In a recent home building case, the New South Wales Court of Appeal confirmed that evidence of an objective standard or "market rate" is not necessarily required when determining a fair and reasonable quantum meruit amount.

Roude v Helwani [2020] NSWCA 310 concerned a claim by a builder for payment for work done on a residential building project. The builder carried out plumbing and electrical works on a "do and charge basis" over five years. The owner failed to pay the invoiced amounts claimed by the builder. Since the builder had not complied with the requirements under the Home Building Act 1989 (NSW), it could not enforce the contract. However, in Lower Court proceedings, the builder was successful in its recovery on a quantum meruit basis.

In the Court of Appeal, the appellant owners argued that a quantum meruit assessment needs to be based on establishing a "market rate" for the work. In particular:

  • the builder needed to provide objective evidence; against which the reasonableness of the invoiced amounts could be assessed;
  • the invoices alone (without reference to an objective standard; such as market value) were not capable of establishing the reasonable value of the work done.

The Court of Appeal rejected the appellant's submission that the Court must look to evidence of objective or "market value" when valuing a quantum meruit entitlement. The Court observed:

"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".

The Court of Appeal noted several factors supporting the trial judge's finding that evidence of reasonable remuneration existed, including:

  • the owners' earlier failure to object to the invoices supplied;
  • the owners' earlier promises to make some payment; and
  • the absence of any expert evidence led by the owners to contradict the reasonableness of the invoiced amounts.