Myrine Pty Ltd v Mesiti
[2006] WADC 106
•21 JULY 2006
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: MYRINE PTY LTD -v- MESITI & ANOR [2006] WADC 106
CORAM: STAVRIANOU DCJ
HEARD: 18-21 APRIL 2006
DELIVERED : 21 JULY 2006
FILE NO/S: CIV 524 of 2004
BETWEEN: MYRINE PTY LTD
Plaintiff
AND
VINCENT MESITI
First DefendantCASSIA HOLDINGS PTY LTD
Second Defendant
Catchwords:
Contract - Formation of contract - General contractual principles - Offer and acceptance - Turns on own facts
Quasi contract - Quantum meruit - Building work carried out by unregistered builder - Whether builder may claim reasonable cost of the work on a quantum meruit - Builders' Registration Act 1939 s 4 - Claim in unjust enrichment not available
Legislation:
Builders Registration Act 1939, s 4
Result:
Claim dismissed
Representation:
Counsel:
Plaintiff: Mr R R Cywicki
First Defendant : Mr P D Quinlan
Second Defendant : Mr P D Quinlan
Solicitors:
Plaintiff: Williams & Co Lawyers
First Defendant : Curwood & Co
Second Defendant : Curwood & Co
Case(s) referred to in judgment(s):
Ardon Enterprises Pty Ltd v Mizen [1999] WADC 83
Builders' Registration Board of Western Australia v Roroka Pty Ltd, unreported; SCt of WA; Library No 8776; 25 March 1991
Great City Pty Ltd v Kemayan Management Services (Australia) Pty Ltd & Ors [1999] WASC 70
Jones v Dunkel (1959) 101 CLR 298
Marist Bros Community Inc v Shire of Harvey (1995) 14 WAR 69
Pavey & Matthews Pty Ltd v Paul (1986) 162 CLR 221
Pownall v Conlan Management Pty Ltd (1995) 12 WAR370
Case(s) also cited:
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305
POS Media Online Limited v Queensland Investment Corporation [2001] FCA 809
STAVRIANOU DCJ: On 5 April 2002 the second defendant acquired a property situated at 408 Main Street, Balcatta. A home on the land was demolished and three units were then constructed and sold by the second defendant. The plaintiff's claims arise out of the construction and sale of the units.
The claims made are in contract and on a quantum meruit. A pleaded claim for damages reliant upon a contravention of s 52 of the Trade Practices Act 1974 was not pursued.
The claim in contract is for damages for breach of a Partnership Agreement, alternatively, breach of what is described as a Construction Agreement. The quantum meruit claim is for work performed by the plaintiff in procuring the construction of the units.
The net profit from the sale of the units was $161,119.37. The contractual claim is for $80,559.68 being one half of that sum.
The quantum meruit claim is for $46,750.
Dramatis personae
The plaintiff is an investment company. Mr Fortunato Luglio is a director of that company and also a director of Corvus Pty Ltd which carries on business as a concrete supplier.
The first defendant is a plumber. He is a director of the second defendant which carries on business as a plumbing contractor under the name of Four Waters Plumbing & Gas.
Mr Gerardo Giustiniano is a registered builder and has known Mr Luglio for approximately 20 years. Mr Giustiniano is associated with a firm known as Pacific Building Co which carries on business as a builder.
Mr Luglio, Mr Giustiniano and a Mr Angelo Carbone (now deceased) were for a number of years shareholders in an investment company known as AGL Projects Pty Ltd ("AGL").
Delport Homes is a construction firm operated by Mr Nick Crupi.
The pleadings
The primary issues in relation to the contractual claims concern the existence of the agreements and performance.
The plaintiff pleads the formation and terms of the Partnership Agreement as follows:
"5.On or about 17 July 2002, the Plaintiff and the Second Defendant entered into a partly oral and partly written partnership for the development of the Land ('the Partnership Agreement').
Particulars
The Partnership Agreement consists of a document dated 17 July 2002, a copy of which may be inspected at the offices of Williams & Co, Lawyers at any mutually convenient time, and conversations between Mr Fortunato Luglio on behalf of the Plaintiff and the First Defendant on behalf of the Second Defendant, and by the conduct of the parties from 17 July 2002 until May 2003.
6.There were terms of the Partnership Agreement that:
the Second Defendant would contribute to the Land;
the Plaintiff would procure the construction of three residential units ('the Units') on the Land at rates below the then prevailing rates for labour and materials for the construction of residential units;
the Second Defendant would pay the costs of the construction works procured by the Plaintiff;
the Plaintiff would sell the Units on the Land;
the Plaintiff and the Second Defendant would share equally the profits from the sale of the Units, after deducting the purchase price of the Land, the costs of the construction works procured by the Plaintiff, interest charges incurred by the Second Defendant in respect of the purchase price of the Land and the construction costs, and the selling costs of the Units."
The plaintiff pleads in the alternative what is described as a Construction Agreement as follows:
"7.Alternatively, in or about July 2002, the Plaintiff and the First and Second Defendants entered into an agreement ('the Construction Agreement').
Particulars
The Construction Agreement consists of a document dated 17 July 2002, a conversation between Mr Fortunato Luglio on behalf of the Plaintiff and the First Defendant on behalf of himself and the Second Defendant in or about July 2002, and the conduct of the Plaintiff, the First Defendant and the Second Defendant from July 2002 until May 2003.
8.There were terms of the Construction Agreement that:
8.1the Plaintiff would procure the construction of the Units on the Land at rates below the then prevailing rates for labour and materials for the construction of residential units;
8.2the Second Defendant would pay the costs of the construction works procured by the Plaintiff;
8.3the Plaintiff would sell the Units on the Land;
8.4the Plaintiff and the First or Second Defendant would share equally the profits from the sale of the Units after deducting the purchase price of the Land, the costs of construction works procured by the Plaintiff, interest charges incurred by the Second Defendant in respect of the purchase price of the Land and the construction costs, and the selling costs of the Units.
9.It was an implied term of the Partnership Agreement, alternatively the Construction Agreement, that the parties would do all that was necessary on their part to enable the other party to have the benefit of the Partnership Agreement, alternatively the Construction Agreement, including that each party would:
9.1use its best endeavours to complete all necessary steps under the Partnership, alternatively Construction Agreement, and cause same to be effected;
9.2account to each other for any profit or loss arising from the sale of the Units.
Particulars
The term is implied by law. Alternatively, it is reasonable and equitable, obvious in its terms, required to give business efficacy to the Partnership Agreement, alternatively Construction Agreement, and is not inconsistent with any express terms thereof."
