she had not called either her husband or Ms Anning, or whether she was in contact with either of them.
[9] See [1] of respondents’ written submissions filed on 2 April 2024.
It was submitted on behalf of the respondents, though, that a text message sent by Heyward to Woodford on 8 December 2021 confirmed that Heyward’s husband and Anning had attended the 26 August 2021 meeting, the submission by Counsel for the respondents being that such meeting was referred to by Heyward in the text as being the “first meeting”. [10] The text message sent by Heyward, seized upon by the respondents, was as follows:
[10] See Annexure EH-16 to the first Heyward affidavit filed on 17 June 2022 at p. 3–14 – 4-14.
“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 1^st
December, 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 8^th 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.
(underlining inserted)
I ask you to look at it from my
point of view. I’ve paid 50k for an
app that is in the sky right now.
And you will be billing me another
20-40k at this rate which I just
don’t have.”
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,[11]. 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.
[11] Transcript of 27 September 2023 at T. p. 12 – 14.
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.
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.
No adverse inference will therefore be drawn by reason of the non-calling by Heyward of Heyward’s husband and Ms Anning as witnesses.
The Court’s Assessment of the Evidence
For reasons which will be set out later in these reasons, the Court has in all respects preferred and accepted the evidence of Heyward, as opposed to the evidence of Woodford, whenever their evidence was in conflict.
At [8] of the Further Amended Statement of Claim filed on 25 September 2023, it was pleaded that the relevant terms of the agreement entered into between Heyward and Appello were as follows:
8.   The material terms of the Service Agreement were:
(a)      The First Applicant was the Purchaser.
(b)      The First Respondent was the Vendor.
(c)        The completed project price was quoted and guaranteed to not exceed
$50,000.00, with an expected estimate of $30,000.00.
(d)The first applicant would pay the respondent $80 per hour for services rendered to be billed fortnightly.
(e)        The first applicant was instructed to pay triple the normal deposit of
$4,000.00, equalling $12,000.00 to allocate more staff to the project to ensure that the project would be completed by the guaranteed date.
(f)The project was guaranteed to be completed by the 1st of December 2021.
(g)      Time was of the essence of the contract.
(h)Once the project was completed and released to the App Store, the code for the application was to be transferred over to the First Applicant along with all relevant materials.
At [8A] of the FASOC, it was pleaded that Woodford made the following representations as to future matters:
8.        The material terms of the Service Agreement were:
(a)       The First Applicant was the Purchaser.
(b)       The First Respondent was the Vendor.
(c)The completed project price was quoted and guaranteed to not exceed $50,000.00.
(d)The first applicant would pay the respondent $80 per hour for services rendered to be billed fortnightly.
(e)The first applicant was instructed to pay triple the normal deposit of $4,000.00, equalling $12,000.00 to allocate more staff to the project to ensure that the project would be completed by the guaranteed date.
(f)The project was guaranteed to be completed by the 1^st of December 2021.
Annexure EH-1 to the first Heyward affidavit was a copy of the Service Agreement dated 26 August 2021, which agreement was in general terms.
Annexure EH-2 to the first Heyward affidavit was a Design and Prototype Agreement which relevantly recorded at page 4 thereof that a deposit of $4,000.00 was initially payable “upon project commencement”, with a further $4,000.00 payment due upon “Delivery of your Project”, a phrase not readily identifiable, contextually with the rest of the document, as including any timeframe. The first sum of $4,000.00 was said to be based upon a 50 hour time estimate over a 3-4 week period.
Annexure EH-3 to the first Heyward affidavit was an email from Woodword to Heyward and her husband dated 20 August 2021 which purported to attach annexure EH-2. It is of relevance that as at 20 August 2021, Woodford had only required Heyward - under the Design and Prototype Agreement - to pay the sum of $4,000.00 by way of initial deposit for work to be performed over a specified 3 – 4 week period. That requirement for the payment of $4,000.00 by way of deposit was confirmed by Woodford in his 20 August email to Heyward and her husband [12] when he said:
“As promised, I’ve attached a design & prototype proposal, which will be for the full design and prototype phase of your project. It requires a 50h deposit to begin and will take roughly 5 weeks to complete.”
[12] Annexure EH-3 to the first Heyward affidavit.
