Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions

[2025] NSWCA 166

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166

Hearing dates:

18 June 2025

Date of orders:

25 July 2025

Decision date:

25 July 2025

Before:

Bell CJ at [1];
Adamson JA at [2];
McHugh JA at [3]

Decision:

Appeal dismissed with costs.

Catchwords:

CIVIL PROCEDURE — rule in Browne v Dunn — whether inferences drawn by primary judge contradicted witness’s evidence — whether rule extends to any construction of conduct legally adverse to a party’s case

RESTITUTION — quantum meruit — fair and reasonable remuneration — whether sufficient evidence that rates and hours were fair and reasonable

Cases Cited:

Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1

Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226

Browne v Dunn (1893) 6 R 67 (H.L)

Commercial Union Assurance Co of Australia Ltd vFerrcomPtyLtd (1991) 22 NSWLR 389

H.C. Loneragan & Company Pty Limited as trustee for the Loneragan Family Trust trading as Quantum Forensic Solutions v Locke [2024] NSWDC 525

Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11

Nationwide News Pty Limited v Rush [2020] FCAFC 115; (2020) 380 ALR 432

Roude v Helwani [2020] NSWCA 310

Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219

Category:

Principal judgment

Parties:

Brian Joseph Locke (Appellant)
H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions (Respondent)

Representation:

Counsel:
D Barnett SC, B Hord (Appellant)
M Bennett (Respondent)

Solicitors:
Blackwell Short (Appellant)
Bartier Perry Pty Ltd (Respondent)

File Number(s):

2024/452660

Publication restriction:

Nil.

 Decision under appeal 

Court or tribunal:

District Court

Jurisdiction:

Civil

Citation:

H.C. Loneragan & Company Pty Limited as trustee for the Loneragan Family Trust trading as Quantum Forensic Solutions v Locke [2024] NSWDC 525

Date of Decision:

8 November 2024

Before:

Waugh SC DCJ

File Number(s):

2023/343424

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant, Mr Brian Locke, was a director of Gold and Copper Resources Pty Ltd (GCR) until 8 December 2017. In late 2017, he was the subject of investigation by GCR relating to alleged “spending discrepancies”. Mr Locke sought the assistance of the respondent (QFS), a firm of forensic accountants. Mr Locke and QFS entered a contract in relation to specific work (described as Phase 1), which was completed on 8 December 2017. It was a term of the contract that QFS would charge using hourly rates, but that the total fees for the contract work would not exceed $20,000 plus GST. QFS continued to work after 8 December 2017. It issued invoices addressed to Mr Locke for forensic accounting services totalling $219,454.89. Mr Locke paid only $30,000.

QFS commenced proceedings in the District Court, claiming the unpaid balance in contract or by way of quantum meruit. The primary judge upheld QFS’s claim in quantum meruit for the unpaid balance of the invoices. In doing so, his Honour drew inferences which were not put to Mr Locke in cross-examination.

The issues on appeal were whether the primary judge erred in finding (1) that Mr Locke had requested QFS to perform work after the completion of Phase 1 in light of what Mr Locke submitted were breaches of the rule in Browne v Dunn; and (2) whether there was no evidence, or no sufficient evidence, for the primary judge to reach the conclusion that the amounts claimed in the invoices were fair and reasonable remuneration.

The Court held (McHugh JA, Bell CJ and Adamson JA agreeing) dismissing the appeal:

As to issue (1)

1. The fundamental concern of the rule in Browne v Dunn is to avoid unfairness to the witness and the party calling the witness. There was no breach of the rule in this case. Mr Locke did not give any evidence that was contradicted by the inferences the primary judge drew. Nor does the rule require a cross-examiner to put to the witness every construction of the witness’s conduct that would be legally adverse to the case of the party who called the witness: at [37]-[49], [51], [56]-[62].

   Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219, considered.

   Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226, Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11, Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1, referred to.

As to issue (2)

1. What is fair and reasonable remuneration for work done is a question of fact. The ultimate question is not the market rate but what is fair and reasonable. Mr Locke’s failure to dispute the invoices was an admission by conduct that the invoiced hours and rates were reasonable. There was sufficient evidence to support the primary judge’s findings that the hours and rates charged by QFS were fair and reasonable: at [72], [83]-[96].

   Roude v Helwani [2020] NSWCA 310, applied.

JUDGMENT

1. BELL CJ: I have had the benefit of reading the reasons of McHugh JA.  I agree with those reasons and the orders his Honour proposes.

2. ADAMSON JA: I agree with McHugh JA.

3. McHUGH JA: This appeal raises two issues: the scope of the rule in Browne v Dunn and the evidence necessary to establish what is fair and reasonable remuneration for the purposes of a claim in quantum meruit. No error has been shown in the comprehensive reasons for judgment of the primary judge, Waugh SC DCJ, of 8 November 2024 (H.C. Loneragan & Company Pty Limited as trustee for the Loneragan Family Trust trading as Quantum Forensic Solutions v Locke [2024] NSWDC 525). The appeal should be dismissed.

Background

4. The appellant, Mr Brian Locke, was until 8 December 2017 a director of Gold and Copper Resources Pty Ltd (GCR), a company which he had founded and of which he had been the managing director and chief executive officer from 31 May 2007 until 11 September 2017. He was also a major shareholder.

5. On 14 October 2017, Mr Ken Lowe, the then chairman of GCR, sent Mr Locke an email seeking an explanation of “what the board considers spending discrepancies” which totalled about $3.1 million. The email was copied to other directors of GCR, including Mr Peter Coates, who was the chair of a sub-committee of GCR’s board recently formed to investigate the allegations made against Mr Locke. Central to the investigation were expenses incurred on Mr Locke’s wife’s credit card which had then been reimbursed by GCR.

6. Axiom Forensics Pty Ltd (Axiom), forensic accountants, had been appointed by GCR. On 2 November 2017, Axiom wrote to Mr Locke seeking certain information relating to the allegations against him.

7. On 12 November 2017 Mr Locke sent Mr Coates an email, which he forwarded a few minutes later to Mr Robert Mangioni (a solicitor), copying Mr Hugo Loneragan (a forensic accountant who was the sole director and shareholder of the respondent (QFS or Quantum Forensics)) and Mr Andrew Ponnambalam (a solicitor at Watson Mangioni). Mr Locke’s email to Mr Coates included the following statements:

“Given the seriousness of the allegations being made, you will also not be surprised to learn that I have now retained a legal adviser (Robert Mangioni of Watson Mangioni) and a forensic accountant (Hugo Loneragan of Quantum Forensics).

I have been asked to provide documents and explanations for transactions which, in some cases, go back to 2009. I have been given 2 weeks to provide that information. That time period is patently unreasonable. …

…

In these circumstances, I propose to respond to the request for information that has been made by working with Quantum Forensics to have them produce a report in response to all relevant matters. Given the number of years to address, and the detail required to address each matter, I anticipate that that will take at least a number of weeks. Once available, I’ll provide that report to you. You can assess what matters you then wish to take further, and how. I have nothing to hide in this. If the process that follows is a fair one, I will cooperate fully.”

8. Between 6 February 2018 and 19 July 2018, QFS issued invoices addressed to Mr Locke for forensic accounting services it provided between December 2017 and June 2018. The total of the invoices was $219,454.89. Mr Locke paid only $30,000. QFS commenced proceedings in the District Court of New South Wales, claiming the unpaid balance either in contract or alternatively by way of quantum meruit.

