Plaintiff v Defendant

2 The defendant, Peet Ltd, is a company based in Western Australia. Peet has developed numerous residential housing estates, including in Victoria.

3 In July 2002, Peet was negotiating with Steve Carter, the owner of land adjoining the Richmond land, about a possible option to buy the Carter land. During that process, Peet learned of the existence of the Richmond land.

4 In about August 2002, Peet representatives began discussions about the Richmond land. Although the land is in Mrs Richmond's name, other family members, particularly her son, Colin Richmond, were heavily involved in negotiations and decisions in relation to the land. Colin Richmond told Peet that the Richmonds were interested in doing a joint venture for the development of the Richmond land and had been in negotiations with other parties to that end. He asked whether Peet would like to make a presentation to them. Peet did so in October 2002.

5 Also in October 2002, the Minister for Planning gave a direction under the Planning and Environment Act 1987, introducing the "Werribee Growth Area" and the concept of the "Urban Growth Boundary" ("UGB"). The effect of the direction was, that in order for the Richmond land to be developed, the UGB would need to be realigned so that the land was included within it. The land would then need to be rezoned, before it could be subdivided and developed. At that time, the Richmond land was zoned "Rural Use". The UGB was a new and unknown concept in Victorian planning law, so there was no established practice or guidelines for bringing land into the UGB.

6 In late December 2002, Mrs Richmond and Peet executed a memorandum of understanding ("MOU"), which anticipated the future execution of binding heads of agreement, setting out the terms upon which the Richmond land would be developed or sold after it had been included in the UGB and rezoned. Although several draft heads of agreement were circulated between the parties between 2003 and 2005, a binding contract was never executed.

7 In the meantime, Peet organised or undertook a number of steps to have the Richmond land included in the UGB, either by its own staff or by engaging third parties with particular expertise.

8 A realignment of the UGB, to include the majority of the Richmond land, was gazetted in November 2005. There is no dispute that the inclusion of the Richmond land in the UGB increased its value by $15.7 million, from $13 million to $28.7 million.

9 After a steady deterioration over a period of time, by early 2006, the relationship between the Richmonds and Peet had irretrievably broken down. By an email received on 13 January 2006, the Richmonds instructed Peet to do no further work in connection with the land.

10 In January 2007, Peet commenced this proceeding.

11 By its statement of claim, filed on 16 January 2007, Peet sought relief on a number of alternative bases:

(a) Contract: Peet alleged the existence of a binding contract with Mrs Richmond, whereby it would carry out work to have the Richmond land included in the UGB, rezoned and developed, and share the profits of sale of each of the sub-divided lots. The contract was said to be partly constituted by discussions between Colin Richmond and Anthony Lennon, a director of Peet, on 19 September 2003, and partly implied by conduct. Peet claimed that Mrs Richmond had repudiated the contract, and it sought specific performance or damages in lieu;

(b) Estoppel: Alternatively, Peet alleged that Mrs Richmond was estopped from denying that she was bound by the terms of the contract, because she had stood by while Peet performed the contract, believing that it was bound by it;

(c) Unjust enrichment: Alternatively, Peet alleged that, by reason of its actions, the value of the Richmond land had been greatly increased by its inclusion in the UGB, and it would be unjust for Mrs Richmond to retain that benefit. It sought the entire amount of the increase in value; [2]

(d) Quantum meruit: Alternatively, Peet alleged that it was entitled to remuneration and compensation for the work it had done and the expenses it had incurred in relation to the Richmond land, on a quantum meruit basis.[3]

12 The statement of claim contained no particulars of the actual amount sought in respect of any of the claims.

13 In her defence, Mrs Richmond denied the allegations based in contract, estoppel and unjust enrichment. However, she admitted that Peet was entitled to remuneration on a quantum meruit basis and provided details of various requests she had made to Peet, seeking information about Peet's costs and expenses. It is clear on the evidence that Mrs Richmond has, since at least 2005, indicated a willingness to pay Peet for its actual work and expenses on a quantum meruit basis.

14 The parties filed lay witness statements in late 2007 and early 2008.

15 Peet did not provide any details of the amount of its claim until November 2007 - some 10 months after the proceeding was commenced - when it filed the first expert report of Michael Dwyer, an accountant ("the first Dwyer report").

16 Revised witness statements were filed in late August 2008, including a supplementary report by Mr Dwyer, dated 26 August 2008 ("the second Dwyer report").

17 On 10 September 2008, Peet provided formal particulars of its loss and damage for the first time. It sought more than $63 million damages in respect of the contract claim, and $15.7 million in respect of the unjust enrichment claim.

18 As far as the quantum meruit claim was concerned, Peet sought to be compensated on three alternative bases:

(a) $15.7 million, being the whole of the increase in value of the Richmond land before and after inclusion in the UGB;[4]

(b) Alternatively, $3,510,995.78, being the sum of:

(i) The amount paid by it to various suppliers and consultants in connection with the inclusion within the UGB ($463,744.73 including GST); and

(ii) $3,047,251.05, being 20% of the increase in the value of the Richmond land, less the amount paid to suppliers and consultants;

(c) Alternatively, no less than $1,279,709.73, being the sum of:

(i) The amount paid by it to various suppliers and consultants ($463,744.73); and

(ii) No less than $815,965.00 in respect of Peet's own time, effort and expertise related to the inclusion in the UGB.

19 During a directions hearing on 12 September 2008, Peet indicated that it intended to amend its statement of claim, and on 17 September 2008 it delivered the proposed amendments. The principal proposed amendment was to allege that Mrs Richmond owed Peet a fiduciary duty, the content of which was not specified. The fiduciary duty was said to arise by virtue of the parties having begun to implement a joint venture project.

20 Mrs Richmond objected to the proposed amendments on a number of grounds, including embarrassment and a failure to plead material facts. Peet sought an opportunity to consider further its proposed amendments. On 26 September 2008, I reserved to the trial date the question of whether Peet would be given leave to amend.

21 On 2 October 2008, a further proposed amended statement of claim was delivered, in which the proposed fiduciary duty claim was more fully articulated.

22 During opening submissions on the first day of the trial, Peet's senior counsel said that Peet no longer pressed the application to amend the statement of claim, or its claims in contract, estoppel or unjust enrichment. As far as the quantum meruit claim was concerned, Peet abandoned the claim for $15.7 million, being the entire increase in value of the Richmond land, but persevered with the two alternative bases mentioned in paragraphs 18(b) and (c) above.

23 Peet also claims penalty interest on any amount which it is awarded. Mrs Richmond says that a commercial rate of interest, such as 7%, should be awarded. I will hear further from the parties in relation to interest, and any outstanding GST issues, after the publication of these reasons.

Scope of the current disputes about the quantum meruit claim

24 There is no dispute that the work done by Peet, or by third parties at its request, in connection with the inclusion of the Richmond land in the UGB, was done at the express or implied request of Mrs Richmond.

25 That work included the preparation of concept plans, general infrastructure design, a business case for the development of the land, briefing papers, project evaluation and economic modelling. Peet was involved in the selection, appointment and briefing of consultants in all disciplines necessary for the project, including archaeology, ecology, vegetation, geotechnology including drilling, road and rail transport, public transport infrastructure, traffic modelling, aerial topography, water supply and water recycling, sewerage reticulation, drainage infrastructure, town planning, land surveying, site analysis, flora and fauna description, and drainage.

26 The project included the preparation of plans for the land and its environs, including concepts for redevelopment, statement of existing conditions, hydrology, environmental features, schools, general site analysis, pipeline alignment, railways, traffic conditions and population growth and projections. It included attendances on local council members, participation in community meetings, workshops, forums and presentations, and lobbying (by external lobbyists and Peet staff). Submissions and lobbying were also required to various government departments, including V/Line, City West Water, the Wyndham Smart Growth Committee, the Department of Sustainability and Environment, and to the Wyndham City Council regarding a proposed amendment to the Wyndham planning scheme concerning flood control.

27 Both of the alternative bases on which a quantum meruit is still pursued seek payment of the sum of $463,744.73, being the amount allegedly paid by Peet to various suppliers and consultants in connection with the inclusion of the Richmond land within the UGB ("the third party claim").

28 Mrs Richmond does not dispute that Peet is entitled to receive around $350,000 to $356,000 in respect of the third party claim, but she does dispute Peet's entitlement to four specific items, which are discussed in detail below.

29 In addition to the sum of $463,744.73, the first quantum meruit claim also seeks the recovery of $3,047,251.05, calculated as follows ("the 20% claim"). If the amount of the third party claim is deducted from the amount of the increase in the value of the Richmond land ($15.7 million), that leaves a balance of $15,236,255.27. 20% of $15,236,255.27 is $3,047,251.05.

30 Peet's primary submission is that it is entitled to an award based on 20% of the uplift in the value of the Richmond land because, before it began any work on the project, it agreed with Mrs Richmond that it would receive 20% of the ultimate profit of the joint development project. It says that agreement was reflected in the legally unenforceable MOU, executed in December 2002, and in draft heads of agreement which were prepared while work was ongoing.

31 Mrs Richmond disputes that Peet is entitled to any amount calculated on such a percentage basis. In particular, she denies that there was any such percentage profit agreement, even in principle.

32 In addition to the sum of $463,744.73, the alternative quantum meruit claim also seeks payment of not less than $815,965, in respect of Peet's own time, effort and expertise related to the inclusion in the UGB ("the internal costs claim").

33 Mrs Richmond raises a number of objections to Peet's calculation of internal costs. She says Peet should receive no more than $370,000 to $395,000 in total for its internal costs.

34 In Pavey & Matthews Pty Ltd v Paul[5], the majority of the High Court confirmed that the right to recover payment of a reasonable remuneration or compensation on a quantum meruit no longer depends on any implied contract, but on a claim to restitution based on unjust enrichment.[6]

35 Where there is an enforceable contract, no question of reward on a quantum meruit will ordinarily arise, and the plaintiff must sue on the contract.

36 In some cases, the parties clearly intend to be legally bound by a contract, but the contract is nevertheless void or unenforceable, for reasons such as uncertainty or illegality. There may be other cases where, although the parties have reached agreement as to the content of an anticipated contract, the parties do not yet intend to be legally bound. In such cases of an ineffective contract, a quantum meruit may be awarded.

