Quantum meruit in professional services - a Court of Appeal win

The New South Wales Court of Appeal has delivered a significant judgment in Locke v H.C. Loneragan & Company Pty Ltd as trustee for the Loneragan Family Trust t/as Quantum Forensic Solutions (QFS) [2025] NSWCA 166. The decision offers important clarification on the application of quantum meruit principles in the professional services context, particularly regarding entitlement to fair remuneration for work performed beyond the scope of an initial agreement.

Background

Mr Brian Locke, a former director of Gold and Copper Resources Pty Ltd (GCR), engaged QFS during an internal investigation into alleged “spending discrepancies”. An initial agreement (“Phase 1”) capped fees at $20,000, but QFS continued to provide extensive forensic accounting services beyond that scope. The work involved analysing “thousands and thousands” of transactions over eight years, reconciling records across multiple sources, and liaising with GCR’s accountants.

QFS issued invoices totalling over $219,000. Mr Locke paid only $30,000. The District Court found that all post-Phase 1 work was performed at Mr Locke’s request and awarded the unpaid balance on a quantum meruit basis. Mr Locke appealed, challenging both the factual findings and the sufficiency of the evidence supporting the fees.

Key Issues on Appeal

1. Browne v Dunn: Whether the trial judge erred by drawing inferences adverse to Mr Locke without putting them to him in cross-examination.

2. Quantum Meruit: Whether there was sufficient evidence to establish that the rates and hours charged were fair and reasonable.

The Court of Appeal’s Findings

The Court (Bell CJ, Adamson JA, McHugh JA) unanimously dismissed the appeal and rejected all grounds of appeal:

• No breach of Browne v Dunn

  The Court confirmed that the rule is concerned with fairness, not with requiring every legally adverse inference to be put to a witness. Mr Locke’s evidence was not contradicted by the inferences drawn, and he had every opportunity to rebut QFS’s case.

• Fair and reasonable remuneration established

  The Court restated that quantum meruit is a factual inquiry; the ultimate question is what is fair and reasonable in the circumstances and not simply the market rate.

  Crucially, the Court held that:

• Mr Locke’s failure to dispute the invoices, despite receiving detailed time records and being actively involved in the work, was an admission by conduct that the rates and hours were reasonable.

• Rates agreed in the earlier contract for similar work provided persuasive evidence of fairness.

• Professional obligations of accountants to bill reasonably further supported the conclusion.

• The scale and complexity of the work, involving 1,500+ recorded hours, justified the time claimed.

Why this case matters

This decision reinforces key principles for quantum meruit claims in the professional services context:

1.  A party can recover reasonable remuneration for services performed outside the scope of a contract, even where no fresh contract exists.

2. Silence, ongoing engagement, and partial payments can be powerful evidence of acceptance of charges.

3. Detailed records and transparent billing, coupled with the client’s knowledge of and involvement in the work, will carry significant weight in court.

4. The rule in Browne v Dunn does not extend to every inference or legal characterisation of conduct.

This decision is a strong endorsement of the proposition that a well-documented, transparently billed professional service, coupled with a client’s knowledge and acquiescence, will likely withstand attack in court. It also underscores the evidentiary power of detailed time records and the client’s own conduct in quantum meruit claims.

Our role

We acted for QFS at trial and on appeal. The Court unanimously dismissed the appeal and ordered costs in our client’s favour, a resounding endorsement of QFS’s entitlement to payment and an important clarification of quantum meruit principles in professional services disputes.

The Court’s decision reflects the strength of our client’s position and the clarity by which the evidence supported their entitlement to payment. For legal practitioners, it is also a timely reminder; in complex, high-value engagements, thorough documentation and clear, consistent conduct can be as decisive as any expert report.

Authors: Gavin Stuart, Gilbert Olzomer & Yasmin Humaidan

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.