appellant. The respondent is ordered to pay the applicant $2,000 on or before 28 February 2019. The applicant's claim for return of the full $4,500 deposit is dismissed to the extent of $2,500. The...
Key principles
Where a builder fails to comply with s 7AAA of the Home Building Act 1989 (NSW) by not providing a written contract in the prescribed form for work exceeding $5,000, the contract...
A claim for quantum meruit under s 94(1A) of the Home Building Act 1989 (NSW) requires the court or tribunal to determine whether it is 'just and equitable' that the builder...
The assessment of the quantum meruit sum involves determining the reasonable cost of work done and expenditure incurred, with reasonableness assessed by reference to the results...
A party terminating a contract at common law must establish that the other party evinced an intention no longer to be bound by the contract or intended to fulfil the contract...
Issues before the court
Whether the contract was lawfully terminated by the applicant for fundamental breach or repudiation by the respondent
Whether the respondent's failure to provide a complying written contract under s 7AAA of the Home Building Act 1989 (NSW) affects enforceability
Plain English Summary
A homeowner hired a handyman for landscaping work but terminated the contract early, claiming poor workmanship and wrong materials. The Tribunal found that the homeowner actually terminated the contract without proper grounds, but the handyman couldn't enforce the contract because he failed to provide the proper written contract required by the Home Building Act. Because the contract was unenforceable, the handyman could only claim payment for the value of work actually done (quantum meruit). The Tribunal decided $2,500 was a fair amount for the work and materials provided, so the handyman must return $2,000 of the $4,500 deposit to the homeowner.
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Catchwords
Termination - Quantum Meruit
Cases Cited: 33 Electra Pty Ltd v Commonwealth Bank of Australia [2013] NSWSC 1076Darin v Olzomer [2012] NSWCA 60Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273Foran v Wight [1989] 168 CLR 385Galafassi v Kelly [2014] NSWCA 190Jason and Michelle Zammit trading as Zammit's Quality Constructions v Saul Markunsky and Shereen Markunsky [2015] NSWCATCD 21Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] 233 CLR 115
Whether the respondent is entitled to payment on a quantum meruit basis under s 94(1A) of the Home Building Act 1989 (NSW)
Whether the respondent made actionable misrepresentations about being licensed
Cited legislation
No linked legislation citations have been extracted yet.
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] 166 CLR 623
Pavey & Matthews Pty Limited v Paul (1987) 162 CLR 221
Shevill v Builders Licencing Board [1982] 149 CLR 620
Stephenson v State Bank of New South Wales (1996) 39 NSWLR 101
In March 2018, the Home Owner in these proceedings - Mr Rengaraj - contracted with Mr Naveen Chand trading as Chand Handyman Services to do certain landscaping work at his newly constructed home.
The contract price was $12,320, and the Applicant paid a deposit/initial payment of $4,500.
The Applicant claims that the Respondent commenced the work soon after but there were a number of problems. These included a failure to supply the correct materials in accordance with the quotation, using third party contractors without notice, and defective work. He later became aware that the Respondent was not licensed to do the work, and that he had not provided a written contract in accordance with the Home Building Act.
The Applicant states that he unsuccessfully attempted to resolve these matters with the Respondent, including through a complaint to NSW Fair Trading.
There was further discussion about varying the contract to include more work and higher grade materials. However, the parties could not agree on a price.
There is a difference of views about the circumstances in which the work ceased, but the parties agree that the Respondent collected his tools and left the site no later than about 2 weeks after the work commenced. Much of the contracted work had not started.
In October 2018, the Applicant lodged his application seeking return of his deposit of $4,500.
[2]
Proceedings in the Tribunal
The matter first came before the Tribunal on 8 November 2018. The Applicant appeared. There was no appearance of the Respondent. He had requested an adjournment which was denied. The matter was listed for hearing with Directions that each party submit any documents upon which they relied within certain timeframes. Copies of these Directions were sent to both parties.
The Applicant submitted his documents in accordance with the Directions. No documents were submitted by the Respondent.
The Tribunal conducted the final hearing of the application on 7 February 2019. Both parties appeared in person and gave evidence on oath. The Respondent stated he had not received a copy of the Tribunal's directions, nor a copy of the Applicant's documents. He had only received the Notice of Hearing. I checked his address. It was the correct address, and the address to which the mail had been sent. The Applicant confirmed it was the address to which he had sent the Respondent a copy of his documents. He had also sent these documents by email. The Respondent indicated he may not have checked the email from the Applicant carefully.
