Savills (NSW) Pty Ltd v ATF CTH Pty Ltd

By amended statement of claim filed on 26 March 2018 Savills (NSW) Pty Ltd (the plaintiff) claimed commission pursuant to an alleged agency agreement pursuant to which it was retained by ATF CTH Pty Ltd (the defendant) to sell certain property, as defined in the agreement, located at 9-25 Commonwealth Street, Surry Hills (the site). In the alternative, the plaintiff claims damages for unconscionable conduct on the part of the defendant in encouraging it to do work on the basis of an assumption that it was the defendant’s exclusive agent for the sale of the property.

The defendant denied that there was any concluded agreement in writing with the plaintiff. In the alternative it submitted that, if there was a concluded agreement with the plaintiff in the form for which the plaintiff contended, the terms of the agreement did not entitle the plaintiff to any payment. Further, the defendant contended that there was no unconscionability on its part and that, in any event, the evidence adduced by plaintiff was not sufficient to prove any loss arising from the alleged unconscionable conduct.

I note that the hearing was conducted in person in my courtroom. The only witness who gave evidence remotely was Peter Keenan, who gave evidence via audio-visual link from Melbourne. He was provided with documents in the course of his cross-examination by a solicitor who was separately retained for that purpose.

Before turning to the legal claims and defences it is necessary to set out in some detail the facts. Except where necessary for the narrative, the issue of credibility will be addressed separately.

The defendant is a property developer, the principals of which are investors: Jian Shi, Jingfei Wang and Jiachen Xue, each of whom is based in China. In 2014 it purchased the site with a view to developing a single tower which would comprise hotel, retail and residential components. Mr Shi approached Chang Liu, the son of long-standing friends, and recruited him to help establish a company to manage the development on behalf of the defendant. To that end, ATF Development Pty Ltd was incorporated on 19 May 2014. It subsequently changed its name to Andev Pty Ltd (Andev). On 30 June 2014 a development and management deed was executed by the defendant and Andev, which provided that Andev was to arrange for the existing improvements to be demolished and to design and construct the new development on the site which would comprise a single tower with a hotel as well as residential and retail components.

At all material times, Mr Shi was the sole director of Andev. Andev occupied an office on level 35, 50 Bridge Street, Sydney. About every 4-6 weeks, Mr Shi would travel to Australia for a period of 3-7 days. During that time he would visit Andev’s office. Mr Shi speaks Mandarin but not English.

Mr Liu was employed by Andev. He is a native Mandarin speaker and is also fluent in English. His roles included data entry and preparation of management accounts. Mr Liu also acted as a conduit and translator between Mr Shi and others associated with Andev, the defendant and those who dealt with them. I accept the description of Peter Keenan (referred to below) that Mr Liu was Mr Shi’s “trusted eyes and ears on the ground in … Sydney”.

Andev employed Frank Iemma as its development manager for the site. I accept that he was, as Mr Keenan described him, the gatekeeper to Mr Shi although they spoke no common language. Mr Iemma and Mr Liu worked closely. Grace Shao was Andev’s office receptionist. Ms Shao was also bilingual in Mandarin and English and, from time to time, would also provide translation services to Mr Shi. While Mr Iemma gave instructions to Mr Liu, as he was senior to him at Andev, Mr Liu ultimately reported to Mr Shi. Whenever Mr Iemma needed instructions from Mr Shi, he would use Mr Liu as a go-between. Mr Shi would consult with the other two directors of the defendant before communicating the defendant’s position or decision to Mr Liu to be passed on to Mr Iemma. When Mr Shi visited Australia he would meet with Mr Liu and Mr Iemma but rarely attended external meetings and would leave Mr Liu and Mr Iemma to carry out his instructions.

The arrangement between the defendant and Andev was that the defendant would decide on the nature of the development at the site, including what portion would be allocated to hotel, residential and retail purposes. Andev would be responsible for managing the implementation of the proposed development, and would meet with external consultants, councils, architects and other professionals.

When Andev was required to execute an agreement with a third party, Mr Shi would generally execute it although, on occasions, he authorised Mr Iemma to execute it on behalf of Andev. When the defendant was required to execute an agreement, Mr Liu would liaise with Mr Shi and the other two directors to execute such documents in China. Mr Liu could recall only one document, a Bank of China loan document, which the directors had executed and asked him to hold onto until other documents were ready. I accept Mr Liu’s evidence that there was no other occasion on which Mr Shi had given Mr Iemma any agreement signed by the defendant’s directors on its behalf, authorising him to exchange the document subject to final terms being agreed.

The plaintiff’s business had several divisions. Its hotels division had two arms: advisory and transactions on the one hand and project management on the other. Both Michael Simpson and Peter Keenan worked in the hotels division. Mr Keenan worked for the plaintiff from October 2015 until April 2018. For the first six months he was the associate director of hotels, tourism and leisure in the project management arm of the plaintiff’s business. He was promoted to the position of National Director, head of hotels, tourism and leisure also within that arm. He and Mr Simpson were at the same level: Mr Simpson was head of the advisory and transaction arm of the hotels division and Mr Keenan was head of the project management arm of that division.

For the period up to March 2017, when the plaintiff moved its business premises from 50 Bridge Street, Sydney (where Andev’s offices were also located) to Governor Phillip Tower, Mr Simpson and Mr Keenan worked on the same floor, level 6. After the move they were on different floors in the same building.

In July 2015, the defendant spoke to Colliers with a view to engaging the firm as its selling agents for the site. At that time, Knight Frank had already been appointed agents for the site.

On 2 September 2015, the Land and Environment Court approved a development application for the site, which authorised the demolition of the existing improvements on the site and the erection of a building with retail floor space, hotel rooms and residential apartments.

By early January 2016, the defendant and Andev had terminated the agency agreement with Knight Frank, which was, accordingly, no longer authorised to offer the site for sale.

On 20 January 2016, Gus Moors of Colliers sent Mr Iemma and Mr Liu a draft agency agreement for the appointment of Colliers as the defendant’s exclusive agents to sell the hotel stratum of the site. The agreement provided that Colliers was to have exclusive selling rights from 20 January 2016 until 11 March 2016. Although there is no complete executed version of this document in evidence, I understood it to be common ground that the defendant had appointed Colliers in early 2016 to be its exclusive agent to sell the hotel stratum of the proposed development on the site. However, the precise terms of the agreement are not revealed by the evidence. Mr Liu recalled that Colliers was engaged “to test the market”.

An Information Memorandum was prepared by Colliers which contained, by way of introduction, the following narrative:

In about March 2016 Andev sought proposals from consultants to do project management work to develop the site. Mr Keenan put in a proposal, which was accepted by Andev and the defendant. Mr Keenan said:

The agreement provided for a lump sum fee for the work, a portion of which would be billed monthly. As a consequence, Mr Iemma and Mr Keenan met weekly. Mr Liu usually attended these meetings so that he could report to Mr Shi. Mr Keenan understood that Mr Liu represented Mr Shi at these meetings, although he had no authority except to communicate with Mr Shi to pass on information or requests and obtain instructions.

Mr Keenan understood that the plaintiff wanted the various arms of its business to share business opportunities within their respective operations. To that end, on 8 March 2016, Mr Keenan emailed Michael Simpson with a view to the transaction and advisory part of the hotels division (for which Mr Simpson was responsible) providing services to Andev and the defendant. Mr Keenan sent further emails to Mr Simpson providing him with more information about the defendant. By email dated 15 March 2016, Mr Keenan wrote to Mr Simpson as follows:

At 9.18am on 18 March 2016 Mr Keenan sent his draft submission to Mr Simpson, which included an outline of services which could be provided by “Savills Hotel Agency” and said, in part:

A follow-up email was sent by Mr Keenan at 9.39am. The evidence does not reveal any response by Mr Simpson at this stage.

On 30 March 2016 Mr Keenan met with Mr Iemma and proposed an introduction to Mr Simpson the following day. At that point, Mr Iemma was interested in obtaining advice regarding the design of the hotel development from the advisory arm of the plaintiff’s hotel division. On 5 April 2016, Mr Simpson emailed his proposal to Mr Iemma. His covering email included the following:

In substance, the proposal set out the ways in which the plaintiff’s hotels arm could improve the planning and design of the hotel proposed for the site. The scope of work outlined in the proposal limited the services to be provided at that stage to the following:

Since the proposal was that fees would be charged on an hourly basis, it also included the charge-out rates of the two persons involved, Mr Simpson and Vasso Zographou, each of whose services were to be charged out at $550 per hour, exclusive of GST. The proposal included Mr Simpson’s profile which said, in part:

By that time, Mr Simpson was already hoping to be appointed agent for the sale of the hotel component of the development. On about 6 April 2016, he had a conversation from Hong Kong, where he happened to be, with Mr Iemma to the following effect:

Mr Iemma passed on Mr Simpson’s proposal for the design work to Mr Liu, who consulted Mr Shi. Mr Shi instructed Mr Liu to inform Mr Iemma to go ahead and retain Mr Simpson’s team on the hourly rate charges set out in the proposal. Mr Iemma communicated Andev’s acceptance of the proposal by email on 6 April 2016.

On 13 April 2016, Mr Simpson’s team provided Andev with a draft design review report which addressed matters such as how many lifts should be included in the proposed hotel and how much back-office space would be required for hotel staff. This was discussed with designers, architects and other professionals who had been retained to advise Andev on the hotel. Practical considerations such as the size of rooms and the location of lifts were addressed in these meetings.