37 The principles to be applied in assessing a quantum meruit claim were not in dispute and were comprehensively discussed in the decision of Byrne J in Brenner v First Artists' Management Pty Ltd[7], a case which has been widely followed and applied. The following points of principle[8] are of particular relevance here:

(a) The court's task is not to assess damages for breach of contract, as a quantum meruit claim presumes that no contract exists. Therefore, the court is not concerned with compensating a plaintiff for what it might have earned in the future under the ineffective contract;

(b) The fundamental yardstick is what is a fair and reasonable remuneration or compensation for the benefit actually or constructively accepted by the defendant;

(c) Where the services have been performed at the request of the defendant, or under an ineffective contract, the fair value of the work will ordinarily be calculated at a reasonable rate for the work actually done. The assessment must have regard to what the defendant would have had to pay for that work under a normal commercial arrangement. Although the actual cost to the plaintiff is not irrelevant in calculating what is a reasonable remuneration, the court is not concerned with compensating the plaintiff for its loss;

(d) Where the parties have agreed upon a price for certain services to be performed and those services have in fact been performed, but for some reason their agreement is ineffective or no longer on foot, the agreed price is evidence of the value that the parties themselves put on the services performed. But, although it may be received as evidence of the appropriate remuneration, it is not determinative of it.[9] Where the court has regard to the agreed remuneration or agreed mode of calculating remuneration, it is entitled to modify that to determine what is, in all the circumstances, a fair recompense;

(e) In many cases, the appropriate method of assessing the benefit of the work is by applying an hourly rate to the time involved in performing those services. In that case, the court may have regard to the rate of remuneration which is commonly accepted in the relevant industry, for comparable tasks and expertise;[10]

(f) Where the services are of such a kind that it is difficult or impossible to assess the number of hours involved or to itemise the precise services, the court is entitled to make a global assessment, or to reduce or increase the remuneration which can be proved with some certainty, in order to reflect the fair and reasonable value;[11]

(g) If it is customary in the industry for such services to be recompensed on a commission basis, the court may have regard to what is a reasonable commission and to apply it where appropriate.[12]

38 Peet largely relied upon the first and second Dwyer reports, with some limited verification by Peet officers or employees.

39 Most of Peet's lay witness statements were filed on the same day as the first Dwyer report and did not contain any verification of the figures in that report.

40 Each of the amended lay witness statements, filed in August 2008, contained a series of similar formulaic statements, to the effect that the witness had read the appendices to the relevant Dwyer reports, which are discussed below. As to each relevant appendix, the witness simply said that the entries under the witness' initials, as to the activities and times given "are true and correct as to the minimum times [the witness] was so engaged". The verification paragraphs have simply been inserted at the end of the witness statements and, with the few exceptions discussed below, bear little relationship to the rest of the witness statement.

41 Peet also called expert evidence from Jamie Andrew Govenlock, a town planner, and Brian Dudakov, a valuer, about the increase in value of the Richmond land; however their evidence is not discussed in these reasons for decision, as it was uncontroversial.

42 None of the consultants or other third parties gave evidence.

44 Mr Liali started working for Peet in 2000 as a project management assistant. He was later promoted to project manager and acquisitions manager. He was based in Melbourne.

45 He was involved in the discussions with Steve Carter, and the attempts to secure an initial deal with Mrs Richmond in 2002. He was also heavily involved with discussions about and considering the draft MOU and heads of agreement. Like all the Peet witnesses, he did not differentiate between work he was doing for the benefit of Peet in securing a deal, and work done in relation to the UGB.

46 Mr Liali was away on leave from late May until early September 2003. He left Peet altogether around late October 2003.

47 He did not give evidence as to what other projects he was working on, the proportion of his time spent on the Richmond project, or how long he actually or ordinarily spent on particular types of task.

48 He merely provided the formulaic verification of appendices 5, 5a to 5h and 6 to the first Dwyer report and appendices 9 to 11 to the second Dwyer report.

49 Mr Liali said he did not speak to Mr Dwyer or anybody from Mr Dwyer's office, for the purpose of assisting Mr Dwyer to prepare his reports.

50 Mr Mulder joined Peet in June 2002 as a development manager and project manager. In late 2004, he became an operations manager.

51 His first involvement with the Richmond project was in March 2003, and over the next couple of months he appears to have become increasingly involved with the project. When Mr Liali was away on leave from May to September 2003, Mr Mulder took over his role. He also took over that role when Mr Liali left Peet in October 2003.

52 Mr Mulder's witness statement provides detail of numerous meetings and communications. Some of those matters relate to the inclusion of the Richmond land in the UGB, others are clearly for Peet's personal benefit in securing a deal with Mrs Richmond.

53 Mr Mulder is the only Peet witness who gave evidence as to the proportion of time which he spent on the Richmond project. He said that at the relevant time, he was mostly working on other Peet projects at Brimbank and Cardinia Lakes, which took up about 70% of his time. He said that the Richmond project took up about 15 to 20% of his time, and miscellaneous other work took up the rest of his time. That Richmond estimate includes both time spent for the benefit of Peet itself, as well as for the benefit of Mrs Richmond.

54 He said that Peet did not keep records of the time spent on the various project activities, but that experience soon familiarised him with how long major activities would occupy. Meetings with Mr Nicol (who acted on behalf of the Richmonds), including travel time, typically took around three hours; project control and strategic planning meetings usually took at least between 1.5 and 2 hours; and typing minutes and agendas typically took about one hour.

55 Mr Mulder says he believes he worked over 410 hours in preparing, sending and reading emails for the Richmond project; nearly 500 hours in meetings (including preparation, attendance, preparing minutes, travelling and internal reporting); more than 45 hours working on reports, submissions and presentations (including taking instructions, correspondence and review); and over 55 hours authorising consultants' invoices.

56 In addition to that specific evidence, Mr Mulder also provided the formulaic verification of appendices 5, 5a to 5h, and 6 to the first Dwyer report and appendices 9 to 11 to the second Dwyer report.

57 In cross-examination, Mr Mulder said he spoke to Mr Dwyer in the latter half of 2007. He had two or three meetings with Mr Dwyer, which went for about an hour each. He also met with Mr Dwyer's assistant, Neil McLean, on three or four occasions. The meetings with Mr McLean were lengthy, in which Mr Mulder spent at least four hours going through documents with Mr McLean. He provided consultants' reports, business case papers and briefing papers to Mr Dwyer's firm, Dwyer Corporate.

58 Tony Lennon ("Mr Lennon"), is the son of Anthony Wayne Lennon ("Mr Lennon Snr").

59 He started working with Peet in Perth in late 1991 and became a director in 1997. In 1999, he moved to Melbourne to set up Peet's first interstate office.

60 Mr Lennon was involved in some of the initial attempts during 2002 to secure a deal with Mrs Richmond, and in considering the terms of the MOU. He also attended some of the more important meetings and was kept informed about a number of aspects of the Richmond project. He was also involved in the attempts after 13 January 2006 to secure a deal with Mrs Richmond.

61 He did not give evidence as to what other projects he was working on, the proportion of his time spent on the Richmond project, or how long he actually or ordinarily spent on particular types of task.

62 He merely provided the formulaic verification of appendices 5, 5a to 5h to the first Dwyer report and appendices 9 to 11 to the second Dwyer report.

63 A further 100 hours of meeting time was located for him between the first and second Dwyer reports, but there is no evidence that he had any involvement in that process.

64 Mr Lennon did not speak to Mr Dwyer or anybody from Mr Dwyer's office for the purpose of assisting him to prepare the reports.

65 Mr Hemsley has been a non-executive director of Peet since 1985. He became the managing director in 1991. After Peet became a listed company, he became the chief executive officer.

66 Although he was involved in some strategic decisions, he had no day to day involvement in the management of projects.

67 His first involvement in relation to the Richmond project was in September 2002, when he approved Peet putting together a proposal for Mrs Richmond. He attended an important meeting on 21 November 2002 by teleconference, and a few other meetings in 2003 and 2004. He also sent and received a few emails. He spent time in 2006 in connection with Peet's attempt to retain some role with the Richmond land.

68 Mr Hemsley attended directors' meetings. Like the other directors, he gave no evidence as to how long directors' meetings took, or what proportion of directors' meetings, over what period of time, concerned the Richmond land.

69 He did not give evidence as to what other projects he was working on, the proportion of his time spent on the Richmond project, or how long he actually or ordinarily spent on particular types of task.

70 He merely provided the formulaic verification of appendix 5b to the first Dwyer report and appendices 9 to 11 to the second Dwyer reports.

71 Mr Hemsley did not speak to Mr Dwyer or anybody from Mr Dwyer's office for the purpose of assisting him to prepare the report.

72 Mr Davies joined Peet in 2001 and is based in Perth. He is currently Peet's national business development support manager.

73 He had quite limited involvement in relation to the Richmond land. He did some work in September to November 2002 on preparing cashflows; this was clearly done for the purpose of Peet securing the initial deal with Mrs Richmond. He spent some more time on cashflows in early 2004. His witness statement shows that during 2003 to 2005, he spent a few hours here and there, primarily reviewing some documents related to the Richmond land.

74 Mr Davies did give evidence as to the number of hours he spent on some, but not all, tasks. Otherwise, he gave the formulaic verification of appendices 5f and 5b to the first Dwyer report and appendices 9 to 11 to the second Dwyer report.

75 No evidence was led as to whether or not Mr Davies spoke to Mr Dwyer or Mr Dwyer's staff.

76 Anthony Wayne Lennon is the father of Mr Lennon. He joined Peet as its managing director and controlling shareholder in 1985. After Peet became a public company in August 2004, his role changed to that of non-executive chairman of the board. He is based in Perth.

77 His short witness statement was tendered into evidence, without him being required to attend for cross-examination.

78 He attended a few relevant meetings, but had no involvement in the day to day running of the Richmond project. He made no estimate of the amount of time he had spent on the project. He simply provided the formulaic verification of appendix 5b to the first Dwyer report and appendices 9 to 11 to the second Dwyer report.