On all the evidence, I was satisfied that the documents had been served on the Respondent in accordance with the Tribunal regulations. Most of the Applicant's documents were copies of documents already in the Respondent's possession (emails, text messages, quotations etc). Neither party sought an adjournment, and I gave the parties a full opportunity at the hearing to respond to the other party's material.
At various times during the hearing, the Respondent indicated he wanted to rely on evidence that had not been filed. I was not prepared to allow this to occur. Although the Respondent suggested he had not received either the Tribunal's orders of 8 November 2018, nor the Applicant's documents, he had clearly received the 2 notices of hearing for the November 2018 and February 2019 hearings. All of these documents and Notices were sent to the same address. In my view, the more likely situation was that the Respondent had overlooked the other documents sent to him. I was therefore satisfied that he had had a proper opportunity to submit documents in accordance with the Tribunal directions.
Had I allowed the Respondent at this late stage to file documents, this may have required an adjournment of the proceedings to allow the Applicant a proper opportunity to respond to this material. Section 36 of the Civil and Administrative Tribunal Act 2013 provides that the Tribunal must give effect to the guiding principle which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Each party is under a duty to cooperate with the Tribunal in giving effect to the guiding principle and to comply with any directions.
I was satisfied that there was no reason to depart from the usual principle that matters set down for hearing can be expected to proceed on that day.
I explored the possibility of a conciliated agreement at the start of the hearing, but the parties were unwilling to negotiate beyond their previously stated positions.
[3]
Jurisdiction
Section 48A of the Home Building Act (HBA) defines building claim as follows:
"building claim" means a claim for:
(a) The payment of a specified sum of money, or
(b) The supply of specified services, or
(c) Relief from payment of a specified sum of money, or
(d) The delivery, return or replacement of specified goods or goods of a specified description, or
(e) A combination of 2 or more of the remedies referred to in paragraphs (a)-(d)
that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods and services, but not include a claim that the regulations not to be a building claim".
"building goods and services" means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services:
(a) Supplied by the person who contracts to do, otherwise does, that work, or
(b) Supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.
Clause 2(1) of Schedule 1 of the HBA defines residential building work as follows:
"residential building work" means any work involved in, involved in coordinating or supervising any work in:
(a) The construction of a dwelling, or
(b) The making of alterations or additions to a dwelling, or
(c) The repairing, renovation, decoration or protective treatment of a dwelling".
This is therefore a building claim under the HBA, which the Tribunal has jurisdiction to consider pursuant to Section 48K, the claim having been made within the relevant timeframes specified in that section. The reasonable market costs of labour and materials exceeds $5,000 and is therefore not excluded under Schedule 1 of the HBA from the definition of "residential building work".
[4]
Issues
The following issues arise from the submissions and evidence of the parties:
1. What are the Contractual Terms and the scope of works
2. Has the contract been lawfully terminated?
3. Is there any other basis for return of all or any part of the deposit?
[5]
The Contractual Terms and Scope of Works
The contract documentation consists exclusively of the Respondent's quotation of 26 March 2016. This quotation itemises the work to be completed the value of each item of work. Further reference is made to this document below.
[6]
Has the Contract been lawfully terminated?
The applicant relied on the following documents:
1. A document entitled "Dispute details"
2. Email correspondence and text messages between the parties,
3. Quote No. 106 from the Respondent dated 26 March 2018
4. Proof of Payment of deposit - ANZ Bank.
5. Correspondence from Fair Trading NSW
6. Photographs
The Applicant seeks a return of the initial amount paid ($4,500) on various bases. It is common ground that the work ceased not long after it commenced, but there are different versions of events as to how this occurred.
The Applicant claims that he met the Respondent at the steel company where he works. He had been there in relation to his own job as an electrician. He told the person he was dealing with that he was thinking of buying steel for his landscaping job. He was introduced to the Respondent as someone who does landscaping work. The Respondent subsequently came to his home to quote for the job. He submitted the quotation referred to above, and the Applicant accepted this by email.
The Respondent had agreed to commence and complete the work over the Easter break in 2018 (30 March 2018 to 2 April 2018).
The Applicant has the following particular concerns about the Respondent's actions:
1. The Respondent indicated he was licensed to do the work. He later found out through Fair Trading that he did not hold the appropriate licence.
2. The Respondent did not provide him with a sufficient written contract as required under the HBA.
3. On the first day of work, a contractor from "Jim's" arrived with a bobcat. The Respondent never explained that he would be using third party contractors. The contractor's bobcat broke down while he was doing the work. The lever to the lower digger broke, and he had to complete the job manually. Some of the contractor's work caused minor damage to his driveway. He is not claiming for this.
4. The Respondent supplied the wrong dimension steel to construct the channels to house the timber posts to be used for the retaining wall. The steel sections were 62 mm wide. The timber was 75mm hardwood timber, as per the quote. To fit the timber posts within the channel would require shaving off 13 mm, which would weaken the timber.
5. The length of the channel dug was also incorrect and encroached on a neighbouring property
6. The channel was not dug straight. The Respondent had marked out the area using bricks and a paint spray to indicate the location of the holes to be dug. This did not provide an accurate measure. The holes were not at even distance of 2.4 metres as required. Some of the spacing was less, and some was more. The Respondent later indicated this could be corrected "at the end", and this gave the Applicant some hope.
7. The steel posts were meant to be galvanized, as this is required for posts going into the ground to prevent rust. Those supplied by the Respondent were not galvanized. They were bare steel. The Respondent later attended to paint the posts with galvanizing material, but this was not the same.
8. The quote refers to the use of "Buffalo grass at the front and back with premium underlay". What he supplied was not premium quality, according to the private contractor who attended his premises. The Applicant has the supply slip. It was $120 for 4 tonnes. Premium quality underlay would cost at least $300.
9. His neighbour had 3 to 4 metres of leftover grass, and allowed the Applicant to use it. The Respondent spent 60 to 90 minutes laying it. He was later advised by the same contractor that this was not Buffalo grass as promised in the quotation.
[7]
Consideration
Contracts may be terminated either in accordance with the Contract or at common law. In this matter, the only written document is the Quotation. The second page of this Quotation sets out the "Terms and Conditions". The only "terms and conditions" are those relating to when the progress payments are due, and that the balance will change with the choice of grass. There are no conditions relating to circumstances in which either party can terminate the contract.
At common law, where a party to a contract is either unwilling or unable to perform its contractual obligations, that is, it has evinced an intention to no longer be bound by the contract or that it intends to fulfil the contract in a manner substantially inconsistent with its obligations, this may give rise to the right for the other party to terminate the contract. [Galafassi v Kelly [2014] NSWCA 190, Shevill v Builders Licencing Board [1982] 149 CLR 620, Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] 166 CLR 623, Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] 233 CLR 115 and Foran v Wight [1989] 168 CLR 385.]
In the seminal judgment of Shevill v Builders Licensing Board (1982) 149 CLR 620, the Chief Justice refers to the following statement of principle, referenced more recently in 33 Electra Pty Ltd v Commonwealth Bank of Australia [2013] NSWSC 1076 at paragraph 111 by Sackar J:-
"...a contract may be repudiated if one party renounces his liabilities under it - if he evinces an intention no longer to be bound by the contract or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way. In such a case the innocent party is entitled to accept the repudiation, thereby discharging himself from further performance and sue for damages..."
There is no dispute in this matter that the work has ceased. The Applicant suggests that this followed the failure of the parties to negotiate a variation to the contract which was acceptable to both parties, at which point the Respondent indicated he would collect his tools, and the Applicant indicated he sought a full refund. However, the course of events and the email communications between the parties tell a different story.
The evidence makes it clear, and both parties agree that the Applicant wanted the job completed reasonably quickly. The work was to be done on his newly constructed home, and the Applicant told the Tribunal that he was awaiting completion of the landscaping in order to obtain an occupation certificate. The Respondent suggests that the Applicant wanted the work to be commenced almost immediately and to be completed soon after the Easter holidays. There is no time for completion specified on the Quotation, or on any of the correspondence which formed part of the evidence before the Tribunal.
[8]
Defective work, materials
The Applicant the following defects:
1. Use of wrong dimension steel
2. Wrong measurements and digging of channel, and spacing of holes for posts, failure to properly level the ground
3. Use of ungalvanized steel
4. Use of non-premium underlay, and non-Buffalo grass.
The Respondent states:
1. He did not quote for galvanized steel, and that the job did not require hot-dipped galvanized steel. He was proposing an alternative option until stopped by the Applicant
2. The steel parts were not the wrong dimensions to complete the channel for the retaining wall as quoted
3. The channel location and hole spacing would have been corrected, if he had been allowed to finish the job
4. The soil underlay was premium, as quoted. The grass was supplied by the Applicant.
Of the scope of works set out in the Quotation, only part had been commenced by the time the Applicant sought to terminate the contract. In relation to that part, there is insufficient evidence to satisfy me that the work was not in accordance with the contract.
The Applicant's evidence suffers from the absence of independent expert evidence. In circumstances where:
1. The Respondent has always denied the assertions of defective work, and
2. The defects are not evident, or obvious from other evidence:
the Tribunal will generally be unable to make findings at the civil standard of proof in the absence of reliable independent evidence from an expert with the skills and experience to express an opinion. The only other evidence provided by the Applicant are 2 photos - one apparently showing scratches to the driveway, and the other of the steel supplied by the Respondent, apparently showing signs of rust. There is no detailed explanation of the location of the photos, or when they were taken. In the case of the steel, the Applicant offered no explanation as to how it has been kept. In summary, the photos do not provide any obvious additional evidence of the matters of which the Applicant complains.
The contract does not refer to hot-dipped galvanized steel, and there is no independent evidence that this was what was required for the job. The contract does refer to premium underlay and Buffalo grass. There is no independent evidence of the quality of the soil underlay supplied, and the Applicant acknowledges that he supplied the grass for the Respondent to lay.
[9]
Is there any other basis for return of all or any part of the deposit?
The Applicant also raises the following issues for consideration:
1. Respondent had misrepresented that he was licenced to complete the work
2. The Respondent failed to provide a minor works contract in accordance with the requirements of the Home Building Act.
[10]
Unlicensed
A home owner is entitled to contract with an unlicensed builder, but they do at their own risk, unless they have been misled into believing otherwise, and have relied on that misrepresentation to their detriment. In this case, the Applicant alleges the Respondent represented that he was licensed to do the landscaping work. The Respondent denied this, and indicates that he was always intending to sub-contract the work out to licensed tradespeople. I cannot be satisfied on the evidence that the alleged misrepresentation was made, or, that if it was made, the Applicant entered into the contract relying on this representation. The more likely scenario is that the Applicant did not enquire about the existence of the Respondent's licence. The parties agree that they met at the Respondent's workplace, which was unrelated to his work as a landscaper. This should have at the very least alerted the Applicant to the possibility that the Respondent was not licensed, and to make further enquiries. There was no evidence that any of the work done by or on behalf of the Respondent was completed without the necessary licence.
[11]
Lack of complying contract
There are consequences associated with a failure to comply with the terms of the Home Building Act, unrelated to any damages claim. This particularly applies to a contractor who has failed to comply with the requirements to supply a contract in writing.
The Applicant alleges that the Respondent failed to enter into a small works contract as required by s7AAA of the Act which provides as follows:
7AAA Form of contracts (small jobs)
(1) This section applies to a contract only if the contract is not one to which section 7 applies and the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount.
The "prescribed amount" is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST.
(2) A contract must be in writing and be dated and signed by or on behalf of each of the parties to it.
(3) A contract must contain:
(a) the names of the parties, including the name of the holder of the contractor licence shown on the contractor licence, and
(b) the number of the contractor licence, and
(c) a description of the work to which the contract relates, and
(d) any plans and specifications for the work, and
(e) the contract price if known.
(4) The contract must comply with any requirements prescribed by the regulations for the purposes of a contract to which this section applies.
(5) This section does not apply to:
(a) a contract that is made between parties who each hold a contractor licence and is for work that each party's contractor licence authorises the party to contract to do, or
(b) a contract to do specialist work that is not also residential building work.
Note: The exception in paragraph (a) applies to a subcontracting arrangement between licensees, and to a contract between licensees for work to be done on premises that one of the licensees owns.
The prescribed amount at the time this agreement was entered into was $5,000.00. The requirements referred to in (4) are specified in the Regulations:
For the purposes of section 7AAA (4) of the Act, a contract to which section 7AAA of the Act applies that is entered into on or after 1 March 2015 must include a copy of the Consumer Building Guide published by the Office of Finance and Services in February 2015.
It is clear that the quotation was for an amount that exceeded the prescribed amount and that it does not comply with these requirements. In particular, it does not contain the Consumer Building Guide.
[12]
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Registrar
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 09 May 2019
The respondent is ordered to pay the applicant $2,000 on or before 28 February 2019. The applicant's claim for return of the full $4,500 deposit is dismissed to the extent of $2,500. The respondent's claim to retain the full deposit is dismissed.
The Applicant states he raised many of these issues with the Respondent when he spoke to him on site. The Respondent then realised that the Applicant wanted a better job with better materials than he had initially quoted. He said he could provide more premium materials including concrete instead of timber retaining wall. He acknowledged he may have misunderstood the Respondent to say that he was providing hot-dipped galvanized steel. He was prepared to pay "a reasonable variation" to obtain what he wanted. The Respondent indicated he would need to pay 15% extra. He agreed to this.
Soon after, the Respondent sent him a revised quotation (this was not in evidence). The amount of the quotation was significantly more than the extra 15%. He told the Respondent he could not afford this. The Respondent stated he would remove his tools from the site, and he requested the Respondent to refund the money he had paid.
The Applicant's documents include the email and SMS communications between the parties. The SMS communications are not dated.
The first major dated communication is from the Applicant to the Respondent on 6 April 2018. The Applicant sets out details of his complaints including:
The damage to the driveway by the bobcat contractor
The failure of the contractor to properly level the ground
The failure of the contractor to make holes for support posts of consistent distance separate to each other
Steel (PFC) sections of insufficient width to house the timber posts.
The use of bare steel, rather than hot dip galvanised steel
Requoting for an amount 325% in excess of the original, rather than a 15% variation as agreed.
The Applicant finishes this email in the following way:
… 7. In addition … you said to us you bring a couple of workers with you which was not happened (sic) you are doing very very slow.
Unfortunately, you are not doing your job as per contract. We will end our contract you pay us money back. Even though you are not produced any result (sic). You could take $1,500 and you take all material and tools. Refund $3,000 to us.
The Applicant states that he calculated the amount of $1,500 in the following way:
Hire of bobcat and contractor (according to the contractor) $500
Steel $500
Hire of Bunnings ute plus fuel $210
Labour Balance.
He has offered to return the steel to the Respondent.
The Respondent took issue with much of the Applicant's evidence. He provided the following material evidence:
1. He works full-time at a steel company, and does the landscaping work on a part-time basis.
2. He agrees he met the Applicant at his (the Respondent's) workplace. He showed him the steel he would be using. It was not a 62mm width as the Applicant indicates. It was the standard 75mm width, to match the 75mm posts. It was only necessary to shave a few millimetres off the posts to make them fit. This does not affect their structural integrity.
3. It is true that the channels were cut too long. But this could have been fixed before the job was completed.
4. The Applicant indicated he did not have a big budget. He said he would help him with the job. The Applicant initially only spoke about a retaining wall
5. He came to the Applicant's home and "did the estimations". While there, the Applicant asked about other work, and this was included on the quote.
6. He did not state that he had a licence. He was always intending to use other contractors. He explained this to the Applicant before he started.
7. The initial holes made for the posts are always an approximation. They are corrected later. The steel can be moved according to the location of the timber posts.
8. The Applicant wanted everything done over the Easter break. He first came on Easter Friday. The Applicant watched him bring the steel in.
9. He never promised the hot-tipped galvanized steel. The Applicant's budget did not stretch to this. That's why he chose the cheaper option which involved coating the steel with a painted galvanizing product.
10. The soil underlay was a premium product. He paid $300 for the 4 metres, not $120. This was ordered and delivered on Easter Saturday.
11. The Applicant gave him some grass to use, and he spent some time laying it.
12. The Applicant contacted him almost immediately, and continued to contact him throughout the 4 days of Easter. They had further discussions on Easter Monday, when they discussed other options, including constructing a concrete retaining wall. The Applicant agreed to this, and they removed the timber together. He never promised these changes would cost only 15% more.
13. He came back to the Applicant with a revised quote which was 50% more. The Applicant stated he could not afford to pay this extra amount, and requested that he remove his tools. He collected the tools the next weekend.
14. He denies he did a "shoddy job". He had only commenced the work when the Applicant asked him to stop. He did not have the chance to finish the work.
15. He is prepared to refund the Applicant $700, on the basis that he has expended the following amounts:
4 tons of soil $ 300
Galvanizing paint $ 200
Steel $ 700
Bobcat hire and labour $ 800
Hire of ute and petrol $ 240
4 days of labour at $400 per day $1,600
$3,840
The Respondent also made reference to his email to the Applicant which was part of the Applicant's documents. In this email dated 9 April 2018, the Respondent notes that:
1. The Applicant had made the decision to end their association before the construction of the retaining wall had even started. The Applicant initiated the discussions about this, without discussion with him.
2. The Applicant paid the deposit to enable work to commence on Easter Friday, and then terminated the contract verbally before the long weekend was over.
3. His business had never refused or delayed completing the work.
4. His business remains willing to get the material to satisfy the Applicant's requirements.
Only one week after the work commenced, the Applicant emailed the Respondent to indicate that the he was:
not doing your job as per contract. We will end our contract you pay us money back.
Relying on the clear words in this email, the context in which the email was written, and the Respondent's response in his email of 9 April 2018, I find that it was the Applicant who made the decision to terminate the contract.
Was the Applicant entitled to terminate the contract? The Applicant would be entitled if there has been a fundamental breach of his obligations under the agreement between them, or if the Respondent "evinced an intention no longer to be bound by the contract or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way".
In support of this claim, the Applicant alleges that:
1. The Respondent did work not in accordance with the contract, and without due care and skill.
2. The Respondent supplied materials which were not good and suitable for the purpose for which they were to be used.
For these reasons, I cannot be satisfied at the civil standard of proof that the Respondent has completed work without due care or skill, not in accordance with the contract, or that the materials supplied were not good and fit for the job.
If I had been so satisfied, I could also not be satisfied that the Applicant had provided the Respondent with a reasonable opportunity to remedy these defects. The best evidence available would suggest that the Applicant both complained of the alleged defects, and terminated the contract in the same email. All further communications appeared to relate to the demands by the Applicant to return his deposit.
In these circumstances, I cannot be satisfied that the actions of the Respondent amounted to such a fundamental breach of his obligations, that the Applicant was entitled to terminate the contract. Nor am I satisfied that the actions of the Respondent indicated a clear intention not to complete the contracted works. The Respondent indicated clearly in his email of 9 April 2018 that he was prepared to obtain the necessary materials and complete the work, and there was nothing in his actions which indicated differently. There was certainly no delay in proceeding with the work, once the Applicant had accepted the quotation. For these reasons, I find that it was the Applicant, and not the Respondent, who repudiated the contract, and there was no basis therefore for the Applicant to terminate the contract. The Applicant is therefore not entitled to damages.
The Respondent's failure to comply with the terms of S7AAA of the HBA means he cannot enforce the contract (S 10(1)(c)). If the contract is unenforceable, then the Applicant is entitled to a full refund at law, unless he can rely on some other legal principle
The general principle of quantum meruit has been applied by the Court of Appeal on many occasions with respect to building cases involving no written contract, in the context of the HB Act: see, for example, Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277 and Darin v Olzomer [2012] NSWCA 60. To succeed on this basis, the Respondent must establish that it would be just and equitable to recover money for work performed. I note in this matter that neither party was legally represented. The Applicant did not raise this issue, but in my view, this does not relieve me from consideration of any legal issues that might affect liability.
The approach of the Courts to claims for relief on a quantum meruit basis was summarised by Senior Member Goldstein in the Tribunal matter of Jason and Michelle Zammit trading as Zammit's Quality Constructions v Saul Markunsky and Shereen Markunsky [2015] NSWCATCD 21 as follows:
"Section 94(1A) of the Act was considered by Barrett J in Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273. At paragraphs 43 - 61 of his judgement his honour considered the 'just and equitable criterion under section 94(1A)' of the Act and the factors bearing upon the just and equitable assessment.
In considering the just and equitable criterion Barrett J. referred to a number of authorities which establish that the words just and equitable are of wide significance. His honour referred to a passage of the judgement of Sheller JA in Stephenson v State Bank of New South Wales (1996) 39 NSWLR 101 where his honour quoted from a decision of the High Court in Talga v MBC International Limited [1976] HCA 22; (1976) 133 CLR 622.
The passage quoted was:
'Stephen, Mason and Jacobs JJ dealing with the issue raised for the Court by the Banking Act 1974 of whether it was just and equitable that a transaction should be treated as valid, said: 'The court will have before it an existing transaction replete with all its surrounding facts and circumstances and in their light will determine what is just and equitable. In doing so it will certainly be exercising a wide discretion that this is a commonplace of the curial process; the court will be bound to act judicially, exercising its discretion by reference only to such considerations affecting the transaction as, on an examination of the legislation, may be seen to be material to the decision which it is called on to make. Irrelevant matters, matters such as the plaintiffs instanced in the course of argument, which have no rational connection with the policy of the regulations but would be expressive only of the personal predilections of the Court, cannot be allowed by it to play any part in its decision.'
Barrett J. observed that this approach was endorsed by Campbell J in Sullman v Sullman [2002] NSWSC 169.
At paragraph 49 of his judgement Barrett J. stated in connection with section 94(1A) of the Act:
'The inquiry directed by the statute is therefore, in effect, whether the surrounding circumstances are such as to justify the creation of a right and an obligation as to the payment of the sum separately determined to represent fair remuneration. The Act, as I see it, does not attempt to control quantification. That is left to the general principle imported by the expression "quantum meruit". The Act is concerned with factors influencing a decision whether, in the particular circumstances in which the court finds the parties, it is fair that one receive the quantum meruit sum and the other pay it.'
The owners have referred me to the decision of Hall J in Pender v Robwenphi Pty Limited & Anor [2008] NSWSC 1144. In that case Hall J stated, commencing at paragraph 41, in connection with the decision of Barrett J in Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd:
'In relation to the analysis undertaken by Barrett J in Eddy Lau Constructions (supra), the following propositions may be derived from the judgment:-
(1) The words "just and equitable" are of the widest significance and involve evaluations of questions of fact.
(2) In exercising the wide discretion under the provision, a Court or Tribunal is to have regard to considerations affecting the particular transaction as are material to the decision to be made. Irrelevant matters are those that have no rational connection with the policy of the statutory requirement.
(3) The statutory discretion under s.94(1A) must be exercised judicially in light of the whole of the circumstances surrounding the relevant subject matter.
(4) Inquiry is directed to ascertaining whether the surrounding circumstances are such as to justify the creation of a right and an obligation as to the payment of the sum separately determined to represent fair remuneration.
(5) The Act is concerned with factors influencing a decision whether, in the particular circumstances in which the Court finds the parties, it is fair that one receive the quantum meruit sum and the other pay it.
It is apparent from the analysis by Barrett J in Eddy Lau Constructions (supra) that the conduct of the party in breach is an important matter for consideration. In that respect, ignorance or oversight of the statutory requirement under the Act stands in marked contrast to a contravention that is wilful or deliberate.
In my view, it is just and equitable that the Respondent recover something for the work he performed. There is no evidence that the Respondent intentionally neglected his obligations to provide a written contract which complied with the provisions of the HBA. I have found that he did not delay commencing work, or fail to respond to the Applicant's complaints about the standard of the work. He unsuccessfully attempted to resolve the Applicant's concerns through negotiating some variations.
To be entitled to any part of a claim under quantum meruit, the contractor must generally provide some independent evidence as to the true value of the work performed. The Respondents in this case have provided no such evidence. Nevertheless, the Applicant initially acknowledged that he has received some value (to the amount of $1,500) in the work completed by the Respondent. The Respondent gave evidence that he has expended $3,800 in labour and materials of the $4,500 paid by the Applicant.
Pavey & Matthews Pty Limited v Paul (1987) 162 CLR 221 stands for the proposition that a claim for quantum meruit relies upon a claim to restitution, based upon unjust enrichment. In paragraph 75 of Eddy Lau Constructions, Barret J writes:
"The quantum meruit sum is the reasonable cost of the work done and expenditure incurred, with the assessment of reasonableness being undertaken by reference to the results produced and evidence of what it would in the ordinary course of things be necessary to outlay in order to produce those results.
The Respondent had the opportunity but did not provide any supporting evidence in support of the amounts he paid for materials. He indicated he had some further evidence, but for the reasons indicated above at paragraph 12, I did not permit tender of that evidence. Some of the materials used in the work - the timbers - were returned to the Respondent. The Applicant still has the steel and the underlay, and there is insufficient evidence to establish that they are defective. It is also clear that the Respondent, or his contractors did undertake some labour, but the Respondent's claim to 4 full days of labour (either by himself or his contractor) must be treated with some suspicion, given the Applicant's evidence about the course of events over the Easter period.
Doing the best I can with the information provided, and noting the lack of supporting evidence, I am satisfied that the Respondent performed work and supplied materials to the value of $2,500. This is the amount of his quantum meruit claim. As he has received $4,500, I order the Respondent to refund to the Applicant the balance of $2,000. The Respondent is to pay this amount to the Applicant on or before 28 February 2019.