At the meeting between Heyward and Woodford on 26 August 2021, the Court finds that Heyward was insistent that she wanted to have the app operational and publicly available for subscription by at least early December 2021, and that Woodford agreed that it would be so operational. Heyward wanted the app up and running well before Christmas 2021 so that profits over the festive season to be derived from the use of the app could be maximised. She was encouraged by Woodford in his endorsement of the app concept, [13] his having said that it was “an easy build”.[14] To the extent that Heyward was insistent about the timeline for the app being operational by at least early December 2021, the Court finds that the agreement by Woodford, on behalf of Appello, to meet that deadline, made time of the essence for the performance of such term of the agreement. The Service Agreement also provided by cl. 30 thereof that time was to be of the essence.
[13] See [22] and [28] of first Heyward affidavit; Transcript of 27 September 2023 at T. p. 43.25-.35.
[14] See [25] of second Heyward affidavit filed on 28 August 2023.
The Court further finds that in acknowledgement of Heyward’s requirement for such timeline to be adhered to, Woodford required the payment of an initial $12,000.00 deposit, rather than the $4,000.00 deposit estimated in the Design and Prototype Agreement. That requirement was based upon Woodford’s assertion to Heyward that he would need to hire additional app developers at an early stage of the project so as to ensure that the app was delivered on time. Such requirement for the payment of an extra deposit to accommodate the employment of additional app developers was consistent with Heyward’s claims that Woodford had agreed to perform all of the work relating to building the app, and thereafter enabling it to go online as a functioning app, as close to 1 December 2021, in early December 2021, as possible. Woodford’s denials of that agreement having been reached are rejected.
The Court finds that over time, Heyward became aware that those people who Woodford had arranged to be involved in the project development were largely off-shore consultants, something that Woodford assured her during the 26 August 2021 meeting would not be the case. By October 2021, however, Heywood was over-committed financially, and she understandably resolved to continue with Appello, hoping for the best.
Exhibit 3 (which was a larger version of Annexure EH-4 to the first Heyward affidavit) was a cost estimate sent to Heyward on 13 October 2021 by a person by the name of Jibek Bazarkulova (Jibek). Jibek had been introduced to Heyward by Woodford as her app project manager. By 13 October 2021, Heyward had become frustrated, and worried, inter alia, because she believed that ongoing work reports which had been provided to her had underestimated the amount of work that had been performed, relative to what she had paid out. Jibek provided Exhibit 3 in response to Heyward’s request for the full project costs.
On its face, Exhibit 3 clearly contemplated a project duration of 2.5 – 3 months for the completion of the whole of the project, as was set out next to the heading “Project Duration” on page 2 of the Exhibit. That timeline fitted into Heyward’s requirement that the app be up and running by early December 2021. Consistently with that, the tables on page 1 of the Exhibit are indicative of the recording of initial steps such as “Design”, leading up to completion of the project, described as “Project Management” after which was termed “Opening Stores’ accounts, building and sending the Test Flights and APKs, Releasing the app into stores”, and after which was described as “Quality Assurance”, namely “Code quality check, testing use cases, creating bug reports, keep bugs free app”. The cost estimations were accordingly from the commencement of work until the completion of the project.
Also of significance, in that regard, is that from a reading of Exhibit 3, the project costs as a best estimate were expected to be $45,280.00, and on the most pessimistic estimate, were flagged as being $58,864.00. The Court accepts the evidence of Heyward that at the 26 August 2021 meeting with Woodford, it was agreed between them that the cost of the project, from its inception until an operational app was made available online in early December 2021, was not to exceed $50,000. Woodford’s denials of that agreement having been reached are rejected.
Further, in no document executed by Heyward, Appello, or Woodford, was GST included as a project cost. So much was admitted by Woodford in his affidavit filed on 11 September 2023. [15] The Court accepts the submission made on behalf of the applicants at [16](e)(ii) of the applicants’ written submissions filed on 19 February 2024 that the omission of GST in any of the proposed costing documentation given by Woodford to Heyward constituted misleading and deceptive conduct under ACCC MR 249-900. That finding relates to each and every document where a proposed payment for services was required to be made by Heyward to Appello.
[15] [50] of Woodford affidavit filed on 11 September 2023.
The Lack of Credibility of Woodford
Woodford was cross-examined at length about representations made by him concerning what he touted to be his own and Appello’s experience in the software industry, and particularly what was claimed to be expertise in the building and development of dating apps.
The earliest representation made by Woodford/Appello to Heyward was on 20 August 2021 when the Design and Prototype Agreement was emailed by Woodford to Heyward and her husband. On page 2 of such document, under the heading “About Appello”, the following representations were made:
“Our years of experience position us as one of the leading software providers globally and a reliable software provider for Australian businesses.