9. The dispute in this Court concerns the primary judge’s conclusion that QFS, which was the plaintiff below, was entitled to payment for the unpaid balance on the basis of quantum meruit.

10. The primary judge found (which is not challenged on appeal) that Mr Locke and QFS entered a contract prior to an attendance that Mr Loneragan and one of QFS’s accountants, Ms Carol Lam, made at Mr Locke’s office in Orange on 4 December 2017 (the Contract). The terms of the Contract were that Mr Loneragan and Ms Lam would attend at Orange, review documents to be made available to them by Mr Locke and provide a brief written or oral report to him. That work was described at the time as Phase 1. It was a term of the Contract that QFS would charge for the work done by Mr Loneragan and Ms Lam at hourly rates of $450 and $250 respectively, plus GST, but that the total fees for that work would not exceed $20,000 plus GST.

11. The primary judge found that Mr Loneragan and Ms Lam went to Orange on 4, 5 and 6 December 2017. His Honour accepted Mr Loneragan’s evidence that he and Ms Lam provided a brief oral report to Mr Locke and Mr Mangioni on the last day that they were in Orange and followed that up with a brief written report on 8 December 2017. On that basis, his Honour found that the Phase 1 work that QFS had agreed to perform under the Contract with Mr Locke was completed on 8 December 2017. Importantly, that finding is not challenged on appeal.

12. His Honour found that the Contract was the only contract that QFS entered with Mr Locke. He said that to the extent that QFS undertook work outside the terms of the Contract, it had to establish its claim in quantum meruit. His Honour went on to uphold QFS’s claim for the unpaid balance of the invoices on that basis (save in respect of the sum of $876.60 which his Honour found was work performed as part of Phase 1 pursuant to the Contract, but which exceeded the agreed $20,000 cap).

The appeal

13. Mr Locke did not (and does not) dispute that QFS performed the work the subject of the invoices. However, in what became in argument a narrowly focused appeal, he challenges two central findings of the primary judge.

14. The first is the finding that the work performed after the completion of the contracted Phase 1 work on 8 December 2017 was performed at the request of Mr Locke. He argues that the primary judge should not have made that finding because of what he submits were breaches of the rule in Browne v Dunn (referring to Browne v Dunn (1893) 6 R 67 (H.L)). That was the substance of the argument advanced in support of Ground 3, which is: “The Court erred in finding that the Respondent was entitled to restitution from the Appellant.”

15. Secondly, Mr Locke challenges the finding that the amounts claimed in the invoices were fair and reasonable remuneration for QFS’s work. Ground 4 is: “In the alternative, the Court erred (at [169]-[182]) in the amount of quantification of the quantum meruit claim owing to the Respondent.”

16. Grounds 1 and 2 were not pressed. Nor was QFS’s notice of contention.

Ground 3: Browne v Dunn

17. The focus for present purposes is the ultimate finding at J[164] that QFS did the further work after 8 December 2017 described in the schedules of time detail supplied with each invoice at the request of Mr Locke. The primary judge reasoned to that finding from a combination of primary documents, inferences to be drawn from them and the oral evidence of Mr Loneragan which he accepted. Mr Locke’s complaint on appeal is not that the finding was in error by reference to the evidence on which it was based. Instead, his case is that the primary judge should not have drawn inferences from the documents in circumstances in which those matters were not put to Mr Locke in cross-examination. It was said that the failure to do so was a breach of the rule in Browne v Dunn.

The primary judge’s reasons

18. The primary judge said that most of the underlying facts emerged from the contemporaneous documents and that there were few, if any, contests between the parties about the underlying facts, as opposed to the proper inferences to be drawn from those facts. His Honour began by identifying the facts established by the documents, an exercise which ran, in largely chronological form, from J[33] to J[106]. His Honour referred back to that exercise at J[156], before summarising Mr Loneragan’s evidence about the requests made by Mr Locke, and the work QFS performed, as follows at J[157] and J[160]:

“Mr Loneragan’s evidence, given orally and tested in cross-examination, was that following his attendance in Orange he and Mr Locke had many telephone conversations and in-person meetings, at which and during which Mr Locke requested that he continue work - examine the credit card statements; make contact with GCR’s accountants, Camphin Boston; request documents and records from the accountant; attend a meeting with the directors of GCR and the company’s forensic accountant, Michael Potter of Axiom Forensics, in mid December 2017; meet with Peter Coates to take him through the detailed work his team and he had completed in respect of the examination of the credit card statements and documents and accounting records of the company. Mr Loneragan gave evidence that he would say a week would not go by without Mr Locke contacting him by telephone and engaging him in a long conversation to discuss the progress of his work, and to make some request or another about other avenues of enquiry or specific tasks that Mr Locke wanted Mr Loneragan to perform. Mr Loneragan’s evidence was that the work he was requested to do all related to credit cards in the name of Anette Locke (Mr Locke’s wife) over the potential period of review of about 6 or 7 years starting from 2010/2011 up to late 2017. Mr Locke’s [sic: Mr Loneragan’s] evidence was that the vast volume of the work that he was being engaged to do related to substantiation of the expenses based on documents in the possession of Mr Locke. Mr Loneragan agreed that these were largely documents he had obtained in Orange. Mr Loneragan’s evidence was that the substantial scope of review was reviewing the actual transactions recorded on the credit cards. His evidence was that there were thousands and thousands of credit card transactions that were the subject of the review. Mr Loneragan agreed that broadly the work was in relation to reviewing the Visa statements and the company records for that 6 or 7 year period. He explained that those records included the Visa statements, the invoices and receipts associated with those transactions, and the books and records of the company, including the general ledgers, where those transactions were accounted for by the company.

…

… [Mr Loneragan’s] evidence was that a substantial part of the plaintiff’s work involved building a database of the relevant transactions, verifying those, reconciling them to the company’s own books and records and characterising the nature of the transaction. He said most of the work performed and presented related to the documentation possessed by Mr Locke, being the Visa card transactions and the supporting documentation of those transactions.”

19. Central to the argument under Ground 3 is his Honour’s reasoning at J[161], which began, “Mr Loneragan’s evidence, both about the work the plaintiff did and at whose request, is consistent with: …” There followed some 26 chronological sub-paragraphs in which his Honour made a number of findings, often by way of what his Honour described as “obvious” inferences, such as at J[161.5]:

“The fact that before Mr Loneragan had a meeting with Camphin Boston (GCR’s accountants) on 12 December 2017, Mr Loneragan had a meeting with Mr Locke the day before (on 11 December 2017) following which, according to the schedule of time cost detail, Mr Loneragan gave instructions to his team and prepared for the meeting with Camphin Boston. The obvious inference is that Mr Locke provided instructions to Mr Loneragan at the earlier meeting which Mr Loneragan then put into action.”

(Emphasis supplied.)

20. The primary judge concluded at J[162] and J[164]:

“The foregoing survey provides overwhelming contemporaneous and objective support for the oral evidence of Mr Loneragan. I therefore accept his evidence.

…

For those reasons, I find that the plaintiff did the further work after 8 December 2017 described in the schedules of time detail supplied with each invoice at the request of Mr Locke.”

The pleadings and the evidence at trial

21. Mr Locke’s complaint is that the failure to put to him in cross-examination the inferences referred to at J[161] was a breach of the rule in Browne v Dunn. He argues that the primary judge raised the Browne v Dunn issue at the hearing but failed to deal with it. While recognising that the primary judge would have had a discretion to exercise in that regard, Mr Locke argues that in circumstances in which his Honour did not deal with the issue, it was an error to draw the inferences.