79 In his first and second reports, Mr Dwyer set out the nature of the task which he was asked to do by Peet's lawyers.

80 Mr Dwyer was asked to provide Peet with a report encompassing the hours expended by Peet employees and the costs of their suppliers and consultants in relation to the work the subject of the court proceedings, and to report on what he considered reasonable payment for work actually carried out by Peet, its employees, agents and contractors, on the quantum meruit claim.

81 Mr Dwyer was given the discovered documents, which he reviewed. The documents included minutes of meetings, correspondence, schedules containing consultants' costs, and reports, presentations and submissions prepared both by Peet and by consultants.

82 The first Dwyer report said that Mr Dwyer had "detailed discussions with Peet employees", who produced additional records including archived calendar appointments and general ledger transaction listings. In cross-examination, it became apparent he had spoken primarily to Mr Mulder and two of his (unnamed) assistants, and that two of Mr Dwyer's staff, who did not give evidence, had helped him with the task. He did not speak to any Peet lay witness, except Mr Mulder.

83 Because Peet did not charge on a time basis, Mr Dwyer had to reconstruct from the documents provided the time expended, and then apply what he considered an appropriate hourly rate for each relevant employee.

84 The first Dwyer report said that, in order to determine an appropriate hourly rate, he took into account a number of factors, including the rates charged by the third party consultants Peet engaged in relation to the Richmond land; the nature of the work conducted by Peet; the expertise and experience of Peet and its personnel; and rates generally charged by other consultants within the industry. However, in cross-examination, he conceded that he had not actually been instructed as to the expertise and experience of the Peet staff involved with the Richmond land.

85 Mr Dwyer was asked in cross-examination about his discussions with other industry participants. He initially said that "some" industry participants he examined would have charged a success fee in conjunction with hourly rates, but did not reveal the names of those to whom he spoke. He later said that he spoke to one person - the "executive manager, general manager" of a similar-sized development company to Peet, which had similar-sized projects. That person's background was as a real estate agent in a large Melbourne firm; he had been with the development company for a number of years, and Mr Dwyer felt that this person understood the task Mr Dwyer had in terms of determining an appropriate hourly rate.

86 Mr Dwyer was told by that person that his company "would normally charge a fee on a contractual basis, and charging by hourly rates is not normally the way they would charge for their work, but in the event they were asked to provide consultancy services on an hourly basis, their rates would be such and such". Mr Dwyer agreed that the rates he allocated to Peet staff were the rates of people with professional expertise who do not charge success fees. Mr Dwyer said in re-examination that the information this person provided in relation to his company's structure, salary levels at senior level and rates they would expect for certain consulting jobs provided Mr Dwyer with comfort as to the rates he had adopted in his report.

87 The first Dwyer report said that he researched guidelines issued by "appropriate professional bodies" and rates charged for projects of similar nature and size. The report said he discussed "rates charged generally by senior industry participants not associated with Peet or this project". He noted that most industry participants charged on a fixed fee, percentage of cost or success fee basis, not on an hourly rate.

88 He said another way of considering appropriate rates was to consider the salaries charged by directors and executives and to compare them with professions such as lawyers and accountants, who do charge based on hourly rates. Whilst the type and amount of overheads for these professionals may differ from those of property consultants such as Peet, he believed that the comparison of salary, or profit to proprietor levels, was "a useful benchmark".

89 Mr Dwyer said that based on his own evidence and research, project management fees between 2 and 6% are charged, dependent on the size and difficulty of the project.

90 Although in his first report, Mr Dwyer said he had been told by Peet that gross realisations for the Richmond project were expected to be approximately $500 million, and that the project had reached 15% completion, no witness gave evidence to support such an assumption.

91 The first Dwyer report contains 11 relevant[13] appendices. They are:

Schedule of the hourly rates charged by third party consultants engaged by Peet

Summary of the amount then claimed for internal Peet time of some $696,507.50

Time spent by Peet employees on pre-meeting tasks (preparation for meetings), said to be sourced from minutes of meetings, calendar appointments and email correspondence in available records

Time spent by Peet employees on post-meeting tasks[14]

Time spent by Peet employees travelling to meetings[15]

The weekly allowance for Peet employees for internal discussions/meetings about the Richmond project

Time spent by Peet employees in relation to third party consultants, including allowances for instructions and discussions with the consultants, correspondence, review of documents and provision of feedback and final review of the report/presentation/submission

The weekly allowance for Peet employees for sending, receiving and reviewing email correspondence (at a set allowance of 18 minutes per email)

Summary of a "conservative estimate for the review, discussion, authorisation and payment of consultants' invoices"

92 In the second Dwyer report, dated 26 August 2008, Mr Dwyer said that Peet's solicitors had provided him with further discovered documents, which may affect the conclusions in the first Dwyer report. He said he applied the same methodology to the new documents to determine the quantum of the reasonable payment, and identified an additional 318.4 hours expended by Peet on the Richmond project. The same hourly rates were applied to each relevant Peet employee.

93 The further discovered documents provided to Mr Dwyer included calendar appointments, minutes of meetings, correspondence, reports and submissions and witness statements filed by both parties. From these documents, Mr Dwyer identified additional meetings in relation to the project, including more than 100 further hours for Mr Lennon. As Mr Dwyer acknowledged that it may have been the case that only a portion of the extra time identified was spent solely in relation to the Richmond land, Mr Dwyer allowed 0.2 hours for preparation, 1.3 hours for Richmond-related discussions within each meeting and 0.5 hours for post-meeting tasks.

94 The second Dwyer report results in a conclusion that over $119,000 of further time was justified.

95 Mr Dwyer said he believed that estimate was conservative and reasonable, because it was evident from the documents and discussions with Peet employees that the Richmond project was one of the most significant projects being undertaken by Peet at the time. Unfortunately, that assumption is not supported by the Peet lay witnesses. The only Peet witness who even tried to estimate the proportion of time he spent on the Richmond project was Mr Mulder, the project manager, who estimated it took up around 15 to 20% of his time; and that estimate included both work for inclusion in the UGB and work done to secure the deal. From their witness statements, it is evident that all the other Peet witnesses were spending significantly less time on the inclusion in the UGB than Mr Mulder.

96 In around August 2004, there were about 20 different land projects where Peet was either seeking development approval or rezoning, but it is not clear whether all these projects were in Victoria. During the course of his employment with Peet, which began in June 2002, Mr Mulder said he had been involved in a number of subdivision developments in Victoria, including: Brimbank Gardens; Tarneit Rise; Greenvale Rise; Cardinia Lakes; Point Cook; and Brookland Greens in Cranbourne.

97 Other than the reference to those 20 projects, it is not clear to what extent, and how many, Peet projects, were ongoing during the period in which Peet was working on the inclusion of the land in the UGB.

98 The second Dwyer report contains 5 further relevant[16] appendices:

Summary of the further discovered documents Mr Dwyer relied upon in drawing conclusions regarding the allocation of time in the second Dwyer report

Schedule of the discovered documents Mr Dwyer relied upon for the purpose of drawing his conclusions in the first Dwyer report

Time spent by Peet employees on meeting preparation, attendance, post-meeting tasks and travel (additional to that identified in the first Dwyer report), identified from calendar appointments contained in the further documents provided to Mr Dwyer

Time spent by Peet employees on meeting preparation, attendance, post-meeting tasks and travel (additional to that identified in the first Dwyer report), identified from other documents contained in the further documents provided to Mr Dwyer

Summary of the changes in times allocated in the first Dwyer report for meeting preparation, attendance, post-meeting tasks and travel, revealed by the further discovered documents provided to Mr Dwyer, including Peet's lay witness statements

99 Mr Dwyer conceded that there were errors in the report, and that some of the appendices could have been adjusted, but maintained that the overall time allocation was reasonable. He said it equated to some 2,500 hours over a period of nearly 4 years, which equated to 7 or 8 hours a week for 2 people. Having regard to the amount of material and the size of the Richmond project as against the other parts of Peet's business, Mr Dwyer believed that Peet employees (and in particular Messrs Lennon and Mulder) had spent a substantial amount of time on the project, probably more than 7 or 8 hours a week.

100 Peet seeks $463,744.73 (including GST) in respect of amounts allegedly paid to third parties for work done in connection with the inclusion of the land in the UGB. Recovery of this amount is sought as part of Peet's claim on either quantum meruit basis.

101 Mrs Richmond does not dispute Peet's entitlement to recover in respect of many of the third party payments, details of which are listed in appendix 6 to the first Dwyer report. However, she does dispute the following items:

(a) Certain amounts claimed, in respect of which Peet has not provided invoices or other evidence of actual payment;

(b) Expenses which relate to work done by Tract Consultants Pty Ltd ("Tract") in part for the adjoining Carter land;

(c) Expenses which relate not to the inclusion of the Richmond land in the UGB, but to work done by lawyers, Ponte Earle, for the benefit of Peet in striking a deal with Mrs Richmond; and

102 There are a number of items listed in appendix 6 to the first Dwyer report, for which Mr Dwyer did not sight any invoice from the third party, or any evidence that the expense had, in fact, been paid.

103 Mrs Richmond says that Peet should not be allowed to recover in respect of 13 such items, listed in annexure H to the Richmond submissions. Those items total $59,787.16 (including GST) or $54,351.96 (excluding GST), and cover the period from January 2004 to August 2005. In so far as there are unproven payments for Tract, they are dealt with separately below.

104 Some of the items which fall into this category appear on their face, to be possible duplications of items for which there are invoices and proof of payment, particularly some of the Nicol group items. Others, such as the single reference to "SKM" of $33,693.00, do not appear to be mere duplications.

105 Mr Dwyer was taken to a number of these and similar items in cross-examination. He said that the list in appendix 6 "would have been" extracted from the general ledger account. Where there was no invoice or proof of payment "we made further enquiries as to whether dates paid could be provided and within the time frame of [the first Dwyer report] they weren't able to be provided." Mr Dwyer said that he and his staff made no further enquiries about these items in the 15 months after the first Dwyer report was prepared.

106 Mr Dwyer said that because he had not been provided with information that such items either had or had not been paid, they were included in the report.

107 Peet did not adduce any evidence as to how, or when, or by whom, the general ledger was created or reviewed, and it was not tendered in evidence. Nor did Peet lead evidence from the consultants themselves, as to whether the amounts claimed had been paid or were payable, or related to work for the Richmond land.

