High Court considering builder’s claim

The full bench of the High Court of Australia considered an appeal to a point of law on Tuesday 14 May 2019 in Canberra. In the matter of Mann & Anor v. Paterson Constructions Pty Ltd – Case M197/2018, the High Court of Australia has considered a builder’s claim following an unlawful termination of a building contract by the owners.

The outcome will be closely viewed around any impact to one of the nation’s largest, non-service related industries, the Housing and Construction industry.

Kalus Kenny Intelex is acting for the builder, Paterson Constructions, (the respondent) which has succeeded in two courts of appeal claiming the reasonable value of work done following the entry of a contract to construct two townhouses with its customer (the appellants).

The builder claimed that the property owners’ attempt to terminate the contract before construction was completed was a repudiation of the contract, with a resulting claim for a reasonable sum of money for work done (the legal claim is known as quantum meruit).

In December 2016 the appellants were ordered by the Victorian Civil and Administrative Tribunal (VCAT) to pay the respondent a substantial quantum meruit sum of approximately $660,000 associated with the construction of two townhouses in Blackburn in Melbourne’s east.

The matter has been appealed to the Supreme Court of Victoria and the Court of Appeal. In December 2018 the High Court of Australia granted leave to further appeal to the High Court. The critical points of law are now being considered by the High Court of Australia.

A Partner of Kalus Kenny Intelex, Jonathan Kenny, and Senior Associate, Peter Lettieri, have overseen this matter.

Mr Kenny said: “The decision of the High Court will provide clarity for the building and construction industry around the important area of the basis on which damages can be sought following the termination of a contract.”