Stonegate Legal Successfully Defends Federal Court Appeal
Stonegate Legal is proud to announce its successful defence of an appeal in the Federal Court of Australia by Appello Pty Ltd and its director, Mr Cameron Woodford, against our clients, Ms Eva Heyward and Heyward Industries Pty Ltd.
Assisted by Mr. D. Savage KC and Mr. R. Reed of counsel, the Federal Court in the case of Appello Pty Ltd v Heyward [2025] FCA 190, presided over by His Honour Justice Logan, dismissed the appeal in its entirety and awarded costs in favour of our clients.
The appeal followed a comprehensive trial in the Federal Circuit and Family Court of Australia, where her then-legal team secured findings of misleading and deceptive conduct under section 18 of the Australian Consumer Law (ACL).
The case concerned developing a mobile dating application called “Eye Contact | Real Life Dating App” and the business dealings between Ms Heyward and Appello.
Background to the Case
The original case was Heyward v Appello Pty Ltd [2024] FedCFamC2G 371.
Ms Heyward engaged Appello Pty Ltd to design and develop a mobile application, entering into an agreement in August 2021. The agreement was partly written, partly oral, and partly implied.
Counsel successfully argued that Appello and Mr Woodford had made misleading representations regarding the timeframe and cost of the development project, which formed the basis of the engagement.
In April 2024, the trial judge found that Appello and Mr Woodford had contravened section 18 of the ACL and ordered them to pay $75,290 in damages to Ms Heyward under section 236 of the ACL.
This figure comprised the amounts paid to Appello ($62,890) and subsequent costs incurred by Ms Heyward to attempt to rectify the dysfunctional app through another developer, Groovy Web ($12,400).
Grounds of Appeal
Appello Pty Ltd and Mr Woodford appealed the original decision on multiple grounds, including:
- Alleged errors in the trial judge’s findings of fact.
- Contention that adverse inferences should have been drawn under the Jones v Dunkel principle for failing to call certain witnesses.
- Disputes over the assessment and causation of damages.
- Claims that the application was not worthless and was later accepted on the Apple App Store and Google Play Store.
Federal Court Findings
Justice Logan comprehensively rejected all grounds of appeal. Key findings included:
- The trial judge appropriately assessed the credibility of witnesses, and no adverse inference was warranted regarding the absence of two individuals who were not central to the core misrepresentations.
- The Court accepted that the misleading representations made by Mr Woodford on behalf of Appello directly influenced Ms Heyward’s decision to agree.
- As of December 2021, the “Eye Contact” app was deemed commercially worthless in terms of functionality and value. Uncontested expert evidence supported this conclusion, which was confirmed again in 2023.
- The damages awarded correctly reflected a “no transaction” case under the ACL, designed to place Ms Heyward in the position she would have been in had the misleading conduct not occurred.
Justice Logan ultimately concluded at [42]:
In short, there was evidence at trial to support the conclusion that, on the balance of probabilities, the App for which Ms. Heyward contracted with Appello, following Mr. Woodford’s representations to her, was worthless.
The appeal was dismissed, and costs were awarded to Ms Heyward and Heyward Industries Pty Ltd.
Misleading and Deceptive Conduct in Australia
Misleading or deceptive conduct is prohibited under Section 18 of the Australian Consumer Law (ACL), which forms Schedule 2 of the Competition and Consumer Act 2010 (Cth).
The provision states that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive. This is a central tenet of Australian consumer protection law, widely applicable in both consumer and commercial contexts.
Key Elements
To succeed in a claim under s 18, the conduct must:
- Occur in trade or commerce; and
- Be misleading or deceptive, or likely to mislead or deceive.
There is no requirement to prove intent; the focus is on the effect of the conduct on the target audience. Notably, “conduct” encompasses both actions and omissions, such as failing to disclose material facts. It encompasses oral statements, written representations, gestures, and even silence in some cases.
Scope of Application
While initially intended to protect consumers, s 18 has broad application in business-to-business disputes, mainly where parties try to circumvent contractual remedies.
Common areas include construction, infrastructure, and mining projects, where misleading conduct may relate to project timelines, site conditions, design warranties, equipment specifications, or financial performance.
Pre-contractual representations are a significant risk area. Even where contracts contain entire agreement clauses, these don’t necessarily exclude ACL claims. Similarly, contractual representations, site instructions, and statements during negotiations can all form the basis of a misleading conduct claim.
Remedies
Available remedies include:
- Damages under s 236 of the ACL for loss or damage caused by the conduct
- Injunctions
- Contract variations or rescission
- Adverse publicity orders
Civil penalties apply in serious breaches. Corporation fines can exceed $50 million, and individuals may face penalties of up to $2.5 million.
Evidentiary Challenges
Though these claims are “easy to plead, hard to prove”, success depends on:
- Precise identification of the impugned conduct.
- Evidence of reliance by someone with authority in the claimant’s organisation.
- A credible counterfactual showing what would have occurred had the misleading conduct not occurred.
Courts favor contemporaneous written records over retrospective oral recollections. For this reason, it is vital to keep detailed records of meetings, representations, and instructions.
Final Message from Stonegate Legal
This decision underscores the ability of Australian Consumer Law to safeguard individuals and small businesses against misleading conduct, even in complex technology and service agreements.
It also reaffirms the importance of clear and credible evidence and the rigorous approach courts take when reviewing contractual misrepresentations.
Stonegate Legal is proud to have supported Ms Heyward through this complex appeal litigation and secured just outcomes on both the original claim and the appeal.
If you want to appeal a decision or you are defending an appeal, please contact our commercial litigation lawyers.
