Gray (Constructions) Pty Ltd v Hogan

The New South Wales Court of Appeal considered a dispute between Gray (Constructions) Pty Ltd, the builder, and Hogan, the owner, concerning an unwritten building contract. The core of the dispute revolved around the remuneration owed to the builder for work performed under what was alleged to be a cost-plus contract, in circumstances where the contract was not formally documented.

The Court was required to determine whether the builder was entitled to payment on a quantum meruit basis, and if so, what constituted a fair and just restitution for the work undertaken. This involved assessing whether the builder could recover the full cost of the work plus a reasonable profit margin, despite the absence of a formal, written agreement that would typically govern such claims under the *Building Services Compensation Act 1969*.

The Court's reasoning focused on the principles of restitution and the equitable considerations arising from the unwritten nature of the contract. It was held that where a cost-plus contract exists but is not formally documented, a builder may still be entitled to recover the costs incurred, along with a reasonable profit. The Court applied principles of fair and just restitution to ensure the builder was not unjustly enriched by the owner's receipt of the completed work, while also considering the absence of a formal agreement that might otherwise have dictated the profit margin.

The appeal was allowed.