22. In order to consider this argument it is necessary to say something of the issues on the pleadings and the evidence given by Mr Loneragan and Mr Locke.

23. In its amended statement of claim QFS alleged at par 4A: “Between on or about 28 November 2017 until on or about 19 July 2018 the defendant requested the plaintiff (and continued to request that the plaintiff) provide services under the Agreement.” The “Agreement” was alleged at par 2 to have been entered on or about 28 November 2017. Although the particulars subscribed to par 4A commenced with an email from Mr Locke to Mr Loneragan dated 1 March 2018, that email did not limit the period of the allegation by suggesting that Mr Locke’s requests for services only began on that date. Instead, the significance of the email was not that it contained a request for services from Mr Locke to Mr Loneragan (it did not), but rather that it forwarded an email from Mr Locke to Mr Coates of GCR of 27 February 2018. In that email, Mr Locke referred to the work that QFS had already been doing for Mr Locke, saying that “the forensic accountants from Quantum have been very busy working on their report” and that they had completed about 70% of the work. Mr Locke said that QFS had been instructed by Mr Locke’s lawyers to finalise the report as quickly as possible.

24. In the alternative to the contract pleading, par 11A of the amended statement of claim claimed “the amount of $189,454.89 on a quantum meruit basis for the unpaid value of the Services rendered by the plaintiff to the defendant, upon the request of the defendant.” The “Services” were defined at par 2 as “forensic accounting services … in relation to the company [GCR]”.

25. Taken together, the allegations at pars 4A and 11A, which were both denied in the amended defence, squarely raised as an issue for trial the question whether Mr Locke had requested QFS to provide forensic accounting services, whether as part of any contract or independently of it.

26. In the usual way, it was open to Mr Locke to give evidence supporting the denials in his pleading that he had requested QFS to provide forensic accounting services. He did not do so. Instead, the furthest Mr Locke’s evidence went was the statement in the second sentence of par 18 of his first affidavit, dated 24 October 2023:

“Mr Loneragan began providing services without a signed services agreement. He did not consult me regarding the services until he sent me a tax invoice on 6 February 2018 for $82,125.00”.

(Emphasis supplied.)

27. Mr Locke’s first affidavit was made before the introduction of pars 4A and 11A into the amended statement of claim filed on 10 November 2023, which pleaded for the first time that QFS had provided services to Mr Locke at his request. At the time Mr Locke made his first affidavit, the question whether he had requested QFS to provide services had not been identified as a distinct issue in the proceedings.

28. In that context, it is difficult to know what the word “consult” was directed to in the second sentence of par 18. But it should not be read as a denial that Mr Locke requested QFS to provide him with forensic accounting services. The sentence cannot be understood to mean that there were no dealings at all between Mr Locke and QFS before 6 February 2018. The very next paragraph of the affidavit refers to the payment by Mr Locke of $10,000 to QFS on 15 December 2017. And the unchallenged primary findings at J[51]-J[63] demonstrate that there were many meetings and telephone calls between Mr Locke and QFS in the period between 8 December 2017 and 6 February 2018. Those findings were directly based on the contemporaneous documents, and in particular the schedules of time cost detail which had accompanied the very invoices on which Mr Locke was being sued and of which he must have been aware when he made his first affidavit. In light of the first sentence of par 18, it may be that the second sentence was directed to the question whether there was any contract between Mr Locke and QFS (in effect anticipating the denial in subpar 2(a) of the amended defence that Mr Locke entered into an agreement as pleaded in the amended statement of claim or at all).

29. The conclusion that the second sentence of par 18 should not be read as a denial that Mr Locke requested QFS to provide him with forensic accounting services is reinforced by the interaction between Mr Loneragan’s second affidavit (made 14 February 2024) and Mr Locke’s second affidavit (made 22 February 2024). Both affidavits post-dated the specific allegations in the amended statement of claim that Mr Locke had requested QFS to provide services. Mr Loneragan said in the first sentence of par 10 of his second affidavit: “Between 28 November 2017 and 19 July 2018, Mr Locke requested that [QFS] provide services under the Agreement.” In his second affidavit at par 16, Mr Locke replied to various aspects of Mr Loneragan’s second affidavit. These responses did not address par 10 of Mr Loneragan’s affidavit. Mr Locke’s second affidavit did not otherwise deny requesting QFS to provide services, save in two highly specific respects at subpars 16(d) and (e), where he denied asking Mr Loneragan to send him an email and denied instructing Mr Loneragan to meet with Mr Coates.

30. Although the first sentence at par 10 of Mr Loneragan’s second affidavit was not read at the hearing, QFS was given leave to lead evidence from Mr Loneragan on the topic, which QFS took up. That was the oral evidence to which the primary judge had referred at J[157] quoted above. The following day, Mr Locke gave oral evidence in chief extending over four pages of transcript (largely directed to what Mr Locke had communicated to Mr Loneragan about his personal financial position). But counsel then appearing for Mr Locke made no attempt to lead any oral evidence from him rebutting the oral evidence that had been given by Mr Loneragan to the effect that Mr Locke had requested QFS to provide forensic accounting services.

31. That that was a deliberate forensic choice is explicable in light of Mr Locke’s case at trial: that QFS provided its services pursuant to a contract entered in or about November 2017 with GCR, not Mr Locke. Thus, he said at par 13 of his second affidavit: “After [8 December 2017], I had occasional dealings with Mr Loneragan. I understood that Mr Loneragan was primarily dealing with new directors of GCR including Ken Lowe and Peter Coates.” (It might also be noted that this reference in Mr Locke’s second affidavit to “occasional dealings” with Mr Loneragan after 8 December 2017 is in some tension with the suggestion that par 18 of Mr Locke’s first affidavit was a denial of having any dealings at all with Mr Loneragan between 8 December 2017 and 6 February 2018.)

32. That was the context in which the primary judge said at J[155]: “Mr Locke contends that GCR requested the work, principally through the agency of Mr Coates.” That was a summary description of Mr Locke’s case at trial and of par 13 of his second affidavit. But it should be noted that Mr Locke’s evidence did not use the word “requested”.

33. The primary judge rejected this aspect of Mr Locke’s case. Referring at J[162] to what he described as the “foregoing survey” (i.e., the findings at J[161]), his Honour said at J[163]:

“It also undermines considerably the notion that Mr Loneragan or the plaintiff was receiving instructions or requests to undertake work from Mr Coates or anyone else at GCR. …”

Browne v Dunn

34. When Mr Locke entered the witness box, (a) the allegation that he had requested QFS to provide him with forensic accounting services was squarely in issue on the pleadings, (b) Mr Loneragan had given direct oral evidence in support of that allegation, and (c) there was a large body of contemporaneous documents from which to infer, consistently with Mr Loneragan’s evidence, that Mr Locke had requested QFS’s services. In those circumstances, the fact that Mr Locke did not give evidence denying that he had made such requests might have attracted the operation of the principles as to adverse inferences discussed in Commercial Union Assurance Co of Australia Ltd vFerrcomPtyLtd (1991) 22 NSWLR 389 at 418 per Handley JA, as explained in later cases such as Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [63], fn 61 per Heydon, Crennan and Bell JJ and Nationwide News Pty Limited v Rush [2020] FCAFC 115; (2020) 380 ALR 432 at [544]-[547]. It is true that Mr Locke did not bear the legal onus on this issue; QFS did. But in light of the body of evidence in the case, if Mr Locke had not given evidence at all, there is no doubt that QFS would have discharged its legal onus to prove the requests. Mr Locke bore a persuasive onus to answer that body of evidence. No attempt was made to do so. In the circumstances, it would have been open to infer, at least, that his evidence on that topic would not have assisted his case. The Court might also more readily draw inferences of the kind at J[161] in circumstances where Mr Locke, who would have been ideally placed to deny that he had made any such requests for services (if that were the case), failed to do so.