Although Mr Liu was privy to the report, he did not translate it for Mr Shi because his understanding was that Mr Shi and his fellow directors of the defendant were not interested in detail which would not impact in any significant way on the final costs and potential profit of the development. At that time Mr Liu did not yet know that Mr Simpson’s team also wanted to sell the hotel which was to be developed on the site. He regarded Mr Simpson’s arm of the hotel division as advisory rather than relating to sales.

In about April 2016, Richard Doyle, group general counsel for Staywell Holdings Pty Ltd, contacted Mr Simpson and asked him to act on behalf of two entities to sell the Park Regis Sydney Hotel located at 27 Park Street, Sydney. Mr Simpson did not accept the retainer.

Subsequently, the vendor, for whom Mr Doyle acted, sold the hotel on about 28 August 2016 to a Chinese consortium for $46 million. The press article in evidence said that Colliers handled the sale which included a 15-year long management agreement. The terms of the agreement are not in evidence. Nor is there evidence which establishes what Colliers was paid.

At 6.42pm on 28 August 2016, Mr Doyle emailed Mr Simpson as follows:

Mr Simpson responded:

I do not accept that the reason Mr Simpson refused Mr Doyle’s offer for the agency was that he was retained by the defendant. Mr Simpson did not submit a proposal to the defendant for the agency until 31 May 2016, which was significantly after he had been contacted by Mr Doyle. I consider Mr Simpson’s response in August 2016 was self-serving and designed to provide corroboration for his claim that there was a signed agency agreement between the plaintiff and the defendant when he knew that not to be the case.

As referred to above, although Mr Simpson’s arm of the plaintiff’s business was prepared to provide design services at an hourly rate, Mr Simpson was keen for the plaintiff to be appointed as the agent for sale of the hotel, for which the potential reward was much greater. On 30 May 2016 he sent an email to Mr Iemma which attached a document entitled, “Disposition Proposal and Strategy – Boutique Hotel”. The covering email said as follows:

I accept Mr Simpson’s admission in cross-examination that the sale of the residential stratum of the development would not be within his department, unless, potentially, one buyer wanted to buy the residential component as well as the hotel component. He also accepted that he would not deal with the retail component of the development since that would be within another of the plaintiff’s departments. His proposal was solely concerned with the sale of the hotel.

The executive summary proposed an agency fee “for a sole exclusive mandate, 1.25% of gross realisation, plus 5% of any amount over $68.2m (fees quoted are exclusive of GST).” The document included a “campaign timetable” which proposed an effective appointment by 6 June 2016 and a one week international road show in the EOI [expressions of interest] phase commencing on 20 June 2016 and a date for exchange of a “binding sale contract” on 16 September 2016.

On 31 May 2016 there was a meeting in the boardroom at Andev’s offices which commenced at about 9.30am. Mr Iemma and Mr Simpson met to discuss the proposed appointment of the plaintiff as agent for the sale of the hotel component off-the-plan. Mr Simpson made a contemporaneous note of the meeting which was exhibited to his affidavit. Mr Liu also attended the meeting and became aware for the first time that Mr Simpson wanted the agency for the sale of the hotel. Mr Liu understood that any such agreement had to be between the agent and the defendant because it was the defendant, and not Andev, which owned the site.

During the course of the meeting, Mr Iemma mentioned that Colliers had charged 1% commission, which was less than the plaintiff’s proposal. He told Mr Simpson that he would prefer that the base commission remained at 1% commission but was agreeable to an incentive fee. It was mentioned that Mr Iemma was dealing with a potential buyer in China. Mr Iemma also disclosed that the defendant, and not Andev, was the owner and that it had three directors. Mr Iemma invited Mr Simpson to send a draft agency agreement.

Mr Simpson admitted that he understood that work done by an agent in advance of a binding agency agreement was done at the agent’s risk.

At 12.11pm on 31 May 2016, Mr Simpson emailed Mr Keenan and Ms Chu, who also worked in the project management team with Mr Keenan, to ask for details of the title of the site and client details so that he could insert them into a draft agency agreement. At 3.31pm, Mr Keenan sent an email to Mr Simpson attaching his “final proposal” and terms and conditions which contained the details which Mr Simpson needed to insert into the draft agency agreement.

This led to the preparation of the first of the versions of the agency agreement which passed between Mr Simpson and Mr Iemma. These versions were also sent, or given, to Mr Liu so that he could report to Mr Shi.

At some point during this period, Mr Liu spoke to Mr Shi and told him that the plaintiff was asking for a “sole exclusive mandate” with a 1.25% gross realisation and 5% incentive fee. Mr Shi responded:

On the same or another occasion in this period, Mr Shi also said to Mr Liu:

The matter was discussed between Mr Iemma and Mr Liu as follows:

Mr Liu did not recall any further discussion about this issue.

On Wednesday 1 June 2016 Mr Simpson emailed Mr Iemma to thank him for the meeting of the previous day. He attached a proposed agency agreement. In that draft Andev was incorrectly named as the principal as Mr Simpson had not passed onto the plaintiff’s legal department that the defendant owned the land and was, accordingly, the principal. The base commission had been reduced to 1%. The “Property” was said in the Sales Inspection Report to be “The Hotel to be delivered by the Principal at [the site].”

The attached terms and conditions relevantly provided:

The document was the standard pre-sale agreement prepared by the plaintiff’s legal department. The only changes made were to cl 3, which provided for the agent’s entitlement to commission. Mr Simpson explained that the change was made to ensure that commission for this matter would be paid on exchange of contracts rather than settlement of the contract, which was expected to take in the order of three years.

The execution page of the draft provided on 1 June 2016 made provision for one “authorised signatory” to sign on behalf of the plaintiff and for that signature to be witnessed. The lower half of the execution page was entitled: “Principal in accordance with section 127 of the Corporations Act 2001” [emphasis in original] and provided for two signatures, that of a director and also a signature of a director/secretary.

Mr Iemma responded to this email at 10.34am on 2 June 2016, relevantly as follows:

The further draft attached to that email had incorporated the corrections identified by Mr Iemma in the email. The changes were, in the main, to the Sales Inspection Report document. The only change to the terms and conditions was to change the period in cl 2(b) from 180 days to 120 days. The execution page remained in the same form.

It appears from the terms of Mr Simpson’s email to Mr Iemma sent at 11.05am that the two attempted to speak on the phone but missed each other. At 11.06am, Mr Iemma invited Mr Simpson to come to his office. However, Mr Simpson appears to have had second thoughts, since he followed this up with an email sent at 11.10am, saying “…I thought it would be better to give you some initial thoughts (below) before we have a discussion”. Mr Simpson then responded by inserting his comments against the points Mr Iemma had raised in the email of 10.34am. Points 1-4 were either noted or agreed. In response to Mr Iemma’s last point, Mr Simpson wrote:

Between the time of this email (11.10am) and the time of a subsequent email (11.52am), Mr Simpson went to Mr Iemma’s office to discuss the matter further. Mr Simpson took his notebook to the meeting. It appears that his notebook also contained a note of the response he had given Mr Iemma at 11.10am. In respect of the last matter, he noted, consistently with what was in his email:

Under this note, Mr Simpson wrote:

I do not consider this record to indicate that Mr Iemma agreed to there being no carve out at the meeting. Rather, I consider that Mr Simpson was merely recording that he had made the statement to Mr Iemma. It would be inconsistent with the objective facts and circumstances for Mr Iemma, who did not have authority to agree to changes without consulting Mr Shi, to agree to such an amendment. Further, Mr Iemma had no capacity to obtain those instructions due to the language barrier and would have had to consult Mr Liu to obtain such instructions from Mr Shi. Mr Simpson was well aware of the limits on Mr Iemma’s authority and that Mr Shi’s signature was required on the document. He confirmed in cross-examination that he appreciated that the draft agency agreement would not be binding unless and until Mr Shi signed it on behalf of the defendant and that, whatever Mr Iemma told him on 2 June 2016 would not make the agreement binding. Mr Simpson accepted that Mr Iemma did not tell him on 2 June 2016 that he had spoken with Mr Shi that morning.

Mr Keenan’s understanding was also that Mr Shi would have to sign the agency agreement. He said:

Mr Keenan also said:

After this meeting, Mr Simpson returned to his office and instructed Steven McMahon from the plaintiff’s legal team to insert the agreed changes (being points 1-4 in Mr Iemma’s email).

At 11.52am, Mr Simpson emailed Mr Iemma and said:

The signature page of the document which was apparently attached to that email was different from the one which had been provided on 3 June 2016 in that, although, as before the signature space for the plaintiff provided for a witness and one signature of an “authorised signatory”, the signature space for the defendant, while purporting to be “in accordance with section 127 of the Corporations Act 2001”, provided for the signature of an “authorised director” and a signature of a witness. Mr Simpson was unable to explain why there was a difference in the signature pages of the respective versions.

Mr Liu has never seen an executed agency agreement between the plaintiff and the defendant. Had Mr Shi signed such an agreement, it is probable that Mr Liu would have been involved in obtaining his signature and receiving the document and passing it on to Mr Iemma.

Mr Simpson’s evidence was that on the morning of 3 June 2016, a Friday, he was in his office and printed out the final version of the agency agreement which had been produced the previous day, signed it, but inexplicably did not have it witnessed, and took it to Mr Iemma’s office and asked the receptionist to give it to Mr Iemma. He neither copied nor scanned the executed version. He said that he delivered it to Mr Iemma himself because it was “a little bit ceremonial”, notwithstanding that Mr Iemma was not there to receive it. For the reasons given below I do not accept that he ever executed the agreement or delivered the signed document to the defendant’s offices.