Providing fast and effective software solution for a wide range of industries and sectors catering to a variety of markets and cultures, we provide support for each stage of your technology requirements.”
Reference was made on page 3 of the Design and Prototype Agreement of Appello having had an “expert team” behind it. That was important to Heyward, who also wanted to be assured by Woodford that staff engaged on her project were based in Australia. [16] The Court accepts the evidence of Heyward that when asked about Australian involvement, Woodford said that there would be 8 to 12 developers on the project, and that work would be done out of Appello’s “busy Sydney office”. Such was Woodford’s reassurance to Heyward that staff engaged on the project would be Australia based.
[16] See [24] – [25] of first Heyward affidavit.
The Court further accepts the evidence of Heyward that after she said to Woodford that she was trying to avoid “ … the horror stories of offshoring the work to third world countries”, Woodford said that his company had fixed up a lot of “dodgy” jobs from offshore.
In his affidavit at [14] and [15], Woodford deposed that Appello found and employed “ … the highest quality app developers anywhere in the world …”, and that it had “ … approximately 50 staff, most of whom work remotely in Australia and from around the world.” As to the latter, such statement was false on two fronts. Appello did not employ 50 staff, but rather engaged off-shore consultants to undertake work on its behalf. Secondly, nearly all of those off-shore consultants did not work remotely in Australia, but rather from private work spaces around the world. In his cross-examination on this issue, Woodford was most evasive and dissembling. He admitted that in 2021, Appello did not have any employees, but rather that it had engaged contractors to perform some work for it, as and when required. Woodford was unable to point to any timesheets which recorded what, if any, work was performed by whom in respect of the subject Heyward project. Woodford conceded that Appello had engaged different consultants in respect of different projects, mainly from Kazakhstan and Armenia, and that they would each perform different aspects of a design and construct project in respect of an app. Woodford’s evidence was that once work had been completed, Appello would keep the profit after payment out of consultancy fees. The actual evidence of what Woodford said Appello did, and how it carried out its work, was vastly different from, and less extensive than, that which was portrayed by Woodford in his affidavit. A review of the transcript on that issue is illuminating. [17] In particular, the evidence of Woodford on point during his cross-examination was telling: [18]
“All of that really avoids the question. And that is, your role is to persuade people to deal with Appello by which you mean to get their business and then to give it to people in places like Kazakhstan and Armenia and pay them a percentage ‑ ‑ ‑?‑‑‑They can choose to live wherever they look. You know, some choose to live in London. Some choose to live in Spain or Portugal ......
By my point is, Appello doesn’t do anything. It just gets other people to do it. It’s just a clearing house for other people?‑‑‑We have to, obviously, build the company and you have to manage how our team work. We have to correct processes. We’re involved in the development cycle. We have to create guidelines on how the design develop projects – how we manage projects. So we do a lot, actually, in person.
But the people who do that are, themselves, subcontractors?‑‑‑Subcontractors will be given a specific role in the project. Like a puzzle – pieces in a puzzle, which will be specific roles that they’re contracted to. But put all that together, to actually make a software work, you need a lot of team with different experiences and Appello creates all the guidelines and processes for that.
But what’s interesting here is that – or what’s significant here is that none of the people on Ms Heyward’s team were resident in Australia?‑‑‑Michelle and obviously myself was involved in the project where – we’re residents. Nick was the project manager at the end of the project. He’s also – he was in Australia. Same thing. He was studying. So, yes, technical staff weren’t residents in Australia. But to make it happen, there was team members in Australia that work.”
[17] Transcript of 23 November 2023 at T. p. 43.9 – 48.31.
[18] Transcript of 23 November 2023 at T. p. 48.7 - .32.
The Design and Prototype Agreement did not have an address listed for Appello on it. The Service Agreement executed by Heyward and Woodford on behalf of Appello on 26 August 2021 did have an address for Appello noted on it – namely 333 George Street, Sydney, Australia. The represented address for Appello was false, in the sense that it gave a false impression as to the company carrying on business from those particular premises. In cross-examination, Woodford admitted that Appello was a New South Wales incorporated company, but that to the extent that work was carried out by or on behalf of the company, he said that such work was carried out from either a home office space or from, as Woodford said, “ … coworking office spaces that I may attend in New South Wales and Queensland”. [19] At the time of trial, Woodford was living at the Gold Coast in a home from which he said he conducted business online.
[19] Transcript of 28 September 2023 at T p. 7.15 – 8.5.
