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Mann v Paterson Constructions Pty Ltd

Mann v Paterson Constructions Pty Ltd

Case [2018] VSCA 231 12 September 2018

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0055

PETER MANN	First applicant
and
ANGELA MANN	Second applicant
v
PATERSON CONSTRUCTIONS PTY LTD (ACN 135 579 770)	Respondent

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JUDGES:	KYROU, McLEISH and HARGRAVE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	17 August 2018
DATE OF JUDGMENT:	12 September 2018
MEDIUM NEUTRAL CITATION:	[2018] VSCA 231
JUDGMENT APPEALED FROM:	Mann v Paterson Constructions Pty Ltd [2018] VSC 119 (Cavanough J)

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RESTITUTION – Building contract – Whether quantum meruit award available to builder who accepts owners’ repudiation of contract – Sopov v Kane Constructions Pty Ltd (No 2) (2009) 24 VR 510 applied.

RESTITUTION – Building contract – Owners’ repudiation accepted by builder – Claim in quantum meruit – Whether regard must be had to builder’s actual costs in assessing amount payable – Whether Victorian Civil and Administrative Tribunal erred in assessing amount payable on basis of quantity surveyor’s evidence rather than actual costs – Appeal dismissed – Sopov v Kane Constructions Pty Ltd (No 2) (2009) 24 VR 510 followed.

BUILDING AND CONSTRUCTION – Building contract – Owners’ repudiation accepted by builder – Whether Domestic Building Contracts Act 1995 s 38 precludes recovery on quantum meruit basis for orally agreed variations – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr T J Margetts QC with Mr G F Hellyer	Telford Story & Associates
For the Respondent	Mr A J Laird	Kalus Kenny Intelex

KYROU JA
McLEISH JA
HARGRAVE JA:

Introduction and summary

The applicants, Peter and Angela Mann, are the owners of 6 Langtree Court in Blackburn. The respondent, Paterson Constructions Pty Ltd, is a construction company that builds residential properties. Its director is Stephen Paterson.

On 4 March 2014, the applicants entered into a written domestic building contract with the respondent for the construction of two double-storey townhouses on the property. The works specified in the contract commenced on 10 March 2014 but were not completed by the due date of 17 December 2014.

Unit 1 was completed and handed over to the applicants on 19 March 2015. On 16 April 2015, before unit 2 was completed, the applicants asserted that the respondent had repudiated the contract and purported to terminate the contract by accepting the alleged repudiation. On 28 April 2015, the respondent asserted that the applicants’ conduct constituted a repudiation of the contract and purported to accept their repudiation.

On 25 June 2015, the respondent made an application to the Victorian Civil and Administrative Tribunal (‘VCAT’) in which it sought relief on a quantum meruit basis or, in the alternative, sums allegedly due under the contract. Both forms of relief included amounts for variations to the works.

On 12 December 2016, VCAT found that the applicants had orally requested the variations claimed by the respondent, that they had repudiated the contract by their purported termination and that the respondent had determined the contract when it accepted that repudiation on 28 April 2015.[1] VCAT ordered the applicants to pay the respondent the quantum…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Mann v Paterson Constructions Pty Ltd

Details

AGLC: Mann v Paterson Constructions Pty Ltd [2018] VSCA 231
Case: [2018] VSCA 231
Decision Date: 12 September 2018

CaseChat Overview and Summary

In Mann v Paterson Constructions Pty Ltd, the plaintiff, Mann, brought an action against the defendant, Paterson Constructions, seeking restitution for work done under a building contract that had been repudiated by the owners. The dispute came before the court following an earlier decision by the Victorian Civil and Administrative Tribunal (VCAT) which had awarded Mann a quantum meruit sum based on the evidence of a quantity surveyor rather than Mann’s actual costs. Mann appealed the VCAT decision, arguing that the assessment should have been based on actual costs and not on the quantity surveyor’s evidence. Additionally, Mann sought to argue that section 38 of the Domestic Building Contracts Act 1995 precluded recovery for orally agreed variations on a quantum meruit basis.

The court was required to determine whether the VCAT was correct in basing its assessment on the quantity surveyor’s evidence rather than Mann’s actual costs, and whether section 38 of the Domestic Building Contracts Act 1995 precluded recovery for orally agreed variations on a quantum meruit basis. The court considered whether the VCAT had erred in its approach and whether the quantum meruit award should have been based on Mann’s actual costs. Additionally, the court had to examine the effect of section 38 of the Act on the availability of a quantum meruit claim for orally agreed variations.

The court found that the VCAT had not erred in basing its assessment on the quantity surveyor’s evidence rather than Mann’s actual costs. The court held that the quantity surveyor’s evidence was a reliable and appropriate method of assessing the value of the work done, and that it was not necessary to consider Mann’s actual costs. The court also held that section 38 of the Domestic Building Contracts Act 1995 did not preclude recovery for orally agreed variations on a quantum meruit basis. The court followed the decision in Sopov v Kane Constructions Pty Ltd (No 2) and held that the acceptance of the owners’ repudiation of the contract did not prevent Mann from recovering on a quantum meruit basis. The appeal was dismissed.

The court’s final order was that the appeal be dismissed and that the VCAT’s decision be affirmed. The court held that the VCAT had not erred in basing its assessment on the quantity surveyor’s evidence and that section 38 of the Domestic Building Contracts Act 1995 did not preclude recovery for orally agreed variations on a quantum meruit basis. The court followed the decision in Sopov v Kane Constructions Pty Ltd (No 2) and held that the acceptance of the owners’ repudiation of the contract did not prevent Mann from recovering on a quantum meruit basis.

Orders