Quarter Turn Pty Ltd v Reinteractive Pty Ltd (No 5)

Quarter Turn Pty Ltd brought Federal Court proceedings against Reinteractive Pty Ltd over work on a marketplace app. Quarter Turn alleged that Reinteractive engaged in misleading or deceptive conduct and breached contract in relation to work undertaken, or to be undertaken, for that app.

This judgment was not the final result of the case. It was a procedural ruling delivered during the hearing. The immediate dispute was about a set of invoices and bank statements that Quarter Turn wanted to tender. The real fight was not whether the documents existed, but what Quarter Turn could use them for.

Quarter Turn said the documents helped prove two different kinds of loss. One was its loss of opportunity case, which was already accepted as being in issue. The other was a wasted expenditure claim, meaning money it said it had spent because it entered into the contract. Reinteractive said that second use came too late and would be unfair.

The documents in the folder marked MFI 9 were: invoices from Salesforce to Quarter Turn, invoices from Reinteractive to Quarter Turn, invoices from Comet CX to Quarter Turn, and Commonwealth Bank statements showing Quarter Turn paying Salesforce, Reinteractive and Comet CX.

Quarter Turn argued that these records were relevant to its loss of opportunity claim in two ways. First, they were said to show Quarter Turn had the financial capacity to pursue the commercial opportunity it says it lost. Secondly, they were said to form part of the calculation of the value of that opportunity.

Quarter Turn also wanted to use the same records for a wasted expenditure claim. In practical terms, that meant using the invoices and payment records as proof of money spent in reliance on the deal. Reinteractive did not object to the documents being used for the loss of opportunity case. Its objection was narrower but important: it asked the Court to admit the documents only on the basis that they could not be used for wasted expenditure.

Goodman J spent a large part of the judgment tracing the procedural history because the fairness question depended on what case Reinteractive had reasonably understood it needed to meet.

The Court noted that Quarter Turn's 1 May 2023 letter of demand alleged financial loss of $798,428, including amounts paid to Reinteractive, and said additional loss arose from forecast profit and loss of business opportunity. When Reinteractive later sought particulars, Quarter Turn refused to provide them at that stage.

On 19 January 2024, Quarter Turn filed an originating application seeking damages for breach of contract, including loss of profits, and a concise statement saying it had suffered loss and damage in the form of loss of profits, brand value, goodwill and commercial opportunity. When Reinteractive asked for particulars of those losses, Quarter Turn responded that details would be addressed in evidence, including expert evidence.

Quarter Turn then served an expert report from Dr Brent Coker on 25 June 2024. That report addressed the loss of opportunity claim. It did not address wasted expenditure. Reinteractive's solicitor later wrote saying the material still did not provide enough information to understand the claim. On 8 August 2024, Quarter Turn's solicitor replied that the client brought a loss of commercial opportunity case and that the heads of loss sought were loss of potential profits and estimated brand value.

The amended concise statement filed on 9 April 2025 still described the losses in terms of profits, brand value, goodwill and commercial opportunity. Reinteractive's solicitor gave evidence that if Quarter Turn had amended the case at that point to include wasted expenditure, Reinteractive would not have objected to that course provided it had an opportunity to serve evidence in response.

Later, after Reinteractive amended its own case to raise issues about Quarter Turn's financial resources and capability, Quarter Turn filed an affidavit from one of its directors, Mr Liew, with schedules said to record expenditure incurred and paid by Quarter Turn. Shortly before trial, Quarter Turn's written opening submissions included a line saying it sought loss of bargain damages and, in the alternative, reliance damages, but without explaining the reliance damages case. The night before the hearing started, Quarter Turn's solicitor sent through the bank statements and invoices it intended to tender. During opening submissions, counsel referred to evidence of reliance loss. The tender issue then crystallised during trial.

The legal issue was not whether wasted expenditure can ever be claimed in contract cases. Goodman J accepted the general proposition that the law may allow damages to be measured in a way that places the claimant in the same position as if the contract had been performed, and that a claimant is not necessarily required to make an abstract election between expectation and reliance loss.

The actual question was narrower and procedural. Given the way Quarter Turn had framed and conducted the proceeding, was there a danger that using the MFI 9 documents for a wasted expenditure claim would be unfairly prejudicial to Reinteractive? If so, should the Court use section 136 of the Evidence Act 1995 (Cth) to limit the use of the evidence?

Section 136 is important in practice because it allows the Court to admit evidence but restrict the purpose for which it can be used. That is different from excluding the evidence altogether. Here, the Court had to decide whether fairness required a use limitation rather than total rejection of the documents.

The Court admitted the documents in MFI 9 into evidence as Exhibit A2. But it also made a limiting order under section 136 of the Evidence Act.

The order prevented Quarter Turn from using two categories of material in any wasted expenditure claim: invoices rendered by Salesforce and Comet CX to Quarter Turn, and bank statements recording Quarter Turn's payments to Salesforce and Comet CX in satisfaction of those invoices.

Goodman J accepted Reinteractive's evidence that, if a wasted expenditure claim had been identified earlier, Reinteractive would have taken a different approach. That included briefing an expert to assess the reasonableness of the expenditure, obtaining further lay evidence or instructions about whether the expenditure had any nexus with the contract, obtaining expert evidence on whether the expenditure would have been recovered but for the alleged breach, gathering evidence on whether the expenditure resulted from Quarter Turn's own unreasonable or improvident conduct, and seeking further security for costs. The Court described that prejudice as a powerful factor in favour of limiting use of the evidence.

However, the Court drew a distinction for invoices rendered by Reinteractive itself and bank statements showing payment of those invoices. Goodman J was not satisfied there would be sufficient prejudice if Quarter Turn were allowed to pursue wasted expenditure in relation to amounts paid directly to Reinteractive. The judge said it was difficult to see how Reinteractive could contend that payments made to satisfy its own invoices were not reasonably incurred in reliance on its contractual performance, or were the result of unreasonable or improvident conduct by Quarter Turn.

So the result was mixed. The documents came in, but Quarter Turn could not use the Salesforce and Comet CX material for wasted expenditure. The ruling did not finally determine whether Quarter Turn could succeed on any other part of its damages case.

For business owners, the main lesson is about clarity and timing. In a failed project dispute, there may be several possible ways to describe loss. You may say you lost profits, lost a commercial opportunity, or wasted money spent in reliance on the deal. The law may permit more than one measure in principle, but the Court still expects the other side to be told clearly what case it has to meet.

That matters because different heads of loss require different evidence. A lost opportunity case often turns on forecasts, valuation, market assumptions and expert opinion about what might have happened. A wasted expenditure case can raise different questions, including whether the expenditure was reasonably incurred, whether it had a sufficient connection to the contract, whether it would have been recovered if the contract had been performed, and whether some of the spending resulted from the claimant's own unreasonable conduct.

This case is especially useful for businesses involved in software builds and implementation projects with multiple suppliers. If the project fails, a claimant may want to recover not only amounts paid to the main contractor, but also related spend on platform providers, consultants and integration partners. This judgment shows that third-party supplier spend may attract a stronger prejudice argument if it is introduced late as part of a new damages theory.

It also shows the practical importance of amending your case openly. The Court relied on the principle that litigation should not proceed on hidden issues or assumptions that the other side has not appreciated. If your damages theory changes, do not leave clues in correspondence and hope that is enough. State the change directly, amend the relevant documents and give the other side a fair chance to respond.

A common misunderstanding is that if a document is relevant and admitted, it can be used for any purpose. This case shows that is not always true. Section 136 allows the Court to admit evidence but confine the use that can be made of it where a broader use would be unfairly prejudicial.

Another practical point is that broad wording in an originating application may not save a party if the rest of the case has been conducted more narrowly. Goodman J looked not only at the formal relief sought, but also at the concise statement, amended concise statement, correspondence about particulars, expert evidence and the way the case was opened at trial.

Businesses should also note that prejudice is easier to show where a late claim would have required different evidence. In this case, Reinteractive pointed to specific additional work it would have done if wasted expenditure had been clearly raised earlier. That included expert analysis, further lay evidence and potentially an application for more security for costs.

The judgment was delivered by Goodman J on 16 February 2026 in the Federal Court of Australia. The hearing on this issue took place on 13 February 2026. The ruling concerns an objection to evidence and the exercise of the Court's discretion under section 136 of the Evidence Act 1995 (Cth).

This should be read as a procedural case note. It does not provide the final outcome of the underlying misleading conduct and breach of contract claims.