As to Woodford’s claim in his affidavit that since 2015 he had assisted in developing more than 140 apps and software programs that had been launched on the Apple App and Google Play Stores, Woodford accepted in cross-examination that if someone wanted to find out who had developed those apps, one could go to an Apple Store a Google Play Store to search.[20] The Court finds that Woodford exaggerated both his and Appello’s past experience when he deposed in his affidavit to having assisted in developing more than 140 apps. His evidence on point was unconvincing and evasive.
[20] T. of 28 September 2023 at T. p. 10.35-.37.

Woodford conceded that none of the companies identified by Woodford as having had Appello input into the development of any app (namely an app developed or part developed by Appello where such app was used by such companies) had ever referred to Appello on their websites in glowing or satisfactory terms concerning the development of any such app. Woodford, when pressed, said in answer to the question as to whether any such companies ever referred to any work done by Appello, that they had “Not publicly” done so. When asked why Appello hadn’t made disclosure of any documentation which went to confirming the involvement of Appello in the development of any app, Woodford flippantly replied that he wasn’t aware that he needed to make such disclosure.
Exhibit 9 was a print-out from the Appello website entitled “App Developers – Appello Software”. It was tendered on behalf of the applicant, and Woodford was cross-examined at length as to its contents. The evidence which Woodford gave, both in relation to Exhibit 8 as well as Exhibit 9, was evasive and incredible. Woodford was invited on many occasions to explain why companies listed by him as having had work performed on apps by Appello had not either critically or non-critically mentioned any Appello involvement in software programs operated by them, something which Woodford had impliedly asserted at [11] of his affidavit.
As to whether Appello had any relevant experience in dating app projects, it was put to Woodford in further cross-examination that Appello had no relevant experience at all in creating a dating app. That proposition was denied by Woodford, his saying that prior to August 2021, Appello had been involved with the development of a dating app called “Huggg”. When asked about whether invoices had been sent by Appello to Huggg’s owner, and as to why such invoices had not been disclosed in the proceeding, Woodford insisted that such invoices did exist, and that they could be made available if they were needed. The relevant transcript of such cross examination was as follows. [21]
[21]          See Transcript of 28 September 2023 at T. p. 51.20 – 52.25.
MR SAVAGE:
…
Good. Thank you. Now, is it true that Appello, in August of 2021, had no relevant experience at all in creating a dating app? --- No.
Okay. So do I take it, then, that Appello in August 2021 had pre-existing experience in creating dating apps? --- Yes.
All right. Now, can you point to me any dating app that Appello developed prior to August 2021 that can reasonably be described as a dating app rather than a social app or some other private app or whatever? Just one? --- Huggg.
Is Hug two Gs? --- Three Gs.
Sure.
HIS HONOUR: H-u-g-g-g? --- Yes
That right?
MR SAVAGE:   Now, Huggg is a UK company, isn’t it? --- Yes.
And you were, at some time between 2017 and 2021, the growth manager in the UK for Huggg? --- Yes, I was involved.
Yes. So you weren’t representing Appello in the UK; you were employed by Huggg? --- I was contracting.
Yes. But you weren’t contracting on behalf of Appello? --- I was contracting on behalf of myself.
Yes. So, when asked to nominate what Appello’s experience was, it’s not Appello’s experience; it’s your experience? --- I can also consult outside of what I do for Appello.
Let’s not play games. I asked you what experience Appello had. And, instead of telling me what experience Appello had or identifying an app that Appello had developed, you simply referred me to Huggg, which is a UK company? --- Yes.
So Appello did not have any relevant experience? --- That’s not true.
HIS HONOUR:   Well, what involvement did Appello have with the owner of Huggg? --- We designed the interface, so we designed their app.
Well, where are the invoices that were sent by Appello to Huggg’s owner? --- They – they would be – they would – they would be available if you needed them, your Honour.
MR SAVAGE:   You can’t produce them because they don’t exist; that’s right, isn’t it? --- That’s not true. They do exist.
HIS HONOUR:   Mr Savage, I’m – could you leave the courtroom just for a short time, please? --- Yes. Thank you, your Honour.
After the matter was stood down, argument ensued as to whether or not the Court ought to make an order for further and better disclosure, together with an attendant order adjourning the hearing so as to allow Woodford and Appello to produce invoices and other documentation, said to have been sent by Appello to the owners of Huggg, which the Court was assured by Woodford were both in existence and available. It transpired that both such orders were made, as reflected by orders published on 26 October 2023. The further hearing was adjourned to resume on 23 November 2023.
