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[2026] NSWCA 173
respondent. Appeal dismissed with costs. The primary judge's award of $166,100 on a quantum meruit, together with pre-judgment interest, was left undisturbed. [3], [83]
The Court of Appeal held that voiding an unfair commission clause did not automatically prevent the agent from seeking reasonable payment for services through restitution. Here the agent's services were lawful, the agreement did not provide an enforceable payment right for the relevant situation once the clause was void, and the evidence supported the amount awarded. The decision is fact-specific: it does not establish that an agent can always recover the amount of a void commission term.
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2,274 words · generated 08/10/2026
Yin Bo engaged Costi Cohen Pty Ltd, a commercial buyer’s agent, under an agency agreement signed on 13 November 2023. The agreement named Bo as the client, related to a commercial investment property in metropolitan Sydney, and had a six-month term. Its fee schedule recorded an engagement fee of $5,000 plus GST and a percentage fee of 2% of the purchase price plus GST. The agreement's cl 4.2(a) made the percentage fee payable on specified events, including where the client procured another person or entity to enter into a purchase contract.
Costi Cohen provided services that included identifying and investigating properties, arranging inspections, and negotiating with vendors. It brought the Drummoyne property to Bo's attention and was involved in communications and negotiations concerning it. Y&M Australia, a company used by Bo and his wife for property investment, made an initial offer. A revised offer was later made by Boying Development Pty Ltd, a company incorporated during the dealings and of which Bo's wife was the sole director. Boying bought the property for approximately $7.5 million and settled on 19 July 2024. [7]-[20]
Costi Cohen invoiced Bo $166,100, calculated as 2% of the purchase price plus GST. Bo disputed the invoice on the basis that Boying, not he, bought the property. Costi Cohen sued in the District Court on alternative contractual, estoppel and quantum meruit grounds. The primary judge found that Bo had procured Boying's purchase and that the agreement, construed on its terms, would have required payment. But cl 4.2(a) was an unfair term under ACL s 24 and therefore void under s 23. The contractual claim failed; the primary judge nevertheless awarded $166,100 on a quantum meruit. [21]-[23], [28]-[40]
Bo appealed on three issues: whether restitution undermined the ACL regime, whether it fitted with the agreement after the clause was void, and whether Costi Cohen proved the amount was reasonable. The Court of Appeal, with Ward P and Stern JA agreeing with Mitchelmore JA, dismissed the appeal with costs. [1], [4], [83]-[84]
The Court treated the statutory policy issue as a question of legislative purpose and coherence, not as a rule that restitution is always barred whenever a contractual term is void. Bo argued that allowing Costi Cohen to recover a fee in restitution would give it the very commission that the ACL had removed. He relied on decisions concerning restitution claims connected with statutory illegality and regulatory protection. [41]-[46]
Mitchelmore JA accepted that a restitutionary claim can stultify a statutory regime, but found the analogy with those authorities inapt. In Equuscorp, recovery would have been from investors whom the prospectus regime was intended to protect, and the loan agreements were part of the illegal investment scheme. In Redland City Council v Kozik, the question arose in the context of statutory safeguards for local government charges. Here, the services themselves were not prohibited. The statutory consequence was that the unfair contractual term could not be relied on; that did not, by itself, determine whether a claim on a distinct restitutionary basis could succeed. [43]-[49]
The Court also emphasised the continued force of ACL penalties. Section 23 rendered the unfair term void and included provisions penalising specified conduct, with penalties under s 224. The existence of a possible restitutionary claim did not eliminate those consequences. Nor did this case concern Costi Cohen applying the clause to collect commission for a property it had not introduced, which was the kind of breadth that made the term unfair. Whether another claimant could recover, and in what amount, would depend on the circumstances and the basis actually established. [47], [50]
On the contractual-fit issue, the Court considered the relationship between ACL s 23(2), which allows the rest of a contract to continue if capable of operating without the unfair term, and the availability of restitution. The primary judge had preferred the view that the agreement could not operate without cl 4.2(a), because the $5,000 retainer was not the agreed consideration if a purchase occurred. Mitchelmore JA said that view was likely correct, but did not need finally to decide it. [35], [55]
Even assuming the agreement continued, the void clause left no accrued contractual right to payment for the relevant services. The agreement was silent on the fair and reasonable value of the services in the circumstances where those services resulted in a qualifying purchase. The Court contrasted this with categories in Mann v Paterson Constructions Pty Ltd where restitution was constrained by statutory provisions or by contractual rights already accrued. Here, the result did not contradict an enforceable contractual payment entitlement. The quantum meruit claim therefore fitted with the agreement. [56]-[59]
On quantum, the Court rejected the proposition that proof of an external market rate is invariably necessary. The question is what constitutes fair and reasonable remuneration for the work done, a factual inquiry. Authorities such as Flett, Horley and Roude did not establish an across-the-board requirement for independent market evidence. They illustrated that the necessary evidence depends on the particular record. [61]-[72]
The evidence here differed from the sparse or problematic evidence in Horley. The agency agreement set out the percentage fee. Bo had discussed and agreed to it, was an experienced commercial property investor, and did not challenge the rate as unreasonable, either when disputing the invoice or at trial. Mr Costi also testified that Costi Cohen's standard commission was between 1.8% and 2.2%, depending on the brief and budget. Although that was not an industry-wide standard, the Court held it could be considered with the other evidence. There was no competing evidence. Taken together, the evidence was enough to establish the claimed amount. [69]-[82]
The judgment did not announce a new statutory rule or change the text of the ACL. It applied the existing provisions: s 23 makes an unfair term void, s 23(2) addresses whether the remaining contract continues, and s 24 defines unfairness. It also applied existing restitution principles concerning coherence between common law remedies and statutory purpose. [24]-[27], [43]-[50]
Before this decision, the authorities discussed in the judgment already recognised that statutory policy may prevent restitution where recovery would undermine the statute. Equuscorp concerned recovery from persons protected by a prospectus regime, while Redland City Council v Kozik examined whether restitution would undermine regulatory safeguards. The Court did not reject those principles. It distinguished the circumstances before it: services were not prohibited, and the unfairness lay in the breadth of the fee clause. [43]-[49]
The decision's clarification is narrower. A void ACL term does not automatically bar every restitutionary claim relating to services provided under the agreement. Equally, the decision does not authorise routine recovery of a void fee under a different label. The claimant must establish an independent restitutionary basis, and the result remains subject to the policy of the relevant statute and the particular facts. The Court expressly made recovery turn on circumstances. [47], [50]
For contractual fit, the Court applied the distinction between an accrued contractual entitlement and a situation where the agreement, once the void term is removed, does not govern fair and reasonable remuneration for the services. Mann informed that distinction. The judgment did not resolve in the abstract when any particular contract survives excision under s 23(2); it said the agreement's survival need not be decided to resolve this appeal. [55]-[59]
For the measure of restitution, the judgment confirms the importance of evidence rather than imposing a fixed evidentiary formula. A fee stipulated in an agreement may be evidence of reasonable value, but it is not automatically conclusive. Whether market comparisons or other evidence are needed depends on the facts. [72]-[78], [82]
At [47], Mitchelmore JA said: “Whether a claimant can recover when a contractual provision is found to contravene s 23 of the ACL will depend upon being able to establish an alternative basis for the claim in the particular circumstances.” In plain English, having an unfair term declared void does not answer every question about payment. A claimant still needs to prove a separate legal basis for the particular amount sought, and the statutory purpose may prevent recovery in some cases.
At [50], the Court said that recovery of “the same amount as the unfair term stipulated or some other amount” depends on the circumstances. That matters because it rejects both extremes: there is no automatic restitutionary recovery of the void fee, but neither is there an automatic bar simply because the term was void. The civil penalty regime remains relevant.
At [59], the Court explained that the agreement was “silent on the fair and reasonable value” of the services after the commission clause was void. In ordinary terms, there was no enforceable contractual rate that decided what payment was due in the relevant situation. That gap was important to the finding that the restitution claim fitted with the agreement.
At [72], the Court stressed the “fact-specific nature of the inquiry” into reasonable remuneration. The point is that a decision about the evidence needed in one service dispute does not necessarily prescribe the proof required in another.
At [82], the Court identified the combination of evidence it accepted: Costi Cohen's usual fee range, Bo's experience and agreement to the percentage, and the absence of a reasonableness challenge or competing evidence. This is not a rule that silence always proves a fee reasonable. The Court treated the facts together as sufficient in this case.
