The High Court will soon consider a builder’s capacity to recover payment on a Quantum Meruit basis, where an owner has repudiated a construction contract in the case of Mann & Anor v Paterson Constructions Pty Ltd. The Court’s decision will be significant in that they will be required to reconsider the current common law precedent which allows a builder to be paid on a quantum meruit basis where it has accepted an owner’s repudiation. The current common law position is that a builder to a construction contract can recover payment from the owner for any unpaid work performed prior to the termination. In most cases the builder is only entitled to be paid for amounts calculated under the contract. However, an idiosyncrasy in the law exists whereby in the circumstance where a construction contract is terminated by repudiation, the builder is able to recover payment from the owner on a quantum meruit basis (as much as is deserved).
In late 2018, the High Court granted the appellants (Owners – Mann) special leave to appeal the decision made by the Victorian Court of Appeal, on the grounds that the Court of Appeal held that the respondent (builder), having terminated a contract upon the repudiation of the owners was able to sue on a quantum meruit basis. The case was heard on the 14th May 2019, with the decision expected to be handed down within the coming months. B+a will provide an update on the case following the handing down of the High Court’s judgement.