In a sworn Second Further List of Documents filed on 6 November 2023, and executed by Woodford in his capacity as a director of Appello, there was no disclosure of any documentation which demonstrated that Appello had had any involvement in the development of the Huggg dating app. There was some disclosure in relation to the involvement of Appello in the development of some mobile social apps, which apps were distinct and different from dating apps. There was purported disclosure in relation to a mobile online dating app called GTKM, consideration of which will be dealt with later. The relevant part of Woodford’s affidavit concerning the non-disclosure of any documentation relating to Hugg was as follows:
9. In compliance with order 6 of the Orders, I have made a number of enquiries as to the existence and location of the documents specified in order 3 in relation to the UK company identified in the Orders as Huggg.
10. Upon my review of my records, as well as personal documents and the books and records of the First Respondent, I no longer have in my control any agreements, invoices, or bank statements in relation to the Huggg app.
11. When work was conducted on the Huggg app, I lived in the United Kingdom. The bank accounts which Huggg made payment to for the services were operated in the United Kingdom. Those bank accounts have subsequently been closed.
12. I have also had several different lap top computers and hard drives containing information and records since that time. I no longer have access to those lap top computers or hard drives.
13. I have contacted Paul Wickers, the CEO of Huggg, regarding any documents he may be able to provide me,but am yet to hear back from him. I have included evidence of my conversation with Mr Wickers on 27 October 2023 in the discovered documents.
14. Further to the above, I have not been able to identify the day the documents last existed, given that the events occurred in or around 2018. I cannot recall ever deleting any of those documents, they are simply no longer under my control.
15. Once any response is received from Huggg or if any other documents relevant to the Orders and Appello’s work on dating apps comes into my control, I will make such documents discoverable in this proceeding.
As to Huggg, Woodford was cross-examined extensively about why there had been no disclosure concerning Huggg by the time the trial resumed on 23 November 2023. Knowing full well the obligation on the part of Appello and Woodford to produce documents at the resumption of the trial at the time of the making of the order for adjournment – an adjournment which came about by reason of Woodford’s evidence given to the Court on 28 September 2023 that Huggg documents were available, and would be able to be produced, at the resumption of the trial - Woodford gave evidence that after he said that he had been unable to locate any such Huggg documents, he had only attempted to locate them by trying to contact one Paul Wickers, the alleged CEO of Huggg, via LinkedIn. Having received no response from Wickers, Woodford did nothing further. He was asked by the Court if he had attempted to telephone Wickers to talk to him about the issue, but Woodford replied that he had not.
The Court finds that Woodford had deliberately obfuscated on the question of disclosure of Huggg documentation, both in his evidence during his cross examination on 28 September 2023, as well as on 23 November 2023. The Court finds that Woodford’s deception was motivated by his attempt to portray Appello as having relevant experience in the development of dating apps which it did not have, and which Woodford well knew it did not have. The Court accepts the submission made on behalf of the applicants that Woodford falsely made the representation about Appello having had past app development experience (as pleaded in paragraph 8A - and particularly at 8A(c) - of the Further Amended Statement of Claim) so as to induce Heyward into entering into the app development agreement with Appello. The Court further accepts that at the time that Woodford made such representation, he knew it to be false.
As to the GTKM disclosed material, the Court accepts the submissions made on behalf of the applicants that there were only four (4) timesheets disclosed by Appello, and that those timesheets only reflected work concerning the development of the user profile, the chat screen and questionnaire logic. [22] There were no other timesheets reflective of Appello having been responsible for the development of any dating app for GTKM in its entirety. The Court finds that the disclosure as made does not support any of Woodford’s claims.
[22] Annexure B to Applicant’s written submissions filed on 19 February 2024 relating to GTKM.
The Court finds that Woodford was not a witness of credit. He wasted the Court’s time in suggesting that Huggg documentation was accessible, and able to be produced, when he had no basis for doing so. At the least, he was reckless in so suggesting. He overstated the involvement of Appello in app development, and he was untruthful when he impliedly suggested that Appello not only employed Australian staff, but also that most of the staff employed by Appello were based in Australia. That was clearly not the case, and Woodford knew that such proposition was false at the time he swore his affidavit, and at the time he was cross examined.