35. Mr Locke’s Browne v Dunn complaint falls to be considered against that background. Although Ferrcom is concerned with principles of proof, and Browne v Dunn is principally concerned with fairness, such that they are not necessarily opposite sides of the same coin, that background does not assist Mr Locke.

36. It is important to observe at the outset that Mr Locke’s complaint under Ground 3 is not that there was insufficient evidence to support the ultimate finding that he requested QFS to provide the forensic accounting services for which QFS sought payment. Mr Locke acknowledged that there was a wealth of evidence to support that finding (which included the direct evidence of Mr Loneragan). Instead, Ground 3 rests entirely on an asserted breach of the rule in Browne v Dunn. The gist of the complaint is that the primary judge should not have made the ultimate finding because it was based, in part, on inferences drawn from particular documents in circumstances where (although Mr Locke was cross-examined on some of the documents) the inferences sought to be drawn (in particular, that Mr Locke requested services at particular points in time) were not put directly to him.

37. In the 132 years since Browne v Dunn was decided, the rule to which it gave its name has been subject to a good deal of elaboration, qualification and refinement. There are several reasons why it is undesirable to attempt to state the rule, or the consequences of its infringement, in comprehensive terms. First, the fundamental concern is to avoid unfairness to the witness and to the party calling the witness, and the situations in which unfairness may arise are many and varied. Secondly, at least if the issue is raised at trial, the appropriate remedy where the rule is infringed will be a question of practical justice. In that situation, depending on the nature of the breach, the remedy is essentially a matter in the discretion of the trial judge: Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 at 225B per Glass JA (Reynolds JA agreeing); Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226 at [48] per Allsop P, Giles JA and Tobias AJA). The position may be different where, without warning, a trial judge makes an important adverse finding based on matters with which the witness was not given an opportunity to deal: see, e.g., Kuhl at [70]-[72]. Thirdly, the parties’ forensic choices may bear on the question whether in a particular case the absence of cross-examination on a topic leads to any unfairness, and the appropriate remedy if it does. It suffices for present purposes to observe that the rule is often invoked in two broad types of situation, which tend to overlap. Both categories are said to be relevant in the present case.

Contradicting a witness’s evidence

38. The first category is where a party seeks to contradict the evidence given by a witness. That was the situation addressed in Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1. Hunt J stated the position as follows at 26E:

“… unless notice has already clearly been given of the cross-examiner’s intention to rely upon such matters, it is necessary to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings.”

39. The principal reason for this aspect of the rule is that it is unfair not to give the witness the opportunity both to explain or to qualify their own evidence, and to explain or qualify or deny the evidence relied upon to contradict it, especially where the contradiction is by way of inference. A second reason is that it gives the party calling the witness the opportunity to call corroborative evidence which might otherwise be unnecessary.

40. To the extent that Mr Locke advanced a complaint in this category, it fails for two reasons. First, Mr Locke did not give any evidence which the inferences the primary judge drew contradicted. Secondly, even if Mr Locke had given evidence denying that he had requested QFS to provide the services for which it sought payment, his Honour’s ultimate finding to that effect would have been properly made in any event.

The primary judge’s inferences did not contradict evidence given by Mr Locke

41. In the present case the only evidence given by Mr Locke which it was suggested was in any sense contradicted by the inferences and other findings at J[161] was that at par 18 of Mr Locke’s first affidavit (the statement that Mr Loneragan “did not consult me regarding the services until he sent me a tax invoice on 6 February 2018 for $82,125.00”). For the reasons already given, that was not evidence by which Mr Locke denied requesting that QFS provide him with forensic accounting services. Instead, as already noted, Mr Locke’s failure to give evidence on this topic might have led to a Ferrcom inference.

42. Mr Locke’s inability to point to any evidence he gave which was contradicted by the inferences he complains were not put to him in cross-examination is sufficient to dispose of this aspect of the argument in support of Ground 3.

The ultimate finding was properly made in any event

43. In any event, even if (contrary to what occurred at trial) Mr Locke had given evidence in terms, by way of a blanket denial, that he did not request QFS to provide him with any forensic accounting services, the primary judge’s ultimate finding would still have been properly made. In those circumstances the failure to put to Mr Locke that it should be inferred from particular documents that he requested QFS to provide the services would not have been a sufficient reason to uphold a challenge to the primary judge’s ultimate finding that Mr Locke requested the services for which QFS claimed payment. That is so for two reasons which, in the circumstances of this case, reinforce each other.

44. First, as to what Hunt J described as the nature of the case relied upon in contradiction of his evidence, Mr Locke was on notice that any blanket denial, if given, would be directly contradicted by the evidence Mr Loneragan had already given. Moreover, in opening, counsel for QFS had said “the documents make clear it was Mr Locke engaging the plaintiff. At all relevant times Mr Locke was aware of what was being done and was providing instructions and getting reports and information back.”

45. The six invoices on which QFS sued had been accompanied by detailed time cost schedules. The schedules included many entries similar to that recorded with respect to 4 hours of Mr Loneragan’s time on 11 December 2017: “Meeting with Brian Locke; team instructions and review; prepare for meeting with Camphin Boston”. Consistently with QFS’s opening, the inference which the primary judge drew from that entry was “that Mr Locke provided instructions to Mr Loneragan” at the meeting on 11 December: J[161.5]. Mr Locke was in fact cross-examined on the 11 December entry in the schedule; he agreed with the proposition that “part of those four hours was you and [Mr Loneragan] meeting to discuss the records and how to advance your position in relation to the records”. Mr Locke was also cross-examined on a number of other entries (but by no means all of them). In light of the pleadings, counsel’s opening, and the documentary material in the court book, it could not realistically be said that Mr Locke was not on notice of the nature of the case upon which QFS proposed to rely to prove that he had requested QFS to provide the services.

46. In those circumstances, even if (contrary to what occurred at trial) Mr Locke had given a blanket denial in his evidence that he had requested any services from QFS, fairness would not have required the cross-examiner to put to Mr Locke the documents from which the inferences of requests were sought to be drawn. That is to say, the rule in Browne v Dunn would not have been infringed.

47. (That is very different from saying that it would have been a sound forensic decision not to challenge such a denial, if it had been given. The failure to put questions to a witness in order to challenge their evidence, or to test an inference that the witness might have answered, may be highly material to the weight to be given to the evidence or the question whether the inference should be drawn. But here there was no such denial.)