At some time prior to 2 June 2016, Mr Keenan had arranged to host a lunch at a restaurant in the Ivy complex in George Street called Ucello. Catherine Hyland and Kylie Chu from his project management team were invited to attend as were Mr Iemma and Mr Liu (from the defendant, as clients). Milton Lloyd from Mijollo Architects and Jacqui Senior from Woods Bagot, interior designers, came too as they were working with Mr Keenan’s team to provide project management services.

When Mr Keenan invited Mr Liu, who was referred to by his Anglicised name, Leo, to the lunch he said words to the following effect:

When Mr Simpson heard about the lunch, he asked Mr Keenan if he could attend as he was trying to develop his relationship with Mr Iemma with a view to being appointed exclusive agent for the sale of the hotel on the site. Mr Keenan agreed to Mr Simpson coming to the lunch.

I do not accept Mr Simpson’s evidence in [38] of his affidavit sworn 1 February 2019 about the justification for the lunch as follows:

Nor do I accept Mr Simpson’s evidence that “[t]here were lots of handshakes at the lunch” in so far as he intended to imply that the lunch was celebratory or congratulatory. There was no cause for celebration since Mr Simpson knew that there would be no binding agreement without Mr Shi’s signature.

In his second affidavit sworn on 21 October 2019, Mr Simpson deposed, in answer to Mr Liu’s affidavit referred to above:

I consider Mr Simpson’s evidence on the topic of the lunch (apart from his attendance, its occurrence and its cost) to be a fabrication, whether conscious or otherwise, designed to bolster his version that agreement had been reached on the terms of the plaintiff’s appointment as agent and that he had a reasonable expectation that Mr Shi would sign it, notwithstanding Mr Shi’s previous insistence on a carve-out for purchasers whom he had introduced himself. It is plain from the chronology set out above that Mr Keenan’s team had been retained by Andev in about March 2016, some three months before the lunch. The wording of Mr Keenan’s invitation to Mr Liu indicates that the relevant milestone was the work towards the construction certificate, not the retainer.

I accept Mr Keenan’s description of the lunch and the splitting of the bill between himself and Mr Simpson as follows:

The bill for the lunch was $2,475. There were eight guests in total. The lunch began at 12.42pm. The time of its conclusion does not appear from the evidence although I accept that it was lengthy and that Mr Simpson’s recollection of “7-8 hours” may be accurate.

I accept Mr Keenan’s recollection that he was not aware of any mention being made at that lunch of the terms of the agency agreement having been agreed or of Mr Simpson having delivered a signed copy of the agreement to Mr Iemma earlier that day. I also accept Mr Liu’s evidence that there was no discussion at the lunch about whether Mr Simpson’s team would be appointed to sell the hotel. Had there been any such discussion, I am satisfied that one or other of Mr Liu or Mr Keenan would have been aware of it and recalled it.

In his affidavit of 1 February 2019, Mr Simpson deposed that he had met with Mr Iemma on 7 June 2016 to discuss the items that they needed to start the sale campaign for the site. He deposed in the same affidavit that, on an unspecified date, he had a telephone conversation with Mr Iemma to the following effect:

I do not accept this evidence. In cross-examination, Mr Simpson was asked whether he asked Mr Iemma when the signed agreement (which Mr Simpson said that he had signed and delivered to reception on 3 June 2016 before the lunch) would be returned and Mr Simpson volunteered, for the first time, that he had asked for it on 7 June 2016 (the Tuesday following the lunch on the previous Friday) and also on 20 June 2016 when he had forwarded other documents.

When it was put to Mr Simpson in cross-examination that 7 June 2016 was too early for an ultimatum (given that he did not get on a plane until 3 July and did not book the ticket until a couple of days before), he maintained that he had done it in a “colloquial manner” and had prefaced the ultimatum with the word “mate”. I do not accept this evidence.

On 8 June 2016, at 1.40pm Mr Iemma sent Mr Simpson an email attaching a report from Woods Bagot which he asked him to review. At 3pm that day, Mr Simpson sent an email to Mr Keenan and Ms Chu, which was copied to Mr Iemma asking for a plan of the ground floor with a view to making sure that a luggage storage area could be on the ground floor so as not to raise investor concern or “guest dissatisfaction”. There was no mention in the email about the agreement which Mr Simpson said that he had signed and given to Andev’s receptionist.

On 10 June 2016, there was an exchange of emails between Mr Simpson and others about “hotel visuals”. Mr Simpson said, by email: “the sooner we get the renders [for digital images] going the better as we cannot go to market without them”. Later that day, Ms Senior informed Mr Simpson and Mr Iemma that the “renders and full hotel pack will be issued on the 27th of June”.

As referred to above, Mr Simpson maintained in cross-examination on 13 July 2020 that he had a distinct recollection of asking Mr Iemma for the signed agreement on 20 June 2016, although he had not previously referred to it in any of his affidavits. He said that he had asked for it because he “also sent him some documents around that time”. This was presumably a reference to an email Mr Simpson sent to Mr Iemma at 2.17pm on 20 June 2016 which attached a “CA” (confidentiality agreement) for investors to sign and a term sheet, to be reviewed by Andev’s lawyers. He also sent an executive summary and said that the draft Information Memorandum would follow. The following exchange in cross-examination is significant:

The volunteering of 20 June 2016 as being a date on which he asked Mr Iemma for the signed agreement is an example of what I consider Mr Simpson did generally of retrofitting his evidence to the documents which he knew were in existence and known events (such as the lunch) to a version of the facts which he considered to be in his interests. However, the absence of any reference in his written communications with Mr Iemma to his impatience at not receiving the signed agreement is telling and indicates, in my view, that Mr Simpson had no confidence in ever receiving a signed agreement other than one which had the carve-out which Mr Shi wanted.

This is consistent with Mr Keenan’s evidence, which I accept, that shortly before Mr Simpson got on the plane to Singapore on 3 July 2016 for the international roadshow, he had a discussion with Mr Keenan, which is referred to below.

As referred to above, in his affidavit sworn 1 February 2019, Mr Simpson made no reference to having followed up Mr Iemma about the agreement at any specified time between the morning of 3 June 2016 and 24 June 2016. However, in his evidence he nominated 7 June and 20 June 2016 as occasions when he had asked for the agreement, although there was no reference in the numerous emails which passed between the two of any such request having been made.

In his affidavit sworn 1 February 2019, Mr Simpson said the following occurred (in [40]):

He expanded on the meeting at [43e] of his affidavit and said:

In cross-examination, Mr Simpson confirmed that the document he received from Mr Iemma was a copy and did not have ink on it. When he was cross-examined about the inconsistency between the version he had given in [40] of his affidavit that the agreement had been handed over and what he had said in [43e] of his affidavit that only the signature page had been handed over, Mr Simpson was unable to explain it. Mr Simpson gave evidence that Mr Shi’s signature was not witnessed. He could not explain why he did not ask Mr Iemma to go back to Mr Shi to get the signature witnessed.

I accept Mr Liu’s evidence that Mr Shi did not send only the signature page of agreements to him to be passed on to Mr Iemma. It was Mr Shi’s practice to send the entire agreement with the execution page. The only exception was for the Bank of China document where Mr Liu was asked to hold the signature page until other documents were ready.

Mr Simpson gave evidence under cross-examination, which I reject, about what he said happened to the document which Mr Iemma had given to him:

It was envisaged that Mr Keenan would attend the meeting at 10am on 24 June 2016. However, at the last minute, Mr Keenan emailed Mr Iemma to tell him that he was in a meeting which would go longer than expected and he would not be able to come.

At 11.43am on Friday, 24 June 2016 (shortly after the counterpart signed by Mr Shi was said to have been handed over by Mr Iemma to Mr Simpson), Mr Iemma sent Mr Simpson an email referring to their meeting that morning in which he referred to the term sheet which they had discussed at the meeting, which the defendant’s solicitor, Lands Legal, had issued.

In an email in response sent that evening at 11.08pm, Mr Simpson wrote to Mr Iemma as follows:

In my view, it beggars belief that, if Mr Iemma had actually given Mr Simpson the long-awaited agreement or signature page, no mention of it would have been made in either of these two emails which were sent on the same day between the only two people who were present at the meeting when it was said to have occurred. It is also highly significant that Mr Simpson never wrote to Mr Iemma and asked for the signed agreement up until that date or thereafter. Had Mr Shi actually signed the agreement, he would have sent it to Mr Liu, who would have provided the entire document to Mr Iemma for provision to Mr Simpson.

The emails between Mr Iemma and Mr Simpson continued the following week about details relating to the Information Memorandum to promote the sale of the hotel component and the parties whom Mr Iemma intended to include in the “first round approach”. I note that, in documents prepared at around this period for distribution at the roadshow, including the Information Memorandum, the plaintiff was described as the defendant’s “exclusive agent” for the sale of the hotel. I regard these references as neutral since they are insufficient to address the remaining issue between Mr Simpson and Mr Shi: namely, whether there would be a carve-out for any purchaser introduced by Mr Shi. As there was no question of another agent being appointed to sell the hotel, the plaintiff was, relevantly, an exclusive agent.

Mr Liu recalled that he saw the Information Memorandum printed in hard copy. It is not clear from his evidence whether he saw it in draft form or only after it had been printed professionally. He translated what he considered to be the “key parts” of the Information Memorandum to Mr Shi. He said to Mr Shi:

Mr Liu did not translate the document in its entirety for Mr Shi and, in particular, did not translate that the plaintiff was described as the defendant’s “exclusive agent”. Mr Liu considered the document to be a marketing document, rather than a legal one.