The defendants deny the existence of either the Partnership Agreement or the Construction Agreement. It is pleaded that the second defendant entered into a contract with Delport Homes for the construction of the units at 408 Main Street. The defendants plead the construction of the units was procured by the first defendant on behalf of the second defendant.
The defendants deny the plaintiff is entitled to recover on a quantum meruit.
The defendants deny any request having been made to the plaintiff to perform any work in relation to the development of the three units. The defendants further plead that there was no benefit conferred upon them by the plaintiff, and further that any work performed by the plaintiff was done officiously or as a volunteer.
Reliance is placed by the defendants upon s 4 of the Builders Registration Act 1939 to defeat the plaintiff's quantum meruit claim.
AGL
Towards the end of 2001 AGL was involved in the purchase of and development of units on a property at 158 Main Street, Osborne Park. At about that time Mr Carbone was taking steps to extricate himself from AGL.
By letter dated 5 December 2001 Mr Carbone wrote to Mr Luglio and Mr Giustiniano requesting $223,000 for what was described as "the total payment figure required to exclude me from all dealings with AGL". At about that time the first defendant was tendering on behalf of the second defendant to perform the plumbing work for the development at 158 Main Street. Mr Giustiniano suggested to the first defendant that he should buy into AGL for the $223,000 which Mr Carbone had requested.
Financial accounts for AGL were prepared up to 31 March 2002 and a copy was provided to the first defendant by the accountant for AGL. Ultimately the first defendant did not proceed with the purchase of Mr Carbone's share in AGL.
The acquisition of 408 Main Street, Balcatta
On 3 March 2002 408 Main Street, Balcatta was auctioned. Mr Luglio and the first defendant attended the auction. It was Mr Giustiniano's evidence that he had seen the property prior to the auction but on 3 March 2002 he was in Mandurah. It was his evidence that he had spoken to Mr Luglio on the day of the auction by mobile telephone and had told him to buy the property for $162,000. Mr Giustiniano gave evidence that "we were looking at the block". When questioned he said that the reference to "we" was a reference to AGL. He said that if he had been at the auction AGL would have purchased the property.
Mr Luglio's evidence was that there were discussions about development of the property before the auction. The evidence of the first defendant was that there were no discussions with him. I accept his evidence in that respect. Mr Giustiniano did not give evidence as to any pre‑auction discussions involving himself Mr Luglio and the first defendant.
The first defendant's evidence which I accept was that he bid on his own behalf at the auction and was the successful purchaser for $162,000. He had been looking out for a property and had seen it advertised in the newspaper. I accept that at the auction Mr Luglio and the first defendant were bidding against each other. The evidence of Mr Giustiniano provides some support for the first defendant's version of the events at the auction. In any event as I have said I accept the first defendant's evidence.
Following the auction the first defendant signed the contract to purchase on behalf of the second defendant. The contract for sale of the property makes no reference to either the plaintiff or Mr Giustiniano. Following the auction and whilst the first defendant was writing out the deposit cheque Mr Luglio spoke to the first defendant and said he had paid too much for the block.
The settlement of the sale was completed on 5 April 2002.
Tripartite Negotiations
After the auction there were discussions between Mr Luglio, Mr Giustiniano and the first defendant concerning the development of 408 Main Street.
Mr Giustiniano's evidence was that he attended a meeting with Mr Luglio and the first defendant. He was unsure as to where the meeting occurred but told me that an agreement was reached in relation to the development.
The terms of the agreement were that the second defendant would finance the development, Mr Giustiniano's building firm Pacific Building would be the registered builder and the plaintiff would do the site supervision, site labouring and arranging for the site . Mr Giustiniano prepared a cost plus construction contract. The cost plus contract did not provide for any remuneration for services to be performed by Pacific Building. In that circumstance Mr Giustiniano told me that he prepared a document described as a memorandum of understanding.
The memorandum of understanding provided for an equal division of the profit from the development and sale of the units between the plaintiff, the second defendant and Pacific Building.
The memorandum was in the following terms:
"IN RELATION TO THREE UNIT DEVELOPMENT ON LOT 33 H/N 408 MAIN STREET BALCATTA
IT IS AGREED THAT CASSIA HOLDINGS PTY LTD PAYS FOR THE PURCHASE OF THE LOT AND THE COST OF THE THREE‑UNIT DEVELOPMENT.
IT IS AGREED THAT PACIC [sic – PACIFIC] BUILDING CO ENTERS INTO A BUILDING CONTRACT WITH CASSIA HOLDINGS PTY LTD FOR THE COST ONLY OF THE BUILDING WORKS.
(NO BUILDERS FEES)
IT IS AGREED THAT MYRINE PTY LTD PROVIDES THE SUPERVISION AND THE SITE LABOUR FOR THE PROJECT.
IT IS AGREED THAT UPON THE SALE OF THE UNITS CASSIA HOLDINGS AFTER DEDUCTING FOR THE COSTS OF THE BUILDINGS AND THE COSTS OF THE INTERESTS FOR THE PROJECT PAYS THE REMAINDER <PROFIT> IN THREE EQUAL SHARES TO:
CASSIA HOLDINGS PTY LTD AND MYRENE PTY LTD AND GIUSTINIANO NOMINEES PTY LTD."
Mr Giustiniano gave the memorandum to the first defendant who told him that he would "have to run it past or get approval by his accountant". At about the same time as the discussions in relation to the memorandum of understanding occurred the first defendant, Mr Giustiniano and Mr Luglio were discussing the acquisition by the first defendant of Mr Carbone's share in AGL.
Ultimately the arrangement sought to be documented by the memorandum of understanding did not proceed. Before Mr Giustiniano withdrew from the negotiations Pacific Building had done preliminary work in relation to the development. Mr Giustiniano's evidence relevantly was as follows:
"In fact ultimately this arrangement, as it's described there, didn't get agreed to and didn't go ahead. That's right, isn't it?‑‑‑That's because I pulled out.
Yes. But before you pulled out, before you dropped out of the deal, Pacific had done some preliminary work in relation to this development?‑‑‑Not a lot.
Not a lot but?‑‑‑Some work, yes.
In anticipation that this might come off, Pacific were?‑‑‑Yes, I remember we were having a problem getting the plans approved because of a boundary fence and Mr Luglio went and saw the neighbour and he got him to sign the plan because he knew somebody in the family. This was happening through my office. Luglio was doing the running. I was involved in that and in the signing of the job because earlier I booked the demolition contractor. He didn't finish the job but I commenced him.
As I say, I'm not suggesting that you got particularly far but preliminary work was done in terms of getting some quotes and so on in anticipation that you might sign a building contract with Cassia. Is that right?‑‑‑Well, as far as I was concerned, I already had a contract. It was just a matter of delivering the form that I already prepared and gave to Mr Mesiti, and he took it to his accountant. But because he wasn't bringing it back, one day – I felt really uncomfortable. I asked for it and I said, 'What's happening about it?' He says, 'Oh, look, we have to talk. We need to determine what's in the cost.' I said, 'Is this guy for real.'
For example, Pacific were on the original application for a building licence. Is that right?‑‑‑Yes.
And that's because this memorandum of understanding was still up in the air at that stage?‑‑‑Like I said – I don't know if you heard me – verbally I thought we had a contract in place. Everything was a goer. Mesiti had the finance, I had the ability as a builder. Lucky had the ability as supervisor. Everything was going for it. Everything was happening except when I didn't feel comfortable any more when I asked – got asked what I thought was an odd question."
The effect of the tripartite arrangement embodied in the memorandum of understanding would have been that the second defendant would provide the land and meet all the building costs. Mr Giustiniano would allow his building licence to be utilized and the plaintiff would carry out supervision and site labour. The profit would be divided three ways. Whilst Mr Giustiniano was to arrange construction with no builder's fees the defendants were providing the land which had been acquired for $162,000 and meeting all of the construction costs. Much was made in the cross‑examination of the first defendant of the tripartite negotiations. Notwithstanding the extensive cross‑examination of the first defendant I am satisfied he was an honest, truthful and reliable witness.
Site development
In March 2002 and June 2002 the defendants obtained quotations from builders for development of three units on 408 Main Street, Balcatta. The quotation of 17 March 2002 provided for construction on the bases of a "cost plus contract based on 17%". The quote of 23 June 2002 provided for a fee of "13.5 per cent of total construction costs".
By letter dated 25 June 2002 Murphy Demolition provided a quotation to the first defendant for the demolition work required at 408 Main Street, Balcatta.
On 9 July 2002 the second defendant received approval from the City of Stirling to develop three units on 408 Main Street. The City issued a building licence to the second defendant on the 11 July 2002.
By letter dated 13 September 2002 Mr Giustiniano wrote to the City of Stirling withdrawing his company Pacific Building as the builder for 408 Main Street.
By written agreement dated 15 August 2002 Delport Homes agreed with the second defendant to construct three brick and tile units at 408 Main Street. The consideration expressed in the agreement was "Cost plus 5%." Nowhere in the written agreement is there a reference to work having been performed or to be performed by the plaintiff.
Before execution by the parties of the agreement dated 15 August 2002 Mr Crupi on behalf of Delport Homes presented a different form of agreement to the first defendant for execution by him. The agreement described the owners of the property as being the plaintiff and the first defendant. The first defendant refused to sign the agreement because of its reference to the plaintiff. The first defendant's evidence was that Mr Crupi took the agreement away and amended it by deleting the reference to the plaintiff. The version which named the plaintiff as a party referred to the owner as paying to the builder the sum of $210,000 as the consideration for the work to be done. As I have said the final form of agreement was an agreement which provided for a consideration based upon construction cost plus five per cent.
Pursuant to the executed costs plus agreement with Delport Homes three units were constructed at 408 Main Street. Invoices were rendered by Delport Homes to the second defendant for work done and were paid for by the second defendant.
Negotiations and discussions between plaintiff and first and second defendants
At trial Mr Luglio had known the first defendant for approximately five years. They had been introduced by a Mr John Italiano.
The agreements sought to be relied upon by the plaintiff are pleaded to have been made on 17 July 2002. Particulars of the statement of claim were delivered and refer to a number of conversations, a document dated 17 July 2002 and conduct of the parties from 17 July 2002 until May 2003.
Mr Luglio's evidence was that the relevant discussions were between himself representing the plaintiff and the first defendant representing the second defendant.
Mr Luglio gave evidence that he gave the document dated 17 July 2002 to the first defendant whilst they were on a site in Main Street. The particulars of claim filed on 12 April 2006 referred to a "conversation which occurred on or about 17 July 2002, though the time and place of such conversation is not known."
Mr Luglio's evidence was:
"What happened to that agreement?‑‑‑A few weeks down the track Mr Giustiniano was over‑committed with the insurance and he had other commitments, so that was – that agreement did not – did not go ahead.
Okay, and did you have a further meeting with Mr Mesiti?‑‑‑Yes, we had meetings with him to see what's going to happen.
When did that occur?‑‑‑That could have been really – including in the car.
Don't just say 'could have'. If you don't know, say you don't know?‑‑‑I don't know.
Okay, but you recall having a meeting with Mr Mesiti?‑‑‑Yes, we had meetings over the phone or in the car.
Do you recall what was discussed‑ ‑ ‑?‑‑‑We discussed that we could go ahead and build the project, do the development on the site between us two, but we needed a builder.
But when you say 'between us two, was that discussed as to who the 'us two' would be?‑‑‑Yes, Myrine and Cassia.
What would Cassia do in this agreement?‑‑‑Cassia was to provide all the finance for the project.
What were you to do?‑‑‑I was to ‑ ‑ ‑
Or should I say what was your company to do?‑‑‑I was to provide the subcontractors, get prices for them, at the best prices possible, help on site as much as possible.
Yes, and what else?‑‑‑And then when the project was finished we were going to split the profits.
How were the profits to be split?‑‑‑The profits were to be split, take all the cost of the block, the cost of the building and whatever is left, whether it's profit or loss, to be shared between the two companies fifty‑fifty.
Who was to be responsible for the sale of the units?‑‑‑The sale of the units I had – I was a director in ‑ ‑ ‑
Listen to the question. Who was to be responsible for the sale of the units?‑‑‑Well, it would have to be Mr Mesiti because that was his money. I was just going to organise the selling.
How were you to do that?‑‑‑Because I was a director in Acton real estate and we decide – Vince and I decide to let Acton real estate sell the – actually, he did not want to first to use Acton real estate but then because I was a partner there or a director he come up, said it's going to be funny for us – for me being involved in a project and have another real estate selling the project. So we decided Acton would sell it.
I wonder if you would look at this bundle, this book of documents. It's the plaintiff's book of documents.
Be careful, it's held with a metal clip. If you can turn to page 123. The page number is found on the right bottom hand corner?‑‑‑Yes.
Firstly, can you identify that document?‑‑‑Yes.
Who prepared that document?‑‑‑Myself and my daughter.
When was it prepared?‑‑‑This was prepared on 17 July 2002.
Why was it prepared?‑‑‑Was prepared because myself and Giustiniano we done another joint venture exactly the same as this at number 458 Main Street and Mr Mesiti seen that and I've sort of – and I copy that and gave a copy to Mr Mesiti.
What was his response when he received a copy of that document?‑‑‑His response is said he's going to show to his lawyer and then he will come back to me.
And did he come back to you?‑‑‑No, he didn't.
Did you ever raise that document with him again?‑‑‑Yes, I have.
What was his response?‑‑‑He said he hasn't seen it yet so when he sees it he will come back to me.
Did you ever press Mr Mesiti to sign and return that document?‑‑‑Yes, I have.
What was his response?‑‑‑He said to him once, 'When we do this project are we partners or what are we doing?' He said, 'What were you doing here if you're not a partner?' "
The first defendant gave evidence that there were negotiations between himself and Mr Luglio concerning the development of 408 Main Street but that he did not see the document dated 17 July 2002 until legal proceedings were commenced. I accept that evidence.
The first defendant gave evidence of a document prepared by him and dated 7 August 2002 and that he presented the document to Mr Luglio on or about that date and that Mr Luglio's reaction was to screw the document up. Mr Luglio denied that he received the document.
The first defendant's evidence which I accept was that he sent the document of 7 August 2002 to a friend by facsimile on that date. The document produced had a facsimile date of 7 August 2002. In all the circumstances I consider that the document was given to Mr Luglio as the first defendant said in evidence.
It was shortly after 7 August 2002 that the negotiations with Delport Homes to take over as the builder for the units occurred. Following the execution of the costs plus agreement with Delport Homes on about 15 August 2002 Mr Luglio again approached the first defendant concerning being involved in the development. The first defendant then prepared a further document for consideration by the plaintiff. The proposed agreement dated 21 September 2002 included terms that the plaintiff would provide and guarantee 50 per cent of finance towards the total construction of the units and that the balance of profits would be divided equally between the plaintiff and the second defendant. The first defendant's evidence which I accept was that he gave the document to Mr Luglio who screwed it up.
The first defendant gave evidence which I accept that the terms in his document dated 21 September 2002 were never agreed and that on 25 September 2002 he wrote to the plaintiff and Pacific Building in terms that:
"…Furthermore, Cassia Holdings Pty Ltd (the second defendant) will be developing three (3) units at 408 Main Street, Balcatta solely on its own…"
Work done on site
The plaintiff delivered particulars that it had attended to procuring the following tasks in relation to the construction:
"-Demolition of the existing building by GMF;
-negotiation with neighbours about the boundary walls;
-preparation of plans by Rysbek;
-approval of plans by the City of Stirling;
-earthworks by GMF;
-construction of the concrete slabs by National Concrete;
-supply of concrete and mesh;
-supply of bricks by Midland Bricks;
-bricklaying services by Tony Condelli;
-all hardware, doorframes, from Osborne Park Hardware;
-windows and fittings from Stegbar;
-electrical services by Lucci Marinella;
-timber for the roof from WA Timber Sales;
-roof tiles from Monier;
-interior painting by Dominic Trimbole;
-supply of brickies and plasters sand, site cleaning and bobcat services by Domenic Caccamo;
-Construction of kitchen cabinets by Armando Carbone;
-disassembling of existing boundary fence by Mirco;
-reconstruction of fence by Osborne Park Fencing;
-installation of interior tiling by Vince Luglio;
-survey by Jim Kelly;
-final inspection by the City of Stirling;
-supply of electricity by Western Power;
-supply of gas by Alinta Gas;
-installation of ceilings by Nick Cruppi;
-erect dividing fence, install stormwater pipes, spread mulch, install clothesline, erect and dismantle safety fence, install concrete to garages and perform general cleanup all by Lucky Luglio."
Mr Luglio gave evidence that the plaintiff was to source and negotiate with contractors pursuant to the agreement between the plaintiff and the second defendant. Mr Luglio told me that he negotiated with and arranged contractors, was on site from time to time, and arranged quotations. As is apparent from the above some of the items related to preparatory work performed at a time when Pacific Building was involved.
In relation to the invoices and quotations put into evidence there are some addressed to Pacific Building Mr Giustiniano's firm. For example the Stegbar quotation dated 25 July 2002 is addressed to Pacific Building. That was at a time when Pacific Building was the nominated builder on the building licence to construct the units. Some of the invoices are addressed to "Lucky" or Mr Luglio.
The invoices and quotations were tendered without the authors of the documents being called.
The first defendant's evidence was that he paid invoices for contractors from time to time when they were submitted to him by Delport Homes. When payment was made he also paid the five per cent which the second defendant was obliged to pay. I accept and prefer the first defendant's evidence to that of Mr Luglio that he did not consult with Mr Luglio in relation to contractors on site.
The demolition contractor GMF Contractors provided an invoice for the work it had done at 408 Main Street. The invoice is dated 31 August 2002 and is addressed to "Delport Homes c/o Lucky Luglio." The evidence in relation to the invoices and quotes was unconvincing. Whilst many of the documents referred to Mr Luglio some also referred to Pacific Building Co at a time when it was accepted that it had no involvement in the development. There are documents dated March and April 2003 which are addressed to Pacific Building.
Evidence of Fortunato Luglio and the first defendant
The primary controversy between the parties concerned the existence and performance of the agreements pleaded by the plaintiff.
The evidence of Mr Luglio in relation to the formation and performance of the agreements was unconvincing. There were inconsistencies with the further and better particulars of claim which had been delivered. His recollection was not good in relation to certain matters. His evidence was vague and imprecise.
The evidence of the first defendant was far more convincing than that of Mr Luglio. He was cross‑examined in detail as to his recollection. In the end I was satisfied that his version of events was honest and truthful. Further, I am satisfied that I could rely upon his evidence.
The first defendant did not have the experience as an investor which Mr Luglio had. The first defendant impressed me as a cautious person. I do not accept that he would have been prepared to proceed without an executed written agreement. The first defendant's version of events is more probable. His version, which I accept, was that the tripartite negotiations did not proceed. There were then discussions with Mr Luglio about a joint venture but there was no concluded contract.
Was there an agreement
There are cases where the courts will certainly hold that there is a contract even though it is difficult or impossible to analyse the transaction in terms of offer and acceptance. (Marist Bros Community Inc v Shire of Harvey (1995) 14 WAR 69 at 75 per Pidgeon J).
If mutual assent is established from the entirety of the negotiations an offer and acceptance will emerge. (Marist Bros (above) at 75).
The agreement sought to be relied upon is partly oral, partly written and partly constituted by conduct.
The written part of the agreement sought to be relied upon is constituted by the document dated 17 July 2002. Mr Luglio's evidence was that the document was never executed by the first defendant or second defendant. He told me that the first defendant had told him that he needed to get the proposed agreement checked by a lawyer and that he (the second defendant) would get back to him. Mr Luglio's evidence (T87) was:
"And even on your evidence you say he never did that?‑‑‑Never did that, never – I asked him a couple of times and he says, 'Why, don't you trust me?'
He never came back and said that arrangement was okay, did he?‑‑‑No."
I have carefully considered the evidence of Mr Luglio and the first defendant as to the negotiations. As I have said I prefer the evidence of the first defendant to Mr Luglio as to the negotiations. The first defendant's evidence was more consistent with the documentary evidence produced. The agreement with Delport Homes which was executed by the first defendant on behalf of the second defendant contained no reference to the plaintiff. The plaintiff had been named on an earlier version of the agreement and had been deleted at the request of the first defendant. If there was a partnership as alleged one would have expected Mr Luglio to have insisted at that stage upon being included in the agreement or at least there being some reference to his involvement.
Mr Crupi was not called to give evidence in the plaintiff's case and there was no proffered explanation for this. Mr Crupi would have been able to give evidence in the plaintiff's claim. Specifically he could have given evidence as to precisely what duties the plaintiff had performed subsequent to the engagement of Delport Homes as builder and what Delport Homes did and was remunerated for. He also could have given evidence as to rates which I will refer to later in these reasons. Mr Crupi and Mr Luglio have a relationship by marriage and were at one stage represented by the same firm of solicitors.
I am not prepared to accept and rely upon the evidence of Mr Luglio. As I have said I prefer the evidence of the first defendant as to the negotiations between the parties. I accept the evidence of the first defendant that there was no concluded agreement as alleged by the plaintiff.
Mr Luglio's oral evidence was that the plaintiff was to provide the subcontractors, get prices from them, the best possible prices and help on site as much as possible. The pleaded obligation sought to be established was to procure rates below the then prevailing rates for labour and materials for the construction of residential units.
The pleaded written part of the agreement was a document entitled Memorandum of Understanding dated 17 July 2002 does not particularise the obligation of the plaintiff in relation to the obtaining of contractors.
Mr Luglio's evidence as to the performance of work and conduct between 7 July 2002 and May 2003 in relation to the construction was unconvincing. The evidence was vague and imprecise. Whilst for example one would not expect Mr Luglio to say precisely how much time he spent on particular tasks his evidence was altogether too unreliable. I am not satisfied that there was any conduct on the part of the first and second defendants and the plaintiff which leads to an inference of the existence of an agreement with the plaintiff. A consideration of the particularised work alleged to have been done and the evidence of Mr Luglio reveals there are preliminary items for example shire negotiations and preparation of plans. There is then some contact with contractors. I have particularised the items involved later in these reasons when considering the quantum meruit claim.
Mr Luglio's evidence in relation to negotiations concerning the acquisition of Mr Carbone's share and his evidence as to the discussions involving himself, Mr Giustiniano and the first defendant caused me to have doubts as to the reliability of his recollection of events.
In relation to Mr Carbone's share Mr Luglio initially said that no figure was mentioned. When shown a letter which made specific reference to a figure of $223,000 he said in his words that he "made a mistake". His evidence had been very definite that no figure had been mentioned.
Mr Luglio's evidence was that for three or four weeks prior to the auction he had been discussing acquisition of the block with the first defendant. I do not accept Mr Luglio's evidence in this respect. I prefer the evidence of the first defendant. Mr Giustiniano's evidence was that AGL was considering the acquisition. In that circumstance Mr Giustiniano's version is supportive of the first defendant's version.
In answers to a request for further and better particulars the plaintiff particularised the first material conversation concerning the development of 408 Main Street as having taken place on the date upon which the second defendant purchased the land at auction. At trial Mr Luglio had said there had been discussions before the auction with the first defendant.
I do not accept that the first defendant accepted the terms of the Memorandum of Understanding dated 17 July 2002 either expressly or by conduct. In the tripartite negotiations involving Mr Giustiniano he had told Mr Giustiniano that he needed to discuss the document with his accountant. When the first defendant executed the cost plus contract with Delport Homes his signature was witnessed by his lawyer.
I do not accept that the parties and the first defendant in particular would have proceeded with a partnership/construction agreement without documentation of the arrangement. The first defendant had purchased the land and was on the plaintiff's version also required to contribute all of the construction costs. In saying that I accept that often there are informal non documented arrangements involving significant sums of money. I just do not accept that the first defendant would have allowed himself and the second defendant to be in that position without documentation.
The other factor which supports the first defendant's version of events rather than that of Mr Luglio and the plaintiff is that there was no real reason why in the circumstances the defendants should enter into the agreement contemplated by the memorandum of 17 July 2002. Whilst on its face Mr Luglio was to share in any losses incurred in the development, the second defendant had paid for and owned the land and it had engaged Delport Homes to build on the land. The agreement with Delport Homes was with the second defendant only and in the event of a breach Delport Homes would look to the second defendant for payment. Each of the subsequent documents prepared by the first defendant referred to a guarantee being provided by the plaintiff and payment of management fees to the second defendant and an additional fee to the first defendant.
Performance
Whilst it is not strictly necessary for me to decide I do not consider that the plaintiff has performed its obligations pursuant to the pleaded agreements.
The plaintiff alleges that its obligations pursuant to the partnership agreement, alternatively the construction agreement included an obligation to procure the construction of the units at rates below the then prevailing rates for labour and materials for construction of residential units and to sell the units on the land.
The agreement between the second defendant and Delport Homes was on a "costs plus 5%" basis. Mr Luglio's evidence was that the final basis of remuneration for Delport Homes of cost plus 5 per cent was one which was agreed between Mr Crupi, Mr Luglio and the first defendant.
Mr Crupi could if called have given evidence as I have said not only as to the work done by the plaintiff on site but also evidence as to the rate charged to the second defendant of "Cost plus 5%." In particular evidence could have been adduced from him as to whether the rate of five per cent was a rate below the then prevailing rate for labour and materials for the construction of residential units. In this case there was no explanation as to why Mr Crupi was not called as a witness for the plaintiff's case. I infer in the circumstances that his evidence would not have assisted the plaintiff. (Jones v Dunkel (1959) 101 CLR 298, 308, 312, 320‑321). Whilst quotations from two builders were tendered which referred to higher rates I am not satisfied that the quotations establish that the plaintiff has performed its pleaded obligations. There is no evidence as to rates at about the time the agreement with Delport Homes was entered into.
James Kelly is a licensed surveyor. He was asked by Mr Luglio to do a levels survey at 408 Main Street, Balcatta. He took levels and produced a survey plan. Mr Luglio subsequently asked Mr Kelly to re‑peg the site which he did.
Mr Kelly issued an account for his services dated 5 April 2003 which was addressed to Mr K Luglio c/- Delport Homes.
Mr Kelly gave evidence that he assumed that Mr Luglio operated Delport Homes.
Mr Kelly was unsure as to whether Mr Luglio was present when the re‑pegging of the site was done.
Mr Kelly had a conversation with the first defendant who told him that the account should be made out to another company. On that basis Mr Kelly issued a new account addressed to "Mr. Vince Mesiti Cassia Holdings" which was paid on or about 26 May 2003.
Mr Kelly gave evidence that as well as doing the initial levels survey and then the re‑peg he also set out the three units. He could not recall whether the set out occurred the same day as the re‑peg. He agreed that re‑pegging and setting out must have occurred before any concreting.
Mr Kelly did not give any evidence as to his rates and whether they were below the then prevailing rates.
Giovanni Italiano is a builder and has known Mr Luglio for in excess of 30 years. He has also known the first defendant for a number of years.
He was asked by Mr Luglio whether he would be prepared to do the concrete work for a construction project which he understood was to be a triplex at 408 Main Street, Osborne Park. Mr Italiano gave Mr Luglio a price of $43 per metre which was discounted from his normal rate which was between $45 to $48 per metre.
Mr Italiano told me that he was engaged by Mr Luglio to do the concrete work and did do the work. He rendered an invoice to Mr Luglio's company Corvus Pty Ltd dated 17 September 2002. Whilst in evidence Mr Italiano had said that he had quoted $43 per metre the invoice rendered was calculated on the basis of a per metre rate of $48.
Mr Italiano said that he was on site when the concrete work was done and that Mr Luglio had paid the invoice. During the course of the concrete work being carried out he had seen the first defendant and Mr Luglio on site. It was his evidence that Mr Luglio was helping on site and that he had done the setting out for the concrete. He said the required setting out work would depend upon the complexity and that the time involved ranged from between three to six hours.
Mr Italiano was unclear as to when the concrete work had been done on site. Initially in his evidence he referred to it having been performed mid year. He later said that the relevant date was September but accepted that his evidence was based upon the fact the invoice was dated 17 September 2002. It is clear from the evidence of Mr Italiano that he had charged the top end of his range for the work which he had carried out. He had not charged below the then prevailing rates.
There was no evidence which I accept that the plaintiff procured the other contractors and suppliers engaged at rates below the then prevailing rates for labour and materials. The contractors were not called and I am not prepared to rely upon the evidence sought to be adduced from Mr Luglio in this respect. He referred in some cases to negotiations but this evidence fell far short of establishing the pleaded obligation.
I am not satisfied that the plaintiff in the circumstances performed its pleaded obligations pursuant to the alleged agreements.
Quantum meruit
The claim on the quantum meruit is pleaded as follows:
"22.Further, or alternatively, by reason of the matters pleaded above, the value of the Land has been increased.
Particulars
The value of the land after the actions of the Plaintiff
$632,000.00
Less value of the Land before the actions of the Plaintiff
$162,000.00
Less the combined construction costs of the Units
$236,761.30
$233,238.70
23.Further or alternatively, it was an implied term of the Partnership Agreement, alternatively the Construction Agreement that upon the sale of the Units, the Second Defendant would pay to the Plaintiff a reasonable fee in consideration for the work performed by the Plaintiff in procuring the construction of the Units.
Particulars
The term is implied by law in that it is reasonable, obvious and necessary to give business efficacy to the Partnership Agreement or alternatively, the Construction Agreement.
24.The Plaintiff avers that a reasonable fee in consideration for the work performed by the Plaintiff in procuring the construction of the units is $46,750.00.
25.The Second Defendant has failed and refused to pay to the Plaintiff the sum of $46,750.00 or any sum."
The claim as pleaded relies upon the existence of the Partnership Agreement alternatively the Construction Agreement. I have found there was no concluded Partnership or Construction Agreement.
The plaintiff whilst not amending its pleading submitted that there was a "legal entitlement" to a quantum meruit claim in circumstances where there had been unjust enrichment to the detriment of the plaintiff. This recognised the correct approach to quantum meruit as outlined in Pavey & Matthews Pty Ltd v Paul (1986) 162 CLR 221.
In Pavey (above) the High Court allowed an appeal by a builder against the dismissal of its claim arising out of the construction of a home. The Builders Licensing Act (1971) (NSW) prohibited a builder from recovering in circumstances where there was no written building contract. The builder did not have a written agreement with the owner and sought to recover on a quantum meruit in relation to the work it had done. The builders claim was allowed and the judgments contained analysis of the basis of the availability of the claim in quantum meruit. In essence the implied contract theory was displaced by concepts of unjust enrichment or restitution.
In their joint judgment at p 228 Mason and Wilson JJ said:-
"However, when success in a quantum meruit depends, not only on the plaintiff proving that he did the work, but also on the defendant's acceptance of the work without paying the agreed remuneration, it is evidence that the Court is enforcing against the defendant an obligation that differs in character from the contractual obligation had it been enforceable."
At pp 256‑7 Deane J said:
"The circumstances in which the common law imposes an enforceable obligation to pay compensation for a benefit accepted under an unenforceable agreement have been explored in the reported cases and in learned writings and are unlikely to be greatly affected by the perception that the basis of such an obligation, when the common law imposes it, is preferably seen as lying in restitution rather than in the implication of a genuine agreement where in fact the unenforceable agreement left no room for one. That is not to deny the importance of the concept of unjust enrichment in the law of this country. It constitutes a unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognise such an obligation in a new and developing category of case: see Muschinski v Dodds (26); Goff & Jones, op.cit, pllff. In a category of case where the law recognises an obligation to pay a reasonable remuneration or compensation for a benefit actually or constructively accepted, the general concept of restitution or unjust enrichment is, as is pointed out subsequently in this judgment, also relevant, in a more direct sense, to the identification of the proper basis upon which the quantum of remuneration or compensation should be ascertained in that particular category of case."
The defendants submit and plead that by virtue of the provisions of the Builders Registration Act 1939 ("the Act") the claimed quantum meruit cannot be sustained. Section 4 of the Act relevantly provides:
"(1)Subject to this section, a person who is not registered under this Act shall not ¾
(A)(a)construct either for himself or any other person, any building for the purpose of the immediate sale thereof;
(aa)construct for himself any building other than a dwelling house or a building comprising 2 dwellings on ground level, each being complete and self-contained, whether or not the building is so designed as to give an external appearance of a single dwelling;
(b)enter into any contract or engagement to construct any building, or build any building for another in pursuance of any contract or engagement;
(c)be entitled to recover in any court any fee or charge under any such contract or engagement;
(d)hold himself out as trading as a registered builder, or, as the case may be, a journeyman builder, unless ¾
(i)the total fee or charge payable in respect of the carrying out of the same does not exceed $6 000 or such other amount as may be prescribed by regulations made under section 24; or
(ii)under subsection (2) he is a person exempted from the necessity of obtaining registration;
(B)assume, take or use (either alone or in combination with any other word, letter or device) the name or title of "registered builder" or, as the case may be, "journeyman builder", or any name, title or description calculated to lead others to believe he is so registered, or by words or conduct hold himself out as being so registered.
(1aa)A person who contravenes subsection (1) commits an offence and is liable to a penalty of $10 000 and a daily penalty of $250 for a continuing offence.
(1a)Notwithstanding anything in subsection (1), the Board may, on the application in writing in the form approved by the Board of a person who is not registered under this Act, authorise in writing that person to construct for himself a building ¾
(a)which is specified in that authority; and
(b)which is not a dwelling house or a building referred to in subsection (1)(A)(aa).
(1b)In subsections (1) and (1a) ¾
"construct" includes add to, alter, improve, renovate and repair.
(2)The persons exempted from the necessity of obtaining registration under this Act as mentioned in subsection (1)(A)(ii) are ¾
(a)any person who is ¾
[(i) and (ii)deleted]
(iii)an officer or servant of the Crown or of any Crown instrumentality, or of any local government, in so far as he directs or supervises the carrying out of any contract or engagement in the performance of his duties as such officer or servant;
[(b)deleted]
(c)any local government.
(3)The provisions of this section apply notwithstanding that a number of distinct contracts or engagements to perform work or render services are entered into in connection with the same building by the same person, where ¾
(i)the moneys payable in respect of the performance of the contracts or engagements exceed $6 000 or such other amount as may be prescribed by regulations made under section 24, in the aggregate but some or all of such contracts or engagements taken severally do not exceed that sum; or
(ii)in any case where the Board is satisfied that they are substantially in respect of the one undertaking or that they were entered into with a view to evading the provisions of this Act.
In Ardon Enterprises Pty Ltd v Mizen [1999] WADC 83 Macknay DCJ noted (at par 8) one of the issues before him as being:
"It being conceded that the plaintiff was not entitled to recover any sum pursuant to a contract with the defendant, as the work done was building work within the meaning of the Builders Registration Act 1939 WA (the Builders Registration Act) s 4 and as the plaintiff was not then a registered builder, and if as a result any contract was illegal and void, and the plaintiff having failed to ensure that the contract was in writing, and that the defendant was provided with the necessary notice, as required by the Home Building Contracts Act 1991 WA (the Home Building Act) s 4, whether the plaintiff was entitled in the circumstances to recover any balance on a quantum meruit."
His Honour's analysis of the issue included the following (at [59]):
"If one looks at the plain words of s 4(1)(A)(b) and (c), the preservation of a claim in restitution or on a quantum meruit would seem an odd result. Further, there is no good reason why such an intention ought be imputed. Rather, a construction which excluded a right to make such a claim would appear more consistent with the purpose of the Builders Registration Act: see Interpretation Act 1984 (WA) s19.
The NSW Legislation considered in Lee Gleeson Pty Ltd and O'Connor is materially different to that here.
Similarly, the Qld Legislation under consideration in J C Scott Constructions was significantly different, whilst the observations made about the same were obiter, the builder there being registered.
In coming to the conclusion that a claim in restitution lay in this State, notwithstanding s4(1) of the Builders Registration Act, Heenan CJDC said in Steelhomes (1985) Pty Ltd (at 145) that the prohibition against recovery of a fee under any contract ensured that 'instead of merely proving the agreement and construction of the building in accordance with it, the builder is required to justify recovery of the amount claimed by proving that it is reasonable remuneration for the work done and that the owner has accepted the benefit of that work'.
With respect, I find it difficult to accept that the legislature would prohibit recovery of "any fee or charge under any … contract" merely so as to see that an unregistered builder did not recover more than a reasonable charge.
Rather, I prefer the analysis in, and consider that I ought follow Zullo, and therefore hold that a claim by an unregistered builder in restitution or on a quantum meruit for the reasonable value of building work carried out must fail, as such a claim is prohibited by s4(1) of the Builders Registration Act.
It follows that the plaintiff's claim here must be dismissed.
If the plaintiff was able to make out a prima facie claim for restitution then I consider that in any event the defendant could rely on the defence of statutory illegality, and that the claim would fail for that reason also."
I respectfully adopt all that his Honour has said in his reasons in relation to the interpretation of s 4 of the Act and the availability of quantum meruit. I prefer his Honour's analysis to what I consider to be the obiter dictum remarks of White J in Great City Pty Ltd v Kemayan Management Services (Australia) Pty Ltd & Ors [1999] WASC 70.
White J's conclusion in Great City above was that s 4 of the Act barred the plaintiff in that case from making a contractual claim in relation to the building work. However his Honour's view was that it did not preclude the plaintiff from recovering for work done in restitution based on the principles of unjust enrichment.
In my view as I have said the remarks of White J concerning s 4 were obiter dictum. His Honour said (at par 50):
"This issue has become academic in view of the finding that the evidence does not establish any contract between the plaintiff and the defendant. However, in case I am wrong in that regard and this matter goes further I shall nonetheless deal with this issue."
In the result in Great City (above) the facts did not establish a quantum meruit and accordingly it was unnecessary for his Honour to decide whether s 4 of the Act precluded a quantum meruit claim.
As I have said I prefer with respect the reasons and conclusion of his Honour Macknay DCJ in Ardon (above) that the Act did prohibit a quantum meruit claim by an unregistered builder.
The suggestion by the plaintiff in this case is that whilst Delport Homes had been engaged as the registered builder it (that is the plaintiff) was doing work in relation to the construction at a time when it was not registered.
I accept the submission that if one reads the Act as a whole, Parliament intended that only persons who meet the relevant criteria of the Act engage in building work pursuant to contracts or engagements and that people should be prohibited from recovering where they are not registered.
In this case what the plaintiff alleges that it did through Mr Luglio was to arrange subcontractors and materials. On his evidence he was involved in obtaining quotations, managing and supervising contractors, labourers and others on site. He was if his evidence were to be accepted involved in management and supervision. In my view the agreements sought to be enforced by the plaintiff were contracts or contracts or engagements to construct any building, or build any building for another (s 4(1)(A)(b) of the Act. Builders' Registration Board of Western Australia v Roroka Pty Ltd, unreported; SCt of WA; Library No 8776; 25 March 1991). In the circumstances I do not consider the plaintiff's claim in quantum meruit is maintainable.
In case I am wrong in my above conclusion as to the availability of quantum meruit I will consider the evidence adduced.
Mr Luglio gave evidence in support of the claim for a quantum meruit. The evidence relating to work done by Mr Luglio in relation to the construction. It was vague and unconvincing. I am not satisfied that there was any request made by the defendants for the work to be done. What emerges from cross‑examination is that the total time involved was not more than approximately 40 hours. I adopt in this regard the defendant's analysis of the evidence as to the work done as follows:
"17.The evidence lead [sic – led] on behalf of the Plaintiff, even if accepted and taking it at its highest, could only establishes [sic – establish] that the work actually performed in relation to the pleaded tasks was, in the circumstances, very minor.
18.That evidence may be summarised as follows:
TASK
TIME TAKEN
Demolition of the existing building by GMF
2 hrs
Negotiation with neighbours about the boundary walls
See below
Preparation of plans by Rysbek
A matter of asking
Approval of plans by the City of Stirling
3 hrs
Earthworks by GMF
See demolition
Construction of the concrete slabs by National Concrete
1 hr
Supply of concrete and mesh
See above
Supply of bricks by Midland Bricks
30 mins
Bricklaying services by Tony Condelli
1 hr
All hardware, doorframes, from Osborne Park Hardware
30 mins
Windows and fittings from Stegbar
30 mins
Timber for the roof from WA Timber Sales
10 mins
Roof tiles from Monier
Particular wrong
Interior painting by Dominic Trimbole
30 mins
Supply of brickies and plasterers sand, site cleaning and bobcat services by Domenic Caccamo
1 hr
Construction of kitchen cabinets by Armando Carbone
2 hrs
Disassembling of existing boundary fence by Mirco
15 mins
Reconstruction of fence by Osborne Park Fencing
30 mins
Installation of interior tiling by Vince Luglio
30 mins
Survey by Jim Kelly
1 hr
Final inspection by the City of Stirling
2½ hrs
Supply of electricity by Western Power
No time
Supply of gas by Alinta Gas
Phone call
Installation of ceilings by Nick Cruppi
30 mins
Erect dividing fence
4 hours
Install stormwater pipes
Whole day
Spread mulch
3 hrs
Install clothesline
30 mins
Erect and dismantle safety fence
5 hrs
Install concrete to garages and perform general cleanup
Charged in Exhibit 68
19.In relation to the negotiations with neighbours, Mr Luglio's evidence of five to six weeks almost full time, was, it is submitted, fanciful, in fact, when scrutinised, it would be very little:
All up, in terms of the amount of time that you spoke, adding up all the times that you would have spoken to a neighbour, it couldn't have been more than an hour, couple of hours?‑‑‑I said there's six weeks' work there, to go up and down to talk to the neighbour. Not on a full‑time basis but almost. Once or twice a week I used to go and see him and make sure that something happened and got the answer no, then I got the answer no and I keep pursuing and then I got the answer yes.
Once or twice a week you would go to see him and say, 'Have you got an answer?' and he's say no and you would go away?‑‑‑I – no; yes, I would just go away ‑‑‑
So adding up all the time it couldn't be more than a couple of hours?‑‑‑Well, I never took time down because I didn't think it was going to come to this, so that's why I cannot register the minutes that I spent. I was involved with the project from the A to Z.
20.An overly‑generous estimate of these activities (even if accepted), would amount to little more than 40 hours."
I acknowledge that Mr Luglio's evidence went to other matters than those particularised. However I am not prepared to rely upon his evidence. In my view as I have said the time involved is approximately 40 hours.
The quantum of the plaintiff's claim was sought to be established through the evidence of Brian Wales.
Brian Wales is a construction consultant and was a registered builder between 1979 and 1998.
Mr Wales gave evidence that in large commercial construction projects remuneration for a project manager is based upon a percentage of construction cost. Mr Wales produced a report dated 27 April 2005.
In his report Mr Wales opined that reasonable remuneration for the tasks which Mr Luglio was required to perform was $46,750. In making that assessment he did not determine precisely what Mr Luglio had done.
Mr Wales accepted that the sum of $46,750 was a hypothetical figure based on a description provided to him. Mr Wales did not visit the development. He said in re‑examination that he did not consider it necessary to do so. He gave evidence that a reasonable rate was $60 per hour. I accept that part of his evidence.
However I do not accept that the evidence of Mr Wales as to the quantum of $46,750 is basis for the assessment of the quantum meruit claim in this case. He had no relevant current experience and the appropriate factual basis for the expression of his opinion was not established. He had not visited the site. His evidence was unconvincing (Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370).
I accept that Mr Luglio was involved in preliminary matters in relation to the development. This was at a time when the tripartite negotiations involving the plaintiff, the defendants and Mr Giustiniano were proceeding. It is clear for example that Pacific Building had made application to the local authority for a building licence and that quotes were being obtained in the name of Pacific Building. I accept also that Mr Luglio was on site from time to time. What is not clear is the relationship between the work done by Mr Luglio and the work required to be done by Delport Homes. I accept and prefer the evidence of the first defendant to that of Mr Luglio in relation to work done on site.
I accept the submission of the defendants that any work done on site by the plaintiff was for the benefit of Delport Homes and did not benefit the first or second defendant. Doing the best I can on the evidence produced and on the basis of approximately 40 hours work at the rate of $60 per hour I would assess the claim at $2,400. However, as I have said the claim must fail.
The claim on a quantum meruit must fail.
Conclusion
The plaintiff's claim is dismissed.
1
6
1