The decision is most relevant where a service provider has performed services under a consumer or small business standard form contract, a term governing payment is held unfair and void under ACL s 23, and the provider seeks reasonable remuneration in restitution. The service must have a basis independent of reliance on the void term, and the court must consider whether permitting recovery would undermine the purpose of the relevant statutory regime. [24]-[27], [47]-[50]
The fit analysis is relevant where removing the unfair term may leave the contract silent about payment for a particular outcome. A court would need to consider whether the remaining contract still contains an accrued right or a contractual payment mechanism. The judgment's reasoning differs from cases where the contract or a statute continues to govern the payment right. [56]-[59]
The quantum analysis is relevant where the parties agreed a price or rate before the work, but that term cannot itself be enforced. It may be evidence of value, but its weight depends on context. Here, the provider had also given evidence about its usual charges, the client was commercially experienced, and there was no competing evidence. A materially different evidentiary record could call for a different assessment; the Court did not prescribe a minimum checklist. [74]-[82]
The case should not be read as deciding that any service provider may recover a void contractual fee. The judgment itself notes that a claim depends on an alternative basis and the circumstances, and it distinguishes the statutory-protection settings in Equuscorp and Redland City Council v Kozik. [47]-[50]
The judgment provides no information about how later courts treated Bo v Costi Cohen Pty Ltd. It is dated 27 August 2026, and the supplied judgment contains no later decisions citing, following, distinguishing or criticising it. No conclusion about its subsequent treatment can be drawn from this source alone.
Within the judgment, the Court considered earlier authorities rather than reporting later treatment of this decision. It considered Equuscorp and Redland City Council v Kozik in addressing statutory stultification; Mann in analysing when restitution fits with contractual rights; and Flett, Horley and Roude on proof of reasonable remuneration. These are the appellate court's stated authorities and reasoning, not evidence of what later courts have done with this judgment. [43]-[49], [56]-[59], [61]-[72]
The Court did not finally decide whether the agency agreement was capable of operating after cl 4.2(a) was excised. It said the primary judge's preference that it could not was likely correct, then resolved the appeal on the alternative assumption that it continued. The judgment therefore does not supply a definitive answer on the survival of this agreement under s 23(2). [35], [55], [59]
The circumstances in which restitution after an unfair term would undermine the ACL regime remain open. The Court provided a contextual approach but did not define an exhaustive test for all types of unfair terms, services, or claims. In particular, it did not decide the result where the services themselves are prohibited, where the claimant seeks to reproduce the precise advantage of an unfair term in circumstances closely tied to the unfairness, or where statutory protection is directed at the defendant receiving the benefit. [43]-[50]
The judgment also leaves open how much weight an agreed but void price should receive in other cases. It held the 2% figure could be evidence and, on this record, the total evidence discharged the onus. It did not say that the agreed percentage would be sufficient alone, nor that a client's failure to challenge a price will invariably establish reasonableness. [74]-[82]
Finally, the Court did not set a universal evidentiary threshold for quantum meruit claims. It rejected the idea that external market evidence is always a prerequisite, but the required proof remains fact-dependent. The detail of the work, reliability of the provider's evidence, nature of any agreed fee, and any competing evidence may matter in another dispute. [64]-[72], [82]
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Bo v Costi Cohen Pty Ltd [2026] NSWCA 173
Hearing dates: 25 May 2026
Date of orders: 27 August 2026
Decision date: 27 August 2026
Before: Ward P at [1]
Mitchelmore JA at [2]
Stern JA at [84]
Decision: Appeal dismissed with costs.
Catchwords: RESTITUTION — quantum meruit — fair and reasonable remuneration for services rendered — contract term void for unfairness — where services rendered pursuant to void term — where legislative policy prohibits inclusion of unfair terms in standard form contracts — whether legislative policy stultified by permitting quantum meruit claim
RESTITUTION — quantum meruit — fair and reasonable remuneration for services rendered — contract term void for unfairness — whether contract survives excision of void term — where remaining clauses silent on fair and reasonable remuneration for services — whether quantum meruit claim “fits” with remaining clauses
RESTITUTION — quantum meruit — fair and reasonable remuneration for services rendered — whether necessary to establish external standard for work performed — whether percentage fee agreed by parties can be some evidence of reasonableness — whether evidence sufficient to discharge onus of proof in respect of quantum of restitutionary claim
Legislation Cited: Companies (New South Wales) Code 1981, Div 6 of Pt IV, s 170 (repealed)
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 18, 23, 24, 27, 224
Contracts Review Act 1980 (NSW)
Domestic Building Contracts Act 1995 (Vic), s 38
Cases Cited: Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347; 153 ACSR 347
Australian Securities and Investments Commission v Bank of Queensland Ltd [2021] FCA 957; 155 ACSR 468
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7
Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383
Horley v Sector 7G Architecture Pty Ltd (in liq) [2011] NSWSC 827
Horton v Jones (No 1) (1934) 34 SR (NSW) 359
Jetstar Airways Pty Ltd v Free [2008] VSC 539; 30 VAR 295
Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166
Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5
Redland City Council v Kozik (2024) 281 CLR 202; [2024] HCA 7
Roude v Helwani [2020] NSWCA 310; 36 BCL 444
Texts Cited: Nil.
Category: Principal judgment
Parties: Yin Bo (appellant)
Costi Cohen Pty Ltd (respondent)
Representation: Counsel:
P D Reynolds and T Immidi (appellant)
P Folino-Gallo (respondent)
Solicitors:
MLH Lawyers (appellant)
Hitch Advisory (respondent)
File Number(s): 2025/00390216
Publication restriction: Nil
[This headnote is not to be read as part of the judgment]
In November 2023, the appellant, Yin Bo, entered into an agency agreement with the respondent, Costi Cohen Pty Ltd (Costi Cohen), a commercial buyer’s agent. Pursuant to cl 4.2(a) of the agency agreement, Mr Bo was obliged to pay Costi Cohen a commission fee in the event that he purchased a property, procured another person or entity to purchase a property, or became the legal owner of a property by any other means whatsoever.
As a result of services provided by Costi Cohen to Mr Bo, a property was identified and subsequently purchased for $7.5 million by Boying Development Pty Ltd (Boying), a company incorporated during the course of Mr Bo’s dealings with Costi Cohen, of which Mr Bo’s wife was the sole director. When Costi Cohen issued an invoice to Mr Bo for a commission fee of $166,100, being 2% of the purchase price of the property plus GST, Mr Bo denied liability for the commission, claiming that he was not obliged to pay because Boying was the purchaser of the property.
In September 2024, Costi Cohen commenced proceedings in the District Court seeking recovery of the invoiced amount, contending that it was entitled to payment either under cl 4.2(a) of the agency agreement or, alternatively, by way of quantum meruit. Mr Bo raised several defences, including that cl 4.2(a) of the agency agreement was an unfair contract term within the meaning of ss 23 and 24 of the Australian Consumer Law (ACL).
The primary judge, Habib SC DCJ, held that Mr Bo was contractually obliged under cl 4.2(a) of the agency agreement to pay Costi Cohen the commission fee by reason of his procurement of Boying to purchase the property. However, his Honour found that the clause was an unfair contract term within the meaning of s 24 of the ACL and therefore void under s 23. Accordingly, Costi Cohen’s contractual claim failed. Nevertheless, on the basis that it would be unjust for Mr Bo to take the benefit of Costi Cohen’s services without fair restitution, the primary judge held that Costi Cohen was entitled to recover on a quantum meruit. In determining what was reasonable remuneration for Costi Cohen’s services, the primary judge had regard to the commission percentage stipulated in the agency agreement, to which Mr Bo agreed, and the evidence of Mr Costi (the sole director of Costi Cohen) on standard commission fees in his experience as a commercial buyer’s agent.
Mr Bo appealed from the primary judge’s conclusions on both liability and quantum, raising for determination: (i) whether the quantum meruit claim stultified the unfair contract term regime in the ACL; (ii) whether the quantum meruit claim “fit” with the agency agreement; and (iii) whether Costi Cohen discharged its onus of proof on quantum.
The Court (Mitchelmore JA, Ward P and Stern JA agreeing) held, dismissing the appeal:
Whether the quantum meruit claim stultified the ACL’s unfair contract term regime
(1) Section 23 of the ACL prohibits the inclusion of unfair terms in standard form contracts and renders them void, while the civil penalty regime imposes a significant financial disincentive to their inclusion. Whether a restitutionary claim undermines that legislative policy will depend upon the circumstances. In the present case, the legislative policy was not stultified by permitting a claim in restitution for services rendered, where the services themselves were not prohibited and only the contractual term pursuant to which they were provided was void for unfairness: at [47], [50].
