Catchwords

Where builder fails to include cost estimate in 'cost plus contract' – Domestic Building Contracts Act 2000 (Qld) (Act) section 55(4) – ability to pursue claim for quantum meruit

Significance

A builder who fails to provide a cost estimate in a 'cost plus contract' under the Act can still pursue a claim for outstanding payments on a quantum meruit basis.

Facts

Mr and Mrs Riggall (respondent) contracted with CMF Projects Pty Ltd (appellant) to renovate their home.  The parties entered into a 'cost plus contract' (contract) within the definition of Schedule 2 of the Act.

The Act precludes a builder from enforcing a 'cost plus contract' that does not contain a cost estimate. As the contract did not contain an estimate of the appellant's costs, the appellant was unable to enforce the contract.

The appellant commenced proceedings against the respondent in the District Court, alleging the respondent owed $182,252 in outstanding payments. Because the appellant could not claim the payment under the contract, it brought its action in debt and as a claim for quantum meruit.

The trial judge struck out the paragraphs of the appellant's claim that referred to its claim in debt and its claim for quantum meruit. The trial judge held that the Act precludes a builder who fails to provide an estimate in a cost plus contract from claiming for outstanding payments regardless of whether the claim is brought as an action under the relevant contract, as an action in debt or as a claim for quantum meruit.

The appellant appealed, arguing the trial judge erred in holding that the Act prevented the appellant from maintaining a claim for quantum meruit.

Decision

The Court of Appeal upheld the appeal.

The court held that the appellant had a common law right to raise a claim for quantum meruit. Although the court recognised that statute may remove a common law right, the court held the legislative intention to take away that right must be clearly expressed.

The court rejected the respondent's argument that the legislative intention to remove the appellant's right to maintain a claim for quantum meruit is contained in section 55(4) of the Act.  Section 55(4) of the Act requires payment claims involving cost plus contracts that do not provide a cost estimate to be brought before the Queensland Civil and Administrative Tribunal (QCAT). The court held that section 55(4) of the Act intends to regulate a jurisdiction conferred on QCAT and does not intend 'to abrogate a right to claim on a quantum meruit basis'.