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[2016] ACAT 38
ACT Civil and Administrative Tribunal
2016-05-12
Original judgment source is linked above.
CHETTY & ANOR v AUTOMOTIVE COMPUTER DIAGNOSTIC CENTRE (ACDC) PTY LTD (Civil Dispute) [2016] ACAT 38
Catchwords: CIVIL DISPUTE - whether costs of vehicle repair was reasonable
Legislation cited: Sale of Goods Act 1954 s 13
Cases cited: Baldwin v Jones and Cubit [2000] QBT 30
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Eagle Sea Pty Ltd V Radford and Dick t/as Radford Cartage Contractor [2012] TASSC 41
Horton v Jones [No2] (1939) SR (NSW) 305
Tickner v The Boat Clinic Pty Ltd (Civil Claims) [2015] VCAT 2062
AUTOMOTIVE COMPUTER DIAGNOSTIC CENTRE (ACDC) PTY LTD
(b) may be left to be fixed in a way agreed by the contract; or
(c) may be determined by the course of dealing between the parties.
(2) If the price is not determined in accordance with subsection (1), the buyer must pay a reasonable price.
I note that the Applicant performed the construction of the Respondents' two (2) storey domestic residence for a sum in excess of one hundred thousand dollars ($100,000.00) without committing the agreement to writing however I accept that the works were done in accordance with an oral agreement and consequently there has been no breach of section 58 of the Act. It was the Applicant's evidence that he performed works in accordance with the 1997 plans "in the hope that he would receive payment from the Respondents". Further, the Applicant conceded that at no time did he provide a costing to the Respondents of the works to construct their residence in accordance with the 1997 plans, and the price stipulated in the Contract was for construction of the residence in accordance with the 1993 plans only. In these circumstances, it is necessary to imply as a term to give effect to the parties' oral agreement to require the Respondents to pay to the Applicant remuneration calculated at a reasonable rate for work actually done and the fair market value of goods supplied (per Deane J. in Pavey & Matthews supra at 263). The established principles for the implication of terms are enunciated in Codelfa Construction Pty Ltd -v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337.(emphasis added)
19 Quantum meruit refers to the body of law under which a person may claim reasonable remuneration for work or services performed, in one of the following situations -
(a) where the parties have a binding contract for the performance of services for payment of a reasonable sum, but where the sum itself is not stated;
(b) unusual situations, such as salvage at sea, which are irrelevant for present purposes; and
(c) where there was an arrangement between the parties which for legal reasons does not amount to a 'contract'. Sometimes the technical requirements for there to be a contract at law are missing: for example, where the person who performed services and expected to be paid, was unlicensed in the relevant field and prohibited by legislation to contract to perform the services; or where the person receiving the services did not have 'capacity' to enter into a contract. But there are also examples where the missing element, which prevents the arrangement from amounting to a 'contract', is the express agreement as to payment.
if a person employs another to do work... Nothing been said as to wages... The law implies a promise to pay a reasonable wage... and an action may be maintained for quantum meruit
10. Deane J., whose reasons for judgment we have had the advantage of reading, has concluded that an action on a quantum meruit, such as that brought by the appellant, rests, not on implied contract, but on a claim to restitution or one based on unjust enrichment, arising from the respondent's acceptance of the benefits accruing to the respondent from the appellant's performance of the unenforceable oral contract. This conclusion does not accord with the acceptance by Williams, Fullagar and Kitto JJ. in Turner v. Bladin (at p 474) of the views expressed by Lord Denning in his articles in (1925) 41 Law Quarterly Review p 79, and (1939) 55 Law Quarterly Review p 54, basing such a claim in implied contract. These views were a natural reflection of prevailing legal thinking as it had developed to that time. The members of this Court were then unaware that his Lordship had, in his judgment in James v. Thomas H. Kent & Co. Ld. (1951) 1 KB 551, as reported in the authorized reports, discarded his earlier views in favour of the restitution or unjust enrichment theory. Since then the shortcomings of the implied contract theory have been rigorously exposed (see Goff and Jones, The Law of Restitution 2nd ed. (1978) pp.5-11) and the virtues of an approach based on restitution and unjust enrichment, initially advocated by Lord Mansfield and later by Fuller and Perdue (see "The Reliance Interest in Contract Damages" (1936-37) 46 Yale Law Journal 52, 373, esp. at p.387), widely appreciated (Goff and Jones, op cit. at p.15 et seq.; and see Deglman v. Guaranty Trust (1954) 3 DLR 785, at pp 794-795). We are therefore now justified in recognizing, as Deane J. has done, that the true foundation of the right to recover on a quantum meruit does not depend on the existence of an implied contract.
7. An understanding of the principles affecting the right to sue for the recovery of money due under a contract is impeded by an unhappy ambiguity in the use of the terms "implied contract" and "quantum meruit". Sometimes a contract is said to be implied when the contract is an actual, if tacit, agreement made by the parties; sometimes a contract is said to be implied when there is no actual agreement but the law imposes an obligation as though there were a contract between the parties. Even Blackstone did not avoid that ambiguity (Fifoot History and Sources of the Common Law (1949), p.367; Holdsworth History of the English Law, vol.VIII, p.96). Correspondingly, quantum meruit is sometimes used to describe an action to recover a reasonable sum which is due under a contract and sometimes to describe an action to recover a reasonable sum when the obligation to pay it is imposed by law independently of actual contract. As we have seen, indebitatus assumpsit was first expanded to embrace an action of quantum meruit when a contract did not stipulate a fixed sum as the remuneration of the work to be done. Later it was expanded to embrace an action of quantum meruit in quasi-contract when an obligation to pay was imposed by law independently of contract. There is now as there was in the seventeenth century a manifest difference between implying in a contract a term to pay quantum meruit and imposing an obligation to pay quantum meruit independently of contract.
64 In the case of an implied term as to reasonable remuneration, or a claim in restitution based on a quantum meruit, the contractor has an entitlement to recover the fair and reasonable value of the work performed. Although the two types of case often require different considerations because of the existence of a contract in the first and the nature of the remedy in the second, the assessment of this value remains a question of fact to be determined in regard to all of the relevant circumstances. The remuneration will be that calculated at a reasonable work rate for the work done. Alternatively, the value might be assessed by reference to the cost to the contractor, plus a reasonable mark-up for overheads and profit: see generally Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221, per Deane J at 263; Brenner v First Artists' Management Pty Ltd [1993] VicRp 71; [1993] 2 VR 221 at 257 - 259; Sopov v Kane Constructions (No 2) [2009] VSCA 141; (2009) 24 VR 510 at 519 [29] - [30]; Bolot v Capper (1957) 75 WN (NSW) 316 at 317.
65 Most of the discussion in the cases concerning proof of value relates to the situation in which there is a claim based on a quantum meruit, with the defendant raising the issue of negligent workmanship. In such cases it is clear that the plaintiff has to establish that the work was done, that it was done skilfully and without such negligence as renders it worthless, and an entitlement to the amount claimed. It also seems clear that the quality of the work performed is something which needs to be taken into account when assessing value. There is nothing to suggest the same does not apply to a contractual entitlement to reasonable remuneration. In the case of a concluded contract, depending on its type, entitlement may depend on substantial completion.
66 Where some evidence is given that the work was completed with due skill, the burden of adducing evidence may shift, but the burden of proof as to value remains on the plaintiff: Riverside Motors Pty Ltd v Abrahams [1945] VicLawRp 5; [1945] VLR 45 per O'Bryan and Martin JJ (Macfarlan J agreeing) at 53 - 55; Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 at [81] - [82]; Pool Data Systems Pty Ltd v Bayliss [2011] NSWSC 224 at [147].
67 I am not able to find any case where the point about reasonable method or means has been specifically addressed. However, acting on first principles, it seems to me that in a case in which the plaintiff is required to prove the value of work done, where the method or way of doing the work was not the subject of specific agreement, that would involve proof that the method adopted or the way in which the work was done was reasonable in terms of cost to the other party.
68 In cases in which the plaintiff is entitled to reasonable remuneration, that remuneration would not be reasonable if it were done by means which are unreasonably time consuming or lengthy, thereby increasing the overall cost. However, as I have indicated, that would only apply where the means of carrying out the work or of achieving the end result is not the subject of agreement. In the absence of anything to do with an agreed method, which would impact on the enforceability of the agreement, then the recipient of the benefit of the work would not be able to raise the issue of reasonableness.
The repair times as manual are estimated flap repair times.
No allowance has been made to include the use of special tools, the freeing up of seized or rusty parts, the removal of broken studs and the removal of accessories and non-standard fitments
Automotive Computer Diagnostic Centre (ACDC) Pty Ltd
CHETTY & ANOR
AUTOMOTIVE COMPUTER DIAGNOSTIC CENTRE
(1982) 149 CLR 337
(1987) 162 CLR 221
(2009) 24 VR 510