108 In her closing submissions, Mrs Richmond does not attack all of the third party items for which there was no invoice and no proof of payment. There are other items in appendix 6, totalling around $30,000 (including GST), which appear to fall into this category and could also have been the subject of attack by Mrs Richmond.

109 In the circumstances, it is not fair and reasonable for Peet to recover in respect of these amounts, which ought to have been capable of simple proof.

110 Conclusion: I will disallow the 13 items identified by Mrs Richmond. That leads to a deduction of $59,787.16 (including GST) from the amount of the third party claim.

111 Tract provided strategic and statutory planning expertise. In particular, Tract prepared a written submission to the Wyndham Smart Growth Committee, for the purpose of the application for inclusion of the Richmond land in the UGB. Tract also prepared a similar written submission seeking the inclusion of the adjoining Carter land in the UGB.

112 Peet claims a total of $94,986.80 for Tract's work in relation to the Richmond land. That figure is comprised of 32 items in appendix 6 to the first Dwyer report, with entries spanning the period from January 2003 to August 2005.

113 There is no dispute that Tract actually did the work identified in the invoices, or that (subject to a few exceptions discussed below) Peet paid Tract for that work. Messrs Mulder and Liali both gave unchallenged evidence that Tract's expertise was important to the process of having the Richmond land included in the UGB.

114 However, Mrs Richmond says the court should conclude that the sum paid to Tract was excessive, as the work was completed for the benefit of both the Richmond and Carter lands.

115 A comparison of the Richmond and Carter land submissions certainly shows considerable overlap in the data used in both submissions. Mr Lennon conceded that some of the same data appeared in both submissions. However, he said that there was a difference in the work done by Tract for the Richmond and Carter lands, in that Tract had greater involvement in formulating strategies to have the Richmond land included into the UGB, including a lot more work in the design of the concept plan and structure plan, and that they were involved in more meetings and discussions concerning the Richmond land.

116 That some Richmond land data was apparently copied into the Carter submission is also supported by one of two invoices from Tract to Peet relating to the Carter land, which were tendered into evidence; they were dated January and February 2003 and totalled $5,397.97. The January invoice included in the description of services "Transfer of data/images from Peet-Richmond", but gave no indication of how much of the invoiced amount of $3,723.88 was referable to that task.

117 If it were established that Peet and Tract had unfairly allocated as between the two landowners the true costs of Tract's work in relation to the Richmond and Carter lands, that might be a matter which would lead to some adjustment in favour of Mrs Richmond. But the evidence here is insufficient to establish any such unfairness.

118 Mr Dwyer was challenged in relation to the Tract payments, but had no personal knowledge about the nature of Tract's work in relation to the Carter land. Any such cross-examination should have been addressed to one of the lay witnesses.

119 Mr Liali's evidence that Tract separately invoiced Peet in relation to the Richmond and Carter projects was not challenged.

120 Mr Lennon was asked, but did not know, whether the two invoices referred to above were the only invoices received from Tract in relation to the Carter land.

121 Mrs Richmond's counsel did not cross-examine any other Peet witnesses, or lead any other evidence, as to how much Mr Carter had been charged for work done by Tract for the Carter land. The court simply does not know the total amount charged to Mr Carter over the relevant period.

122 Nor does the evidence allow the court to draw any conclusions as to the exact process by which the two submissions were prepared, precisely what work was done by Tract in respect of the two pieces of land, or how Tract made whatever decisions it did as to the allocation of costs. For example, I note that the Richmond land is considerably larger than the Carter land (430 versus 87 hectares), but have no evidence as to whether that might have had any impact on the scale of the work or the allocation of costs. As mentioned above, Mr Lennon's evidence was to the effect that Tract did considerably more work in respect of the Richmond land.

123 I am satisfied that, subject to the few exceptions discussed below, Peet did pay Tract for its work in connection with the inclusion of the Richmond land in the UGB, which work was of benefit to Mrs Richmond.

124 However, the following Tract items identified in appendix 6 appear to involve possible duplication:

125 There was no explanation given by Mr Dwyer or any other witness as to what the date in the first column ("Date (per Peet schedule)") signifies.

126 It is quite possible that these entries in fact reflect only two, not six, separate payments. There are only two invoices which have been sighted, one for $1,376.28 and the other for $2,009.21. It is evident from Tract's invoices that it charged professional fees on an hourly basis, plus actual disbursements and GST. Up to half a dozen Tract staff appear to have worked on the project, charging at different hourly rates. It seems highly improbable that exactly the same staff would work exactly the same combination and number of hours in different months. That is supported by the fact that none of the other 32 Tract items are in the same amount as any other item.

127 The first 7 January 2003 entry of $1,376.25 appears to be a clear duplication. There is no invoice for it and no record of its payment, and it is in exactly the same amount as the previous entry. There is a record of a payment of only one of these three items, being $1,376.25 on 15 August 2003, for an invoice dated 31 May 2003, which was not tendered in evidence. Only one invoice for these three items was tendered, being the invoice dated 31 May 2003 for $1,376.28, but, according to Mr Dwyer, there is no record of it having ever been paid. No other evidence was led as to these payments.

128 The same reasoning applies to the three items which are all in the sum of $2,009.21, for which there is only one actual invoice and the same invoice date for two of the entries.

129 Whilst it may well be that these six entries reflect only two actual invoices and payments, Mrs Richmond only challenges two of the six entries. She does so on the basis that, in the absence of any invoice or proof of payment, the entries should not be allowed. For the reasons given in the previous section of these reasons, I accept that argument.

130 Conclusion: It follows that a total of $3,385.46 will be deducted in respect of the payments to Tract.

131 Mrs Richmond disputes Peet's entitlement to a sum of $4,811.15 paid to Ponte Earle, solicitors.

132 Appendix 6 to the first Dwyer report lists a total amount of $4,811.15, for Ponte Earle. That figure is broken down into two payments, one of $4,734.15 dated 7 April 2003 and one for $77.00 dated 9 November 2006. Nothing in either Dwyer report indicates who Ponte Earle were, or to what precise services the payments relate.

133 In cross-examination, Mr Dwyer said he was not aware whether Ponte Earle were a law firm. He had no personal knowledge of, and made no enquiries as to, the services to which the payments relate.

134 The only other evidence concerning Ponte Earle is an email dated 17 March 2003, from Leon Ponte Jr of Ponte Earle, Business Lawyers, to Marco Liali and Tony Lennon of Peet. Attached to the email is a marked-up version of the first draft of the heads of agreement, reflecting Ponte Earle's suggested changes to that document.

135 Mrs Richmond argues that the email and attachment prove that Ponte Earle were engaged by Peet, to give legal advice to Peet, in relation to draft contractual documents. On no view was that to the benefit of Mrs Richmond.

136 Peet does not dispute that the payments relate to legal advice to Peet concerning the heads of agreement. But it argues that work directed to formalising joint venture documentation was of benefit to the joint enterprise. It says that work need not be narrowly referable to the UGB in order to be compensable under the quantum meruit.

137 Whilst I accept that work need not only refer to the UGB to be compensable, I do not accept that it is fair and reasonable that Mrs Richmond pay for Peet's lawyers to provide it with advice as to how to protect its own commercial interests. As a matter of general fairness, in the absence of some contrary agreement, each side should bear its own costs of negotiating and documenting any deal between the parties.

138 In fact, in so far as the parties turned their minds to this topic, clause 8 of the MOU (the only clause which was binding) provided that Peet would pay one half of Mrs Richmond's reasonable legal costs in connection with the preparing and settling of the MOU, the heads of agreement and other relevant agreements and, otherwise, each party was to bear its own legal costs of such work.

139 Conclusion: The sum of $4,811.15 will be disallowed.

140 The third party claim for $463,744 is inclusive of GST.

141 Mrs Richmond says this figure should be GST-exclusive. She says that Mr Dwyer should have reduced the figure to 10/11ths of that figure, to take account of the GST input credit benefits which would have accrued to Peet on payment of the invoices.

142 Mr Dwyer said he was not a GST expert, but accepted that the net out of pocket expenses to Peet would have been the net amount, not the GST inclusive amount.

143 No evidence was led by Peet as to its tax position, or as to when and how much it has claimed by way of input credits. But, given that it would have been entitled to claim them, it is not fair and reasonable for it to charge Mrs Richmond the grossed up amount.

144 Conclusion: The GST on third party payments should be disallowed.

Summary of conclusions on the third party claim

145 Peet's pleadings seek $463,744.73 (including GST) on the third party claim. The Dwyer reports only purport to verify $463,744.72, so I shall use that figure.

146 For the reasons given above, I have concluded that the following deductions should be made:

147 Deducting those three items from $463,744.72 leaves a total of $395,760.95 (inclusive of GST). If GST ($35,978.27 is 1/11th of $395,760.95) is then deducted, that leaves a net figure of $359,782.68 (being 10/11ths of $395,760.95).

148 Peet says that it has always worked on development projects on the basis it takes a percentage of the profits of the project. In that sense, it runs the risk that a project might not proceed. Peet says that it is for this reason inappropriate to award remuneration on the basis of an hourly rate for work completed.

149 Peet's claim to a percentage of the increase in value of the Richmond land is based on the MOU and draft heads of agreement. Peet says that a 20% profit figure consistently appeared in the MOU and the various draft heads of agreement (which themselves were still being negotiated right up until the inclusion of the land in the UGB), and that should be taken into account when determining the value of the services it provided.

150 Peet acknowledges that the MOU is not legally enforceable as a contract, but says that it nevertheless represents a meeting of the minds between the parties as to what was to occur. In that sense, it reflects an agreement as to the manner in which the remuneration on quantum meruit ought be determined.

151 In so far as the MOU itself provides that Peet was to bear most of the initial costs of the development in any event, Peet says that would be relevant if it had sued in contract, but not to the quantum meruit claim, which is based upon principles of unjust enrichment.

152 The 20% claim is not based on any evidence as to industry practice or the like.

153 Peet led some evidence in relation to the usual basis on which it charged.

154 I accept that Peet did not ordinarily charge on a simple hourly or fee-for-service basis. Precisely how much it did charge seems to have varied, depending on the structure of the development.