Jetstar Airways Pty Ltd v Free [2008] VSC 539; 30 VAR 295; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48, considered; Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7; Redland City Council v Kozik (2024) 281 CLR 202; [2024] HCA 7, distinguished.
Whether Costi Cohen’s quantum meruit claim “fit” with the agency agreement
(2) The primary judge’s preference for the view that the agency agreement could not survive the excision of cl 4.2(a) was likely correct. In any event, it followed from cl 4.2(a) being void that Costi Cohen had no contractual entitlement to payment for services resulting in the purchase of a property. In those circumstances, the primary judge was correct to conclude that the quantum meruit claim “fit” with the agreement: at [55]-[56], [59].
Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347; 153 ACSR 347; Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32, considered.
Whether Costi Cohen discharged its onus of proof in respect of quantum
(3) Costi Cohen bore an onus to establish what constituted reasonable remuneration. What is required to discharge that onus is fact specific. In the present case, the commission percentage stipulated in the agency agreement, together with the fact that Mr Bo, an experienced property investor, agreed to that percentage and never took issue with its reasonableness, was sufficient to discharge Costi Cohen’s onus of proof as to quantum, especially in the absence of any competing evidence or challenge to the fee: at [72], [74], [78], [81]-[82].
Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383; Roude v Helwani [2020] NSWCA 310; 36 BCL 444; Horley v Sector 7G Architecture Pty Ltd (in liq) [2011] NSWSC 827; Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389; Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5; Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32, considered.
WARD P: I agree with Mitchelmore JA.
MITCHELMORE JA: The appellant, Yin Bo, was interested in acquiring a commercial investment property in Sydney. In November 2023, he entered into an agency agreement with the respondent, Costi Cohen Pty Ltd (Costi Cohen), a commercial buyer’s agent.
In September 2024, Costi Cohen commenced proceedings against Mr Bo in the District Court seeking to recover $166,100 from Mr Bo by way of commission. Costi Cohen put its claim for that amount on a number of bases, including in contract and on a quantum meruit. The primary judge, Habib SC DCJ, found Mr Bo liable on the quantum meruit claim, awarding Costi Cohen the amount that it sought, together with pre-judgment interest: Costi Cohen Pty Ltd v Bo [2025] NSWDC 356; Costi Cohen Pty Ltd v Bo (No*.*2) [2025] NSWDC 385.
Mr Bo appeals from the primary judge’s decision, challenging his Honour’s conclusions on both liability and quantum. In his amended notice of appeal filed 7 April 2026, Mr Bo contended that the primary judge erred in the following respects:
granting relief on the quantum meruit claim in circumstances where his Honour also held that the clause of the agency agreement dealing with commission was void under s 23 of the Australian Consumer Law (ACL) (ground 1);
finding that Costi Cohen’s claim for quantum meruit fit or was not inconsistent with the contract between the parties, and that Costi Cohen was thus entitled to relief on a quantum meruit basis (ground 2); and
concluding that Costi Cohen had discharged its onus of proof as to the amount of its claim (ground 3).
For the reasons I set out below, I would dismiss the appeal.
The background to the dispute was largely uncontroversial and can be summarised by reference to the primary judge’s reasons.
Mr Bo and his wife, Geying Ma, were, at the time of their dealings with Costi Cohen, directors of Y&M Australia Pty Ltd (Y&M Australia), which they used as a corporate vehicle for purchasing commercial investment properties: at [32]. During the course of Mr Bo’s dealings with Costi Cohen, a new company, Boying Development Pty Ltd (Boying), was incorporated, of which Ms Ma was the sole director: at [7(o)].
On 24 October 2023, Mr Bo was introduced as a potential client to Tasos Costi and Zackery Harkins, who were Costi Cohen agents: at [7(a)]. Mr Harkins became Costi Cohen’s primary point of contact for Mr Bo.
In November 2023, Mr Harkins met with Mr Bo to discuss Costi Cohen’s services and fees: at [7(f)]. On 13 November 2023, the parties executed the agency agreement: at [7(g)].
The first two pages of the agency agreement set out five recitals and the particulars of the agreement, the latter being divided into ten “parts”. Following the acknowledgment and signatures on page 3, pages 4 to 9 of the agency agreement, under the heading “Terms of Agreement”, contained what Mr Costi accepted, in cross-examination, were standard terms that Costi Cohen used.
In the section of the particulars headed “PART 1 – CLIENT'S DETAILS”, Mr Bo was recorded as the “Client”. Part 4.1 of the particulars, titled “PROPERTY DETAILS”, recorded that Mr Bo was looking for a commercial investment property in the Sydney Metro area, with an ideal net yield of 6.5% and to be leased preferably on a five-year term. The “Approximate Price Range” was “$3,000,000 - $13,000,000 (potential to increase to $20,000,000)”. The term of the agency agreement was six months, commencing on 13 November 2023.
Clause 1.1 of the “Terms of Agreement” contained a number of definitions, of which the following are relevant for the appeal:
“a. Affiliate means any person or entity (including without limitation companies, partnerships, trusts, listed property trusts and unlisted property trusts) that, in relation to their property investments or business affairs, acts or could reasonably be expected to act in accordance with the Client’s directions or wishes, or in concert with the Client, or is otherwise under the Control of the Client or is a Relative of the Client, including any Associated Entities;
…
e. Associated Entity has the meaning prescribed in s50AAA of the Corporations Act 2001 (Cth);
f. Client means the party described as the Client in Part 1 and includes its Associated Entities, Affiliates, directors, officers, employees, contractors, successors and permitted assigns, and any person nominated in writing by the Client to the Agent to act as the Client’s nominee …;
…
k. Fees means either the agreed fixed fee or a percentage of the purchase price of the Property as listed in Part 6 of the Particulars plus GST;
…
s. Property means any property which meets any of the criteria set out [in] Part 4 of the Particulars (or as varied).
t. Relative means, in relation to a person, any of the following:
i. Spouse;
ii. blood or adoptive relative;
iii. blood or adoptive relative of the person’s Spouse; and
iv. Spouse of any blood or adoptive relative of the person.
u. Retainer Fee means the non-refundable retainer fee in the amount specified in Part 6 of the Particulars, plus GST;”
“Agent’s Remuneration
4.1 Retainer Fee
a. The client agrees to pay to the Agent the Retainer Fee upon execution of this Agreement.
b. If the Client changes their instructions during the Term and the Agent is required to identify new properties with new, alternate or additional features (for example, new location, price range, property type) (New Property), the Agent expressly reserves the right to charge an additional non-refundable retainer fee not exceeding the amount specified in Part 7 of the Agreement for each new location, price range or property type.
4.2 Fees
a. The Client agrees to pay to the Agent the Fees in accordance with the Agreement in the event that during the Term any one of the following occurs (regardless of who funds the purchase of, finds or introduces the Property). The Client:
i. enters into a contract for the purchase of, or an option to purchase, any property, irrespective of whether that contract allows a cooling off period;
ii. procures another person or entity to enter into a contract for the purchase of, or an option to purchase, any property irrespective of whether that contract allows a cooling off period;
iii. where any property is owned by a company;
(1) enters into a contract for the purchase of any shares in that company;
(2) procures another person or entity to enter into a contract for the purchase of the shares in that company; or
(3) by any other means whatsoever becomes the legal and/or beneficial owner of any of the shares of that company; or
iv. by any other means whatsoever becomes the legal and/or beneficial owner of any property.
b. The Fees are due and payable by the Client on the first to occur of:
i. any of the events referred to in clause 4.2a; or
ii. completion of the transfer of the legal and/or beneficial ownership referred to in clause 4.2a.”
| Description | Percentage of Purchase Price | | Percentage Fee | 2% (Plus GST) | | Fees Payable | 100% on Exchange | | Engagement Fee | $5,000 (Plus GST) |
Upon execution of the agency agreement on 13 November 2023, Costi Cohen issued an invoice to Mr Bo in the amount of $5,500, being the “Retainer Fee” referred to in cl 4.1 plus GST (referred to in the table in Part 7 as the “Engagement Fee”). Mr Bo paid that invoice on 15 November 2023: at [7(h)].
