Cases - Pavey and Matthews Proprietary Ltd v Paul

Record details

Name

Pavey and Matthews Proprietary Ltd v Paul

Date

(1987)

Citation

162 CLR 22

Legislation

Building Licensing Act 1971

Keywords

Contract - oral building contract - quantum meruit - unjust enrichment - unenforceable contract - whether there was an obligation to pay a quantum meruit - whether fair and just compensation for the benefit or enrichment accepted will ordinarily correspond to the fair value of the benefit provided - whether the contractor was entitled to restitution based on unjust enrichment - Building Licensing Act 1971

Summary

The claimant builder claimed for the value of work done and materials supplied pursuant to an oral building contract. By virtue of the Builders Licensing Act 1971 (NSW), an oral contract between an employer and a builder holding a licence was not enforceable. The action upon the basis of a quantum meruit succeeded because it rested not on an implied term of the (unenforceable) contract, but on a claim to restitution based on unjust enrichment. However, the quasi-contractual obligation to pay a fair and just compensation for a benefit which has been accepted will only arise in a case where this is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable.

The Court held that, ordinarily, fair and just compensation for the benefit or enrichment accepted will correspond to the fair value of the benefit provided (e.g. remuneration at a reasonable rate for work actually done, or the fair market value of materials supplied). However, that would not be the case if, for example, the cost of unsolicited work far exceeded the enhanced value of the property.