155 For example, Mr Liali said that, during his time at Peet, some projects were syndicated. Syndicates typically comprised 700 to 1000 shareholders in an unlisted public company. Peet would act as project manager and sales and marketing manager, and receive reimbursement from the sale of lots. He said Peet would receive total fixed fees in the order of 7-9% (plus GST) gross revenue from the sale of lots,[21] upon the project achieving expectations.

156 It seems that there were other Peet development projects which were carried out as a joint venture, and others which were wholly owned by Peet. Messrs Liali and Davies said that the fee structure in respect of joint venture agreements was "quite different", but did not explain what they were.

157 Whilst I accept the general proposition that Peet ordinarily works on some sort of percentage basis, the evidence is insufficient to enable me to draw any conclusion as to any "usual" percentage that Peet might charge. In particular, there is simply no evidence of any other project in which Peet has received 20% of any profit (either net or gross).

158 It is necessary to examine the MOU and the draft agreements in some detail, to explain why I reject Peet's suggestion that the parties had always agreed in principle that Peet would receive a 20% profit share.

159 In the MOU, Peet and Mrs Richmond agreed that, except for clause 8 (which dealt with the legal costs of preparing certain contract documents), the MOU was only a statement of their mutual intent and was not legally binding on them (clause 11.1).

160 Peet and Mrs Richmond agreed to use their best endeavours to agree upon and execute a legally binding heads of agreement document, pursuant to which Peet would carry out the "planning phase", which would cover the inclusion of the Richmond land in the UGB, and the rezoning of the land ready for development or sale (clause 4.1).

161 The MOU said that the heads of agreement were to provide that, after the successful completion of the planning phase, Peet would have the option (exercisable within 90 days after completion) to develop the Richmond land on behalf of Mrs Richmond, buy the land from Mrs Richmond, or act as her agent to sell the land (clause 5).

162 If Peet chose to develop the land, it was to enter into a development agreement and carry out the development in accordance with certain principles set out in schedule 2 of the MOU (clause 5.1.1). In that event, Peet had to offer Mrs Richmond the opportunity to join in the development of the land, through a joint developer ("the developer"), which would be a trust, company or partnership formed by Peet and Mrs Richmond or their nominees (clause 5.2.1 and schedule 3).

163 If Mrs Richmond chose to proceed with that joint development route, then the following would happen (clause 5.2.3 and schedule 3). The developer would appoint Peet as the manager of the project, for which Peet would be paid "not more than 9% of the actual proceeds received from the sale of each lot." In return for designing, sub-dividing, marketing and selling the land, the developer would receive a development fee of 90% of "the amount payable by the purchaser for the land."

164 The developer would distribute its profits (being the development fee less specified fees and costs) as follows:

165 This contemplates a split of profits once all sale, rezoning, government and development costs have been accounted for and paid, and after 19% of the remaining income has been allocated between the Peet and Richmond interests. That is to say, on no view is Peet's possible return a simple percentage of the gross improved value of the Richmond land.

166 If Mrs Richmond chose not to participate in the development, Peet could go ahead with the development for a fee which would, unless otherwise agreed, be 70% of the net proceeds of sale of each parcel of land (clause 5.2.2).

167 If Peet exercised the second option, it could buy the land from Mrs Richmond, at a price not less than the net present value of the proceeds Mrs Richmond would have received had the land been developed and sold under the development option (the first option) (clause 5.1.2). In that event, Peet would be free to develop and/or sell the land itself, entirely at its own expense and risk, and retaining all of the profit.

168 If Peet exercised the third option - to act as Mrs Richmond's agent to sell the land - the fees to be paid to Peet would be settled by negotiation before the heads of agreement were signed (clause 5.3).

169 It seems that the various different options were included in the MOU at the request of the Richmonds, in order to address their particular taxation concerns. I accept that Peet's intention, at the time of executing the MOU, was that (once the land had been included in the UGB and rezoned) it would develop the land in joint venture with Mrs Richmond and enter into a development agreement.

170 Irrespective of which of the options Peet elected to exercise after the completion of the planning phase, the MOU provided that Peet was to bear most of the costs of the planning phase (clause 4.4). It would pay all of the first $250,000 of costs, one half of the next $400,000 of costs, and all of the costs thereafter. Mrs Richmond would pay no more than $200,000 of the costs of the planning phase.

171 It can be seen from this discussion that the respective risks and rewards for the parties could vary significantly, depending on which option, if any, Peet exercised at the end of the planning phase. None of the options in the MOU reflected a flat rate return to Peet of 20% of anything. None of the options envisaged that Peet might receive a simple percentage of the increased value of the land, if the parties did not proceed beyond the planning phase. Nor did the MOU envisage that Peet could recover more than a small portion of its actual expenditure on consultants and third parties during the planning phase.

172 Finally, none of Peet's witnesses gave evidence that they undertook the work necessary to have the Richmond land included in the UGB because of what was in the MOU (or even in the other draft agreements). That omission may be explained, at least in part, by the fact that the witness statements were all prepared to support Peet's primary claim, abandoned on the first day of the trial, that there was a binding contract entered into in September 2003.

173 Clause 9 provided the MOU would have no effect unless heads of agreement were executed within 30 days of execution of the MOU, or such further time as mutually agreed in writing.

174 On 23 January 2003, Mrs Richmond agreed in writing to extend that period by 30 days. There were no formal extensions of time thereafter.

175 Throughout the period from January 2003 to around December 2005, regular project and planning meetings were held between Peet and Richmond representatives. The parties and their lawyers also commenced and continued the process of negotiating draft heads of agreement and a development agreement. Those agreements were never finalised or executed.

176 During that period, Peet continued to engage consultants and work towards the inclusion of the Richmond land in the UGB.

177 The first draft heads of agreement was prepared by Mrs Richmond's then solicitor, Graham Candy of Rigby Cooke, and provided to Peet in February 2003. It largely reflected the matters envisaged by the MOU, particularly in relation to the three options open to Peet, and the risks and rewards attending each of those options.

178 The first draft development agreement followed shortly thereafter. Over the following few months, further drafts of the agreements passed between the parties, and a number of revisions were made.

179 On 16 May 2003, Colin Richmond informed Mr Liali that the delay in documentation was due to matters within the Richmond family, as the heads of agreement had to take into account private family matters. Mr Richmond offered to sign a letter of comfort regarding the project.

180 By around June 2003, Mrs Richmond had engaged a new solicitor, Janet Whiting of Corrs Chambers Westgarth. On 23 September 2003, Ms Whiting wrote to Peet, informing it that there was no concluded agreement between the parties, and Mrs Richmond's previous solicitors had provided Peet with draft documents which did not reflect Mrs Richmond's instructions and contained some terms contrary to her instructions. The letter went on to say that Mrs Richmond wanted to continue negotiations to determine whether an agreement could ultimately be entered into, and requested a proposal from Peet.

181 Peet responded by letter dated 7 October 2003, setting out what it considered the terms of the "general agreement to enter into a joint development project" between it and Mrs Richmond. Whilst denying that the exclusive arrangement between them had expired, later that month, Peet requested a four month exclusive arrangement between itself and Mrs Richmond.

182 In January 2004, a project meeting was held between Peet and the Richmonds to set a "revitalising plan for progressing the project". In April 2004, Peet provided detailed cash flow material requested by Mrs Richmond. That information was sent to Mrs Richmond's advisors, Ernst & Young, for analysis, which took some months to complete.

183 The third draft heads of agreement were circulated in January 2005, and, in the first couple of months of 2005, there was correspondence between the parties as to its terms. It seems that the negotiations stalled somewhat in the middle of the year because Colin Richmond was busy farming.

184 Peet provided a further draft of the heads of agreement in September 2005. By this time, Mr Richmond was expressing concerns to Peet about how long the process was taking. He said that the Richmonds might enter into an agreement with Peet for the rezoning of the land only. This proposal was not acceptable to Peet. Meetings between the parties from September 2005 onwards demonstrated a growing chasm in the relationship.

185 Over the course of the two years in which draft agreements were being negotiated and circulated, there were a number of proposed changes to the various provisions which dealt with the allocation of risks and costs.

186 As far as the costs of the planning phase were concerned, the first draft heads of agreement contained a new clause (clause 4.7) which expressly provided that, if the agreement ceased for any reason, Mrs Richmond would not be obliged to refund to Peet any of the costs of the planning phase, other than her one half share of any costs between $250,000 and $650,000. That arrangement was implicit in the MOU, but was spelt out explicitly in the first draft heads of agreement and in all subsequent versions.

187 In the third draft heads of agreement, Peet proposed the inclusion of a new clause (clause 4.9), to the effect that if Mrs Richmond terminated the heads of agreement, without first giving Peet the right to exercise one of the three post-planning phase options, she would pay to Peet an amount equivalent to a percentage increase in the value of the land between December 2002 and the date of termination. The third draft said that the amount of the percentage was subject to further discussion and final agreement. Clause 4.9 remained in subsequent drafts, but the amount of the percentage was apparently never agreed.

188 The first draft heads of agreement was blank as to what the commission percentage rate would be if Peet exercised the third option and chose to act as Mrs Richmond's agent in the sale of the land. The second draft was also blank, but contained a note which suggested that the parties could either agree to a nominal commission (say 1%) plus reimbursement of reasonable planning phase expenses, or a higher commission (say 1.5%) with no such reimbursement. By the third draft, Peet was proposing that it would receive commission of 3% of the gross sale price under each contract of sale; there was no mention of reimbursement for planning phase expenses. That 3% commission had been incorporated into the fifth draft.

189 Three drafts of the development agreement were tendered, all apparently prepared in early 2003. The development agreement was to reflect the principles contained in schedule 2 to the draft heads of agreement. The draft development agreements all proceeded on the basis that Peet would be appointed as developer, to develop and sell the Richmond land, essentially at its own cost (clause 3). Mrs Richmond was to pay Peet development fees of 70% of the net proceeds of sale of each allotment sold, transferred or otherwise dealt with pursuant to the project (clause 10).

190 As with the MOU, none of the options in the draft heads of agreement or development agreement reflected a flat rate return to Peet of 20% of anything. Nor did the draft agreements envisage that Peet could recover more than a small portion of its actual expenditure on consultants and third parties during the planning phase.

