Purnell v Manson

In the case of Purnell v Manson, the appeal was brought by the homeowners, Sarah Purnell and Stewart Brett, against the builder, Lee Manson, trading as Manson Homes. The homeowners had terminated the building contract and sought damages for the cost of completing the works and rental expenses, while the builder sought to recover on a quantum meruit basis for the work done. The tribunal below awarded the homeowners damages, reduced by the builder's entitlement to quantum meruit. The homeowners appealed on several grounds, including the tribunal's assessment of their entitlement to damages, the builder's entitlement to recover on a quantum meruit basis, and the homeowners' failure to mitigate their loss. The legal issues before the court were whether the tribunal erred in assessing the homeowners' entitlement to damages, whether the tribunal erred in allowing the builder to recover on a quantum meruit basis, and whether the homeowners failed to mitigate their loss.

The court found that the tribunal erred in allowing the builder to recover on a quantum meruit basis. The court held that the builder was not entitled to recover on a quantum meruit basis for the work done under the relevant stage of the contract, where the work performed was not to the standard necessary under the contract. The court noted that there is no basis for a claim for quantum meruit in such circumstances, and that the application of quantum meruit does not depend on who treated the contract as discharged. The court found that the homeowners had not freely accepted the benefits flowing from the builder's part performance, and that it was difficult to demonstrate that the homeowners had a proper opportunity to reject, or accept, the work.

The court allowed the appeal and set aside the decision of the tribunal below. The court ordered that Lee Manson t/as Manson Homes must pay Sarah Purnell and Stewart Brett the amount of $20,103.00. The parties were required to file and exchange submissions on costs within a specified timeframe. The Appeal Tribunal would determine the costs of the appeal on the papers.