The parties did not address Costi Cohen’s provision of services to Mr Bo in any significant detail, and it is unnecessary to do so for the purposes of the appeal. It suffices to say that between October 2023 and May 2024, Costi Cohen provided a range of services to Mr Bo, which the primary judge described as including: (i) identifying a range of prospective properties; (ii) investigating prospective properties; (iii) organising inspections of prospective properties; and (iv) negotiating with vendors of prospective properties: at [19].
On 25 March 2024, Mr Harkins called Mr Bo to tell him about a prospective property at 66-72 Victoria Road, Drummoyne (Drummoyne property), and followed up this call with an email containing information about the property: at [7(j)]. In the period between 28 March 2024 and 4 April 2024, Mr Harkins exchanged a series of emails with Mr Bo in respect of the Drummoyne property. On 2 May 2024, Mr Harkins sent a draft contract for the purchase of the Drummoyne property to the solicitors acting for Y&M Australia: at [7(l)]. The purchase price and other terms of that contract were the subject of negotiations in correspondence between Mr Harkins and Mr Bo in early May 2024, during which Mr Harkins recommended that an offer of $7.35 million be made: at [15].
On 15 May 2024, Y&M Australia made an offer of $7.35 million for the Drummoyne property: at [7(m)]. The vendor rejected that offer, which Mr Harkins communicated to Mr Bo on 21 May 2024: at [7(n)].
On 23 May 2024, Boying submitted a revised offer of $7.55 million: at [7(p)]. The vendor accepted Boying’s offer. On 28 May 2024, a contract for sale was signed, and on 7 June 2024, the contracts were exchanged, at which time Boying paid a 10% deposit to the vendor’s agent. Settlement of the Drummoyne property occurred on 19 July 2024: at [7(q)].
On 11 June 2024, Costi Cohen issued an invoice to Mr Bo in the amount of $166,100, being 2% of the purchase price for the Drummoyne property plus GST, pursuant to cl 4.2(a) and cl 4.2(b) of the agency agreement. Mr Bo did not pay the invoice, claiming that he was not obliged to pay it because Boying was the purchaser.
On 26 September 2024, Costi Cohen commenced proceedings in the District Court seeking recovery of the amount of the invoice, to which it claimed to be entitled pursuant to cl 4.2(a) of the agency agreement by reason of Boying’s purchase of the Drummoyne property. Costi Cohen put its claim on three alternative bases: (i) in contract, relying on the agency agreement; (ii) in reliance on conventional estoppel; and (iii) by way of a quantum meruit: at [2].
Mr Bo raised several defences to Costi Cohen’s claims and filed a cross claim. The primary judge summarised the matters that Mr Bo raised as including the following: (i) the term “Client” as it appeared in the agency agreement meant that the agreement was never properly executed and/or was void for uncertainty; (ii) Costi Cohen did not perform its obligations under the agency agreement with respect to the Drummoyne property; (iii) the agency agreement contained unfair terms within the meaning of ss 23 and 24 of the ACL; (iv) Costi Cohen engaged in misleading and deceptive conduct in contravention of s 18 of the ACL; (v) Costi Cohen engaged in unconscionable conduct; and (vi) pursuant to the Contracts Review Act 1980 (NSW), the Court should refuse to enforce the agency agreement: at [4]. Only the unfair terms defence under ss 23 and 24 of the ACL remains relevant to Mr Bo’s grounds of appeal.
23 Unfair terms of consumer contracts and small business contracts
(1) A term of a consumer contract or small business contract is void if:
(a) the term is unfair; and
(b) the contract is a standard form contract.
(2) The contract continues to bind the parties if it is capable of operating without the unfair term.
(2A) A person contravenes this subsection if:
(a) the person makes a contract; and
(b) the contract is a consumer contract or small business contract; and
(c) the contract is a standard form contract; and
(d) a term of the contract is unfair; and
(e) the person proposed the unfair term.
Note: A pecuniary penalty may be imposed for a contravention of this subsection: see section 224.
(2B) A person who contravenes subsection (2A) commits a separate contravention of that subsection in respect of each term that is unfair and that the person proposed.
(2C) A person contravenes this subsection if:
(a) the person applies or relies on, or purports to apply or rely on, a term of a contract; and
(b) the contract is a consumer contract or small business contract; and
(c) the contract is a standard form contract; and
(d) the term is unfair.
Note: A pecuniary penalty may be imposed for a contravention of this subsection: see section 224.
24 Meaning of unfair
(1) A term of a consumer contract or small business contract is unfair if:
(a) it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
(2) In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(a) the extent to which the term is transparent;
(b) the contract as a whole.
(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term.
(4) For the purposes of subsection (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.
At the time the agency agreement was entered into, ss 224(1)(a)(iia), 224(3) and 224(3A) of the ACL provided that the maximum penalty for each breach by a corporation of s 23(2A) or s 23(2C) was the greater of: $50 million; three times the benefit directly or indirectly obtained (if it can be ascertained); and 30% of the corporation’s adjusted turnover during the breach period (if the value derived cannot be ascertained).
It was common ground in the proceedings below that the agency agreement was a small business contract for the purposes of s 23 of the ACL: at [97]. The primary judge also found that the contract was a standard form contract, noting the statutory presumption in s 27 and that Costi Cohen advanced no submissions to the contrary: at [98]. Accordingly, the key question in respect of Mr Bo’s unfair terms defence was whether cl 4.2(a) of the agency agreement was an “unfair term”.
The first and primary question of construction of cl 4.2(a) of the agency agreement was the meaning of the term “Client” where it was used in the clause. The first sentence in cl 4.2(a) imposed an obligation on the “Client” to pay Costi Cohen the “Fees” in the event that one of four conditions occurred. It was common ground that in that sentence, “Client” was a reference to Mr Bo: at [75]. The dispute between the parties related to the proper construction of “Client” in the second sentence of cl 4.2(a), in which the “Client” was the subject of each of subcll (i) through to (iv): at [77]. His Honour concluded that “Client” should be given a consistent meaning throughout the clause. It followed that “Client” referred to Mr Bo in both sentences: at [80]-[81].
Although Mr Bo did not purchase the Drummoyne property, the circumstances in which the obligation in cl 4.2(a) was engaged included where the “Client” “procures another person or entity to enter into a contract for the purchase of … any property …”. The primary judge found that Mr Bo procured Boying to enter into the contract to purchase the Drummoyne property, in circumstances where it was his effort and conduct that brought about the purchase and he solicited the purchase by Boying. His Honour further found that Mr Bo did so “to enable a purchase of the Drummoyne property at approximately $7.5 million by avoiding, in his mind, an obligation under the Agency Agreement to pay commission to Costi Cohen”: at [90].
The obligation to pay in cl 4.2(a) arose on the purchase of a “Property”; and the Drummoyne property fell within the definition of that term in cl 1.1 (by reference to Part 4 of the particulars), being a commercial property in the Sydney metropolitan area. Accordingly, his Honour found that Costi Cohen satisfied that aspect of the clause and Mr Bo was contractually obliged under the agency agreement to pay Costi Cohen 2% (plus GST) of the purchase price, subject to the defences he had raised: at [94]-[95].
Mr Bo relevantly contended that cl 4.2(a) was “unfair” within the meaning of s 24 of the ACL because it imposed an obligation to pay the agreed fees upon the purchase of any property, provided that it met the criteria in Part 4 of the particulars and that one of the conditions in (i) to (iv) of cl 4.2(a) was satisfied. He argued that the effect of the clause was that he would incur an obligation to pay the agreed fees even if someone other than Costi Cohen introduced the property to him: at [119].
The primary judge considered that cl 4.2(a) was transparent, but nevertheless concluded that it was unfair: at [126]-[127]. His Honour found that the clause imposed “a significant burden upon Mr Bo, namely the burden [of] paying a 2% commission to Costi Cohen, a buyer's agent, even in circumstances where the sourcing of the relevant purchased property had nothing to do with the agent”: at [125]. That same aspect of the clause heavily favoured Costi Cohen’s right to a fee, regardless of its performance or its connection with sourcing the purchased property: at [125]. Accordingly, s 24(1)(a) of the ACL was satisfied: at [127].
As to s 24(1)(b) of the ACL, his Honour referred to the presumption in s 24(4) and noted that Costi Cohen did not, by way of either evidence or argument, seek to advance a basis for why the clause, which entitled it to commission when it was not the effective source of the property purchased, was reasonably necessary to protect its legitimate interests: at [128]. As to s 24(1)(c), his Honour considered it plain that if Costi Cohen applied cl 4.2(a) in accordance with its terms, it would cause a financial detriment to Mr Bo if (as was not here the case) the purchase of a property had no connection or relationship with the work done by the agent: at [129].
