Pavey & Matthews Pty Ltd v Paul

Pavey & Matthews Pty Ltd (the builder) sought to recover payment for work performed under an oral building contract with Paul (the owner). The builder had undertaken renovations to the owner's residential property. The dispute arose because the *Builders Licensing Act 1971* (N.S.W.) stipulated that building contracts must be in writing to be enforceable. The builder's claim was for the reasonable value of the work done, not based on the contract itself, but on the principle of restitution. The matter was heard by the High Court of Australia.

The central legal issue before the High Court was whether a builder could recover the reasonable value of work performed under an oral contract that was rendered unenforceable by statute. Specifically, the court had to determine if the doctrine of unjust enrichment provided a basis for a claim in quantum meruit, notwithstanding the statutory prohibition on enforcing oral building contracts.

The High Court, by majority, held that the builder was entitled to recover the reasonable remuneration for the work performed. The court rejected the argument that the statutory requirement for written contracts extinguished any right to claim for work done. Instead, it affirmed that the law of restitution, based on the principle of unjust enrichment, provided an independent basis for recovery. The court reasoned that it would be unjust to allow the owner to retain the benefit of the work performed without paying for it, simply because the contract did not meet the statutory formality requirements. The statutory provision was interpreted as preventing enforcement of the contract, not as negating the obligation to pay for work already done and accepted.

The High Court ordered that the builder was entitled to recover the reasonable value of the work performed.