Further, in circumstances where Woodford had no intention to have any substantial personal involvement in the development of the Heyward app concept – his intention was to engage mostly overseas consultants who would carry out the work – he had no reasonable ground for representing to Heyward that the app would be able to be finished and able to go live in early December 2021. He was reliant upon others performing work within a timeframe about which they were neither either informed about, or held to account in respect of. There was no evidence adduced on behalf of Appello that he had any relevant knowledge, from time to time, about how the project was progressing. Woodford did not adduce credible evidence that there were any reasonable grounds for the making of such representation as to a future matter. [23]
[23] S. 4 of ACL.
Heyward impressed the Court as being a witness of credit, who did her best when giving evidence. Heyward was forthright in the way she gave her evidence, and she was untroubled when giving consistent versions of that evidence during the course of her cross examination. The Court accepted the evidence of Heyward concerning Woodford having given a fixed price quote of no greater than $50,000.00 for the performance of all work associated with getting the app up and running by early December 2021. Heyward’s insistence that that was the case did not waiver, albeit that during her cross-examination she from time to time confused the word “quote” with the word “estimate”, something which the Court finds was of no moment considering its finding that Woodford had agreed with Heyward that total project costs at the time of handover of the app on a live basis would not exceed $50,000.00. The Court accepted the evidence of Heyward that she had told Woodford that because of her limited budget, total costs were not to exceed $50,000.00. The Court finds that Woodford had agreed to that.
The Court has already adverted to what it considered to be witness error on the part of Heyward as to who was present at the relevant 26 August 2021 meeting, and what was discussed at such meeting. However, there was a substantial truth about all of the relevant elements of Heyward’s claims against both Appello and Woodford in terms of misrepresentations by Woodford as to both past and future matters as pleaded, especially in relation to a fixed price for the project, and the time for completion of the project, each of which were fundamental to Heyward agreeing to have Appello develop her app.
The Court finds that had those representations not been made, Heyward would not have been induced, as she was, to have entered into the agreement. Specifically, the Court finds that Woodford, on behalf of Appello, made the following representations which were either representations made without reasonable grounds, or representations which constituted misleading or deceptive conduct, or conduct which was likely to mislead or deceive, in contravention of the provisions of ss. 4 and 18 of the ACL (the Australian Consumer Law), namely that:
(a)The project which Heyward proposed would cost in the order of $30,000.00 in fees payable to Appello with an upper limit of $50,000.00;
(b)The project would be completed by 1 December 2021 in time for the Christmas marketing period;
(c)Appello was practiced in creating social dating apps;
(d)The app once developed would be functional and live for operation in the first week of December 2021;
(e)Heyward would be eligible for a government grant in respect of the development of the app;
(f)Appello was an Australian company with most staff based in Sydney who would work on the project
The representations referred to in sub-paragraphs (a), (b), (d), (e) and (f) of [64] hereof were representations as to future matters where Woodford, on behalf of Appello, had no reasonable grounds for so representing. Woodford effectively divested himself of control over the nature and extent of work done on the app, his having left those details to consultants based overseas.
Further, the Court accepts that at the time of handover of the app by Appello/Woodford to Heyward on 22 December 2021 – the date on which the EYE Contact app went live on the app store – the app did not function. The Court accepts the evidence of Heyward that as at 22 December 2021, the app was completely dysfunctional and unable to be used. The necessary coding required to be installed into the app to allow it to operate was absent. It had no commercial value at that time. Unlike a three-wheeled motor vehicle capable of repair, the app was then, and it remained, dysfunctional.
The Court further accepts that there was no delay or obstruction, on the part of Heyward subsequent to 26 August 2021, which in any way contributed to problems concerning app development on the part of Appello. Heyward was prompt in the payment of money consequent upon the issue to her of invoices. The inability of Appello to make available to Heyward a functioning app, in at least the first week of December 2021, was not due to any lack of diligence, change of project scope, or lack of co-operation, on the part of Heyward. Assertions to the contrary by Woodford, such as in relation to an alleged change of instruction by Heyward to request a blocking feature, are rejected. It is trite, and it was established on the evidence, that a blocking capacity was required as a standard feature before the app could be released on either the App Store or the Google Play Store. The purported claim by Woodford and Jibek to the contrary was risible.
Further, the Court accepts the evidence of Mr Panchal that at the time that Groovy Web was first contacted by Heyward, the app was unable to work in a number of important respects, and that otherwise, it was not commercially viable. The Court also accepts that the sum of $12,400.00 was reasonably paid by Heyward to Groovy Web in respect of work firstly performed by Groovy Web to identify what had caused the app to be non-functional, and secondly in respect of work designed to enable the app to be functional and released onto the Apple platform and the Google Play platform on 12 May 2022.
Heyward has made out her claims against Appello under ss. 2, 4, 18 and 236 of the ACL as pleaded.
The Court further finds that Woodford was involved in the Appello contraventions, in that he aided and abetted, or counselled or procured such contraventions, or was directly or indirectly knowingly concerned in Appello’s contraventions. No serious contention was made during the course of the trial that Woodford ought not to be found accessorily liable in the event of the Court finding that Appello had contravened relevant provisions of the ACL.
In the light of the Court’s findings that Heyward was entitled to the award of damages under s. 236 of the ACL, it is unnecessary for the Court to deal with the other claims made by Heyward in negligence, for breach of contract or fraudulent misrepresentation.
Damages/Compensation
As articulated earlier in these reasons, and helpfully, Mr Savage confirmed that the quantum of the claim was in the amount of $75,290.00 – being the amount of $62,890.00 paid to Appello for the provision of services, [24] together with the amount of $12,400.00 paid to a different web developer called “Groovy Web”. [25] The Court proceeded on the basis that the amounts of such respective claims were not in issue.
[24] [18] of FASOC.
[25] [19] of FASOC.
The Court accepted the applicant’s submissions that the appropriate measure of damages recoverable can only be ascertained after a thorough analysis of the provisions of the ACL for the contravention of which the statutory cause of action may be maintained. [26]
[26] Murphy v Overton Investments Pty Ltd [2004] HCA 3 at 526.
The assessment of damages ought to be undertaken with a view to giving to the injured party the amount of damages which most fairly compensates them for the wrong which they have suffered. [27] A relevant inquiry is to ascertain the extent to which an applicant may be worse off as a result of their having been induced to enter into the transaction in reliance upon the misleading or deceptive conduct of the respondents, as opposed to what their situation would have been had the transaction not taken place. [28]
[27] Johnson v Perez (1988) 166 CLR 351.
[28] Finucane v NSW Egg Corporation (1988) 80 ALR 486.
Additionally, the Court is empowered, pursuant to the provisions of ss. 139 and 140 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), to grant such remedies as to the Court considers that a party has properly made out. Those sections are as follows:
139.     Determination of matter completely and finally
In every matter before the Federal Circuit and Family Court of Australia (Division   2), the Court must grant, either:
(a)       absolutely; or
(b)       on such terms and conditions as the Court thinks just;
all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by a party in the matter, so that, as far as possible:
(c)  all matters in controversy between the parties may be completely and finally determined; and
(d)  all multiplicity of proceedings concerning any of those matters may be avoided.
140.     Making of orders and issue of writs
The Federal Circuit and Family Court of Australia (Division   2) has power, in relation to matters in which it has jurisdiction, to:
(a)  make orders of such kinds, including interlocutory orders, as the Court considers appropriate; and
(b)  issue, or direct the issue of, writs of such kinds as the Court considers appropriate.

There was no expert evidence called to establish what value, if any, the app had as at the time of its failure on 22 December 2021, or subsequently. The Court finds that there was no need to adduce any such evidence, as it was self-evident that all of the work which had been performed by Appello had not been productive of that which had been agreed – namely the development by it of a functional dating app. [29] No member of the public would reasonably have downloaded, or sought to take advantage of, a non-functioning app. It was worthless.
[29] Dessent v Commonwealth of Australia (1977) 51 ALJR 482.
The Court finds 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.
It was not in dispute that the amount of $62,890.00 was paid by Heyward to Appello for the provision of its services, and that the amount of $12,400.00 was later paid by Heyward to the web developer called “Groovy Web” out of Heyward’s own funds. [30] The submissions made on behalf of the Respondents about the Groovy Web contract having been entered into by the second applicant are without merit. To the extent that any work was carried out by Groovy Web at the behest of the second applicant, such work was merely facilitated by the second respondent on behalf of the applicant as her agent. That arrangement did not disqualify the applicant from being entitled to recover costs incurred by her, as principal, in the engagement of Groovy Web. By engaging Groovy Web, Heyward took reasonable steps open to her in an attempt to mitigate her loss. Heyward ought not be criticised for doing so.
[30] See unchallenged bank records at CB 422 being part of Annexure EH-1 to the Heyward affidavit filed
on 28 August 2023.
The submission made on behalf of the respondents that Heyward was not entitled to damages because no evidence was led about the value of the app as at 22 December 2021 was without merit for the reasons advanced above. The Court finds that this was a no-transaction case where Heyward would not have entered into any agreement with Appello or Woodford had Woodford not made the representations, both as to past and future matters, as pleaded in the Further Amended Statement of Claim.
Heyward is entitled to damages under s. 236 of the ACL because she suffered direct loss and damage by reason of the contravening conduct of Appello and Woodford.
The Court does not accept the applicants’ alternative submission that the agreement entered into between Heyward and Appello ought to be declared void ab initio so as to enable Heyward to be compensated to the full extent of the loss suffered by her – namely by the payment to her of the sum of $75,290.00, plus interest. [31] No such case was advanced on the pleadings, it was not run at trial, and such claim was only agitated in Heyward’s final written submissions. There is merit to the respondents’ submissions that if a claim is sought to be made under s. 238 of the ACL, such claim should be properly pleaded. [32] The late making of a claim for a new cause of action ought not to be allowed as a matter of public policy. [33]
[31]          In reliance upon Rapid Roofing Pty Ltd v Natalise Pty Ltd (2007) 2 Qd. R 335 at [80] – [81] per Keane
JA.
[32]          Babstock Pty Ltd v Laurel Star Pty Ltd (No. 5) [2024] QCA 3; Bond Corporation Pty Ltd v Thiess
Contractors Pty Ltd (1987) 14 FCR 215 at 222; McKellar v Container Terminal Management Services (1999) FCA 1101 at 26; Murdoch v Lake [2014] QCA 216 at [18] – [21] per P Lyons J.
[33]          AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.
The Court publishes its reasons and directs that the lawyers for the parties confer with a view to forwarding to Judge’s Chambers, within seven (7) days of the date of this judgment, such draft declarations and orders as are reflective of such reasons on the case as pleaded.
The Court also asks the parties to address in such draft proposed orders the question of interest and costs.

I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan.
Associate:
Dated: 26 April 2024

7.

File number(s):	BRG 246 of 2022
Judgment of:	JUDGE EGAN
Date of judgment:	26 April 2024
Catchwords:	CONSUMER LAW – agreement for the development and release of an online dating app – where Second Respondent was a director of the First Respondent – where the Second Respondent made false or misleading representations to the First Applicant on behalf of the First Respondent as to both past and future matters – where representations were false or misleading - where the First Applicant suffered loss and damage as a result – where damages appropriate on a no-transaction basis – where an alternative claim under s. 238 of the ACL not pleaded and agitated at a stage too late in the proceedings – declarations and orders consistent with the orders of the Court to be forwarded to Judge’s Chambers.
Legislation:	Federal Circuit and Family Court of Australia Act 2021 (Cth) ss. 139 and 140. Australian Consumer Law ss. 2, 4, 18, 236 and 238.
Cases cited:	AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. Babstock Pty Ltd v Laurel Star Pty Ltd (No. 5) [2024] QCA 3 Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222 Dessent v Commonwealth of Australia (1977) 51 ALJR 482 Finucane v NSW Egg Corporation (1988) 80 ALR 486 Johnson v Perez (1988) 166 CLR 351 Jones v Dunkel (1959) 101 CLR 298 McKellar v Container Terminal Management Services (1999) FCA 1101 at 26 Murdoch v Lake [2014] QCA 216 at [18] – [21] per P Lyons J. Murphy v Overton Investments Pty Ltd [2004] HCA 3 Rapid Roofing Pty Ltd v Natalise Pty Ltd (2007) 2 Qd. R 335 at [80] – [81] per Keane JA. Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496
Division:	Division 2 General Federal Law
Number of paragraphs:	83
Date of last submission/s:	2 April 2024
Date of hearing:	25, 26, 27, 28 September 2023, 23 November 2023, 13 December 2023 and 13 February 2024
Place:	Brisbane
Counsel for the Applicant:	Mr D. Savage KC and Mr R. Read
Solicitor for the Applicant	Ms L. Pearce, MPD Law
Counsel for the Respondent:	Mr G. Coveney
Solicitor for the Respondent:	Mr D. Bycroft, Merton Lawyers

<BRG246 of 2022>
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	EVA ROSE HEYWARD First Applicant HEYWARD INDUSTRIES PTY LTD ACN 653 831 559 Second Applicant
AND:	APPELLO PTY LTD ABN 42 627 437 316 ACN 627 437 316 First Respondent CAMERON WOODFORD Second Respondent

ORDER MADE BY:	JUDGE EGAN
DATE OF ORDER:	26 APRIL 2024