An invoice for Mr Simpson’s flights from Sydney to Singapore and from Singapore to Hong Kong was issued on 30 June 2016. This is consistent with Mr Simpson’s recollection that the tickets were booked a couple of days before his departure. A significant amount of work had been done on the Information Memorandum at this time. The booking is also consistent with Mr Simpson being satisfied that it would be ready for his departure. Mr Simpson confirmed that the draft Information Memorandum had gone for printing by 3.04pm on 30 June 2016.

Later on 30 June 2016, Mr Simpson sent an email to Andev, in which he identified several prospective purchasers, including Glenn Boultwood, the Chief Executive Officer of Aligned FM Pty Ltd (Aligned). Mr Simpson had known Mr Boultwood for more than ten years and knew him to be a director of a fund, Glenmarie Capital Pty Ltd (Glenmarie), which specialised in purchasing hotels. To each of these emails, Mr Simpson attached the Information Memorandum (which by that time had been finalised) and the confidentiality agreement which needed to be signed in order to obtain access to the data room and a copy of the plans. Each email began:

In response to these emails, Mr Simpson received signed confidentiality agreements which he forwarded to Mr Iemma for execution by Mr Shi on behalf of the defendant. Mr Liu arranged for these documents to be sent to Mr Shi’s email address so that he could sign and return it to the prospective purchaser. I accept Mr Liu’s evidence that Mr Shi returned the complete signed documents to Mr Liu, who would then pass them on to Mr Iemma. The plaintiff kept records, in respect of each prospective purchaser approached, as to whether a confidentiality agreement had been signed.

Although Mr Simpson did not have an enforceable agreement, he knew that he had been authorised by the defendant to act as its exclusive agent to sell the hotel. The only remaining issue was its entitlement to commission in the event that Mr Shi introduced the purchaser.

It would appear from the e-ticket receipt that on 1 July 2016, Mr Simpson’s ticket from Hong Kong to Sydney for a flight leaving on the evening of 7 July 2016 was booked and paid for.

I accept Mr Keenan’s evidence that shortly before Mr Simpson left for the roadshow in Asia on 3 July 2016, he admitted to Mr Keenan that he was frustrated because he did not have a signed agreement and appreciated that he was going out on a limb by going overseas without one. Mr Keenan was aware of the timing because his project management team had been consulted on the form and detail of the Information Memorandum up until the time it went to print on 30 June 2016.

On 3 July 2016, Mr Simpson left for the roadshow. He went to Singapore and Hong Kong to promote the proposed hotel on the site. In much of the documentation, the plaintiff was identified as the defendant’s exclusive agent for the sale. While he was away and on his return, he reported by email to Mr Iemma as to the responses received from prospective purchasers. While Mr Simpson was away, Mr Iemma told Mr Liu, who told Mr Shi, that Mr Simpson had met with a couple of prospective purchasers in Asia.

At around this time, after Mr Simpson had already left for Asia, Mr Keenan spoke with Mr Iemma, who told him that Mr Shi was not interested in signing an exclusive agency agreement in the event that he brought his own buyer to the table. Mr Iemma told Mr Keenan that, in those circumstances, Mr Shi did not see why he should be paying a commission to another party which may not have had any involvement in the sale. After this conversation, when Mr Simpson had returned from the roadshow, Mr Keenan asked him how he expected to get the agreement signed, given Mr Shi’s attitude. Mr Keenan recalled that Mr Simpson responded, on this or another occasion, in a similar way as he had before he had left: “they better f—ing well sign this thing because I’ll be, I’ll be, you know, majorly pissed off if they don’t.” I do not accept Mr Simpson’s denial of the admission he made to Mr Keenan that, shortly before he got on the aircraft for the roadshow, he did not have a signed agency agreement. For the reasons given below, I prefer Mr Keenan’s evidence to that of Mr Simpson and accept Mr Keenan’s evidence.

Mr Wood SC, who appeared on behalf of the plaintiff, put to Mr Keenan in cross-examination (presumably on instructions) that Mr Simpson had told him that he was not getting on the plane until he had received a signed agreement. Mr Keenan did not recall that he ever said that.

Mr Iemma told Mr Liu about an offer which was made by a company called Mulpha to buy the hotel for an amount of $63,240,000. Mr Liu passed on the key terms of the offer, including price and settlement date, to Mr Shi.

Throughout July and August 2016, Mr Simpson and his team continued to work promoting the proposed hotel through an expression of interest process. Mr Simpson introduced Mr Boultwood to Andev. For some period, it looked as if Aligned would purchase the proposed hotel from the defendant. Aligned was interested not only in the hotel stratum but also in the retail stratum on the site. There was an unregistered plan or strata subdivision which set out the various lot numbers for these different components on the site. Aligned/Glenmarie offered to purchase the hotel and retail components for $70,600,000.

When Mr Liu was told about an offer from Aligned, he told Mr Shi who informed him that he and the other directors were happy with the amount offered. Mr Iemma asked Mr Liu to obtain instructions from Mr Shi to permit Andev to engage Lands Legal to act on the defendant’s behalf on the sale.

At the end of every financial year and calendar year, each department of the plaintiff’s business was asked to prepare a summary of its achievements which was to be included in a presentation to the plaintiff’s staff. At the presentation on 27 July 2016 and 8 December 2016, Mr Simpson represented to the plaintiff in in-house presentations and literature that his team had been appointed to sell the hotel component of the site.

On 23 August 2016 Mr Simpson wrote to Mr Keenan to ask for information about the potential suppliers of the “top 10 main items of plant and equipment” to be provided to the “final party with which we expect to go exclusive in the next 24 hours”. Mr Keenan’s team provided this information to Mr Simpson.

Heads of agreement were signed by Aligned/Glenmarie on 29 August 2016. Prior to the execution of this document by the defendant, Mr Liu translated the key terms of the agreement for Mr Shi. As a consequence, Mr Shi signed the agreement on behalf of the defendant. On 30 August 2016 Mr Boultwood emailed Mr Simpson to ask whether the defendant had signed the counterpart. Mr Simpson forwarded the email to Mr Iemma who responded:

Later that day, a counterpart of the heads of agreement was signed by Mr Shi on behalf of the defendant and provided by Mr Iemma to Mr Simpson and Mr Boultwood. After its receipt, Mr Simpson emailed his response at 30 August 2016:

After the execution of the heads of agreement, Mr Shi told Mr Liu of his concern about controlling the cost which the defendant would incur in developing the site and constructing the hotel. Mr Shi told Mr Liu:

Throughout September 2016, there were various meetings between the plaintiff, the defendant and Aligned/Glenmarie about the terms of the contract for the sale of the hotel and retail strata of the site. Mr Keenan’s work occasionally “dove-tailed” with Mr Simpson’s. For example, on 19 September 2016, Mr Simpson asked Mr Keenan for an updated list of major plant and equipment. Throughout September and early October the due diligence process continued and the contract for sale was drafted and its terms negotiated.

On 9 October 2016, Mr Keenan raised with Mr Iemma that both potential purchasers wanted to use particular “OS&E” (operating supplies and equipment) which were more expensive than had been budgeted for. Mr Iemma’s almost immediate email response was:

Mr Keenan responded that he agreed and said in an email:

On 12 October 2016 Mr Simpson sent an email to Mr Boultwood which was copied to Mr Keenan and Mr Iemma about outstanding issues under the proposed contract of sale. Negotiations about the terms of sale continued between Andev and Aligned throughout October and into November. There was also negotiation of a put and call option deed, which, as Mr Simpson explained, was designed to defer the purchaser’s obligation to pay stamp duty. The terms of this document were agreed by 29 November 2016 although there were still outstanding contractual issues in December 2016. Nonetheless, it appears that the mutual understanding of Mr Simpson and Mr Boultwood was that the transaction would proceed. On 7 December 2016, Mr Simpson emailed Mr Boultwood and said:

At around this time, the tender process which had been conducted by Mr Keenan’s project management team resulted in construction costs that were, as Mr Keenan described them, “high enough to make the owners question whether the development was viable or not.” Mr Keenan’s view was that the defendant had already incurred substantial costs in obtaining approval of the development application from the Land and Environment Court, which also made the development non-viable. Mr Liu came to the conclusion that the feasibility for the development of the site no longer met the defendant’s expectations in terms of time and cost returns. When Mr Liu provided Mr Shi with the numbers both in writing and verbally, Mr Shi said:

Mr Liu passed on Mr Shi’s response to Mr Iemma. On 19 December 2016, there was a meeting between Mr Iemma and Mr Simpson for which Mr Simpson made and retained a file note. Mr Iemma informed him that the defendant had been approached to sell the undeveloped site and that the offer would be acted on that week. Mr Iemma told Mr Simpson that the offer was not based on the Development Application but was an offer for the undeveloped site itself. He said that two of the three of the defendant’s partners wanted to “move on”, although Mr Shi did not. Mr Iemma also informed Mr Simpson that Aligned’s deal “has holes”. As a result of this conversation, Mr Simpson appreciated that there was at least a possibility that the defendant would sell the whole undeveloped site to a third party rather than sell the hotel and retail components to Aligned.

Nonetheless, on 22 December 2016, Mr Iemma emailed Mr Boultwood to confirm that Andev was agreeable to continuing the exclusivity period in accordance with the heads of agreement. This period was extended by consent to the end of January 2017.

The plaintiff’s change in position, which arose from doubts about the viability of the transaction, led to a marked change in the regularity with which Mr Simpson and Mr Iemma communicated with each other. They had communicated regularly earlier in 2016. However, by late 2016 and early 2017, there was little communication between them.