It followed from his Honour’s findings in respect of s 24 of the ACL that the whole of cl 4.2(a) of the agency agreement was void pursuant to s 23: at [132]-[133]. This conclusion was not affected by the fact that Costi Cohen did not take advantage of the specific aspect of cl 4.2(a) that rendered the clause unfair (it had, in fact, identified the Drummoyne property for Mr Bo), citing Australian Securities and Investments Commission v Bank of Queensland Ltd [2021] FCA 957; 155 ACSR 468 at [44] and [80]: at [130].
In the alternative to its contractual claim, Costi Cohen claimed a reasonable amount for the services it provided to Mr Bo on a quantum meruit: at [202]. In addressing that claim, the primary judge first considered whether, having regard to s 23(2) of the ACL, the agency agreement was capable of operating without the unfair term and, therefore, continued to bind the parties: at [204]-[205]. His Honour concluded that he did not need to express a concluded view, although he expressed a preference for the view that if cl 4.2(a) was void the agency agreement could not continue to operate. In his Honour’s view, a critical basis of the contract was no longer enforceable, describing the retainer fee as “clearly not the consideration agreed to be provided if a sale eventuated”: at [206].
Whether or not the agency agreement was capable of operating without the unfair term, the primary judge concluded that Costi Cohen was entitled to bring a claim in quantum meruit: at [207]. Referring to Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; [2019] HCA 32 (“Mann”), his Honour stated that by reason of s 23 of the ACL, cl 4.2(a) of the agency agreement was void and Costi Cohen had no accrued right under the agreement to claim the money it sought by way of quantum meruit. It followed that the quantum meruit claim “fit” with the agency agreement as it arose in the context of there being no enforceable contractual claim: at [208]. His Honour stated at [209]:
“The evidence discloses that Costi Cohen provided valuable professional services to Mr Bo, being market analysis, negotiation facilitation, and sourcing properties. I find that the services were requested by, provided to and accepted by Mr Bo. On no basis could it be said that Mr Bo considered that Costi Cohen would carry out those services for no reward, or for only the $5000 (plus GST) retainer. Ultimately it was Costi Cohen’s work that resulted in the identification of the Drummoyne property which I have found Mr Bo procured Boying to purchase.”
The primary judge referred first to Horton v Jones (No 1) (1934) 34 SR (NSW) 359 (“Horton”) at 367-368, in which Jordan CJ stated that the existence of “the unenforceable contract may be referred to as evidence, but as evidence only, on the question of [the] amount” to be recovered. The percentage commission fee in the agency agreement was some evidence on the issue of reasonable remuneration, as the parties agreed it in circumstances where, notwithstanding that he had sought to negotiate a lower fee, Mr Bo had never asserted that the fee was unreasonable: at [217].
His Honour also referred to the evidence of Mr Costi that he had worked exclusively as a commercial property buyer’s agent since 2020 and had acted for approximately 500 commercial buyers during that time, for which the standard commission fee was 1.8% to 2.2% (depending on the brief and budget of the prospective property): at [217]. There was no cross-examination of Mr Costi on this issue, and Mr Bo did not lead any evidence to suggest that 2% of the purchase price plus GST was an unreasonable fee, or that the $5,000 plus GST retainer fee was a reasonable fee for the services. His Honour stated at [218]:
“… The observation that there was no such cross-examination nor evidence is not to reverse the onus, it being squarely Costi Cohen’s onus to establish its claim. However, when there is ‘evidence, but only evidence’ of quantum that can be used in a quantum meruit claim (namely, the agreed fee for the relevant service), and evidence of such a fee being within the standard fee range charged to hundreds of clients over a number of years, the absence of any competing evidence, or challenge to that fee, enables the Court to more readily rely on that evidence as sufficiently proving that the amount claimed is reasonable remuneration for the services provided."
Mr Bo contended that having concluded that cl 4.2(a) was void pursuant to s 23, his Honour’s decision to uphold Costi Cohen’s claim in quantum meruit stultified or undermined the regime in the ACL, or frustrated its policy. In Mr Bo’s submission, the primary judge should instead have found that relief on the quantum meruit would, in essence, recover the very commission that his Honour found Mr Bo was protected from by reason of s 23 voiding the unfair contract term.
Mr Bo submitted that the purpose of s 23 of the ACL was to protect consumers by preventing the inclusion of unfair terms in their standard form contracts, citing Jetstar Airways Pty Ltd v Free [2008] VSC 539; 30 VAR 295 at [112]. The legislative mechanism to achieve that purpose was two-pronged: (i) a significant pecuniary penalty; and (ii) rendering the unfair term void, as opposed, for example, to rendering it unenforceable or rendering it void to the extent it was relevantly “unfair”. Mr Bo submitted that recovery on a quantum meruit basis was inconsistent with this regime in the ACL in the sense that it was the very operation of that regime, in voiding a contractual term, that formed the basis for the relief. Coherence in the law, he submitted, required the contrary conclusion, relying upon Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 (“Equuscorp”) and Redland City Council v Kozik (2024) 281 CLR 202; [2024] HCA 7 (“Redland CC v Kozik”).
In Redland CC v Kozik at [128], Gageler CJ and Jagot J observed that “[t]o say that the imposition of common law liability in restitution would ‘stultify’ a statutory scheme is to say that common law liability in restitution would undermine the fulfilment of the legislative purpose and intended efficacy of that scheme”, citing Equuscorp at [34]-[36] and [45] in support of that proposition. Equuscorp relevantly concerned an attempt on the part of the appellant (Equuscorp) to enforce loan agreements (of which it had taken an assignment) by way of a claim in restitution for money had and received. The investment schemes pursuant to which the loan agreements were made, by Rural Finance Pty Ltd, were held to be unenforceable for illegality: at [1]-[2]. The legislative regime in issue was that dealing with prospectuses in Pt IV, Div 6 of the Companies (New South Wales) Code 1981 (Code) and equivalent provisions in the Code of other States in which the investors lived. It was common ground that contrary to s 170(1) of the Code, the scheme promoters had failed to register a prospectus, or a valid prospectus, in circumstances where investors were being offered a “prescribed interest” within the meaning of that section: at [10].
In the joint judgment of French CJ, Crennan and Kiefel JJ, their Honours noted that Equuscorp’s restitutionary claims depended entirely upon the unenforceability of the loan agreements, in the sense that it was unlikely that such claims would have been brought had the agreements been enforceable: at [26]. In rejecting those claims, the joint judgment stated at [34]-[36], being one of the passages to which Gageler CJ and Jagot J referred in (footnotes omitted):
“[34] The outcome of a restitutionary claim for benefits received under a contract which is unenforceable for illegality, will depend upon whether it would be unjust for the recipient of a benefit under the contract to retain that benefit. There is no one-size-fits-all answer to the question of recoverability. As with the question of recoverability under a contract affected by illegality the outcome of the claim will depend upon the scope and purpose of the relevant statute. The central policy consideration at stake, as this Court said in Miller, is the coherence of the law. In that context it will be relevant that the statutory purpose is protective of a class of persons from whom the claimant seeks recovery. Also relevant will be the position of the claimant and whether it is an innocent party or involved in the illegality.
[35] Much judicial and academic ink has been spilt on this topic, which exercised the minds of Roman jurists in the days of the Republic. It elicited the cri de coeur of Lord Chief Justice Wilmot in 1767, ‘no polluted hand shall touch the pure fountains of justice’, and the more temperate offering of Lord Mansfield, who wrote of a plaintiff's need to ‘draw [his] remedy from pure fountains’.
[36] The importance of policy in determining the effect of illegality upon a restitutionary claim was central to Lord Mansfield's observation in Holman v Johnson:
‘It is not for [the defendant's] sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say.’
There were often compelling policy arguments on both sides. In listing reasons for and against the grant of relief in relation to illegal transactions, Professor John Wade, writing in the Texas Law Review in 1946, said that:
‘The balancing process … leaves on one side the view that a court should not help a man who has engaged in an illegal transaction out of the predicament in which he has placed himself, and on the other the view that a court should not permit unjust enrichment of one person at the expense of another. Of these two arguments, each of which seems most nearly determinative upon its side of the question, neither takes precedence upon logical analysis.’
(Footnote omitted.) The search then is for a principled basis for determining whether or not relief is to be allowed.”
Their Honours observed that the loan agreements in question were an integral part of the investment schemes and furthered the schemes’ illegal purpose in so far as they involved the issue of invitations and offers to investors to take up prescribed interests without the benefit of the protections required by the Code. The failure of consideration that Equuscorp invoked, having taken an assignment of the loan agreements, was the product of the assignor’s own conduct in offering the loan agreements in furtherance of an illegal purpose; and recovery from the investors pursuant to a restitutionary claim “would have been recovery from persons whose protection was the object of the statutory scheme”: at [45]. Their Honours concluded that it was “a clear case” in which the coherence of the law, and the avoidance of stultification of the statutory purpose by the common law, led to the conclusion that the assignor did not have a right to claim recovery of money advanced under the loan agreements as money had and received: at [45].
Counsel for Mr Bo submitted at the hearing that because there would be no restitutionary claim if cl 4.2(a) were enforceable, it followed that the quantum meruit claim was entirely dependent upon cl 4.2(a) being void, in the same way that recovery in Equuscorp, for money had and received, was only available because the loan agreements were unenforceable on the basis that they were in furtherance of an illegal purpose. Counsel for Mr Bo submitted during the hearing that, as in Equuscorp, any unfairness suffered by Costi Cohen as a result of the clause being void was the product of its own conduct and did not give rise to a right to recovery.
The analogy might have some superficial attraction, but it is inapt. Section 23 of the ACL prohibits the inclusion of an unfair term in a standard form contract. The legislative consequence is exposure to a civil penalty, as well as the term being void. It follows that the drafter of the unfair term cannot rely on the term to obtain a remedy. However, it does not stultify the legislative policy for the drafter to seek to recover an amount, by way of a common law claim in restitution, for services rendered in circumstances where the services provided pursuant to the contract are not prohibited, but a contractual term pursuant to which those services are provided is void for unfairness. Whether a claimant can recover when a contractual provision is found to contravene s 23 of the ACL will depend upon being able to establish an alternative basis for the claim in the particular circumstances. In the present case, Costi Cohen was not, for example, seeking to take advantage of the unfairness his Honour found in cl 4.2(a) and recover commission from Mr Bo in circumstances where he purchased a property that Costi Cohen had not introduced.
As I have explained, Equuscorp was dealing with a claim for money had and received that would stultify the legislative policy behind the prospectus provisions in the Code. Justices Gummow and Bell, who agreed with [45] in the reasons of the joint judgment, put their conclusion in the following way at [111] (footnotes omitted):
“The prospectus provisions have a long history. This was traced by Mahoney JA in Hurst v Vestcorp to the mid-nineteenth century. As Heerey J later remarked when dealing with the prospectus provisions of the Code, so seriously did the legislature regard these provisions, including s 170, that a breach not necessarily fraudulent and not necessarily causing monetary loss nevertheless could result in a five year term of imprisonment. This supports the conclusion that in a case such as is presented by these appeals, the investors who received prescribed interests should not be in the same position as if Pt IV Div 6 of the Code had not been enacted or had been complied with by Rural, and the loan agreements had been effective in accordance with their terms. The respondents correctly submit that to permit recovery on the actions for money had and received would stultify the statutory policy evident in Pt IV Div 6 of the Code. …”
Similarly, in Redland CC v Kozik, the regulations in issue, as explained by Gordon, Edelman and Steward JJ, required the relevant Council resolutions “to identify an overall plan which stated the estimated cost of carrying out, and the estimated time for carrying out, the overall plan”. The purpose of such safeguards was “to ensure that care is taken by a local council before incurring substantial costs that will ultimately be borne by a section of the community”: at [212]. Against that regulatory background, which placed a duty of compliance “firmly” on the shoulders of the Council for the protection of the members of the community within its area of government, permitting the Council to rely on a defence of good consideration as a defence to restitution payments “would need to be excluded to avoid undermining the purpose of the Regulations”: at [212]. Their Honours drew an analogy in this respect with the joint judgment and Brennan J’s refusal, in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 384, 400; [1992] HCA 48, to allow the Bank a defence of good consideration because it would stultify the purpose of the statutory provision that rendered void any contractual obligation that required a borrower to pay withholding tax: at [211].
Mr Bo submitted that his Honour’s decision risked undermining the Parliament’s intention in enacting the statutory scheme, alleging that a hypothetical person may consider s 23 of the ACL as posing little real commercial risk where, if a term is declared void, the fee could nonetheless be recovered by way of quantum meruit. For the reasons I have already set out, I do not accept that Mr Bo’s submission follows as a matter of logic from the primary judge’s decision in the present case. Whether or not a claimant can obtain a remedy in restitution, for the same amount as the unfair term stipulated or some other amount, will depend upon the circumstances. The civil penalty regime otherwise continues to apply according to its terms, imposing a significant financial disincentive to include “unfair” terms as defined in s 24 of the ACL. Mr Bo’s reliance on what he submitted was “[t]he reality … that businesses know the regulator will not prosecute every instance of a contravention”, does not relevantly bear on the question of discerning the legislative policy and whether permitting a claim in restitution in the present case would undermine it. Accordingly, I reject ground 1.
Mr Bo submitted that contrary to the approach that the primary judge adopted, it was necessary to determine whether the agency agreement survived the excision of cl 4.2(a), in order to determine whether the quantum meruit claim could “fit” with what remained (if anything). He submitted that the question was not whether the agency agreement should continue to operate without cl 4.2(a), but whether it was capable of operating, even if the nature of its operation was thereby changed, citing Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347; 153 ACSR 347 at [103].
Mr Bo submitted that all of the necessary elements required for the agency agreement to be an operating contract survived the excision of cl 4.2(a), because the retainer fee specified in Part 7 of the particulars provided a price for Costi Cohen’s services. He submitted that Costi Cohen accepted the risk of receiving only $5,000 (plus GST) for services provided under the agency agreement — being the outcome that the agency agreement contemplated if the investor did not purchase a property (an outcome that was at the investor’s discretion). It followed, he submitted, that his Honour should have determined that the contract survived the excision of cl 4.2(a). Relatedly, he submitted, quantum meruit did not “fit” with the remaining clauses because it was inconsistent with the contractual allocation of risk under that agreement.
In oral argument, counsel for Mr Bo accepted that the practical effect of this ground, if accepted, would be that Costi Cohen was required to continue to perform its obligations under the agency agreement; and in the event that Costi Cohen introduced Mr Bo to a property that met the description in the particulars, the only fee that would be payable was the “Retainer Fee” paid on execution of the agreement. Counsel submitted that in circumstances where a fee was still payable, it was not for the primary judge to seek to supplement that fee through restitution.
Perhaps recognising the force of his Honour’s stated preference, Costi Cohen submitted that the agency agreement was not capable of operating without cl 4.2(a) so as to continue to bind the parties, in circumstances where the clause provided the essential consideration for its services.
The primary judge’s preference for the view that the agency agreement could not continue to operate absent cl 4.2(a) was likely correct. As noted above, his Honour stated that the retainer fee of $5,000 (plus GST) was “clearly not the consideration agreed to be provided if a sale eventuated”: at [206]. That consideration was the subject of cl 4.2(a). As was put to Mr Bo’s counsel in the course of his oral submissions, the particulars in the agency agreement separately stipulated a “Fee”, as defined in cl 1.1 of the standard terms, and the basis for calculating it, and yet on his analysis the agreement would be entirely silent as to how and when the “Fee” was payable.
“As [Nettle, Gordon and Edelman JJ] explain, the Builder’s claim to recover by way of restitution a sum of money representing the value of work done by the Builder for the benefit of the Owners before the Contract was terminated upon the Builder’s acceptance of the Owners’ repudiation covered work within three distinct categories:
(1) work done by the Builder in respect of variations to the plans and specifications set out in the Contract which were asked for by the Owners;
(2) work done by the Builder in respect of the plans and specifications set out in the Contract for which the Builder had accrued a contractual right to payment under the Contract at the time of its termination; and
(3) work done by the Builder in respect of the plans and specifications set out in the Contract for which the Builder had not yet accrued any contractual right to payment under the Contract at the time of its termination.”
Neither of the first two categories is applicable. In Mann, recovery for the first category of work was governed by s 38 of the Domestic Building Contracts Act 1995 (Vic) to the exclusion of a claim in quantum meruit, on the basis that recovery pursuant to the latter would stultify the protective purpose of the provision: at [157]-[160] (Nettle, Gordon and Edelman JJ), with the other members of the Court agreeing at [4] (Kiefel CJ, Bell and Keane JJ), [58] (Gageler J). This reasoning does not apply in the present case for the reasons I have already addressed on ground 1.