48. Secondly, even if there had been a breach of the rule in Browne v Dunn, it would not automatically follow that the ultimate finding that Mr Locke requested QFS to provide the services for which it claimed payment was made in error. The rule is not that in every case in which it is infringed, the court is prohibited from drawing any inferences that would contradict the witness’s evidence. Glass JA made a strong statement to the opposite effect in Seymour (which involved a civil jury) at 225C: “it is going altogether too far to contend that evidence which would otherwise be relevant to a conclusion for which one party contends should be disregarded because its implications have not been put to the party against whom the inference is to be drawn.” His Honour’s statement must be understood in its context, including his Honour’s observation in the same paragraph that the remedy is essentially a matter in the discretion of the trial judge; see also at 236G-237A, 237F per Mahoney JA. Ultimately, the consequences of infringing the rule will depend on the circumstances of the case including any steps that were or might have been taken to remedy the infringement, and the extent and cogency of any other evidence relevant to the matter in issue.

49. Here, the effect of the evidence as a whole overwhelmingly established (as the primary judge clearly considered) the ultimate finding that Mr Locke requested QFS to provide the services for which it claimed payment. That finding did not depend solely on the inferences drawn at J[161]. Mr Loneragan’s direct oral evidence was that a week would not go by without Mr Locke requesting Mr Loneragan to perform work. That evidence, from which Mr Loneragan was not shifted in cross-examination, and which the primary judge accepted, strongly supported the ultimate finding. So too did the probabilities having regard to the basic dynamics driving the situation: GCR had made serious allegations against Mr Locke; Mr Locke needed the assistance of forensic accountants to answer the allegations; and QFS was in the business of providing such services for reward. In the circumstances, even if (contrary to what occurred at trial) Mr Locke had given a blanket denial in evidence of ever requesting QFS to provide him with any services, the lack of cross-examination directed to testing the specific inferences drawn at J[161] would not have been a sufficient reason to uphold a challenge to the primary judge’s ultimate finding in the circumstances of this case.

Non-gratuitous work

50. The conclusions reached above are not affected by the submission made for Mr Locke that the need for cross-examination was heightened here because, in order to found a claim in quantum meruit, the request must be for non-gratuitous work. The argument relied on the finding at J[137] that there was a contractual $20,000 cap on the cost of the Phase 1 work; the finding at J[109]-[110] that Mr Loneragan had said to Mr Locke, shortly before 4 December 2017, “If more work’s required down the track, I’ll prepare an estimate before any work is done”; and the fact that no further estimate was given. The argument was that in those circumstances, it should have been put to Mr Locke that he had requested work to be done on the basis that it would not be covered by the contractual cap, at least in the period until the first invoice was issued on 6 February 2018. That invoice was for much more than $20,000, and undoubtedly conveyed that QFS was not providing services after 8 December 2017 gratuitously.

51. The short answer to this part of the argument is that it does not change the fact that Mr Locke is unable to point to evidence that he gave which was contradicted by the inferences of which he complains.

52. In any event, the primary judge found that the contracted work was completed on 8 December 2017, when Mr Loneragan provided a brief written report on the work done in Orange. As noted above, that finding is not challenged on appeal. What happened after 8 December 2017 was outside the Contract, and therefore not subject to the contractual cap. The suggestion that in those circumstances a firm of professional accountants such as QFS would perform a very large body of further work at a client’s request for no charge borders on the fanciful. The fact that Mr Loneragan did not provide any further estimate (despite his statement that he would) might be a circumstance relevant to whether to find that Mr Locke requested QFS to perform non-gratuitous work in the period 8 December 2017 to 6 February 2018. But that is not the issue on appeal. Instead, the Browne v Dunn question is whether as a matter of fairness it was necessary to put to Mr Locke the inferences (sought to be drawn from particular documents) that he had requested QFS to perform work non-gratuitously.

53. For the reasons already given, it was not necessary as a matter of fairness to do so. When he entered the witness box, Mr Locke could hardly have failed to understand that QFS’s case was that it was entitled to charge for all the work the subject of the invoices. As to the detail of that work, Mr Locke was on notice of the 6 February invoice and the schedule of time cost detail attached to it. The six invoices were not only in evidence — they were the foundation of QFS’s claim, particularised at par 6 of the amended statement of claim, and exhibited to Mr Loneragan’s first affidavit at par 15. Similarly, Mr Loneragan had given evidence in chief that he attended a meeting at Mr Locke’s request in mid-December 2017 with the directors of GCR and Mr Michael Potter of Axiom. The schedule of time cost detail that accompanied QFS’s first invoice records that that meeting occurred on 14 December 2017. The submission that it was necessary as a matter of fairness to put to Mr Locke that it should be inferred from that material that he had requested QFS to provide services other than on a gratuitous basis should be rejected.

50. Moreover, the following exchange took place in cross-examination.

“Q. You have not, other than in the fact of defending these proceedings, you've never written an email or a text message or anything that you can put before his Honour to say, ‘I question that bill. I don't understand where this work's come from. I don't understand what you're doing in this month or that month’, have you?

A. No, because I didn't think they were my bills. Can I just - I don't know if it's right, can I answer one thing to that? At the time this would have been happening to me many times a day. People, lawyers, drillers, truck drivers, would have been sending me saying, ‘Look at this bill’. You know, it was quite a common occurrence and I used to say to them, ‘It's not mine. I'm not here’, so what - why should I - I couldn't do anything about it. I've still got the bills there, so, I mean, it wasn't something that was just to Hugo. I mean, the only thing different to Hugo is that after all this, everything else had - that he came back and said, ‘I'm personally responsible’.”

(Tcpt, 7 March 2024, 43.10-23)

55. If Mr Locke had any basis to say, in answer to QFS’s claim, that the services of that firm of professional accountants had been provided to him after 8 December 2017 gratuitously, it might be expected that he would have questioned the invoices addressed to him. When confronted with his failure to question the invoices, it was no part of Mr Locke’s answer that QFS was doing the work it was performing at his request for free; or that the work that he requested was covered by the $20,000 contractual cap; or that it was only after receiving the invoice on 6 February 2018 that he was on notice that QFS expected to be paid. Instead, the answer “I didn’t think they were my bills” was directed to who was liable to pay for the services (i.e., GCR, not Mr Locke). That answer was inconsistent with any suggestion QFS was providing services gratuitously.

Criticising a witness

56. The second category of case in which Browne v Dunn is often invoked is where the witness’s credit or conduct is to be impugned. One reason for requiring that the criticism, and the matters on which it is based, be put directly to the witness in cross-examination is that it is unfair to make a submission criticising the witness without permitting them to deny the imputation. The witness can then explain the evidence on which the criticism is based, and the party who called the witness can lead corroborating evidence as discussed above.

57. A case in this category is Bale v Mills at [38], where Allsop P, Giles JA and Tobias AJA described adverse credit findings made by the primary judge against the witness, Mr Schipp, a solicitor, as “devastating”: “they involved a finding of professional misconduct based on conscious dishonesty for relevant personal advantage”. The findings had been based exclusively on inferences drawn from correspondence which had not been put to Mr Schipp, such that he was given no opportunity to explain whether he had understood its significance or to deny that he had intentionally misled his client. As the Court said at [66]:

“Fairness in the administration of justice extends not only to ensuring a fair trial for the actual parties but also to ensuring that a witness who is not a party is treated fairly. It is especially important in circumstances such as the present, where a witness such as Mr Schipp had himself no right to object to his credit being impugned with respect to the Centrelink representation and where he was not given the opportunity to respond to what was clearly an extremely serious allegation not only going to his credit as a witness but also, as the primary judge was at pains to emphasise, to his honesty as a person and to his probity as a solicitor and an officer of the court. Further, the unfairness consequential upon the breach struck directly at the entitlement of the appellants to a fair hearing and procedural fairness in the making of findings by the District Court.”

58. In the circumstances of that case, it was held that fairness dictated that in the absence of any cross-examination on the correspondence, the primary judge should have refrained from making findings about dishonesty arising from that correspondence.

59. However, Mr Locke relied on the following passage from Seymour at 224G, quoted in Bale v Mills at [45], for a much more general proposition:

“If counsel proposes to submit that a witness’ evidence should not be accepted or that a particular construction should be placed on his conduct, the witness should be allowed an opportunity to deal with the suggestion.”

(Emphasis supplied.)

60. The substance of Mr Locke’s argument is that the words “a particular construction” should be understood as extending to any “construction” legally adverse to a party’s case, whether personally critical or not. The argument must be rejected. It is not supported by the fairness rationale described above. And, as sought to be deployed in the present case, the meaning Mr Locke would give to the words “a particular construction” would extend beyond merely characterising conduct. It would go to the fact of the conduct itself (here, whether or not Mr Locke requested QFS to perform the services). If that were the rule, it would dramatically expand the scope of the matters necessary to be put to a witness in cross-examination, for no sensible reason.

61. The argument is also not supported by Seymour itself. Seymour was a defamation case in which the plaintiff (again, coincidentally, a solicitor) had sued on imputations of involvement in fraud. The defendant had relied, relevantly, on five matters from which the jury were asked to infer the plaintiff’s involvement in the fraud, although that had not been suggested to the plaintiff in cross-examination: see at 223G, 224E. The context in which the words “a particular construction” appear is the middle of a paragraph replete with references to fraud: 224F-225D. In that context, the word “particular” must be understood as referring to the characterisation of conduct as involving serious wrongdoing.

62. The result in Seymour is also notable. It was held (notwithstanding the failure to cross-examine) that it must have been apparent to the plaintiff from the defence of justification that the defendant was suggesting that the plaintiff was involved in the fraud, and that it should have been apparent to the plaintiff that his connection with each of the five matters “might establish by circumstantial means that he was associated in the fraud which undoubtedly occurred”: at 224F-G per Glass JA; see also at 237D per Mahoney JA. The appeal was dismissed.

63. Ground 3 has not been made out.

Ground 4: quantum

64. As to Ground 4, the argument was again put narrowly.

The primary judge’s decision

65. It was not in issue that the amounts claimed in each of the six invoices on which QFS sued were the product of two integers: the hourly charge-out rates for the various people doing the work, and the number of hours of work they performed (which were recorded in the schedules of time cost detail accompanying each invoice).

66. Mr Locke’s argument drew a distinction between two categories of worker.

67. The first category was the accountants (i.e. Mr Loneragan and Ms Lam, who were charged out at $450 and $250 per hour respectively, plus GST). The primary judge found that the invoiced rates were the same as those that had been used under the Contract for Phase 1, and that in the absence of a challenge to those rates at the hearing it was appropriate to adopt them as reasonable or fair hourly rates for the work the accountants did as disclosed in the schedules of time cost detail: J[169].

68. The second category was the two QFS analysts who did the lion’s share of the work. They were charged out at $75 per hour, plus GST. That was a 50% discount on the $150 analyst rate that had been identified in QFS’s Proposal to deliver Forensic Accounting Services dated 28 November 2017. The primary judge accepted Mr Loneragan’s evidence that he had informed Mr Locke that the work he wanted Mr Loneragan to do required the work of more people; that he could offer a heavily discounted rate of $75 plus GST per hour for that work to be done by QFS’s analysts; and that Mr Locke accepted that offer. His Honour noted that Mr Locke did not challenge the use of that rate and found that it was a reasonable and fair rate for their work.

69. Although Mr Locke contested that the amount and nature of recorded time were fair and reasonable, the primary judge did not agree. His Honour found that the fair value, or reasonable or fair price, of all the work the plaintiff did after 8 December 2017 was as claimed in the schedules of time cost detail provided with each invoice.

The argument on appeal

70. On appeal, Mr Locke did not contest the fairness and reasonableness of the analysts’ rate, but argued that QFS had failed to discharge its onus of showing that the number of hours charged for the analysts’ work was fair and reasonable. This was a submission that there was no evidence, or no sufficient evidence, on which the primary judge could properly reach that conclusion. It was not suggested that there was evidence affirmatively indicating that there had been overservicing or that the amount of work was otherwise unreasonable.

71. As to the accountants, Mr Loneragan and Ms Lam, Mr Locke argued that there was insufficient evidence to support the fairness or reasonableness of the rates used (for example, evidence of market rates). While Mr Locke accepted that the rates used were the same as those agreed under the Contract for the Phase 1 work, he argued that the cap under that contract meant that the agreed rates could not be relied on as evidence of fair or reasonable rates more generally. He also argued that there was insufficient evidence to support the reasonableness of the number of hours claimed with respect to the two accountants’ work.

Consideration

72. It is essential to bear in mind that the issue is fair and reasonable remuneration for the work done. That is a question of fact. While the fact will commonly be established by proof of the market rate for the work done, the ultimate question is not the market rate, but rather what is fair and reasonable: Roude v Helwani [2020] NSWCA 310 at [34] per White JA (Brereton and McCallum JJA agreeing). The parties’ conduct may be relevant to establishing the fact. Thus, as was held in Roude at [33], a failure to respond to a demand for payment may amount to an admission if there are circumstances which render it more reasonably probable that a person who denied liability for the claim would answer the claim than not.

73. In the present case the issues fall to be determined against the following background.

74. Although Mr Locke disputed the reasonableness of the number of hours claimed, he did not dispute that the time recorded as spent on the work was in fact spent or that the work the subject of the invoices was actually done.

75. There had been a very large volume of work to be performed, as Mr Locke well understood. The analysis QFS was requested to undertake traversed eight years commencing in July 2009 and ending in July 2017. Among other things, it involved “thousands and thousands” of credit card transactions. QFS’s 28 November Proposal contemplated that the analysis would include company expenses incurred on a private credit card; management fees charged by a company associated with Mr Locke; accounting fees paid to GCR’s accountants, Camphin Boston; and the accounting for loans provided to GCR by related parties. As Mr Loneragan explained in his first affidavit, QFS was asked to examine the books and records of GCR, including journal entries, and to analyse expense claims submitted by Mr Locke to GCR, credit card statements, bank statements, invoices and receipts for purchases, and other financial and commercial documents in order to assess the nature and substance of the transactions and to identify, verify and categorise the expenditure and reconcile it to the accounting treatment in the books of GCR. The total of the alleged payments made was $3,105,093.84, based on GCR’s MYOB general ledger accounts. Part of QFS’s task was to reconcile that figure with the figure of $3,060,343.83 produced by QFS’s own analysis, which was based on the bank statements.

76. Mr Locke was heavily involved in the work that was done. He participated in a large number of meetings and telephone calls with Mr Loneragan and Ms Lam in the period from 8 December 2017 until July 2018, commencing with meetings on 11 and 14 December 2017. The subject matters varied, but they included, for example, a two-hour meeting on 15 May 2018 with Mr Loneragan and Ms Lam “to discuss Visa transaction analysis”. Mr Locke also attended QFS’s office to go through the statements “line by line”, as he said in an email to Mr Loneragan on 21 May 2018.

77. Specifically in relation to the reasonableness of the number of hours claimed, the primary judge found at J[175] that as each invoice was presented to Mr Locke he was aware of the work that had been done, of how much the plaintiff expected to be paid for it, and that some of the work had been undertaken by analysts, and that he made no protest, but instead asked QFS to undertake more work. His Honour had earlier found that there was no evidence that Mr Locke questioned the detailed descriptions of the work that had been done as set out in the schedule of time cost detail that accompanied each invoice: J[161.14]. Referring to the first invoice, dated 6 February 2018, his Honour inferred that Mr Locke continued to give instructions to Mr Loneragan to undertake work notwithstanding that he had received a bill for $82,125.39: J[161.15]. That figure well exceeded the original estimate of $20,000 plus GST. Mr Locke was also prepared to deploy his knowledge of the work being performed to his advantage. Thus on 26 February 2018 he had a meeting which the primary judge found lasted at least 2½ hours with Mr Loneragan and Ms Lam: J[161.16]. On 27 February 2018 Mr Locke emailed Mr Coates, saying that “the forensic accountants from Quantum have been very busy working on their report”, which he said was about 70% complete. He asked Mr Coates to help QFS obtain further information from GCR’s accountants, Camphin Boston: J[161.16].

78. When Mr Loneragan issued QFS’s second invoice on 7 March 2018, he raised the fact that the first invoice remained outstanding. The primary judge found that, as the email recorded, Mr Locke had assured Mr Loneragan that he was “actively seeking to make funds available to pay [QFS’s] fees as soon as possible”: J[161.17]. Given that the schedules of time cost detail accompanying the first invoice (like the others) had clearly identified the hourly rates charged and the hours taken for each item or work performed, and given Mr Locke’s knowledge of the work performed, his assurance that he was seeking to pay the invoice as soon as possible amounted to an admission that the rates and hours in the schedule supporting the first invoice were properly charged. That is a proper basis to infer that the rates and hours were fair and reasonable.

79. Mr Locke’s assurance to Mr Loneragan is also evidence that it would be fair and reasonable for QFS to carry out future work on the basis that it would charge using those rates. Fairness and reasonableness is a two-way street. On the primary judge’s findings, QFS was not contractually bound to carry out any work after 8 December 2017. Yet it did a very large amount of work at Mr Locke’s request. QFS did so on the basis that it would charge using certain rates. In determining whether the rates charged by QFS for that work were fair and reasonable, it is significant that Mr Locke requested QFS to continue to provide services to him, involving hundreds of hours of work, when he was fully on notice of the basis on which QFS was charging for the ongoing work, and did not demur.

80. When Mr Loneragan issued QFS’s third invoice on 5 April 2018, the covering email referred to Mr Locke’s having “agreed to make an immediate payment of $20,000 against outstanding invoices”. Mr Locke then did so on 9 April 2018. Mr Locke had already paid $10,000 to QFS on 15 December 2017. Together with the $20,000 paid on 9 April 2018, Mr Locke had at this point paid $30,000 in total to QFS. That exceeded the $20,000 cap under the Contract by $10,000. That strongly supports an inference that the $10,000 was paid towards so much of the invoiced work as was done after the contracted work came to an end on 8 December 2017. Mr Locke’s argument that both figures were “contractual” sums (the $10,000 being an initial retainer fee and the $20,000 being the cap) is unpersuasive in circumstances where the retainer fee had been described in QFS’s 28 November Proposal as an amount “to be applied against the first invoice”. That being so, and in the absence of any protest by Mr Locke (or even any query as to the rates, the number of hours, or the total charged), the payment on 9 April 2018 was again an admission, by conduct, that the rates and hours were properly charged. That is again a proper basis to infer that the rates, hours and total invoiced were fair and reasonable.

81. As to the work performed by the analysts, the primary judge found by reference to the schedules of time cost detail that their work was supervised by Ms Lam and largely undertaken at her direction. Moreover, when Mr Loneragan was asked about the accumulating time recorded on Mr Locke’s matter and whether he had a good day-to-day understanding of the total fees, he said, “Yes, I directed every piece of work on the matter.”

82. On 28 June 2018, Mr Loneragan sent an email to Mr Locke in which he referred to in excess of 1,500 hours spent examining Visa transactions, related expenditure summaries, expense claims and accounting entries over seven financial years. Mr Locke later embraced the figure of 1,500 hours work performed by QFS in an email sent on his behalf to a lawyer at Norton Rose Fulbright (the solicitors for GCR’s insurers, Chubb) on 30 July 2020.

83. Against that background, there was no error in the primary judge’s finding that the rates were fair and reasonable, or that the number of hours performed was fair and reasonable, such that the total amounts invoiced were fair and reasonable remuneration for the services QFS provided.

Roude applies

84. First, the reasoning in Roude applies in the present case, both as to the rates and as to the hours. It was conceded in argument that Mr Locke’s failure to dispute the invoices could be treated as an admission that the accountants’ rates were reasonable. But the significance of the failure to dispute the invoices went beyond the rates; it included the amount of time spent. Mr Locke not only received the detailed schedules of time cost detail that accompanied each invoice, he had been closely involved in the work himself, including reviewing primary documents. He was well-placed to form a view whether the number of hours was reasonable or excessive. At no point did he protest the rates, the number of hours or the amount of any invoice. Instead, he gave Mr Loneragan assurances that he would pay, and in fact made payment in April 2018 against invoices in respect of work performed after 8 December 2017. He also embraced the number of hours for which invoices had been issued in his communications with Norton Rose Fulbright.

85. When Mr Locke was cross-examined on his failure to question any bill, he answered: “No, because I didn’t think they were my bills.” (See the extract from the transcript set out at [54] above.) Later in the same answer, Mr Locke disputed that he was “personally responsible” for QFS’s bill. (Tcpt, 7 March 2024, 43.15-23.) It was submitted for Mr Locke that his answer amounted to saying he didn’t care, and that that explained his failure to dispute the invoices. That explanation should be rejected. First, Mr Locke’s denial of personal liability was immediately challenged in the next question; that had also been the object of much of the earlier cross-examination. The primary judge rejected the proposition that Mr Locke was not personally responsible when his Honour found at J[164] that Mr Locke had requested the services. Secondly, the explanation is inconsistent with Mr Locke’s conduct described above, most particularly with respect to his payment of $20,000 in April, (taking the total to $30,000, being $10,000 in excess of the contractual cap). Thirdly, Mr Locke himself admitted “I should have stopped Hugo”: Tcpt, 7 March 2024, 39.24. That was again inconsistent with the assertion that Mr Locke had no reason to care about the contents of the invoices (which were addressed to him and identified him as the client).

84. Mr Locke took a discrete Browne v Dunn point with respect to the inferences to be drawn from his having paid $30,000 (i.e., $10,000 more than the Phase 1 cap). In his first affidavit, he had asserted at par 26: “I have paid Quantum $30,000 in relation to the services rendered in accordance with Phase 1 of the Proposal”. That was evidence (so the argument ran) that the whole $30,000 had been paid for services rendered under the Contract and before 8 December 2017. It was submitted that that evidence was not contradicted in cross-examination.

85. This Browne v Dunn point must fail. At the time Mr Locke made his first affidavit, his original defence admitted that he had been a party to a contract with QFS for provision of those services. His first affidavit was consistent with that admission. But by the time of the hearing, Mr Locke’s amended defence denied ever entering any agreement with QFS, instead alleging that the agreement was between GCR and QFS. Moreover, QFS had alleged in the original statement of claim that Mr Locke had paid the $30,000 “in reduction of the total amount of the Invoices”. Mr Locke had admitted the allegation. When that allegation was repeated in the amended statement of claim, Mr Locke denied it in his amended defence, saying that “the Plaintiff was paid $30,000 in respect of the Services under the GCR Agreement”. When Mr Locke was cross-examined on par 26 of his first affidavit (as part of a general attack on his withdrawal of the admission that he entered into the agreement in his original defence), his answer was that he had had legal advice. When he was cross-examined on the $20,000 payment that he made on 9 April 2018, it was put to him that he had not brought a claim to recover the $10,000 by which the $30,000 exceeded the $20,000 cap. That cross-examination was part of a broader attack on Mr Locke’s defence that he was not personally liable for any of QFS’s fees.

86. The suggestion that there was any breach of Browne v Dunn in the circumstances must be rejected.

1. At the time of the hearing, the status of par 26 of Mr Locke’s first affidavit was highly doubtful in light of the amendments to his own case: the proposition that he had made the payments in discharge of a contractual obligation relating to the Phase 1 work completed on 8 December 2017 cannot be reconciled with his pleaded case that he was not a party to any agreement.

2. Mr Locke had been on notice all along that QFS’s pleaded case was that the payments had been made in reduction of the total amount of the invoices (i.e., not specifically in relation to the Phase 1 work performed before 8 December 2017).

3. The cross-examination about Mr Locke’s failure to try to recover the $10,000 clearly enough raised that the payment of the $20,000 in April was an acknowledgement of his liability to pay for the work performed after 8 December 2017. That proposition could hardly have come as a surprise to Mr Locke, given his own pleading at subpar 2(g)(ii) of the amended defence that the cost of QFS’s services had been capped under the contract between GCR and QFS at $20,000.

The accountants’ rates were fair and reasonable

89. Secondly, specifically as to the fairness and reasonableness of the rates charged for the two accountants, Mr Loneragan and Ms Lam, in addition to the concession in argument concerning Mr Locke’s failure to dispute the invoices, the findings and evidence referred to above amply support a finding that the rates were fair and reasonable. Those findings include the fact that the rates used were the same as those in the Contract for Phase 1. Mr Locke accepted that the contract price or rates under an unenforceable contract will be at least evidence of what would be fair and reasonable remuneration: Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32 at [100] per Gageler J and [204] per Nettle, Gordon and Edelman JJ. So too in the circumstances of this case are the rates agreed in what was an enforceable contract for Phase 1 of the work.

90. Mr Locke’s reliance on the $20,000 cap under the Contract does not avail him. The cap was not a fixed price; it was a cap. Mr Loneragan had estimated on 15 November 2017 that the work that eventually became part of Phase 1 might cost $12,000 plus GST. By the time of QFS’s 28 November Proposal, the estimate for Phase 1 was in the range $15,000-$20,000 plus GST. There was a realistic possibility that the total cost of the contracted work (as found by his Honour at J[137]) would come in under the cap. In those circumstances, the agreed contractual rate was evidence of a fair and reasonable rate for work of the kind done under the Contract. There is no reason to think that the work done after 8 December 2017 was relevantly of a different kind. In each case, the services were those of professional forensic accountants analysing the same body of material, only in greater detail after 8 December 2017. Mr Locke also relies on the fact that, as his Honour found at J[109]-[110], Mr Loneragan and Mr Locke had a conversation shortly before 4 December 2017 in which Mr Loneragan had said if more work was required “down the track” he would prepare an estimate before any work was done. The fact that the parties were contemplating that an estimate was to be given for work after the Contract has no bearing on the question whether the agreed rate for work under the Contract was evidence of a fair and reasonable rate.

The accountants’ hours were fair and reasonable

91. Thirdly, as to the number of hours of work performed by Mr Loneragan and Ms Lam, Mr Locke conceded in argument that at least some of the time entries, such as for meetings and telephone calls, were reasonable on their face. But he disputed that there was sufficient (or indeed any) evidence to establish that the balance of the time claimed with respect to the two accountants was reasonable. It was submitted that Roude was distinguishable because, unlike the situation in that case (see Roude at [30]), there was no direct evidence from Mr Loneragan asserting the fairness or reasonableness of the fees charged.

92. The basic difficulty Mr Locke faces on this aspect of his argument is inherent in the way in which the argument was advanced. This is not a case in which there was any evidence that the amount of time claimed was unfair or unreasonable. Instead, in order to show error in the finding below Mr Locke must show that there was no evidence, or no sufficient evidence, to discharge QFS’s onus. The threshold the evidence had to reach was relatively undemanding. It is true that there was no direct evidence given by Mr Loneragan, Ms Lam, the analysts or any expert as to the fairness and reasonableness of the amount of time claimed. But direct evidence was not essential. While there may not have been a great deal of other evidence, such evidence as there was provided a sufficient basis to discharge QFS’s onus.

93. First, there was the admission as to the fairness and reasonableness of the amount of time taken flowing from Mr Locke’s failure to dispute any invoice. Secondly, Mr Loneragan and Ms Lam were subject to professional ethical obligations with which there is no reason to doubt they complied. Mr Loneragan had been a member of the Institute of Chartered Accountants since 2001. Given the nature of the schedules of time cost detail, it is reasonable to infer, in relation to entries relating to Mr Loneragan and Ms Lam, that they were responsible for the descriptions of the work performed and the amount of time claimed. As a general proposition, the discharge of a professional person’s obligations in relation to time charging requires the person to be satisfied that the amount of time for which the client is to be charged for a task is reasonable. There is no reason to doubt that that is what occurred in the present case. In the circumstances, a bare conclusory opinion to that effect given in evidence by Mr Loneragan (which on Mr Locke’s argument would have sufficed in the absence of objection to it) would have added nothing of substance to what was implicit in the sending of the invoices themselves.

The analysts’ hours were fair and reasonable

94. Fourthly, for similar reasons, there was a sufficient basis in the evidence for the finding that the number of hours claimed for work performed by the two analysts was fair and reasonable. That included, but was not limited to, the admission flowing from Mr Locke’s failure to dispute any invoice

95. An important part of the context was that the reason the charge out rate for the analysts had been reduced by 50% was the very large amount of work the parties understood would be involved. There was no dispute that the schedules of time cost detail accurately recorded work that the analysts actually did. That work was being supervised by Ms Lam and ultimately directed by Mr Loneragan, who was aware of the amount of time being spent. The two accountants had the professional obligations described above, and the same reasoning applies with respect to time charging for the analysts’ work performed under the accountants’ supervision. The accountants had to satisfy themselves that the amount of time claimed was reasonable, and there is no reason to doubt that that is what occurred in this case. Moreover, given the nature of the work, which was to review, analyse and reconcile various sources of information, once it is accepted that the hours claimed were for work that was actually done, the number of hours claimed is at least prima facie evidence of how long it would take to perform such work. That is, again, a basis on which to infer the reasonableness of the number of hours claimed.

Disposition of Ground 4

96. As noted above, the substance of the argument under Ground 4 is that there was insufficient evidence on which a finding could properly be made that the amount claimed was fair and reasonable. The threshold the evidence was required to meet in order to defeat Mr Locke’s argument on Ground 4 was not high. The evidence met the threshold.

97. Ground 4 has not been made out.

Conclusion and orders

98. The appeal should be dismissed with costs.

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Amendments

28 July 2025 - "RESTITUTION" substituted for "EQUITY" in catchwords.