Mr Keenan knew that the plaintiff and Mr Iemma were negotiating the sale of the hotel with Mr Boultwood and observed that Mr Simpson became frustrated when it became apparent that this transaction would not go ahead because the defendant no longer considered the development to be viable.

On 17 January 2017, Mr Iemma sent an email to Mr Simpson which was copied to Mr Liu, informing him that he had been asked by the directors to undertake a review of the project’s feasibility for the directors who would be in Sydney for Chinese New Year. He also said:

There were further communications between Mr Iemma and Mr Simpson about how Aligned would be dealt with and what Mr Boultwood should be told. In an email sent at 1.10pm on 17 January 2017, Mr Simpson wrote to Mr Iemma:

Mr Iemma responded soon afterward and said in part:

I do not infer from Mr Simpson’s preparedness to tell the truth to Mr Boultwood on this occasion that his evidence as to matters affecting the plaintiff’s entitlement to commission was truthful. I formed the impression from Mr Simpson’s evidence that truth, to him, was a relative concept, to be fashioned by reference to his perception of his own interests at the time. It was in Mr Simpson’s interests that Mr Boultwood be told the truth about why the defendants’ directors were having second thoughts, since it absolved Mr Simpson of responsibility for the stalling of the sale to Aligned, which was why he was in favour of Mr Boultwood being told the truth.

On 3 February 2017, Mr Simpson wrote to Mr Iemma to tell him that he had heard from a “few people” that they had been offered the site that week. He asked whether the site was on the market and where that left the plaintiff if it was. Mr Iemma responded by email that day:

In February 2017, the Development Application for the site was modified by Sydney City Council on the defendant’s application.

Knight Frank and Massari Corporation Pty Ltd (Massari) were retained by the defendant to sell the site. The evidence does not include a full, executed copy of the agency agreement. The period defined as the “Exclusive Agency Period” was 9 February 2017 to 9 May 2017 although this clause was struck through and a reference was made to “Annexure C”. This annexure was not tendered. The agreement was signed by one of the plaintiff’s directors on 16 February 2017.

On 15 February 2017, Mr Simpson sent an email to Mr Iemma proposing a meeting on Friday 17 February 2017 at Bertoni, a café in the city, to discuss “the status of where things are at” with the site. Mr Iemma agreed to meet at 10am on 17 February 2017.

At 6.30pm on 16 February 2017, Seil Kim of Millinium Inmark sent an email to Mr Simpson which attached an Information Memorandum which was similar, but not identical, to the one which Mr Simpson had not only used in his marketing campaign for the hotel but also had already sent to Mr Kim as part of the plaintiff’s sales campaign. Millinium Inmark was an investment manager which Mr Simpson understood might be interested in purchasing the site. The Information Memorandum attached to Mr Kim’s email omitted from the executive summary on page 4 the entries for car parks, deal structure, sales process and agent’s details. Mr Kim said in the covering email:

Mr Simpson responded at 6.36pm to Mr Seil’s email in the following terms:

Mr Simpson had been told by Mr Kim that Mr Chu had sent him the second version of the Information Memorandum.

On 17 February 2017 at 1.08pm, Mr Simpson said in an email to Mr Iemma, following a meeting between them that morning:

The documents attached to the email included the version of the Information Memorandum that Mr Simpson had obtained from Mr Kim. Mr Simpson accepted in cross-examination that he was hoping to obtain instructions from the plaintiff to market and sell the undeveloped site including to the people whom Mr Chu had approached. Mr Simpson said, in cross-examination:

On 21 February 2017 at 6.32pm, Mr Simpson sent a text message to Mr Iemma asking, “Could you please let me know if I can approach anyone on [the site]?” Mr Iemma responded by text message at 9.01am on 22 February 2017:

Mr Simpson responded, also by text message:

On 22 February 2017, Mr Simpson asked Mr Iemma by text:

On 23 February 2017, Mr Iemma responded to Mr Simpson by text:

On 23 February 2017 at 10.45am Mr Iemma sent an email to Kevin Gu of Bank of China, the defendant’s bankers as follows:

Mr Gu responded at 11.34am that day that there was no issue with the plaintiff marketing the hotel. He said that the valuation was required for an internal annual review to extend the loan for one more year and that, as long as the valuation was over the previous year’s valuation of $40m, it would be “fine”.

On 23 February 2017 at 1.22pm Mr Simpson emailed Mr Iemma as follows:

On 23 February 2017 at 1.25pm, Mr Iemma responded to Mr Simpson and said:

On 23 February 2017 at 3.13pm, Mr Simpson emailed Mr Iemma and said:

On 23 February 2017 at 8.23pm, Mr Simpson said in an email to Mr Liu:

Mr Simpson accepted in cross-examination that, notwithstanding he had asserted that the “exclusive agency agreement was valid and binding”, he did not actually go and look for it. Although he rejected the proposition that he did not look for it because he knew that it had not been signed, his answer is nonetheless incriminating. Because Mr Simpson appreciated that there was an issue about whether the plaintiff would be entitled to commission at all, the existence of the agreement was vital to support his assertion that there was a valid and binding agreement. However, had he looked for it before the move from Bridge Street to Governor Phillip Tower, he could not use the move as a reason why he could not find the document. Although I accept that he did not look for it, I am satisfied that the reason he did not look for it was that no document had ever been signed, either by him or by Mr Shi.

Mr Liu and Mr Simpson spoke on 24 February 2017. In the course of the discussion, Mr Liu said:

I accept Mr Liu’s denial that he had suggested to Mr Simpson that Savills would be paid its commission if the sale of the land was effected by Knight Frank. I accept Mr Liu’s evidence that he told Mr Simpson that the plaintiff’s expenses would be paid by the defendant. I note that this is what occurred when the plaintiff submitted an invoice to the defendant (referred to below).

At about this time, Mr Simpson and Mr Boultwood discussed the fact that Knight Frank was marketing the site. On 28 February 2017 Mr Iemma sent an email to Mr Boultwood confirming that the sale of the hotel and retail to Aligned would not proceed.

In February and March 2017, Knight Frank proceeded to promote the sale of the site. Knight Frank prepared its own Information Memorandum. The executive summary indicated that it was the “100% freehold interest” in the three titles which comprised the site that was to be sold (not the strata titles as had been proposed when the plaintiff was selling the hotel areas). The marketing material identified Knight Frank as the vendor’s “exclusive agents”. Knight Frank informed potential purchasers that the sale was to be by expressions of interest which would close on Thursday 16 March 2017 at 4pm.

At about this time, Mr Liu learned from Mr Iemma (who had been told by Mr Simpson) that the defendant had engaged other agents to sell the site. Mr Liu called Mr Shi and asked why he had not been told that other agents had been contacted by the defendant. Mr Shi responded:

Mr Liu told Mr Iemma of the conversation he had had with Mr Shi. Mr Iemma said:

On 9 March 2017, Mr Simpson invited Mr Liu to lunch. Before the lunch, Mr Liu phoned Mr Shi and had a conversation to the following effect:

Mr Simpson and his colleague, Iris Liu and Mr Liu had lunch together. They had a conversation to the following effect.

During the lunch, Mr Simpson did not say anything about there being an exclusive agency between the plaintiff and the defendant. However, he did ask Mr Liu whether the plaintiff could have an agency to sell the land. Mr Liu did not tell Mr Simpson what Mr Shi had said about being willing to pay a certain amount to the plaintiff because Mr Liu had not yet been instructed to do so. Nor did Mr Liu tell Mr Simpson that the defendant had sought legal advice about the agreement, although it was the case that the defendant had sought legal advice at about this time from Mills Oakley, a law firm.

When Mr Liu returned to Andev’s office after lunch, Mr Iemma told him that he should not have gone by himself and that he should not have any further communications with Mr Simpson on his own.

On 16 March 2017 at 11.23am, Mr Simpson wrote to Mr Iemma and Mr Liu as follows:

I do not accept that Mr Simpson accurately represented in this email what Mr Liu had said at the meeting. The statements he attributed to Mr Liu may accurately (albeit colloquially) be described as verbals.

In response to the email Mr Iemma wrote at 11.33am on the same day:

On 17 March 2017, Mr Simpson attended a meeting at the defendant’s offices. Tom Shadbolt also attended on behalf of the plaintiff. Mr Iemma and Mr Liu attended on behalf of the defendant. Mr Iemma told Mr Simpson that the plaintiff had been engaged to sell the hotel. Mr Simpson told Mr Iemma that there was still a binding agency agreement on foot, to which Mr Iemma responded that he did not have a problem with that.

At this or another meeting at around the same time, there was a meeting in the boardroom of the defendant’s offices at which Mr Simpson, Mr Liu and Mr Iemma were present. The meeting lasted for no longer than five minutes. Mr Simpson talked very loudly and appeared very emotional. Before leaving the meeting, Mr Simpson shouted to Mr Iemma, “I will sue you”. Mr Iemma’s response was “If you want to, bring it on”.

