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Sutton v Zullo Enterprises Pty Ltd

Sutton v Zullo Enterprises Pty Ltd

Case [1998] QCA 417 15 December 1998

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IN THE COURT OF APPEAL [1998] QCA 417
SUPREME COURT OF QUEENSLAND
Appeal No. 8045 of 1998
Brisbane
[Zullo Enterprises P/L & Ors. v. Sutton]
BETWEEN:
ZULLO ENTERPRISES PTY LTD
ACN 056 536 264

(First Defendant) First Appellant

AND:
RAEFOLD PTY LTD.
ACN 010 475 180

(Second Defendant) Second Appellant

AND:
YAZD PTY LTD
ACN 058 108 857

(Third Defendant) Third Appellant

AND:
JOHN PATRICK SUTTON

(Plaintiff) Respondent
McPherson J.A.
Pincus J.A.
Jones J.

Judgment delivered 15 December 1998
Separate reasons for judgment of each member of the Court, each concurring as to the orders made.
APPEAL ALLOWED WITH COSTS. THE ORDER OF THE LEARNED PRIMARY JUDGE MADE ON 4 AUGUST 1998 GRANTING LEAVE TO AMEND THE PLAINT SET ASIDE. THE PLAINTIFF’S ACTION IS DISMISSED WITH COSTS.

CATCHWORDS:

BUILDING AND CONSTRUCTION LAW - quantum meruit claim - unlicensed builder - statute provided builder was not entitled to any monetary or other consideration - whether builder could sue for price of work as quantum meruit claim.
Queensland Building Services Authority Act 1991 s. 42
Pavey & Matthews Proprietary Limited v. Paul (1987) 162 C.L.R.
221
Counsel: Mr T Matthews for the appellants.
Mr G I Thompson (solicitor) for the respondent.
Solicitors: William R Wilson & Associates for the appellants.
Barwicks Wisewoulds for the respondent.
HearingDate: 5October1998.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 8045 of 1998
Brisbane

Before McPherson J.A.
Pincus J.A.
Jones J.
[Zullo Enterprises P/L & Ors v. Sutton]
BETWEEN:
ZULLO ENTERPRISES PTY. LTD.
ACN 056 536 264

(First Defendant) First Appellant

AND:
RAEFOLD PTY. LTD.
ACN 010 475 180

(Second Defendant) Second Appellant

AND:
YAZD PTY. LTD. ACN 058 108 857

(Third Defendant) Third Appellant

AND:
JOHN PATRICK SUTTON

(Plaintiff) Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.
Judgment delivered 15 December 1998
1 I have had the advantage of reading the reasons of Pincus J.A. in this matter, which it was agreed to treat as the hearing of the appeal. I agree with his conclusion that the appeal should be allowed with costs; that the order of 4 August 1998 granting leave to amend the plaint should be
set aside; and that the action should be dismissed with costs.
2 There are two questions. One is the impact of s.42(1) of the Queensland Building
Services Authority Act 1991 on the enforceability of a contract to carry out building work. The
other is the effect of s.42(3) of the Act on the respondent’s right, independently of contract, to
recover restitution for such work.
3 Section 42(1) provides that a person must not carry out, or undertake to carry out, building
work unless that person holds a contractor’s licence of the appropriate class under the Act. The
statutory provision embodies two separate and distinct prohibitions. One is that a person must not
“undertake” to carry out building work unless appropriately licensed. The other is that such a person
must not “carry out” building work.…

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 Sutton v Zullo Enterprises Pty Ltd

Details

AGLC: Sutton v Zullo Enterprises Pty Ltd [1998] QCA 417
Case: [1998] QCA 417
Decision Date: 15/12/1998

CaseChat Overview and Summary

The case of Sutton v Zullo Enterprises Pty Ltd involved a dispute between a homeowner, Sutton, and a builder, Zullo Enterprises Pty Ltd. Sutton had engaged Zullo to undertake construction work on his property but terminated the contract due to Zullo's lack of a building licence. Upon termination, Zullo completed some of the work and sought compensation under a quantum meruit claim, arguing that despite statutory provisions that typically bar unlicensed builders from claiming payment, the work completed entitled him to a fair recompense for the value of the work done.

The legal issues central to the case were whether the statutory provisions, which generally prevent unlicensed builders from claiming any monetary or other consideration, could be circumvented by allowing a quantum meruit claim. The court had to determine if the nature of a quantum meruit claim, which is based on the principle of fairness and preventing unjust enrichment, could provide a basis for Zullo to recover the value of the work completed under the contract.

The court held that the statutory provisions did indeed prevent Zullo from claiming payment under the original contract but considered the applicability of a quantum meruit claim. The court concluded that while the statutory provisions barred Zullo from claiming under the original contract, the principles of quantum meruit allowed for recovery of the reasonable value of the work completed. This was based on the principle of preventing unjust enrichment, where Sutton would be unjustly enriched if allowed to retain the benefit of the work completed without compensating Zullo. Thus, Zullo was entitled to recover the reasonable value of the work completed.

The court ordered that Zullo Enterprises Pty Ltd was entitled to recover the reasonable value of the work completed from Sutton, under the principles of quantum meruit. This decision balanced the statutory intent to protect homeowners from unlicensed builders with the equitable principle of preventing unjust enrichment.

Orders