Have you done work without a contract, and are owed money? The law has developed a body of principles to protect such parties. This doctrine is known as Quantum Meruit.
Quantum Meruit, meaning “what one has earned”, operates where one party has been enriched by the receipt of a benefit, which they gained at another party’s expense, and it would be unjust for the first party to retain that benefit.
The case of Roude v Helwani  NSWCA 310 explored a Quantum Meruit claim, where the main point of contention was how the Court determined the ‘fair and reasonable’ cost for compensation. The key background facts of the case are as follows:
- In 2008, Adib Helwani (the ‘Plaintiff’) was engaged by Ali and Susan Roude (the ‘Defendant’) to perform electrical and plumbing work at the Defendant’s development property.
- Prior to, and throughout the project, the parties did not prepare a written contract, quote or clearly defined scope of works.
- In 2015, the Defendant provided detailed invoices to the Plaintiff which amounted to $123,571.50.
- Throughout the course of the project, the Defendant paid the Plaintiff the sum of $37,500, leaving $86,071.50 outstanding, and the Defendant sued for the latter amount.
At first instance, the local court Magistrate upheld the Plaintiff’s claim and ordered that the Defendant pay the outstanding sum of $86,071.50, plus pre-judgment interest in the amount of $26,588.43. The Defendant appealed this decision for several reasons, notably that there was insufficient evidence of the ‘fair and reasonable’ cost of performing the work.
The Defendant contended that the Plaintiff provided no evidence of a ‘market rate’ to support the reasonableness of his invoices. The court stated that “reference to the calculation of remuneration is to be determined according to what is reasonable, rather than by reference to a market”.
Here, the plaintiff, by virtue of his 30+ years of experience as a licensed builder, electrician and plumber, was qualified to give an expert opinion as to the reasonableness of his charges, and the Defendant’s failure to challenge the invoices at the time they were issued might have amounted to an admission that the charges were reasonable. Therefore, the magistrate did not err in her finding that the charges were ‘fair and reasonable’, and the appeal was dismissed.
If you are currently working for someone without a contract in place, and you are being underpaid or not paid at all, contact our friendly solicitors today on (02) 9299 0112.
Important Disclaimer: The material contained in this publication is of general nature only and is based on the law as of the date of publication. It is not, nor is intended to be legal advice. If you require further information on the content of this publication, please contact our office on 9299 0112.