191 Where parties have agreed in principle upon a price for certain services, the court may have regard to the agreed price as evidence of the value that the parties themselves put on the services performed.[22] For that reason, it is certainly appropriate for the court to have regard to the terms of the MOU, which reflected an in principle agreement in late 2002 and early 2003. And, even though the draft heads of agreement and development agreement were never finalised, they may also provide some evidence as to what the parties regarded as the value of the services.

192 However, as the preceding discussion clearly establishes, the respective risks and rewards for the parties could vary significantly, depending on which option, if any, Peet exercised at the end of the planning phase. None of the possible options reflected a flat rate return to Peet of 20%, particularly not 20% of the net increase in value of the land simply as a result of its inclusion in the UGB.

193 Nor did the actual or draft agreements envisage that Peet could recover more than a small portion of its actual expenditure on consultants and third parties during the planning phase; and they certainly did not envisage that Peet could recover its actual expenditure plus a percentage of profits.

194 No evidence has been led of any relevant industry practice. Nor is Peet's evidence sufficient to make any finding as to what percentage return Peet might have expected to recover in respect of a comparable project.

195 The 20% claim was only raised for the first time in the month before trial. At that time, Peet was still pursuing its claim that there was a binding contract to develop the land. That may explain, at least in part, why Peet's witness statements did not address the 20% claim. But it does not excuse Peet from not calling evidence at trial sufficient to establish the 20% claim.

196 In respect of the work relating to the inclusion of the land in the UGB, none of the actual or proposed agreements, or the evidence, suggests that Peet's role was anything more than a project manager. The MOU envisaged that Peet would bear most of the costs of inclusion in the UGB and rezoning the land. After the MOU expired, Peet chose to continue that work for several years, without having secured any binding contract, and at some risk that it would never achieve one. Even though not contractually obliged to do so, Mrs Richmond has at least since 2005, and arguably since 2004, indicated a preparedness to recompense Peet for its actual expenditure in relation to the UGB work.

197 In all the circumstances, it would not be fair and reasonable to remunerate Peet based on a percentage of the increased value of the Richmond land.

198 Peet claims not less than $815,965.00 for work performed by its management and staff to have the land included in the UGB. This claim is based on estimates arrived at by Mr Dwyer.

199 In the first Dwyer report, Mr Dwyer calculated the minimum reasonable payment for work carried out by Peet as $696,507.50.

200 In the second Dwyer report, he had increased that figure by a further $119,457.50.

201 Mrs Richmond has a number of objections to Mr Dwyer's calculations, resulting in the conclusion that Peet should recover no more than around $370,000-395,000 for internal Peet work. In particular, she objects to the following:

(a) Amounts claimed for work done for Peet's personal benefit;

(b) Amounts claimed for the benefit of the Carter land;

202 In so far as specific work is established as having been done for the sole benefit of Peet or the Carter land, it is not fair and reasonable to expect Mrs Richmond to pay for them, and those amounts should be deducted from Peet's claim.

203 However, the position is far more problematic in relation to items which are said to be excessive or unreasonable as to time or amount. Because Peet ordinarily charges on a profit basis, not a time-cost basis, its staff did not keep records of the time actually spent on this project. This means that the task undertaken by Mr Dwyer has necessarily involved the adoption of assumptions and the making of estimates. The court must determine on the available evidence whether those assumptions and estimates are fair and reasonable. That is not an unusual position for the court to find itself in, in a case seeking payment on a quantum meruit basis.

204 Mrs Richmond objects to Peet recovering in respect of work done by Peet for its own personal benefit. That includes: work done in 2002 for the purpose of Peet securing a deal with Mrs Richmond; work done in 2006, after the land had been included in the UGB and Mr Richmond had told Peet to stop work; and work done during the period of their relationship, which relates to the negotiation and drafting of the heads of agreement and development agreement.

205 She also objects to Peet recovering for internal work which she says was done for the benefit of the Carter land, not the Richmond land.

206 As a matter of general principle, Peet should only recover for work undertaken for the benefit of and/or at the request of Mrs Richmond. So that, for example, work done for Peet's own purposes, for example, to strike a commercial deal with Mrs Richmond, is not something for which Mrs Richmond ought to pay.

Work pre-dating the commencement of the project [23]

207 Peet seeks payments totalling $25,940[24] for work done between May and October 2002, details of which are listed in annexure C to the Richmond submissions, and are discussed below.

208 Mrs Richmond says I should find that Peet's involvement in having the Richmond land included in the UGB commenced with a meeting on 21 November 2002, and there should be no allowance for the items sought by Peet from May 2002 to that time.

209 The history of Peet's involvement with the Richmond land is conveniently summarised in its lay witness statements, as follows.

210 In mid 2002, Mr Wadeson of Tract drew Peet's attention to the Richmond and Carter lands, which Mr Wadeson thought had development potential. Peet employees had discussions around July 2002 with Mr Carter about the possibility of acquiring the Carter land. By August or September, Peet employees had started discussions with Colin Richmond, about the development potential of the Richmond land. Mr Richmond told Peet employees that other developers were "pitching" for the job, and he had already spoken to Delfin-Lend Lease Ltd about developing the land.

211 Over the next few months, Peet spent time and effort trying to sell itself to the Richmonds as the preferred developer of the land. For example, there was an oral presentation to the Richmonds on 8 October 2002, which set out the history and credentials of Peet and the various projects in which it was engaged in Australia. On 18 October 2002, Mr Lennon took Richmond family members on a tour of other Peet developments. During September and October 2002, Mr Davies and others prepared a sample cashflow, which was provided to Mr Richmond on 25 October 2002, to demonstrate how a joint venture between Peet and the Richmonds might be structured.

212 Mr Liali says that by late October, Mr Richmond had told Peet that it was the preferred party to jointly develop the Richmond land.

213 There was an important and lengthy meeting on 21 November 2002 at Peet's offices, which was attended by many representatives from both sides, including lawyers. Possible development options were discussed at length. No agreement, even one in principle, was reached at that meeting, as the Richmonds wanted to consider their tax position more clearly. It was agreed that Mr Candy, Mrs Richmond's solicitor, would prepare and circulate the MOU and draft heads of agreement.

214 There were a number of further meetings between Peet and Richmond representatives in late November and December 2002, with a draft MOU circulated by mid December 2002. The MOU was not executed until late December.

215 Although Peet apparently started making some preliminary inquiries, in late 2002, about the Wyndham Council's attitude and requirements for the inclusion of land in the UGB, that was done before Peet even had an in-principle agreement with Mrs Richmond, and there is no evidence that this was done at her request.

216 I am satisfied on the evidence that, prior to 21 November 2002, Peet was devoting its resources to securing a suitable deal with Mrs Richmond, and it is not fair and reasonable that Mrs Richmond pay for such work. Indeed, it could be argued that the line should be drawn later in 2002, perhaps when the terms of the MOU were finally agreed. But Mrs Richmond only argues that the line be drawn at the 21 November meeting, so I shall draw it there.

217 There are several specific types of work which will be disallowed on this basis.

218 In appendix 5f to the first Dwyer report, Mr Dwyer has allowed a total of $4,000 for Messrs Lennon, Liali, Mulder and Davies, for work done by them in relation to the preparation and review of the sample cashflow analysis.[25]

219 There is no evidence to suggest that the cashflow analysis had any connection with the inclusion of the Richmond land in the UGB. On the contrary, I am satisfied that the cashflow was prepared for the purpose of demonstrating to the Richmonds the likely financial benefits of choosing Peet as the preferred developer. It was prepared for the benefit of Peet, to secure itself a deal with Mrs Richmond.

221 For the same reason, Mrs Richmond says I should disallow the claim for $6,340 in appendixes 9 and 11 for preparation, attendance, post-meeting tasks and travel, for the following specific meetings between 24 September and 25 October 2002:

(a) A meeting with Steve Carter on 24 September 2002 regarding "Werribee";

(c) Meetings with Colin Richmond and family on 8 October 2002 and Colin Richmond on 25 October 2002; and

(d) A meeting on 18 October 2002, when Mr Lennon accompanied Mr Richmond to other Peet developments.

222 No Peet witness gave any evidence about a meeting with Mr Carter on or about 24 September 2002, or about the specific City of Wyndham lunch. There was evidence of the 8, 18 and 25 October meetings, which has already been discussed.

223 On the evidence before me, I conclude that all of these meetings formed part of Peet's attempt to secure itself a deal and Peet cannot recover for them on the quantum meruit.

224 Mr Dwyer has made an allowance for Messrs Mulder and Liali for attending internal Peet meetings of 1.2 hours per week,[26] and for Mr Lennon of internal meetings of 0.6 hours per week,[27] throughout the period from May to 21 November 2002. Mrs Richmond seeks a deduction of 26 weeks for each, totalling $15,600.[28]

225 I am satisfied that any such work was also for Peet's own benefit, in securing itself a deal with Mrs Richmond.

226 Conclusion: The total sum of $25,940 will be deducted from Peet's claim, for work done prior to 21 November 2002.

227 Mrs Richmond objects to Peet recovering $17,790 for work done during 2006.[30] She does so on the basis that the Richmond land was included in the UGB by the end of November 2005. Accordingly, Peet has not established that the work claimed in 2006 was for the benefit of the land.

228 Peet says its entitlement should not be limited by reference to the inclusion of the land in the UGB, and that everything it did to further the joint enterprise until its relationship with Mrs Richmond finally ended is compensable on the quantum meruit.

229 I agree with Peet that the line should not simply be drawn at the point of inclusion in the UGB. It is fair and reasonable that Peet should recover in respect of work that it did in relation to the Richmond land, up until the time that it was asked to stop working on the project.

230 Pinpointing a precise time at which the Peet-Richmond relationship had broken down is not easy. Peet's senior counsel conceded that the line could be drawn at a number of places, between September 2005 and early February 2006. I propose to draw it at 13 January 2006, for the following reasons.

231 Peet learned of the gazettal of the land in the UGB on 28 November 2005. Mr Lennon wrote to the Richmonds on 1 December 2005, advising them that Peet would now be vigorously pursuing the rezoning of the Richmond land. It is clear that Peet continued to do work in December 2005 which was for the benefit of the Richmond land, including meetings with the Richmonds, the local council and consultants, as well as perusing relevant documents.

232 In January 2006, Mr Lennon received an email from Mr Richmond, saying that the Richmonds were only prepared to proceed with a rezoning agreement, not a development agreement, at that point in time. Mr Richmond also said that the Richmonds would not contribute to the cost of a valuation of the land and would not engage any consultants. He said that the Richmonds were going to have the land rezoned by a third party, offered Peet the opportunity to put forward a proposal to do that work, and asked how long Peet would need to formulate its proposal. He said he was prepared to allow Peet until the end of January 2006 to do so. Importantly, Mr Richmond concluded by saying that "there is no point having meetings or further discussions in the interim. I do not want any work done until this is resolved".[31]

233 Although the email itself appears to have been sent on 3 January 2006, Mr Lennon's unchallenged evidence was that he did not receive the email until the 13th of that month. I will proceed on the basis of that later date.

234 Schedule G to the Richmond submissions seeks to exclude time spent by Messrs Lennon, Mulder and Hemsley in 2006. The first specific entries are dated 13 January 2006 - the same date as Mr Richmond's order for Peet to stop work - and the last entry is on 26 December 2006. I will allow Peet to recover for work done up to and including 13 January[32], but not thereafter. This means that $15,740 must be deducted for these specific meetings.

235 In addition to the specific meetings, in appendix 5e, Mr Dwyer has made a further general allowance for attendances at Peet internal meetings during January 2006 as follows: Mr Lennon at 1.2 hours per week and Mr Mulder for 2.4 hours per week, for four weeks. Mrs Richmond seeks a deduction of two weeks' allowance for each, totalling $1,200.[33] I will deduct two weeks, being the two weeks after 13 January.

236 Conclusion: The total sum of $16,940 will be deducted from Peet's claim in respect of work in 2006.

Other work done for the benefit of Peet [34]

237 There is a dispute as to whether Peet is entitled to charge, and has in fact charged, for work done between late 2002 and mid January 2006, which relates not to the inclusion of the Richmond land in the UGB, but to the negotiation of relevant contract documents. This involves a question of general principle, as well as a consideration of the evidence.

238 As far as the point of principle is concerned, I have already indicated that Peet should not be able to recover in respect of work done purely for its own benefit, for example, to negotiate the MOU and the draft heads of agreement and development agreement.

239 However, there is a practical problem here in identifying precisely what items should be disallowed as being for Peet's own benefit. Once again, the state of the evidence is less than satisfactory.

240 Annexures D and D.2 to the Richmond submissions list a number of items from the Dwyer reports, which total $54,890. The description of the work in those annexures includes references to "cashflow", "joint venture", "heads of agreement", "negotiation" and the like. Mrs Richmond invites me to conclude that those all reflect work done for Peet's own benefit, not the benefit of the Richmond land.

241 Mr Dwyer admitted that he did not draw a distinction between work Peet did to include the land in the UGB and work Peet did to seek to strike a deal with the Richmond family. The Peet lay witnesses also did not draw that distinction in their evidence. Mr Dwyer admitted that, had he been asked to draw that distinction, he would have approached his task differently.

242 Peet relies on Mr Dwyer's opinion that work done to formalise the joint venture agreements is compensable. That may be his opinion, but it is not an opinion that I share, for the reasons previously given.

243 By examining the descriptions in the relevant Dwyer appendices, as well as the lay witness statements, it appears that most of these items almost certainly do relate to work done for Peet's personal benefit in securing a deal and negotiating and drafting documents so as to protect its commercial interests.

244 However, Mrs Richmond's counsel did not cross-examine any of the lay witnesses in relation to these entries. Some of them may, notwithstanding their description, relate to work done at least in part for her benefit. Having considered each of the individual entries, I propose to disallow $50,000 of these claims.

245 Conclusion: The sum of $50,000 will be deducted from Peet's claim.

Work done in respect of the Carter land [35]

246 I have already addressed the Carter land in the context of Peet's claims for payment for work done before 21 November 2002 and Tract. Mrs Richmond argues that a further reduction of $2,650 is required for internal work done in connection with the Carter land.[36]

247 It is not clear why these specific items have been chosen, as there are other items in the Dwyer schedules which include a reference to "Carter" which are not challenged by Mrs Richmond, and at least one of the ones which she does challenge does not refer to "Carter".

248 The evidence in relation to Mr Dwyer's knowledge of the Carter land is quite unsatisfactory.

249 It is not clear what Mr Dwyer was told about the Carter land, or by whom. Even though the second Dwyer report acknowledged the need to exclude time relating to the Carter land, Mr Dwyer acknowledged that it was possible that the discovered documents provided to him did include time spent by Peet in respect of the Carter land. He said it was not possible for him to determine the exact quantum of time from records kept by Peet. There is no evidence that he or his staff made any enquiries in this regard. This is unsatisfactory from Peet's point of view.

250 Mrs Richmond's counsel cross-examined Mr Dwyer about the Carter land, but Mr Dwyer knew nothing about the underlying facts. None of the Peet lay witnesses was cross-examined about these entries, or about who decided which documents should be given to Mr Dwyer. If Mrs Richmond wanted to suggest that specific entries related to the Carter land (or, indeed, to other Peet projects), that should have been put to the appropriate lay witnesses.

251 In the circumstances, I am not prepared to discount these specific items identified by Mrs Richmond. However, the failure to clearly separate out work done for the Carter land is a matter which will be relevant to my final assessment of the quantum meruit.

The work of administrative staff [37]

252 The first Dwyer report includes a claim for $76,737.50 for work by Michael Harrington-Hawes[38], Nick Elliott[39] and unnamed Peet administrative staff,[40] in appendices 5, 5b, 5e, 5f, 5g and 5h.

253 The evidence in support of such a large claim for administrative staff is quite unsatisfactory.

254 Mr Dwyer said he spoke to some administrative staff, but could not remember who they were, what they said or what (if any) work those staff did for the Richmond project; it seems that he primarily spoke to them to get documents provided to him. Mr Dwyer's evidence is that he simply assumed there would have been other staff within Peet working on the project, and allowed $76,737.50 for their work. No proper basis is given for these calculations.

255 No evidence was given by Messrs Harrington-Hawes or Elliott or any administrative staff.

256 Nor did any of Peet's lay witnesses gave substantive evidence about who those staff were, or what, if any, work they did in relation to the Richmond land. There is the odd reference in their evidence to a receptionist having sent an email, or somebody having provided invoices for approval, but otherwise no indication that administrative staff played any real role in relation to this project. Given the very generous allowances sought for the preparation of reports and correspondence by the managers themselves, I would not be prepared to simply assume substantial involvement by administrative staff, without some proper evidentiary basis for doing so.

257 Peet says its lay witnesses formally "proved" the work of administrative staff, and that these proofs were not challenged by Mrs Richmond in cross-examination of those witnesses. But those witness statements contain no more than a formulaic verification of the accuracy of relevant appendices to the Dwyer reports. It is one thing to make a formulaic verification in relation to one's own time, a matter in respect of which one ought to have personal knowledge. But it is quite unacceptable to purport to do so in relation to other Peet employees, without even identifying who they were, what they did, or how the witness is able to give any evidence as to the accuracy of the very extensive time allocations for those witnesses.

258 There is not even clarity as to an appropriate hourly rate to charge for administrative staff. In the body of his report, Mr Dwyer claimed $125 per hour, but in appendix 5h, he used a figure of $100 per hour. In oral evidence, he could not explain the discrepancy between the two figures.

259 Peet's evidence in relation to this item, such as it is, carries so little weight that it is not fair to criticise Mrs Richmond's counsel for not having cross-examined on the topic. Whilst I initially contemplated disallowing this item in its entirety, because of the lack of proper proof, I have decided that it is fair and reasonable to allow Peet to recover $5,000 for administrative staff, being 50 hours at $100 per hour.

260 Conclusion: I will disallow $71,737.50 and allow $5,000 for the amount claimed for administrative staff.

261 In appendix 5g to the first Dwyer report, approximately $250,000 is allowed for email attendance. This allowance is in addition to time spent in pre-meeting tasks, travel time, reviewing submissions or reports and in the payment of consultant's invoices.

262 In determining the allowance for email, Mr Dwyer said that his staff reviewed all email correspondence available. In fact, Mr Dwyer only personally reviewed about 20 emails; otherwise, he "overviewed" the work his staff did. Based on his review of 20 emails, the information provided to him by his staff, and his experience in the field, Mr Dwyer came to the conclusion that 18 minutes was an appropriate allowance for each email. Mr Dwyer conceded that some email correspondence would have taken less than 18 minutes to deal with, and that, as a result, in order for the 18-minute average to be accurate, some emails would have taken 30 or 40 minutes to deal with, however he could not identify the type of emails that would have taken either 18 minutes or 30 or 40 minutes to deal with.

263 Mrs Richmond says I should conclude that 6 to 9 minutes would be a proper allowance for attendance on emails, reducing the allowance by $125,000 (9 minutes each) or $165,000 (6 minutes each) on the basis of time alone.

264 There are very few lengthy emails which have been tendered in evidence, and an average of 18 minutes each certainly seems excessive to me. Peet's evidence is not satisfactory in relation to such a large claim. Assessing as best I can, I propose to allow emails at an average of 9 minutes each, leading to a reduction of $125,000.

265 Mrs Richmond also argues that the allowance of 4 emails per week for Mr Lennon is excessive, as only 121 emails by Mr Lennon (over a four-year period) were tendered in evidence - this averages less than one email per week - and many of these emails related to Peet's efforts to strike a deal with the Richmond family - including some emails between Peet staff and their solicitors. Mrs Richmond urged me to accept that a reasonable allowance for Mr Lennon would be 2 emails a week, at 6 to 9 minutes per email, totalling $10,560.

266 Peet relies on the fact that each of its witnesses provided formal proofs of the amount of time spent on email, and Mrs Richmond could easily have challenged Mr Lennon's formulaic verification, but did not do so. I agree with that observation.

267 However, it is likely that these email allowances include emails which were for Peet's own benefit and not for the benefit of Mrs Richmond, given that neither the Peet lay witnesses nor Mr Dwyer drew that distinction in their evidence. This will need to be reflected in the final assessment of the quantum meruit claim.

268 Conclusion: There will be a reduction of $125,000 for emails.

Attendance by Anthony Lennon at meetings [42]

269 Appendix 10 to the second Dwyer report makes allowance for a further 100 hours of Mr Lennon's attendance at meetings at $400 per hour.

270 This allowance was based on a bundle of electronic calendar entries provided to Mr Dwyer by Peet's solicitors, after the preparation of the first Dwyer report. Mr Dwyer was instructed, in effect, that each of the calendar entries was relevant to the litigation, and he did not make any inquiries to confirm this. He did not know who made the decision to provide the entries to him.

271 No Peet employee gave evidence as to the decision-making process in providing those calendar entries to Mr Dwyer. In particular, Mr Lennon gave no evidence of being involved in the process of selection of these entries. His witness statement merely contains a formulaic verification of these entries. Mr Lennon had no discussions with Mr Dwyer, or anybody from Mr Dwyer's office, about these entries or anything else. The arbitrary allocation of 1.3 hours for Mr Lennon's time at each meeting was not based on anything Mr Dwyer had been instructed, or on knowledge of what occurred at the meetings.

272 Included within these further 100 hours are allowances for preparation, attendances and post-meeting work for six "corporate executive meetings" and one "board meeting" between June and December 2003.

273 In annexure E to the Richmond submissions, objection is taken to 14 hours of Mr Lennon's time in respect of that work (which, at $400 per hour, totals $5,600). Mrs Richmond does not suggest that Mr Lennon did not attend those meetings, merely that Peet has not established that the meetings had anything, or anything substantial, to do with the inclusion of the Richmond land in the UGB.

274 Certainly, Mr Lennon made no mention of any of the seven particular meetings in his witness statement or oral evidence. Nor did he, or any of the other directors, gave evidence, even at a very general level, as to how much time would typically have been spent at board or corporate executive meetings discussing individual projects. Nor is it apparent from the dates of any of the meetings why they would have been likely to have required substantial discussion of the Richmond project at a corporate executive or board level.

275 The court book includes minutes of some directors' meetings in 2004 and 2005 about the Richmond land, but none for the six meetings in question. Although some of those minutes show meetings devoted to the Richmond land, others merely show it as a single line entry in the managing-directors' report about ongoing projects.

276 By its very nature, any discussion at board or corporate executive level would be likely to have been about "big picture" issues, rather than day to day project issues. Securing a profitable deal with Mrs Richmond would clearly be of major concern at such levels. But, as already mentioned, Peet witnesses have not separated out time spent for the benefit of Mrs Richmond and time spent for Peet's own benefit. Even if the Richmond project was discussed at these meetings, in the absence of proper evidence, it is not possible to say whether what was discussed was for the benefit of Mrs Richmond.

277 For each of the seven meetings, Mr Dwyer has allocated to the Richmond project 1.3 hours for Mr Lennon's attendance, and .7 hours for his preparation and post-meeting work. For the reasons discussed, I am not satisfied that there is a proper evidentiary foundation for such allowances for these specific meetings.

278 Conclusion: The sum of $5,600 will be deducted from Peet's claim.

279 The annotation "Peet v Wyndham Council" appears next to about 30 computerised calendar entries for Messrs Lennon, Liali and Mulder, in appendix 10 to the second Dwyer report. They comprise a large number of the entries provided to Mr Dwyer in 2008, and the allowance made for them totals some $24,600. In so far as such entries are dated 2006, I have already dealt with them in another reduction.

280 Mrs Richmond argues that the items listed in annexure F to the Richmond submissions should be disallowed, as Peet's evidence does not establish that these meetings were for the benefit of the inclusion of the Richmond land in the UGB. Her primary submission is that the whole of that amount should be disallowed; alternatively, if the court is of the view that the attendances are for the benefit of the Richmond family in relation to the inclusion of the land in the UGB, the sum claimed is excessive and should be reduced by 80% (being a reduction of $19,600), given that the evidence is that Peet had a number of projects in the Wyndham area.

281 Peet says that Mr Lennon verified the hours in the second Dwyer report as being referable to the Richmond land. If Mrs Richmond wanted to suggest those entries were not properly referable to the land, she should have done so in cross-examination; she did not.

282 None of the lay witnesses was cross-examined about the "Peet v Wyndham Council" entries. However, Mr Dwyer was asked about them. He said the reference "Peet v Wyndham Council" was a description of the calendar appointment which Peet had with Wyndham Council.

283 Mr Dwyer said he was aware, from his initial instructions, that Peet had discussions with Wyndham Council during the course of the project, but he was not instructed what "Peet v Wyndham Council" meant; in particular, he did not assume it referred to a court or tribunal proceeding, and did not request any further information in relation to it. Had he been told it related to litigation between Peet and the council, he would have asked how it related to the work for the benefit of the Richmond land.

284 On the one hand, the fact that entries containing this description continued into 2006 does raise some doubt as to whether the work was for the benefit of the Richmond land.

285 On the other hand, given the formulaic verification by Mr Lennon, this is a matter where Mrs Richmond's counsel should have at least asked Mr Lennon to what "Peet v Wyndham Council" referred. Although, to a lawyer, the use of "v" or "versus" suggests litigation or some sort of legal dispute, there is no evidence as to what it meant to Mr Lennon. Even if he used "v" to refer to litigation, that may be a reference to a dispute relevant to the UGB issue, such as a panel hearing before the Wyndham Panel, which Mr Lennon did mention in his witness statement.

286 Conclusion: I will not disallow these specific items.

287 There are a number of electronic calendar entries for meetings described as "tentative". An allowance of $6,800 is claimed for them in appendix 11 to the second Dwyer report.

288 No specific evidence was led as to whether any of those meetings actually occurred or as to the process of preparation of diary entries.

289 Mr Dwyer conceded that reference to the word "tentative" could mean that the meetings referred to may not have occurred. He accepted it would have been prudent to have made further enquiries as to whether or not those meetings did in fact occur. He also accepted that, having not made those inquiries, he could not be confident the meetings took place.

290 Peet points out that it was not suggested to the relevant Peet witnesses, all of whom verified the time allocated to them in the second Dwyer report, that these meetings had not occurred. I agree with Peet that cross-examining Mr Dwyer on this point does not advance Mrs Richmond's claim for reduction for these allowances.

291 Although the description of the item itself may raise some doubts as to whether meetings occurred, the relevant witness statements do verify the accuracy of the entries, albeit only by the standard formula. Absent any cross-examination to test this point, I am prepared to accept that the meetings did occur.

292 Conclusion: There will be no deduction for this item.

Conclusion on specific items in the internal work claim

293 For the reasons given, the total claim for internal work of $815,965 should be reduced by $295,217.50, comprised of:

50,000.00 other work done for Peet's personal benefit

294 I accept that, because Peet does not ordinarily charge on an hourly basis, that has presented it with problems in substantiating its claim for internal work. That is not an uncommon problem in a case such as this, as Byrne J acknowledged in Brenner. A party in Peet's position must do the best it can to enable the court to determine what is fair and reasonable compensation for services it has rendered.

295 I have already mentioned a number of respects in which the general accuracy of Mr Dwyer's calculations must be doubted, including:

(a) The (mostly) formulaic verification of Mr Dwyer's calculations by the relevant Peet witnesses;

(b) The failure of Mr Dwyer to speak to any of the witnesses except Mr Mulder;

(c) Mr Dwyer's apparently uncritical acceptance that all documents provided to him related to work done for the benefit of the Richmond land;

(d) The lack of any evidence as to the selection process adopted by Peet or its solicitors in determining the relevance of documents provided to Mr Dwyer; and

(e) The paucity of comparative information obtained by Mr Dwyer as to hourly rates and industry practice.

296 I am not satisfied, as Peet asserts, that Mr Dwyer has probably underestimated the true amount of time Peet spent on work done for the benefit of Mrs Richmond. On the contrary, I am satisfied that he has almost certainly overestimated that work, in a number of respects. Of particular concern in that regard are the following:

(a) The failure to identify and remove work done for Peet's personal benefit in attempting to secure and document an appropriate commercial deal with Mrs Richmond; and

(b) The failure to identify and remove all work done by Peet for the benefit of the Carter land, not the Richmond land.

297 I have given Peet the benefit of the doubt in respect of a number of issues where Mrs Richmond's counsel could have put specific matters to relevant lay witnesses in cross-examination.

298 Nevertheless, it remains the fact that Peet bears the onus of persuading the court as to what is a fair and reasonable amount to allow on the quantum meruit. Having regard to the matters described in the preceding paragraphs, and assessing as best I can, I have concluded that there should be a further reduction of 10% applied to the total of $520,747.50.

299 Conclusion: The amount recoverable by Peet in respect of its internal costs claim will be $468,672.75.

300 I will not award Peet any amount in respect of what I have described as the 20% claim.

301 I will award Peet the following amounts by way of quantum meruit:

302 I will hear from the parties as to the precise form of orders, costs and interest.

[1] The land is known as Berry's Paddock (Certificates of Title Vol 8294 Fol 528 and Vol 3498 Fol 413) and Quarry Paddock (Certificate of Title Vol 3529 Fol 743).

[2] Although (as will be discussed later in these reasons) concepts of unjust enrichment are also relevant to the quantum meruit claim, it is convenient to refer to the now-abandoned claim for the entire increase in value of the land as the unjust enrichment claim.

[3] Although Peet also pleaded an entitlement to recovery on a quantum valebat basis, that was never pursued, presumably because Peet only supplied services, not goods, to Mrs Richmond.

[4] This was the same amount as was sought in respect of the unjust enrichment claim.

[5] [1987] HCA 5; (1986) 162 CLR 221

[6] At 227 per Mason and Wilson JJ, 256-7 per Deane J.

[7] [1993] VicRp 71; [1993] 2 VR 221.

[9] Pavey's case at 257; Horton v Jones [No 1] (1934) 34 SR (NSW) 359 at 368.

[10] Graham & Baldwin v Taylor, Son and Davis (1965) 109 SJ 793.

[11] The Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64.

[12] Way v Latilla [1937] 3 All ER 759.

[13] The other appendices to the first Dwyer report are Dwyer Corporate's letter to Peet's solicitors confirming their instructions and setting out their rates, a copy of the expert witness code of conduct and Mr Dwyer's CV.