GRAY (CONSTRUCTIONS) PTY LTD v HOGAN [2000] NSWCA 26

GRAY (CONSTRUCTIONS) PTY LTD v HOGAN [2000] NSWCA 26

The District Court judge erred in excluding the profit margin and delay costs as components of quantum meruit. A builder recovering on quantum meruit for work performed under an unenforceable contract is entitled to reasonable remuneration, including a profit margin, calculated after the costs are ascertained. There was no evidence that the profit margin was already included in expert costings, and the referee's approach was consistent with the legal principles agreed by the parties.

Jurisdiction
Australia
Judgment Date
03 March 2000
Procedural Posture
Appeal / Judgment After Hearing on Appeal From the District Court
Outcome
Appeal allowed
Legal Topics
['building Contract – Unwritten Agreements' 'quantum Meruit' 'cost Plus Contract' 'fair and Just Restitution' 'profit Margin in Quantum Meruit Claims']
['building and Construction Law' 'contract Law' 'restitution'] ['building Contract – Unwritten Agreements' 'quantum Meruit' 'cost Plus Contract' 'fair and Just Restitution' 'profit Margin in Quantum Meruit Claims']

Case Brief

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Procedural Posture

Appeal / Judgment After Hearing on Appeal From the District Court

Legal Issues

  1. 1 ["Whether the District Court erred in rejecting the profit margin and delay damages components from the referee's report in a claim for quantum meruit on an unenforceable building contract" 'How fair and just restitution should be assessed in the context of quantum meruit when a building contract is unenforceable by statute']

Ratio Decidendi

The District Court judge erred in excluding the profit margin and delay costs as components of quantum meruit. A builder recovering on quantum meruit for work performed under an unenforceable contract is entitled to reasonable remuneration, including a profit margin, calculated after the costs are ascertained. There was no evidence that the profit margin was already included in expert costings, and the referee's approach was consistent with the legal principles agreed by the parties.

Court Disposition

Appeal allowed

Orders

  • ['Set aside the orders made by Mahoney DCJ on 7 May 1998.' 'Court adopts the Report of referee Mr Martyn Chapman dated 22 September 1997.' 'Verdict and judgment for the plaintiff on the Statement of Liquidated Claim in the sum of $62,432.45, such judgment to take effect from 7 May 1998.' 'Verdict and judgment for...