In relation to the second category of work in Mann, in which stages of the building contract had been completed before termination, the right to recovery was limited to the amount due under the contract. As Kiefel CJ, Bell and Keane JJ stated, in those circumstances there was “no room for a right in the respondent to elect to claim a reasonable remuneration unconstrained by the contract between the parties”: at [19]. Gageler J similarly stated that the continuing application of the regime of rights and obligations in the contract to govern the mutual rights and obligations of the parties in respect of payment for the work “has the result that the law of restitution simply ‘has no part to play in the matter’”: at [64].
By contrast, in the present case, the avoidance of cl 4.2(a) by operation of s 23 of the ACL meant that Costi Cohen had no accrued contractual right on which to pursue Mr Bo for payment for the services it rendered to him. Instead, the agency agreement was silent on the fair and reasonable value of Costi Cohen’s agency services when those services resulted in the purchase of a property that met the description in the particulars, as his Honour found in relation to the Drummoyne property. The primary judge was correct to conclude that in those circumstances, and assuming for present purposes that the agency agreement continued to operate, Costi Cohen’s claim in quantum meruit “fit” with that agreement. I reject ground 2.
Mr Bo submitted that the evidence that Costi Cohen adduced on the issue of quantum was limited to the evidence of Mr Costi, the sole director of Costi Cohen which, he further submitted, was limited to the following:
he had worked as a commercial property buyer’s agent through Costi Cohen since 2020 and estimated that he had acted for approximately 500 commercial property buyers in New South Wales;
Costi Cohen’s standard commission was between 1.8% and 2.2% depending on the brief and budget for the prospective property; and
sometimes Costi Cohen’s commission “could also be a flat fee”.
Mr Bo submitted that while this was evidence of Costi Cohen’s charging practices, there was no evidence about rates charged by other commercial buyers’ agents, or evidence as to whether Costi Cohen’s rates were reasonable, and that this was insufficient. He relied in this context on Herron CJ’s statements in Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383 (“Flett”) at 386, that “there must be some evidence of a market or prevailing price” and, put another way, an “external standard to which the trial judge could refer to define the quantum of the claim” (emphasis in original). Mr Bo submitted that Costi Cohen’s attempt to distinguish Flett, on the basis that Mr Costi had given evidence of a consistent commercial practice, overstated Mr Costi’s evidence; and that even if Mr Costi’s evidence supported such a practice, it was still “only evidence of what he had done”.
Mr Bo submitted that in relying on Mr Costi’s evidence, the primary judge had misapplied Roude v Helwani [2020] NSWCA 310; 36 BCL 444 (“Roude”). He submitted that the primary judge should instead have followed what he described as “[t]he correct approach”, as apparent from the reasons of Schmidt J in Horley v Sector 7G Architecture Pty Ltd (in liq*)* [2011] NSWSC 827 (“Horley”). Mr Bo took issue with the primary judge’s reliance on the percentage fee in the agency agreement as some evidence of the reasonableness of the amount that Costi Cohen claimed.
Mr Bo accepted that he did not challenge Costi Cohen’s evidence on quantum in the proceedings below. However, he submitted, he had no obligation to do so when that evidence was insufficient, relying on Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419.
As McHugh JA stated recently in Locke v H.C. Loneragan & Co**mpany Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions [2025] NSWCA 166 at [72] (Bell CJ and Adamson JA agreeing), “[i]t is essential to bear in mind that the issue is fair and reasonable remuneration for the work done”, which is a question of fact. In , White JA rejected, as a general proposition, that the respondent had to prove what was a fair and reasonable market rate for the work done before it could be found that the charges in his invoices were fair and reasonable, stating that “[p]roperly understood, none of the authorities relied upon establishes that proposition”: at [34]. The authorities on which the appellants in relied included:
“What the concept of monetary restitution involves is the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or ‘enrichment’ actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided (e.g. remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied).”
White JA relevantly observed of this passage that “reference to the calculation of remuneration is to be determined according to what is reasonable, rather than by reference to a market": at [41].
Flett, with White JA describing the statements of Herron CJ (on which Mr Bo relied in this appeal) as not purporting to lay down “any general rule that in all cases evidence of such an external standard was necessarily required before a finding of reasonable remuneration could be made”: at [49]; and
Horley, the conclusion in which White JA described as involving “a finding particular to the facts of that case made in the context of a grant of leave to appeal on a mixed question of fact and law”: at [50]-[51].
Closer examination of Horley bears out White JA’s description. Schmidt J concluded that in the particular circumstances of the case, no evidence had been led from which it could be concluded that an amount invoiced by the defendant was evidence of a reasonable sum for the work performed: at [126].
The proceedings in the Local Court concerned a claim that the defendant brought against Mr Horley for the work involved in preparing architectural plans: Horley at [2]. The defendant had received payment from Mr Horley of $5,000, but issued a further invoice seeking an additional $34,600, which Mr Horley did not pay: at [6]. The unpaid invoice was prepared by Mr Howieson, a former working director of the defendant. As summarised by Schmidt J, his evidence about the number of hours of work that the defendant performed in producing the architectural plans for the plaintiff was prepared some two and a half years after the work was done. Mr Howieson was not assisted by any written records, but rather made an estimate based on his recollection that he and his daughter had both worked long hours: at [85]-[87].
Relevantly for present purposes, the defendant in Horley contended that it was an implied term of the agreement between the parties that the defendant would be paid a reasonable sum. Alternatively, the defendant claimed that he should be paid a reasonable sum on a quantum meruit: at [112]. Schmidt J concluded that on the evidence, an agreement for the defendant to produce plans for the sum of $5,000 was “consistent with the payment made by Mr Horley in February; with the defendant not maintaining any records of the hours worked by Mr Howieson and his daughter in producing the concept plans; with its failure to render an invoice to explain the work to which the $5,000 payment related; and with the failure to provide any explanation for the basis on which the further invoice provided in October rested, or what the earlier payment had related to”: at [98]. Her Honour stated:
“[101] The October invoice provided no explanation of the work to which it related, the hours involved, or the rates by which it was calculated, or how the total sum of $39,600 had been calculated. All that it disclosed was that ‘a credit’ had been given for the earlier $5,000 payment, which was described to have been a ‘deposit’, but it provided no other information from which any assessment could have been made of the reasonableness of what was being charged.
[102] Mr Howieson’s assessment of the time worked was produced from memory, only after the proceedings were commenced, some years later. His calculations rested on the defendant’s charge out rates at the time, not any fee scale, as he finally claimed had been agreed.”
“[123] … On the case which it pressed, the defendant had to prove that the rates it claimed represented reasonable remuneration for the work performed. That could not be established simply by leading evidence that the claim had regard to the rates which it charged at the time, no matter Mr Howieson’s experience as an architect. Something more was required. There was no onus on Mr Horley to rebut the reasonableness of the rates the defendant claimed.
[124] There was no agreement as to rates and no evidence as to what market or commercial rates were at the time. Her Honour misunderstood that the Royal Australian Institute of Architects practice note provided such information. It did not. While the March agreement referred to scale rates, they were not in evidence. Nor was there any evidence as to matters such as the costs incurred in the defendant’s provision of the services in question, its overheads, or what allowance for profit was made.”
(Emphasis added.)
“● the description of the work done in the invoices supplied in January 2015 to the appellants;
● the prices charged for that work in the invoices;
● the appellants’ failure to object to the invoices or the amounts charged;
● the promise to make some payment;
● the detailed description of the work done;
● the prices charged for the items of work and the basis for those charges in schedules prepared at the time the invoices were provided but not given to the appellants until proceedings were commenced; and
● the respondent’s denial that his charges were excessive or unreasonable, and thereby his assertion that the charges were reasonable and not excessive.”
The respondent’s denial, being the last item in the above list, was made by the respondent in his affidavit and was not objected to: at [10]-[11]. When cross-examined at the hearing, the respondent denied the proposition that the invoices did not reflect the true cost of performing the work, but he was not otherwise challenged on that denial: at [24]-[25]. As White JA noted, the respondent was himself an expert, being a licensed builder, electrician and plumber, who had been working in the industry for 30 years: at [21].
The appellants in Roude submitted that the respondent had not provided any “objective standard” against which to gauge the amounts charged in the invoices, and did not say how he came to derive those figures: at [23]. They further submitted that there was no evidence of a market rate or evidence that the price the respondent charged was fair and reasonable; and the fact he was not challenged in cross-examination about the reasonableness of his charges wrongly reversed the onus of proof: at [29]-[30]. In rejecting those arguments, White JA stated at [30]:
“…The respondent had given evidence by affidavit (which was not objected to) that his charges were reasonable. There was nothing unreasonable about his charges on the face of the invoices and the detailed description of the work done. By reason of his experience in the industry the respondent was qualified to give an expert opinion as to the reasonableness of the charges (Evidence Act 1995 (NSW) s 79). The fact he was not called as an expert witness does not affect the admissibility of his evidence to the extent his opinions were based on his specialised knowledge (Yeats v Nominal Defendant [2004] NSWCA 259 at [12] and [35]; Sochorova v Durairaj [2020] QCA 158 at [23] and [37]-[40]). The opinion expressed, if objected to, would have been inadmissible. But the opinion was not objected to. If it had been, the respondent may have been allowed to give evidence that set out the basis for the opinion. By not objecting to the evidence, but being able to assert that it should be given little weight, counsel for the appellant made a tactical decision that could not be criticised. But it left some evidence that the respondent’s charges were reasonable.”
The detail of these two decisions highlights the fact-specific nature of the inquiry, such that relying on one or other case as setting out a particular “approach”, or seeking to distinguish one or other case on the facts, does not significantly assist in resolving the ground of appeal. For example, Mr Bo sought to emphasise that the respondent in Roude was accepted as an expert, and that Mr Costi was not accepted as an expert. So much may be accepted. However, it does not follow from that difference that Mr Costi’s evidence could not discharge the onus that Costi Cohen accepted it bore to establish what constituted reasonable remuneration, when considered with the other evidence that the primary judge took into account.
There was no dispute on the appeal that Costi Cohen performed the services it had undertaken to perform pursuant to the agency agreement. Rather than charge for those services by reference to an hourly or other rate, the agency agreement stipulated that Costi Cohen was to receive the “Fee”, to be calculated as a percentage of the purchase price.
The primary judge did not err in treating the percentage in the agreement as some evidence of the reasonableness of the amount that Costi Cohen claimed: at [217]. Mr Bo’s submissions to the contrary relied on:
what Nettle, Gordon and Edelman JJ said in Mann at [204], describing their Honours as referring to a legal concern that the direct application of the contract price would risk incoherence with the policy of the law rendering the contract unenforceable, although this would always require consideration of that policy; and
distinguishing Horton and Pavey on the basis that in both cases a contract was taken into account as evidence of quantum where the contract was unenforceable, and that there was a distinction between that kind of contract and a contract such as was in issue in Equuscorp (and, in Mr Bo’s submission, the present case) where a contract is rendered illegal or void by statute.
The second submission was in tension with Mr Bo’s position on ground 2. On that ground, Mr Bo submitted that cl 4.2(a) of the agency agreement was void but the specification of the commission percentage in Part 7 of the particulars remained, albeit without anything in the agreement to give it effect. That the particulars remained in place was consistent with the basis on which cl 4.2(a) was found to be an unfair term, which rested not on the amount of commission, but the breadth of the circumstances in which Costi Cohen could levy it.
As to his first submission, it is instructive to read what Nettle, Gordon and Edelman JJ said in Mann at [204] as a whole, and in the context of the preceding paragraph (footnotes omitted):
“[203] In some circumstances, it is necessary or appropriate that the benefit of work to the defendant be determined without reference to a contract price. As Dixon J observed in South Australian Harbors Board v South Australian Gas Co, identification of ‘a fair and reasonable rate of remuneration, in other words a quantum meruit’, raises a ‘question of fact’, the answer to which ‘depends very much upon the methods of reasoning which are pursued’. Where the claim to quantum meruit is founded upon a contract which does not expressly fix a price for services, ‘usually’ the value of those services will be ‘assessed by reference to charges commonly made by others for like services’, unless no such standard is available. In such cases, practical necessity justifies the default application of an objective price derived from outside the contract which ordinarily depends on evidence of supply costs and market conditions.
[204] Equally, where the claim is founded on an obligation to pay for services rendered under a contract which is unenforceable, it has been held that ‘[o]rdinarily’ the measure of restitution ‘will correspond to the fair value of the benefit provided (eg remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied)’. Prices stated in the contract are regarded as relevant, but they remain ‘evidence only, on the question of amount’. That approach is informed by a legal concern that direct application of the contract price would risk incoherence with the policy of the law rendering the contract unenforceable, although this will always require consideration of that policy. As Mason and Wilson JJ noted in Pavey & Matthews Pty Ltd v Paul:
‘If the effect of bringing an action on a quantum meruit was simply to enforce the oral contract in some circumstances only, though not in all the circumstances in which an action on the contract would succeed, it might be persuasively contended that the action on a quantum meruit was an indirect means of enforcing the oral contract.’”
The type of incoherence with which their Honours were concerned in [204] of Mann was the type of incoherence that Mr Bo advanced on ground 1. For the reasons I have outlined on that ground, it does not arise in the present case, and, in any event, not in a manner that would preclude the primary judge from relying on the agreed percentage as some evidence of quantum.
In any event, the primary judge did not rely solely on the stipulated commission percentage as evidence of the reasonableness of the amount claimed. His Honour also found, and Mr Bo did not challenge, that in signing the agency agreement he had agreed to the stipulated commission percentage and that at no stage did he assert the fee was unreasonable: at [217]. The primary judge’s finding in this regard was consistent with Mr Bo’s evidence in cross-examination that before signing the agency agreement, he had a discussion with Mr Harkins, including about the 2% commission rate. As his Honour noted at [32], it emerged in cross-examination that Mr Bo had been purchasing properties using Y&M Australia since December 2013, and he was an active commercial property investor well before engaging with Costi Cohen.
Further, as his Honour observed at [217], even when Mr Bo disputed liability to pay the fee, he did not do so on the basis that the quantum of the fee was unreasonable. In cross-examination, Mr Bo was taken to an email that he sent to Costi Cohen after receiving the invoice. In that email, dated 11 June 2024, Mr Bo relevantly wrote:
“I don’t purchase the property, I can’t pay , pls take back your tax invoice.”
“Q. If I can just ask you in respect of point two you say you can’t pay, that’s not strictly true though is it? You had capacity to pay this invoice, didn’t you?
A. WITNESS: I have capacity to pay or the deal not done, so I don’t pay commission what I’m meaning because my English.
Q. So when you say here, ‘I can’t pay,’ what you mean is I don’t want to pay?
A. WITNESS: Because deal is not done. I don’t need to pay.
Q. You don’t accept that the deal isn’t done, you say that you didn’t purchase a property; isn’t that your argument?
A. INTERPRETER: Mr Harris I suggest we don’t get fixated on these particular wordings in the email because my English ability is quite poor. As I said to you what I meant by this email was that because there was no deal between me and an agent so I don’t think I need to pay the commission. That’s what I meant by sending that email.”
“Further, Mr Costi’s evidence was that since 2020 he has exclusively worked as a commercial property buyer’s agent through Costi Cohen and estimated that he acted for approximately 500 commercial property buyers in respect to the acquisition of commercial properties located in New South Wales. He gave evidence that Costi Cohen’s standard commission fee is between 1.8% to 2.2% depending on the brief and budget for the prospective property.”
It follows that the appeal should be dismissed. I propose the following order:
Appeal dismissed with costs.
STERN JA**:** I agree with Mitchelmore JA.
Bo
Costi Cohen Pty Ltd
[2012] HCA 7
(1991) 22 NSWLR 389
(1992) 175 CLR 353
(2012) 246 CLR 498
(2019) 267 CLR 560
(1987) 162 CLR 221
(2024) 281 CLR 202
Appeal dismissed with costs. The primary judge's award of $166,100 on a quantum meruit, together with pre-judgment interest, was left undisturbed. [3], [83]
In any event, his Honour was correct to conclude that Costi Cohen was entitled to bring a claim in quantum meruit. Mr Bo’s argument to the contrary sought to characterise the situation that obtained, with cl 4.2(a) rendered void by operation of s 23 of the ACL, as falling within the first or second of the three categories that Gageler J identified in Mann at [57] by reference to the circumstances there in issue:
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5 (“Pavey”), specifically the following statement in the reasons of Deane J at 263: