JUDGE:	Cavanough J
WHERE HELD:	Melbourne
DATE OF HEARING:	1-2 June 2017
DATE OF JUDGMENT:	19 March 2018
CASE MAY BE CITED AS:	Mann v Paterson Constructions Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 119

---

RESTITUTION – Work and labour done – Building contract – Wrongful repudiation accepted by builder – Quantum meruit as alternative to contract damages – Measure of value – Relevance of contract price – Relevance of builder’s actual costs – Undocumented variations to scope of works – Whether such variations affect quantum meruit claim by virtue of Domestic Building Contracts Act 1995 s 38.

ADMINISTRATIVE LAW – Appeal from VCAT on questions of law – Whether VCAT erred in law in calculating quantum meruit for building work – No error of law – Appeal dismissed – Victorian Civil and Administrative Tribunal Act 1998 s 148.

---

APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr T Margetts QC with Mr G Hellyer	Telford Story & Associates
For the Defendant	Mr A Laird	Klaus Kenny Intelex

HIS HONOUR:

In 2014 the applicants, Peter and Angela Mann, wanted to have two units built on land they owned in Blackburn. One unit would be for renting out as a residential investment property and the other would be for them and their children to live in. In March of that year, the Manns entered into a standard form written contract with the respondent, Paterson Constructions Pty Ltd (‘PCPL’), for the construction of the two units. PCPL is a ‘one man company’. It is owned and operated by Mr Stephen Paterson, who is an experienced builder and someone who turns his hand to the work of many different building trades. The building contract was subject to the Domestic Building Contracts Act 1995 (‘the Act’) (as in force in March 2014), being a ‘major domestic building contract’ within the meaning of the Act.

By March 2015 the investment unit had been virtually completed and the home unit was quite close to completion. However, a dispute had arisen between the Manns and PCPL over moneys claimed and other things. The Manns purported to terminate the building contract and to exclude PCPL from the site. By letters from their respective solicitors, the parties accused each other of wrongful repudiation of the contract.

PCPL commenced a proceeding against the Manns in the Building and Property List of the Victorian Civil and Administrative Tribunal (VCAT), invoking VCAT’s jurisdiction under Subdivision 1 (‘Domestic Building Disputes’) of Division 2 of Part 5 of the Act (as it stood in 2015). The Manns lodged a counterclaim in the same proceeding.

In 2016 the proceeding came before Senior Member Walker for hearing. Many issues were raised. The hearing ran for over three weeks. On 12 December 2016 Senior Member Walker published a written…

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 [2017] VSC 119
Case: [2017] VSC 119
Decision Date: 19 March 2018

CaseChat Overview and Summary

Mann and Paterson Constructions Pty Ltd were involved in a dispute before the court, where the claimant sought restitution for work and labour done under a building contract. The builder had wrongfully repudiated the contract, and the claimant accepted this repudiation. The primary legal issue was the appropriate measure of the value of the work done in calculating the quantum meruit claim. The court needed to determine whether the contract price or the builder’s actual costs were relevant to this calculation, especially in the context of undocumented variations to the scope of work. Additionally, the court had to consider whether section 38 of the Domestic Building Contracts Act 1995 affected the quantum meruit claim.

The court found that the measure of quantum meruit should be based on the value of the work done rather than the contract price or the builder’s actual costs. It emphasised that the value of the work was objectively determined by what a reasonable person would have paid for the work performed, considering the scope of work and any variations. The court also ruled that undocumented variations did not necessarily invalidate the quantum meruit claim, provided that the variations were not in themselves unlawful or fraudulent. The tribunal had correctly applied these principles in its calculation of the quantum meruit.

The appeal from the Victorian Civil and Administrative Tribunal was dismissed as there was no error of law in the tribunal’s decision. The tribunal had appropriately assessed the value of the work done by the builder, taking into account the variations and the reasonable person test. The court held that the tribunal’s approach to calculating quantum meruit was consistent with established legal principles and the relevant statutory provisions. The appeal was therefore dismissed under section 148 of the Victorian Civil and Administrative Tribunal Act 1998.

Orders