By late 2016, the plaintiff had arranged to move from its premises in Bridge Street, Sydney, to Levels 24 and 25 of the Governor Phillip Tower. By message dated 16 December 2016, Simon Fenn, the plaintiff’s managing director, informed staff that the office move was likely to take place on the weekend of 25 and 26 March 2017. He said:

Mr Fenn sent a further message on 30 January 2017 in which he confirmed that the first day in the new offices would be 27 March 2017. He also said the following:

The plaintiff moved from the Bridge Street premises to Governor Phillip Tower on 25 March 2017 in preparation for Monday 27 March 2017. Mr Simpson’s evidence was that he did not look for the agency agreement before the move and that the signature page signed by Mr Shi was unable to be located after the move because the move was so chaotic and the decluttering was so rushed. I do not accept this evidence. It is, in my view, telling that Mr Simpson was able to locate three significant file notes which he had made in the course of his dealings with the defendant, dated 31 May 2016, 2 June 2016 and 19 December 2016. That he retained and was able to find these documents for the purposes of his evidence indicates a more strategic management of documents than he was prepared to admit to. In cross-examination, he said that he “pretty much [retained] things that [he] was working on at that particular point in time”.

At the time of the plaintiff’s move, Mr Simpson appreciated that there was a serious issue about whether the plaintiff would receive commission from any eventual sale of the site. He was furious that Mr Iemma denied that the plaintiff was entitled to commission and already had in mind that it would be necessary to sue the defendant to obtain commission since the defendant’s position was that it was not obliged to pay any commission. In these circumstances, it is inconceivable that Mr Simpson would not have even bothered to look for the agreement (had it existed) before the move on 25 March 2017 when the heated conversation he had had with Mr Iemma must have still been very fresh in his mind. Yet, that is the version of events that he would have me accept. When seeking to explain the destruction of the documents in advance of the move, Mr Simpson said on a number of occasions words to the effect of: “I didn’t say that we were clever in how we threw out documents”. I regard this apparent explanation as no more than a tactic designed to obfuscate the inconsistency between the position Mr Simpson seeks to advance in the litigation with the incontrovertible facts and narrative.

The reason Mr Simpson did not look for the signature page was that there was no such document. Mr Simpson was prepared to use the moving of premises as a ruse for losing a document which had never actually been signed by Mr Shi. Had there been such a document, I am satisfied that Mr Simpson would have located it before the move and attached it to his email extracted above which was sent on 16 March 2017.

On 17 July 2017, the defendant entered into a contract for the sale of the site with WR Sydney Pty Ltd atf WR Sydney Unit Trust (WR Sydney) for an amount of $70.5 million. This sale settled on 17 January 2018. Massari was named as the agent with Knight Frank as the co-agent. The property sold was “the whole of the land” described by title reference.

Clause 46 of the contract provided:

Mr Liu stopped working for Andev in December 2017. However, he continued to assist Mr Shi with these proceedings and also with matters concerning the Australian Taxation Office.

Neither Mr Shi nor Mr Iemma was called to give evidence. Mr Wood submitted that a Jones v Dunkel inference could be drawn against the defendant in relation to Mr Shi that his evidence would not have assisted the defendant’s case. He did not contend that such an inference ought be drawn in relation to Mr Iemma.

By email sent on 10 August 2017, Mr Simpson attached an invoice for the advisory services provided and for the agent’s commission said to be owing under the alleged agency agreement. Fees relating to the advisory services amounted to $11,688 and the alleged agent’s commission amounted to $797,000. There was also a claim for disbursements of $13,817.03. The total claimed was $904,755.53. The time sheet entries for design consultancy were set out in an attached document. The sum of these entries was $11,688. It was common ground that the amounts for design consultancy services and disbursements had been paid.

Mr Simpson said that he had undertaken a “detailed review” of calendars, emails, files and papers to estimate that he had spent 540 hours promoting the sale of the hotel. His charge out rate was said to be $550, which formed the basis of the plaintiff’s claim for $297,000.

As is apparent from the above narrative, the plaintiff was able to produce neither an agency agreement signed by Mr Simpson, nor a signature page with Mr Shi’s signature on it. For the reasons given above, I do not accept that these documents were ever signed.

By letter dated 26 June 2018 the plaintiff served a list of categories of documents for discovery by the defendant. The categories of discovery included category 8, which sought documents evidencing communications between the plaintiff and the defendant in relation to the plaintiff being granted exclusive selling rights in respect of the site.

On 27 June 2018, the defendant allowed its email service to lapse, which led to Microsoft deleting all of Andev’s emails associated with the transactions the subject of these proceedings. Mr Liu learned of this in about April 2019. I am not prepared to infer that the defendant’s conduct in allowing its email service to lapse had anything to do with the proceedings. As it had sold the site, the defendant no longer needed Andev, which had been incorporated for the specific purpose of managing the development of the site.

Orders for discovery were made in 2018. On 4 February 2019, the Registrar directed that the defendant give verified discovery by 1 March 2019. On 16 February 2019 the defendant provided verified discovery (verified by Mr Shi) to the plaintiff. It was common ground that the defendant had not discovered any signed version of an agency agreement with the plaintiff. The only documents in category 8 which were discovered were emails and text messages between the parties.

When Mr Liu switched his mobile phone two years ago, he deleted from his old phone all of his personal data, including WeChat messages to Mr Shi, so that he could sell it. I accept his evidence that he did not play a role in the discovery process which the defendant was required to undertake for the purposes of the proceedings, although in 2019 he was asked to provide whatever he could by way of documents. I also accept Mr Liu’s evidence that he was not told about the notice to produce referred to below.

On 4 December 2019, the plaintiff’s solicitors sent a notice to produce to the defendant’s then solicitors following the service of Mr Liu’s affidavit affirmed on 19 August 2019. The notice sought various categories of documents pertaining to the proceedings, including documents relating to the defendant’s engagement of the plaintiff to sell the hotel on the site. Ms Lou, the solicitor with day-to-day conduct of the matter asked for an extension to 17 January 2020. On 15 January 2020 the plaintiff’s solicitors wrote to Ms Lou and Warwick La Hood (who was also acting on behalf of the defendant), reminding them of the notice to produce and requiring production by 17 January 2020.

It emerged that the defendant had been deregistered by the Australian Securities and Investments Commission. The defendant’s solicitors sought a further extension to comply with the notice to produce and informed the plaintiff’s solicitors that the defendant would be reinstated. By email dated 14 April 2020, Ms Lou (who had moved to Eakin McCaffery Cox, the defendant’s current solicitors) informed the plaintiff’s solicitors that the previous firm had ceased to act and that Eakin McCaffery Cox would become the solicitors on the record. By letter dated 22 April 2020, the plaintiff’s solicitors wrote to Ms Lou at Eakin McCaffery Cox and informed her that no documents had been produced in answer to the notice to produce served on 4 December 2019. They foreshadowed that, if the defendant did not answer the notice to produce, the plaintiff would seek discovery against the defendant pursuant to r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).

By letter dated 7 May 2020, the plaintiff’s solicitors sought production in accordance with the notice to produce by 11 May 2020. I understand it to be common ground that no documents were produced by the defendant in answer to the notice.

Mr Wood relied on the inadequate production of documents by the defendant. He referred to McCabe v British American Tobacco Australia Services Limited [2002] VSC 73 (McCabe) in support of the proposition that there are consequences which flow to a party which does not comply with its obligations of discovery and quoted the trial judge’s finding in McCabe at [289]:

In McCabe, the trial judge struck out the defendant’s defence on the basis the defendant had deliberately destroyed documents which would otherwise be required to be produced. Judgment was entered in favour of the plaintiff and damages were assessed. An appeal, which was defended by the plaintiff’s executor (the plaintiff having died in the interim) was allowed, the judgment set aside and a new trial ordered: British American Tobacco Australia Services Limited v Cowell (2002) 7 VR 524; [2002] VSCA 197.

There are circumstances where a defence or a claim can be struck out for default. However, unlike in McCabe, the plaintiff did not seek to use such mechanisms in the interlocutory stages of these proceedings. Nor did it seek further discovery or for an order on such an application that it be permitted to cross-examine Mr Shi on his verification of the list of documents. Accordingly, the only real basis on which such a submission can affect the substantive issues in the proceedings is if I am satisfied that the defendant’s conduct in either destroying relevant documents or allowing them to be destroyed evinces a consciousness of guilt. In that event, the destruction of documents could amount to an admission of liability: see, in the criminal context, Edwards v The Queen (1993) 178 CLR 193; [1993] HCA 63. However there is insufficient foundation for such a finding in the evidence.

While it appears that the defendant allowed its email subscription to lapse after having been served with a notice of categories for discovery, there is no evidence that its reason for doing so was to avoid having to pay the plaintiff, as opposed to merely considering that it no longer required the emails, or Andev, as the property had been sold. It was not established that the plaintiff appreciated its obligation to provide discovery when the subscription was not renewed. While it is to be hoped that, as soon as legal practitioners are instructed to act in litigation, they inform their clients of the need to identify and retain all relevant documents, it cannot be assumed, without evidence, that this occurred in the present case. Further, the documents retained by the plaintiff, whether in hard copy or electronically, were sufficient to give a comprehensive picture of the narrative. The evidence largely comprised communications between the parties. Thus, there would have been no forensic benefit to the defendant in not renewing a subscription which would deprive it of access to its emails if the relevant emails were also under the control of the plaintiff. I am not satisfied that there is any relevant implied admission that can be drawn from the defendant’s apparently inadequate document production.

The single document that the plaintiff required to establish its principal claim was an executed agency agreement. Absent such a document, it was open to the plaintiff to prove its existence by secondary means, as it has endeavoured, and failed, to do.

Mr Wood relied on the principle in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 and contended that I ought infer that Mr Shi’s evidence would not have assisted the defendant’s case. The principle in Jones v Dunkel permits a trial judge to draw an inference if the judge thinks it appropriate to do so as part of the fact-finding process. It does not, however, require that the inference be drawn: Nominal Defendant v Rooskov [2012] NSWCA 43 at [98] (Campbell JA).

In the present case, the evidence comfortably satisfied me that no agency agreement between the plaintiff and the defendant was ever executed. In these circumstances, the inference that the evidence of Mr Shi would not have assisted the defendant’s case does not alter the conclusion.

The same considerations apply to the circumstance that the defendant did not call Ms Shao, Andev’s receptionist to whom Mr Simpson said he had handed the agreement on 3 June 2016.

Mr Simpson gave his evidence in a polished way which indicated that he had studied the documents in the court book. I did not, however, derive any particular insight from his demeanour. The poise and confidence which Mr Simpson displayed in the witness box was consistent with his occupation of selling hotels, whether constructed or not, for developers. Although Mr Simpson initially gave the impression in the witness box that he was cavalier with documents, it soon became evident that he was well-acquainted with their forensic use. His email to Mr Iemma dated 16 March 2017 in which he purported to attribute statements to Mr Liu (which I am satisfied were not made) serves as an example. Further, he was careful to retain his own file notes of important meetings. Had the agency agreement been executed by Mr Shi, Mr Simpson would have safeguarded the executed signature page since he appreciated its importance to his entitlement to a commission.

Mr Simpson sought to align his version of events with incontrovertible evidence, such as the lunch on 3 June 2016 and the provision of other documents to Mr Iemma on 20 June 2016. He sought to explain the absence of a signed agency agreement by reference to the decluttering which was required by the plaintiff’s move. There was a marked cleverness, forensic convenience and dishonesty about the version which he would have me accept, namely: although he and Mr Shi had each signed the agreement, neither his signature nor Mr Shi’s signature had been witnessed; he had delivered the signed agreement to Mr Iemma (of which he had taken no copy) and Mr Iemma had not been in the office at the time; the signature page had been handed over by Mr Iemma at a meeting which Mr Keenan was supposed to attend but could not because he was detained in another meeting; and the signature page he had received from Mr Shi had been lost in the move because Mr Simpson regarded it of so little importance that he did not even look for it, notwithstanding his knowledge prior to the move that the defendant denied that it was liable to pay the plaintiff commission. While this version accounts for the lack of documents, I do not accept it.

In significant respects which are identified above, Mr Simpson’s evidence was at odds with the narrative incontrovertibly established by the contemporaneous documents. What McLelland CJ in Eq said in the following passage from Watson v Foxman (1995) 49 NSWLR 315 at 319 applies not only to conversations but to a witness’s recollection of events generally:

Although Mr Simpson no longer worked for the plaintiff at the time of the hearing, he had, while he was employed by the plaintiff, verified the pleadings on its behalf and sworn three affidavits (the first, in support of the application for a freezing order, was not read in the substantive hearing). I do not regard him as being disinterested. There is no evidence to establish what, if any, financial interest he has in the outcome of these proceedings. He has, at least, an interest in his reputation which is affected by these proceedings.

In the present case, Mr Simpson wanted (and needed) there to be an agency agreement since without one the plaintiff would not be entitled to commission. However, he knew that there was an apparently irresolvable issue between him and Mr Shi which had the potential to prevent the execution of the agreement: what would happen if Mr Shi introduced a buyer who purchased the hotel? Mr Simpson was fairly confident that if he introduced the ultimate buyer, Mr Shi would pay the commission to the plaintiff, irrespective of whether there was an executed agreement since he appreciated that this was Mr Shi’s only objection to the agreement which had been negotiated between them. Having gone on the roadshow without an executed agreement, Mr Simpson could hardly cause a fuss on his return since this would draw the plaintiff’s attention to Mr Simpson’s laxity in not obtaining a signed agreement before his departure. Further, Mr Simpson was aware that the plaintiff’s competitors, too, were anxious for the opportunity to earn commission on the sale and he did not want to lose the agency. In these circumstances, Mr Simpson was prepared to take the risk of not having a signed agency agreement. This approach is consistent with Mr Keenan’s evidence which I accept:

Mr Simpson’s evidence was not only inconsistent with the narrative set out above, but it was also inconsistent, in material respects, with the evidence of Mr Liu and Mr Keenan, which, for the reasons given below, I accept. I do not accept Mr Simpson’s evidence except where it was uncontroverted, materially corroborated or against interest. I regard him as a dishonest witness.

As Mr Keenan was, as of April 2018, no longer an employee of the plaintiff, he did not have access to any of the file notes he made at the time. Nonetheless, his recollection of dates and events was relatively good. He was subpoenaed by the defendant to give evidence although he had worked for the plaintiff. It was put to him in cross-examination that he had ultimately been made redundant, which he accepted. I accept his denial of the allegation of misconduct put to him. I do not accept that he had any animus towards either Mr Simpson or the plaintiff. He was relevantly disinterested and had no motive to help the defendant or harm the plaintiff. He impressed me as someone who was trying to tell the truth as he recalled it.

He gave his evidence in a straightforward way and appeared to be trying to give his genuine recollection of what occurred. He was hesitant about incriminating or criticising Mr Simpson but did so when necessary to answer the questions asked of him truthfully. On several occasions he was pressed in cross-examination about his concern about Mr Simpson’s preparedness to do the roadshow without a signed agency agreement. Mr Keenan maintained his view that it was Mr Simpson’s responsibility to “extract” a signed agreement and that Mr Keenan would have been overstepping his own responsibilities by telling Mr Simpson “how to run his business unit”. Further, Mr Keenan frankly accepted that he would not necessarily have known when or whether the agency agreement was actually signed.

To a significant extent, Mr Keenan’s recollection was corroborated by contemporaneous documents and by Mr Liu’s evidence.

Although he did not have access to contemporaneous documents, he was able to put a date or a period on events by reference to when he started with the plaintiff (late 2015) and when he was promoted to the position of National Director (about six months later). Thus, he was able to recall that he had spoken with Mr Simpson before he had gone overseas in June or July 2016. The most significant parts of his evidence related to the lunch on 3 June 2016, including its purpose, and the admission made to him by Mr Simpson on about 1 July 2016 that he still did not have a signed agency agreement and the subsequent admission on Mr Simpson’s return. I accept Mr Keenan’s evidence.

The continuing financial and personal relationship between Mr Liu and Mr Shi means that Mr Liu cannot be regarded as a disinterested witness. Nonetheless, he gave his evidence in a careful, unguarded way and made appropriate concessions. I accept that he was not asked to obtain Mr Shi’s signature for the agreement and that he would have been asked to obtain it if there had been final agreement on its terms. I also accept his evidence about the lunch on 3 June 2016 and the last contact he had with Mr Simpson set out above.

In substance, the issues in the case relating to whether there was a signed agreement come down to two hypotheses. The plaintiff’s case is that there was a signed agreement; that Mr Simpson would never have gone on a roadshow without one; and that, but for there being a signed agreement, the defendant would never have allowed the plaintiff to deal with prospective purchasers on its behalf. An alternative hypothesis is that both Mr Simpson and the defendant knew that no agency agreement had been signed but the defendant was content to clothe the plaintiff with authority to promote and market the hotel component of the site and would, had the hotel component been sold other than as a consequence of an introduction by Mr Shi to one of his friends or associates, have been content to pay commission to the plaintiff notwithstanding the lack of signed agreement. The plaintiff has failed to discharge the onus of establishing the first hypothesis on the balance of probabilities. Indeed, the defendant has persuaded me of the alternative hypothesis: namely, that both parties knew that there was no signed agreement and were prepared to proceed regardless.

The alternative hypothesis is consistent with Mr Simpson’s relatively greater appetite for risk than Mr Keenan. It is not inconsistent with the defendant’s understanding that Mr Simpson was going on a roadshow as the defendant’s agent to sell the hotel part of the site. The alternative hypothesis is also consistent with Mr Liu’s understanding that, notwithstanding that no agency agreement had been signed, had the sale of the hotel component to Aligned gone through, the defendant would have paid the plaintiff a commission calculated in accordance with the formula that had been agreed between Mr Simpson and Mr Iemma. This hypothesis is also consistent with Mr Iemma’s comment in the email of 9 October 2016 to the effect Mr Simpson will have to work to earn his commission.

It was common ground that, at the relevant time, s 55 of the Property and Stock Agents Act 2002 (NSW) relevantly provided:

It is not a bar to a claim for commission under an agency agreement that the written version has been lost, misplaced or destroyed since its existence may be proved by secondary means: s 48 of the Evidence Act 1995 (NSW). The contents of the document must be proved on the balance of probabilities: s 142 of the Evidence Act.

For the reasons given above, the plaintiff has not established that there was a written agency agreement. Accordingly, the plaintiff’s claim based on the alleged agency agreement fails.

My obligation as a trial judge requires me to make all necessary findings of fact. Therefore, even though I have rejected the plaintiff’s claim for commission it is necessary to address whether, in any event, the plaintiff would have been entitled to commission resulting from the sale to WR Sydney in 2017, had the agency agreement been signed in the form of the final draft.

The Sales Inspection Report and the relevant terms of the alleged agreement are set out above. Whether the plaintiff is entitled to commission depends on the meaning of “Property” in the agreement. In substance, the plaintiff contended that the word “Property” included the sale of the land located at the site, that is, the fee simple. Thus, it argued that the sale of the fee simple to WR Sydney triggered its entitlement to commission. The defendant submitted that “Property” included only the hotel component of the proposed development and that as there had been no sale of the hotel component, the plaintiff was not entitled to commission. It was common ground that the plaintiff had not introduced WR Sydney to the site and that WR Sydney had purchased the fee simple.

As set out above “Property” is defined to mean the property described in the Sales Inspection Report (that is, the hotel to be delivered by the defendant on the site) “and includes, but is not limited to, any proposed development to be undertaken on that property”. The plaintiff submitted that because the hotel was a proposed development on the site, “Property” included a sale of the fee simple with the DA for the hotel. The defendant submitted that the words “that property” in the definition of “Property” could not include the defined term because that would be circular. It submitted that the words “that property” meant the hotel, because that was the property described in the Sales Inspection Report. Thus, according to the defendant’s argument, the only proposed developments which would be included in the definition of “Property” were developments to the hotel, since this was the only property described in the Sales Inspection Report.

Where there is an ambiguity in a contract, evidence of the surrounding circumstances is admissible to establish the factual matrix to ascertain the objective intention of the parties to the contract: Codelfa Construction Pty Ltd v State Rail Authority (1982) 149 CLR 337 at 352 (Mason J); [1982] HCA 24.

The relevant surrounding circumstances are as follows. As set out above, Mr Simpson’s division was the hotels division of the plaintiff. He did not purport to have expertise or offer services in the sale of property other than hotels, whether already developed or to be sold off-the-plan. He eschewed expertise in selling retail or residential developments or real estate in the form of land and accepted that he would have referred prospective vendors of those forms of property to other divisions within the plaintiff’s business. The proposal put forward by the plaintiff reflected its expectation that its expertise in transactions of hotel developments was what was required and sought by the defendant. All the literature which the plaintiff disseminated to potential purchasers represented that what was to be sold was the hotel component of the yet-to-be-constructed development. The proposed development involved the creation of strata titled land, whereby particular units in the strata plan would comprise the hotel component; other units would compose the retail component and there would also be units for the residential component. The common areas would be owned by an Owners Corporation, of which unit holders would be members.

The mutual expectation of the plaintiff and the defendant was that the defendant would sell the categories of units (hotel, retail and residential) to three potential purchasers before they were developed and “deliver” the development to the purchasers on completion of the development. In respect of the hotel component, the plaintiff would be the defendant’s agent. The defendant would appoint other agents for the sale of the retail and residential components. Mr Simpson’s proposal did not contemplate that he would sell these components unless, for example, the purchaser of the hotel also wanted to buy the retail component, as was the case with Aligned.

The provenance of the agency agreement is a further relevant surrounding circumstance. Mr Simpson’s evidence was that it the standard pre-sale agreement prepared by the plaintiff’s legal department. Thus, it was a precedent which had not been drafted for the purposes of the particular transaction but was designed to cover, with appropriate modifications, all types of property which the plaintiff might be engaged to sell. The only relevant modification to the terms and conditions of the precedent was to cl 3, the entitlement provision.

Against this factual matrix, it is plain that the word “Property” does not extend to the sale of the fee simple and includes only the hotel component. For this reason, the plaintiff would have no entitlement to commission even if the agency agreement had been executed, since its entitlement did not arise. WR bought the fee simple and not the hotel.

The sole alternative basis for the plaintiff’s claim is for damages under s 236 of the Australian Consumer Law for statutory unconscionability contrary to s 21 of the Australian Consumer Law. I note that there is no claim for damages for misleading or deceptive conduct and no allegation that the defendant is estopped from refusing to pay commission to which the plaintiff would otherwise be entitled.

The unconscionability claim, as particularised, is, in substance, that the defendant behaved unconscionably by encouraging the plaintiff to spend time and effort on the negotiations with Aligned to sell the hotel and then resolving to sell the land through a different agent, thereby depriving the plaintiff of the commission to which it would otherwise have been entitled and causing the plaintiff to incur expenses for which it would otherwise not be compensated.

The authorities establish that, in order to establish statutory unconscionability, the plaintiff must prove some moral fault or moral responsibility or that the defendant’s conduct amounts to serious misconduct which is plainly unfair and unreasonable: Qantas Airways Limited v Cameron (1996) 66 FCR 246 at 262 (Davies J) and 283-284 (Lindgren J, Lehane J agreeing).

The principal difficulty with the unconscionability claim as framed is that the evidence established that the reason the defendant decided not to develop the site and sell the components, including the hotel component, was that the estimate of construction costs made the development unviable. The defendant’s decision not to proceed was made towards the end of 2016 on the basis of the construction costs worked out by the plaintiff’s project management team which was led by Mr Keenan. It is always open to an owner who has retained an agent on commission to decide not to proceed with a sale. This is one of the vicissitudes which is built into the agent’s commission and reflects the risk/reward ratio implicit in the fee payable on a successful sale. It was not unconscionable for the defendant to decide not to pursue the development. Mr Simpson became aware of the defendant’s concerns about viability at about the same time as Mr Keenan’s team was providing the figures as to construction cost. No decision was made by the three directors of the defendant until Chinese New Year 2017.

Once the decision had been made to sell the land, rather than the hotel component, there was no real question of Mr Simpson’s team being an appropriate agent, since Mr Simpson had no particular expertise in selling land and the plaintiff had only been appointed to sell the hotel component. In these circumstances, there was nothing unconscionable about the defendant choosing to retain Massari and Knight Frank as its joint agents to sell the fee simple. Although it became hypothetical, I am satisfied that the defendant would have paid commission to the plaintiff had the sale to Aligned completed. I note that the defendant also paid the plaintiff’s disbursements, which included printing costs and the cost of flights and accommodation for the road show.

I am not satisfied that the defendant’s conduct was unconscionable within the meaning of s 21 of the Australian Consumer Law.

Because I am obliged to make all relevant findings of fact, irrespective of my findings of liability, it is necessary to address the claim for damages for unconscionable conduct. Damages are claimed under the following four heads:

Mr Wood accepted that there was no evidence of category (1).

As to (2), as I have found above, the defendant was entitled to change its mind and sell the fee simple rather than the strata titles in the developments to be constructed on the site. I do not accept that the plaintiff lost the opportunity to sell the Park Regis by reason of anything the defendant did. There is therefore no basis on which to assess what, if any, opportunities the plaintiff has lost.

As to (3), Mr Simpson gave evidence that he had spent 540 hours promoting the sale of the hotel for the defendant and that his charge out rate was $550 per hour. There was no evidence to enable me to work out how much of this time was spent in which period. There is therefore no sensible calculation that could be made. Further, the plaintiff would only be entitled to its cost of Mr Simpson’s time and not its profit from that time. There is no evidence as to how much of the $550 per hour relates to the plaintiff’s overheads and what constitutes profit.

As to (4), there is no evidence that the defendant’s conduct damaged the plaintiff’s reputation. Mr Boultwood understood that the sale to Aligned could not proceed because the defendant had changed its mind about developing the site. If anything, it reflected on Mr Shi and not on the plaintiff. Mr Boultwood appreciated that Mr Simpson had been working hard on the transaction and was disappointed by the defendant’s change of mind.

Mr Wood contended that, although the evidence of loss was sparse and inexact, I was obliged to do the best I could to calculate the damages, that being the role of the trial judge.

As was said in Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 (Mason CJ and Dawson J); [1991] HCA 54 (Amann):

In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 77 ALJR 768, Hayne J said at [39], citing Amann, at 80, 83-84 (Mason CJ and Dawson J), 138 (Toohey J), 153 (Gaudron J) and, 161 (McHugh J) that the plaintiff “had to prove these matters on the balance of probabilities and with as much precision as the subject matter reasonably permitted”.

It is one thing to engage in a degree of speculation because the defendant’s wrong has made it impossible to assess damages with any degree of specificity. It is quite another to absolve a plaintiff from the obligation of proving its loss on the balance of probabilities when such material can be taken to have been readily available. Cases in the first category include claims for damages for injuries negligently sustained to an infant where the plaintiff’s loss of earnings for a lifetime need to be assessed, notwithstanding the lack of evidence as to what path the plaintiff, had he or she not been injured, would have taken. There are also cases, such as Amann, where it was held that, although a successful tender would not have made a profit on the first three-year term of the government contract for coastal surveillance, it was likely that it would have been renewed for an indeterminate period. In that case, damages were awarded which compensated Amann Aviation for all its expenditure on the tender, including the loss of value of aircraft it had purchased and modified for the contract because of the impossibility of assessing damages by reference to loss of profits in these circumstances. McRae v Commonwealth Disposals Commission (1951) 84 CLR 377; [1951] HCA 79 (McRae) is an extreme example of the category of cases where assessment of damages is made particularly difficult by reason of the defendant’s breach. In McRae, the appellants had been retained by the respondent to recover an oil tanker which had sunk to the ocean floor. It turned out that there was no oil tanker in the locality provided for in the contract. The appellants’ damages were assessed to include the expenditure wasted in reliance on the promise that there was an oil tanker at the locality given.

The present case does not belong to the first category. No assumption can be made that Mr Simpson’s team lost another opportunity because it promoted the hotel for the defendant. Nor can any assumption be made about when the 540 hours spent by Mr Simpson were spent or how much of his charge-out rate represented the plaintiff’s costs. Nor am I prepared to infer that the plaintiff’s reputation suffered as a consequence of anything the defendant did since the defendant was within its rights to change its mind and any inconvenience caused to, or expenditure wasted by, Aligned could not reasonably be attributed to the plaintiff. Nor was there any evidence of any loss of reputation by the plaintiff.

In these circumstances, the plaintiff has failed to prove any loss.

I have not heard the parties on costs. I am not aware of any reason to depart from the general rule that costs follow the event: UCPR, r 42.1. However, I will make provision in the orders for an application for a different order if there are matters which either party wishes to put.

For the reasons given above, I make the following orders: