[1981] HCA 59
Mann v Patterson Constructions Pty Ltd [2019] HCA 32
93 ALJR 1164
McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
[1987] HCA 5
Re MSU Management Pty Ltd
[2009] VSCA 141
South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485
Source
Original judgment source is linked above.
Catchwords
[1981] HCA 59
Mann v Patterson Constructions Pty Ltd [2019] HCA 3293 ALJR 1164
McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221[1987] HCA 5
Re MSU Management Pty Ltd[2009] VSCA 141
South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485[1934] HCA 45
Thomas v Hollier (1984) 156 CLR 152
Judgment (7 paragraphs)
[1]
Solicitors:
Darby Jones Lawyers (Appellants)
Garland Hawthorn Brahe (Respondent)
File Number(s): 2020/71539
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Common Law Division
Citation: [2020] NSWSC 123
Date of Decision: 26 February 2020
Before: Harrison AsJ
File Number(s): 2017/295301
[2]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[3]
HEADNOTE
The appellants appealed to the Supreme Court from a judgment of a Local Court Magistrate who gave judgment for the respondent on a quantum meruit claim for reasonable remuneration for electrical and plumbing work carried out by the respondent. The appeal was on a question of law. The appellants contended that there was no evidence of the fair and reasonable cost of performing the work. An Associate Judge dismissed the appeal finding there was evidence on which the learned magistrate was entitled to rely in determining the quantum meruit.
The respondent carried out extensive electrical and plumbing work for the appellants over a period of five years from 2008. There was no written contract, no quotation, and no defined scope of work. During the course of the work, the appellants paid the respondent $37,500. The respondent issued invoices to the appellants for the work performed for the first time on 21 January 2015. The difference between the amounts already paid and the invoices was some $87,000. No dispute was raised as to the reasonableness of the invoices at that time and their unreasonableness was denied at the trial before the magistrate. The appellants contended that the primary judge erred in holding that there was evidence to support the conclusion that the invoices represented reasonable remuneration for the work performed.
[4]
The Court of Appeal (White, Brereton and McCallum JJA), dismissed the appeal, holding:
[5]
White JA (Brereton JA and McCallum JA agreeing at [56] and [57] respectively)
The appellants' submission that the determination of the quantum meruit claim required the respondent to establish the "market rate" for the work performed or to provide an "objective standard" on which his charges could be judged should be rejected: [23], [29], [34], [45], [49]. The authorities establish that although a quantum meruit claim may be proved by such evidence, a judge is not precluded in the absence of same, on the particular circumstances of each case, from making an assessment as to whether the evidence adduced established the reasonableness of the charges: [35]-[45], [49], [50].
Mann v Patterson Constructions Pty Ltd [2019] HCA 32; 93 ALJR 1164; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5; South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485; [1934] HCA 45; considered.
Flett v Deniliquin Publishing Co Ltd (1964-1965) NSWR 383; Horley v Sector 7G Architecture Pty Ltd (in liq) [2011] NSWSC 827; explained.
The respondent was entitled to give evidence of his opinions to the extent they were based on his specialised knowledge as a licensed builder, electrician and plumber: [21], [30]. The respondent through the tendering of the invoices and the denying of the unreasonableness of the charges explained therein provided some evidence on which the magistrate could find the charges to be reasonable: [10], [24]-[26], [32].
The failure by the appellants to deny liability on receiving the invoices amounted to an admission from which the reasonableness of the charges could also be inferred: [32]-[33].
L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 1) (1981) 150 CLR 225; [1981] HCA 59; Thomas v Hollier (1984) 156 CLR 152 157; [1984] HCA 35: referred to.
[6]
Judgment
WHITE JA: This is an appeal from orders of the Common Law Division (Harrison AsJ) dismissing the appellants' amended summons with costs (Roude v Helwani [2020] NSWSC 123).
By their amended summons the appellants appealed and, to the extent necessary, sought leave to appeal, from a judgment of the Local Court (Atkinson LCM) given on 9 November 2018 in favour of the respondent (plaintiff in those proceedings). Judgment was given for $86,071.50 plus pre-judgment interest in the sum of $26,588.43. The appeal from the judgment of Harrison AsJ lies of right.
The judgment in favour of the respondent in the Local Court was given on a quantum meruit claim by the respondent for reasonable remuneration for electrical and plumbing work carried out by the respondent for the appellants, who, as owner/builders, were constructing a house in Greenacre. The grounds of appeal to the Supreme Court were:
"7 Her Honour erred at law, in that she found that a claim for quantum meruit was proven when there was no evidence of the fair and reasonable cost of performing the work.
8 Her Honour erred by failing to give any; or alternatively adequate, reasons for decision for the respondent's quantum meruit entitlement being $86,071.50.
9 Her Honour erred by failing to apply the correct standard of proof as to the respondent's quantum meruit entitlement, or alternatively, erred by failing to require sufficient evidence to discharge the respondent's standard of proof as to the respondent's quantum meruit entitlement."
The appeal from the decision of the Local Court to the Supreme Court lay as of right on a question of law (Local Court Act 2007 (NSW) s 39). An appeal lay on a ground that involved a question of mixed law and fact, but only by leave of the Supreme Court (s 40). No appeal lay on a ground that involved a question of fact only.
The primary judge did not grant leave to the appellants to appeal on a mixed question of law and fact, and it may be doubted that any such mixed question arose. It is not a ground of appeal to this court that the primary judge did not give leave under s 40 of the Local Court Act to appeal on a mixed question of law and fact. Accordingly, the appeal to the primary judge was confined to questions of law.
The questions of law identified were that there was no evidence of the fair and reasonable cost of performing the work, that the magistrate failed to give adequate reasons, and that the magistrate failed to apply the correct standard of proof. The alternative ground that the magistrate failed to require "sufficient evidence to discharge the standard of proof" was ambiguous. If it meant that on the evidence adduced only one result was open, then it raised a question of law, but did not materially differ from the first question. If it meant that the Magistrate's decision was unreasonable, having regard to the quality of the evidence adduced, then it would not raise a question of law as distinct from a question of fact (Whitehaven Coal Mining Ltd v Pain [2018] NSWCA 229 at [28]-[29]). In McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8 Jordan CJ said (at 9) that:
"But if there is evidence of the fact, the question whether that evidence ought to be accepted in whole or in part, or ought to be accepted as sufficient to establish the fact, is itself a question of fact and not a question of law, unless, of course, there is some law which provides that the particular evidence, when given, is to be taken to establish the fact."
The appellants relied on authorities, referred to below, that considered the adequacy or sufficiency of evidence to prove the fair and reasonable value of services and materials and whether it was necessary, in order to establish such a reasonable value, to do so by reference to an external standard, such as the market price of labour and materials. In considering those authorities it is important to bear in mind the distinction between whether there is some evidence to support a factual finding (which is a question of law) and whether there is sufficient or adequate evidence for a factual finding where the appeal lies by way of rehearing. The appellants' submissions did not always have regard to the distinction.
The respondent carried out extensive electrical and plumbing work for the appellants. The respondent described in detail the work he did. During the course of the work, the appellants paid the respondent $37,500. There was no written contract, no quotation, and no defined scope of work. No invoices were issued prior to 21 January 2015. The respondent explained this by reference to what he said was his friendship with the appellants and what he perceived to be Mr Roude's good standing in the Lebanese Islamic community. He deposed that in early January 2015 Mr Roude asked him to prepare invoices for work he had done and he provided the appellants with three tax invoices on or about 21 January 2015. One invoice was for electrical works in the sum of $62,480, one was for plumbing works in the sum of $52,000 and one was for the supply of materials, the provision of formwork and a concrete plinth for a water tank, and certification of stormwater in a total sum of $9,091.50. These prices included GST.
The sum of the invoices was $123,571.50. The balance outstanding after allowance for the $37,500 paid was $86,071.50.
In an affidavit made in reply to an affidavit of Mrs Roude, the respondent deposed that:
"41. ... I was friends with Mr and Mrs Roude for about 30 years as at January 2015. Neither of them told me that my work was too expensive until these proceedings were on foot. I had previously asked Mr Roude to pay my invoices and he never once refused by saying that they were too expensive or that I had not finished the job. Commencing at page 8 of 'AXH-3' are a series of text messages between Mr Roude and me. In these text messages I am requesting payment for my work. Mr Roude did not text me to say he was not paying because my work was either over priced or unsatisfactory.
...
61. I refer to paragraphs 20 to 25 of Mr Roude's affidavit. At no time until the commencement of these proceedings has Mr Roude complained to me that the invoices I rendered for the electrical and plumbing work which I did at the property were excessive or unreasonable. Nor has Mr Roude complained that the work I undertook was unsatisfactory.
62. I deny that my charges for work carried out at the property are excessive or unreasonable, or that I did sub-standard work at the property."
These paragraphs were read without objection.
The text messages referred to in paragraph 41 quoted above included a message dated 12 August 2015 from Mr Roude to the respondent asking for the spelling of the respondent's full name because Mr Roude was "making cash cheque". The respondent provided his bank account details and asked for confirmation of the amount deposited. He did not receive a response. On 19 October 2015 Mr Roude said that he would "transfer some this week". Two thousand dollars was paid on 24 October 2015. The respondent pressed for further payments. In June 2016 Mr Roude sent a text message saying:
"No change of circumstances. Still having financial problem. Be assured and as I told you before when I am in a better position, you will be the first one to be contacted."
Proceedings were commenced in the Local Court on 29 September 2017 (J [58]).
The respondent provided a detailed breakdown of the prices charged for the items of work in the invoices. The learned magistrate said:
"64 The plaintiff annexed very detailed material to his affidavits showing what work had been carried out and how the invoices were broken down in terms of activities that were carried out and castings. It is clear from his evidence that the house was very large and different to many other houses. For example, it had three levels, a second kitchen in the laundry, 38 sub-circuits, two 10W air conditioners etc. The plans show the wiring layout, positions of lights and switches etc."
By way of example, under the heading "Main power supply", communications hub and "internal sub-board" the tax invoice for electrical works provided in summary form a description of works carried out to the basement, the ground floor, the first floor, entertainment area. Under the heading "Basement" the invoice referred to "wall lights, ceiling lights, double powerpoints, power supply and control wiring to some pumps, smoke detector, provisions for three x dedicated circuits in rear storeroom, motion sensor and control, weatherproof powerpoints in front garden bed on both sides of driveway". In the breakdown of the invoice, to take but the first item of "wall lights", the respondent provided the following information under the heading "Method of Installation":
"Electrical wiring was installed inside PVC conduits which were laid in the concrete slab before the concrete was poured. The brick walls were chased (channel cut) from the ceiling down to the final location of the light. The wired conduit is secured into the wall chase by cement render."
Under the heading "Additional Information" the respondent stated:
"Price includes wiring, installation, and the supply & installation of light switches and installation of light fitting supplied by owner."
He then provided a statement of the quantity of wall lights installed (14), the price per unit ($150) and total amount charged for the item, including GST ($2,100).
There was a similar level of specificity in relation to the other items.
The respondent said, and the magistrate appeared to accept, that he had prepared the schedules containing the breakdown information at the time he prepared the invoices and that they were not prepared for the purposes of the litigation. The schedules containing the breakdown of information were not provided to the appellants when the invoices were provided.
Both parties had prepared affidavits for the hearing in the Local Court to which they attached quotations from third parties as to what third parties would have charged for the work (or some of the work) done by the respondent. The magistrate recorded that the annexed quotations were not admitted when objections were raised.
This left the evidence on the subject of the quantum of fair and reasonable remuneration for the work done as limited to:
the description of the work done in the invoices supplied in January 2015 to the appellants;
the prices charged for that work in the invoices;
the appellants' failure to object to the invoices or the amounts charged;
the promise to make some payment;
the detailed description of the work done;
the prices charged for the items of work and the basis for those charges in schedules prepared at the time the invoices were provided but not given to the appellants until proceedings were commenced; and
the respondent's denial that his charges were excessive or unreasonable, and thereby his assertion that the charges were reasonable and not excessive.
The respondent was himself an expert, being a licensed builder, electrician and plumber, who had been working in the industry for 30 years.
In the Local Court the respondent also sought to rely upon admissions in statutory declarations made by the appellants that were an annexure to a deed of settlement of proceedings between the appellants and a third party. The statutory declarations acknowledged a liability to the respondent in the amount claimed in the invoices. The magistrate rejected that evidence and no issue was raised in this appeal as to the correctness of that ruling.
The appellants submitted before the magistrate that the respondent had not provided any "objective standard" against which the amounts charged in the invoices had been gauged, and did not say how he came to derive the figures in the invoices.
It was put to the respondent in cross-examination that:
"The invoice you gave them in 2015 did not reflect the true cost of performing the work. That's correct isn't it?"
The respondent said, "No it's not". The question was later repeated in substance (Q. "The invoice has never ever reflected the true cost to you of performing the work. That's correct isn't it?" A. "I did.") It is a little hard to know what to make of that evidence. The respondent was not otherwise challenged on his denial that his charges were unreasonable or excessive.
Paragraph 64 of the learned magistrate's reasons for judgment have been quoted above at [14]. Her Honour continued:
"65. There was no other evidence going to the value of the work e.g. affidavits from other contractors. Both parties had annexed quotes to their affidavits but these were not admitted when objections were raised.
66. Most of the second defendant's affidavit was not read and she gave limited evidence during cross-examination in relation to her complaint of overcharging. However this was of little utility as she was clearly not qualified to give expert evidence.
67. The plaintiff's reply affidavit of 19 July 2018, addressed and refuted various matters raised by the second defendant in the portions of her affidavit that were not read, including issues relating to defects and any rectification work.
68. ... it was put that it would not be just and equitable to permit recovery on a quantum meruit basis and that the plaintiff's affidavits cannot fairly and accurately reflect the work performed and the cost thereof. Amongst other things, the submissions noted that the plaintiff did not provide any objective standard against which the figures could be assessed. I note that it was put [to] the plaintiff and he denied that the supporting documents had been created for the purpose of litigation.
69. Although there is less evidence before the court than would be preferred, this does not relieve me of the obligation to do the best I can and assess whether the amount being claimed is fair and reasonable.
70. Having considered all of the evidence, I find on the balance of probabilities that:
● The defendant did carry out the work he said he carried out noting the second defendant's concession during the hearing about the work that was carried out.
● The defendant has included detailed working showing the work that was carried out and how he calculated the invoices in relation to that work
● The amount that he is claiming is fair and reasonable noting that there is no expert evidence to contradict this finding.
...
72 The second defendant agreed during cross-examination that the house 'was mostly completed [in January 2013] but there was a lot of uncompleted jobs'."
[7]
Amendments
02 December 2020 - Para 30, penultimate sentence, "respondent" amended to "appellant".
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Decision last updated: 02 December 2020
The primary judge dismissed the appeal from Magistrate Atkinson's decision. On the critical question in this appeal as to whether there was evidence to support the magistrate's finding that the amount claimed was a fair and reasonable value for the electrical and plumbing work done for the appellants' benefit, the primary judge said:
"93 I note that Mr Helwani was not challenged at the hearing in the Local Court as to the reasonableness of his costings, nor asked with any specificity by counsel for the Roudes to justify the prices listed. Apparently both parties attempted to tender quotes from various experts at the hearing in the Local Court, but none was admitted after objections. It is in this context that Mr Helwani provided the only evidence of the value of the works.
94 The second issue raised by the Roudes is that Mr Helwani's invoices cannot alone constitute evidence of the fair and reasonable cost of the works. As authority, the Roudes referred to Horley v Sector 7G Architecture Pty Ltd (in liq) [2011] NSWSC 827 ('Horley'), another case in which the respondent advanced a quantum meruit claim.
95 In Horley, Schmidt J stated at [117]:
'[117] In neither a contractual Liebe v Molloy claim, nor a quantum meruit claim is it sufficient for a plaintiff to establish simply that the services in question have been provided and that a claim for payment has been made. More is required if the onus falling on a plaintiff to make out the case pressed, is to be met. There has to be evidence led either as to the fair value of the work, or its reasonable value.'
96 In Horley, Schmidt J continued at [121]:
'[121] In fact, there was no evidence at all from which it could be concluded that the charge out rates pressed by the defendant in these proceedings represented fair or reasonable rates for the work performed by Mr Howieson and his daughter. All that is known about those rates is that they were the rates which the defendant charged at the time.'
97 However, the facts in Horley are different to those in this appeal. In Horley, the invoice provided no explanation of the work to which it related, the hours involved, the rates by which it was calculated or how the total sum had been calculated ([101]). The builder in Horley had also created the invoices years after the works were completed, and only after proceedings were commenced. In these proceedings, the Magistrate accepted Mr Helwani's evidence that he created the detailed invoices in 2015 and not for the purposes of litigation. Mr Helwani's invoices and relevant documents are also 32 pages in length, with charges and works set out in great detail.
98 The Magistrate acknowledged at [69] of her decision that there was 'less evidence before the court than would be preferred'. However, her Honour continued:
'[T]his does not relieve me of the obligation to do the best I can and assess whether the amount being claimed is fair and reasonable.'
99 The evidence on which the Magistrate based her assessment included the invoices, plans and photographs of the house in Mr Helwani's affidavit. Those documents show the house to be 674.3 square metres, comprising 5 bedrooms, 5 bathrooms, and an underground garage for 2 cars with a turning bay and storeroom. Mr Helwani, who had 30 years of experience, gave uncontested evidence that the house had around 5 times the sub-circuits of an ordinary house that size, and twice as many air conditioning units. The Magistrate referred to these details at [64] of her decision. Her Honour was also aware that it took 6 years between 2008 and 2013 for Mr Helwani to complete the plumbing and electrical works in the house. Having considered this evidence, the Magistrate was satisfied that Mr Helwani's 'detailed workings show[ed] the work that was carried out and how he calculated the invoices in relation to that work' ([70]). It was her view that his claim was fair and reasonable on the balance of probabilities.
100 I will consider the adequacy of the Magistrate's reasons in more detail under the second ground of appeal. However, for the purposes of this ground of appeal, it is my view that the Magistrate did not err by making her determination without evidence of the fair and reasonable cost of performing the work. On the contrary, she made the finding on the ample evidence available to her through Mr Helwani's affidavits, detailed drawings and invoices showing the breakdown of his charges for various items and labour. It was open to her Honour to consider the scope and value of the works, and accept the invoices as representing their fair and reasonable cost. This ground of appeal fails."
The appellants submitted that a claim for quantum meruit is for the fair and reasonable price to be paid to the builder for the work he has performed, the benefit of which has been accepted (citing Sopov v Kane Constructions Pty Ltd (No. 2) (2009) 24 VR 510; [2009] VSCA 141 at [29]-[30]). They also submitted that:
"What is fair and reasonable remuneration is determined by proof of 'remuneration calculated at a reasonable market rate for the work done or the fair market value of the materials supplied'" (citing Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 per Deane J at 263).
The appellants submitted that the respondent had adduced no evidence of a "market rate" and submitted that there was no evidence that the price charged by the respondent in his invoices was fair and reasonable. All that the invoices and the detailed schedule giving a detailed breakdown of the work done and, in some cases, setting out the methodology by which the amount charged was calculated, established, was the price that the respondent proposed to charge. That evidence, so it was submitted, was not capable of establishing a fair and reasonable market rate for the work done.
The appellants submitted that the fact that the respondent was not challenged in cross-examination as to the reasonableness of his charges wrongly reversed the onus of proof. The onus was on the respondent to establish the reasonableness of his charges. The latter proposition can be accepted. It does not follow that either the primary judge or the magistrate reversed the onus of proof. The respondent had given evidence by affidavit (which was not objected to) that his charges were reasonable. There was nothing unreasonable about his charges on the face of the invoices and the detailed description of the work done. By reason of his experience in the industry the respondent was qualified to give an expert opinion as to the reasonableness of the charges (Evidence Act 1995 (NSW) s 79). The fact he was not called as an expert witness does not affect the admissibility of his evidence to the extent his opinions were based on his specialised knowledge (Yeats v Nominal Defendant [2004] NSWCA 259 at [12] and [35]; Sochorova v Durairaj [2020] QCA 158 at [23] and [37]-[40]). The opinion expressed, if objected to, would have been inadmissible. But the opinion was not objected to. If it had been, the respondent may have been allowed to give evidence that set out the basis for the opinion. By not objecting to the evidence, but being able to assert that it should be given little weight, counsel for the appellant made a tactical decision that could not be criticised. But it left some evidence that the respondent's charges were reasonable.
There was no error in the reasoning of either the magistrate or the primary judge in observing that the respondent was not cross-examined on that opinion.
Because the opinion provided some evidence of the reasonableness of the respondent's charges, there was no error of law in the magistrate's finding that the charges were reasonable.
There was further evidence for that finding in the failure of the appellants to dispute the reasonableness of the invoices. A failure to respond to a demand for payment may amount to an admission if there are circumstances which render it more reasonably probable that a person who denied liability for the claim would answer the claim than that he would not (L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 1) (1981) 150 CLR 225 per Gibbs CJ at 230; [1981] HCA 59; Thomas v Hollier (1984) 156 CLR 152 per Gibbs CJ at 157; [1984] HCA 35; J D Heydon, Cross on Evidence at 33,435).
The appellants submitted that before it could be found that the charges in the respondent's invoices were fair and reasonable, the respondent had to prove what was a fair and reasonable market rate for the work done. Properly understood, none of the authorities relied upon establishes that proposition.
The appellants first rely on the reasons of Deane J in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5 and the reasons of Nettle, Gordon and Edelman JJ in Mann v Patterson Constructions Pty Ltd [2019] HCA 32; 93 ALJR 1164 at [203]-[204].
In Pavey & Matthews Pty Ltd v Paul Deane J said (at 257):
"In a category of case where the law recognizes an obligation to pay a reasonable remuneration or compensation for a benefit actually or constructively accepted, the general concept of restitution or unjust enrichment is, as is pointed out subsequently in this judgment, also relevant, in a more direct sense, to the identification of the proper basis upon which the quantum of remuneration or compensation should be ascertained in that particular category of case."
Deane J elaborated on this (at 263):
"What the concept of monetary restitution involves is the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or "enrichment" actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided (e.g. remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied)."
The appellants rely on these words.
Deane J immediately went on to say:
"In some categories of case, however, it would be to affront rather than satisfy the requirements of good conscience and justice which inspire the concept or principle of restitution or unjust enrichment to determine what constitutes fair and just compensation for a benefit accepted by reference only to what would represent a fair remuneration for the work involved or a fair market value of materials supplied."
Deane J then provided examples.
Deane J did not say that assessment of the "fair value of the benefit provided" was to be determined only by reference to the fair market value of work done or materials supplied, thereby implying that in the absence of evidence of market value, a claimant could not prove the fair value of the benefit provided. The appellants' contention to the contrary ignores the fact that the words in brackets were given only by way of example. It also ignores the fact that reference to the calculation of remuneration is to be determined according to what is reasonable, rather than by reference to a market.
In Mann v Paterson Constructions Pty Ltd, Nettle, Gordon and Edelman JJ said:
"203 In some circumstances, it is necessary or appropriate that the benefit of work to the defendant be determined without reference to a contract price. As Dixon J observed in South Australian Harbors Board v South Australian Gas Co, [(1934) 51 CLR 485 at 499 (Evatt and McTiernan JJ agreeing at 508); [1934] HCA 45] identification of 'a fair and reasonable rate of remuneration, in other words a quantum meruit', raises a 'question of fact', the answer to which 'depends very much upon the methods of reasoning which are pursued'. Where the claim to quantum meruit is founded upon a contract which does not expressly fix a price for services, 'usually' the value of those services will be 'assessed by reference to charges commonly made by others for like services', unless no such standard is available. [(1934) 51 CLR 485 at 501 per Dixon J, see also at 490 per Starke J.] In such cases, practical necessity justifies the default application of an objective price derived from outside the contract which ordinarily depends on evidence of supply costs and market conditions. [(1982) 149 CLR 600 at 616 per Brennan J; [1982] HCA 53.]
204 Equally, where the claim is founded on an obligation to pay for services rendered under a contract which is unenforceable, it has been held that '[o]rdinarily' the measure of restitution 'will correspond to the fair value of the benefit provided (eg remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied)'.[Pavey & Matthews (1987) 162 CLR 221 at 263 per Deane J.]
The reasoning of Dixon J in South Australian Harbours Board v South Australian Gas Co (1934) 51 CLR 485; [1934] HCA 45 (with which Evatt and McTiernan JJ agreed) was that the appellant was entitled to an amount that should be found "as a matter of fact to represent a fair and reasonable rate of remuneration, in other words a quantum meruit." (at 499) Dixon J said (at 501) that:
"Upon a quantum meruit, usually the value of services is assessed by reference to charges commonly made by others for like services. But in the present case no such standard is available."
It is clear from Dixon J's reasons which were adopted by Nettle, Gordon and Edelman JJ in Mann v Paterson Constructions Pty Ltd that assessing a fair and reasonable rate of remuneration is a question of fact and that reference to a charge "commonly made by others for like services" is a usual measure for assessing that fact where such a standard is available.
Far from supporting the appellant's submission that the reference to an external standard such as market value is essential to establishing the reasonable value of the services provided, the authorities cited are to the contrary.
An authority which was not cited, but which was referred to by Ward J (as her Honour then was) in Re MSU Management Pty Ltd; Urusoglu v MSU Management Pty Ltd & Ors [2011] NSWSC 54 at [366] (which was cited) is Flett v Deniliquin Publishing Co Ltd (1964-1965) NSWR 383.
Flett v Deniliquin Publishing Co Ltd was an appeal to the Full Court from a judgment of the District Court where the appeal was not confined to an appeal on a question of law. There, the appellant had been employed under an oral contract for service as an incident of a contract for the sale of a business where the sale agreement was declared to be void. The appellant sued for a quantum meruit for reasonable remuneration for overtime worked by him, remuneration for which was not payable under the oral contract for service, but to which he claimed to be entitled on the basis that the oral contract of service was inextricably tied to the agreement for the sale of the business which had been declared to be void. Herron CJ was prepared to assume that all agreements, including the service agreement, became void ab initio (at 385.8) and the appellant was entitled to a fair value for the work done (at 385.9). His Honour said:
"In a case of quantum meruit the value of the services rendered is, as the Latin expression implies, a claim for what the services reasonably were worth. It is therefore properly assessed at the normal market rate or price prevailing when the benefit was received. In seeking a measure of reasonable reward, the parties' ineffective contract may be looked at for this purpose and in some cases the degree of benefit conferred on the defendant may be taken into account: Way v Latilla, [1937] 3 All E.R. 759. But there must be some evidence of a market or prevailing price. The Federal Country Printing Award 1959 was tendered but this related to linotype operators and such employees. The appellant was no menial servant; he acted as the senior executive of the respondent. A comparison made with the remuneration of one Bushby, who was general manager and who received £30 per week irrespective of hours worked, did not assist the appellant's case on this issue. The contract of service provided for £30 per week without reference to hours worked or so-called overtime. No starting or knock-off times were stipulated for the manager or that his salary was paid for a working week of forty hours and, as a large part of the production of the newspapers seems to have been done at night, the evidence would not enable a court to say what in such a case represented so-called overtime. Put in another way, there was no external standard to which the trial judge could refer to define the quantum of the claim."
Ferguson J agreed with the Chief Justice.
This was a finding of fact in the particular circumstances of that case. The Full Court did not purport to lay down any general rule that in all cases evidence of such an external standard was necessarily required before a finding of reasonable remuneration could be made.
The appellants relied upon the decision of Schmidt J in Horley v Sector 7G Architecture Pty Ltd (in liq) [2011] NSWSC 827 where her Honour held in the particular circumstances of that case that no evidence had been led from which it could be concluded that an amount invoiced by the plaintiff in the Local Court was evidence of a reasonable sum for the work performed (at [123]-[127]).
That was a finding particular to the facts of that case made in the context of a grant of leave to appeal on a mixed question of fact and law.
In the present case the primary judge did not err in her reasoning in paras [98]-[100] quoted above (or otherwise).
On appeal, the contention that the magistrate and the primary judge failed to provide adequate reasons was not pressed.
Each of the grounds of appeal was that there was no evidence of the fair and reasonable market rate for the work performed, or variations on that ground. For the reasons above, that is not so.
For these reasons I propose that the appeal be dismissed with costs.