Building & Construction Disputes in New South Wales
FACTS: A builder worked for six months under an oral agreement. The Builders Licensing Act 1971 (NSW), as does the current law, required the contract be in writing. The contract was illegal and unenforceable.
HELD: the builder was entitled to make a claim for quantum meruit which is based on the principles of unjust enrichment. The following elements must be met when seeking unjust enrichment:
- The defendant was enriched;
- The defendant’s enrichment was at the plaintiff’s expense; and
- The enrichment was unjust (according to defined categories developed in the cases).
D&R Constructions entered into a building contract with Leela and Bernard Wesiak to carry out building works under a standard Master Builders Association style contract.
Disputes arose regarding the rate of progress, the scope of the work to be performed and the difference between the value of work carried out and the amount of the contract sum remaining to be paid.
26 July 2013, the Contractor suspended building work by reason of an alleged failure on the part of the Principal to pay an outstanding invoice of $27,000
13 September 2013 Principal advised the Contractor that it had grounds to terminate the contract because the Contractor had failed to proceed with the works with due diligence, in a competent manner and had wrongfully suspended the works.
16 September 2013, the Contractor’s solicitors addressed issues of scope of the outstanding works and made a settlement proposal.
17 September 2013 – Principal’s solicitors advised their client would terminate the contract upon receipt of an acceptable quotation. The principal was currently seeking quotations.
ISSUE: Both the contractor and the principal claimed wrongful repudiation of the contract.
First Instance: The contractor had repudiated the contract by terminating the contract on 20 October 2013 for failure to pay the progress payment of $27,000.00 as it had not been properly issued.
Held: The Principal had repudiated the contract by
“manifested an intention to terminate the contract once the respondents had received quotations from others for the completion of the work”