Another in the series of applications in this long, drawn-out case which turns upon Gambaro's claim for restitution for amounts paid to Rohrig under adjudication on the basis that they exceed Rohrig's entitlement to payment under the contract.

In the original application in this series, Rohrig sought to strike out Gambaro's pleading in its entirety on the basis that sections 99 and 100 of Building and Construction Industry Payments Act 2004 (Qld) (Qld SOP Act) prevented the principal from claiming the moneys back, at least for the life of the contract. In that case, Justice Atkinson held that Qld SOP Act did not prevent or suspend a party from enforcing their contractual rights by civil litigation, for the life of the construction contract or at all: Gambaro Pty Ltd v Rohrig (Qld) Pty Ltd [2015] QSC 170. The application to strike out Gambaro's pleadings was denied.

Nearly three years on and the courts have considered yet another strike out application in relation to Gambaro's pleadings: Gambaro Holdings Trust v Rohrig (Qld) Pty Ltd [2018] QSC 149.

The basis of Rohrig's application this time:

  1. There was no basis on which to calculate Rohrig's entitlement under the contract as the contract had been terminated and no final payment certificate had been issued.
  2. Gambaro's claim for restitution relied upon the terms of the contract that, on Gambaro's own case, had been terminated.Gambaro claimed restitution for the difference between the amounts paid to Rohrig (both under the contract and by way of adjudication applications) and the guaranteed maximum price under the contract (as adjusted) as the cost of the works performed prior to termination.In support of this, Gambaro relied upon clause 2.1 of the contract which defined the "cost of the works" as the guaranteed maximum price under the contract.
  3. Section 100(3)(b) of Qld SOP Act did not provide Gambaro with a right to restitution.
  4. Gambaro did not have an arguable action for money had and received as there was not an absence of consideration by Rohrig (the building work under the contract being substantially complete).

Chief Justice Holmes held that Rohrig's first argument was incorrect – termination of the contract or the absence of a final payment certificate did not make it impossible to assess Rohrig's entitlement under the contract.

As to the second ground, Chief Justice Holmes (referring to the judgment in Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd [1995] 2 Qd R 350) found that there was no "real prospect" of Gambaro demonstrating that clause 2.1 survived termination of the contract. As such, the valuation of the works completed was not limited to the guaranteed maximum price or the cost of the works under the contract.

She also accepted Rohrig's third ground for strike out, finding that it was doubtful that Gambaro could rely on s 100 "as giving it some independent restitutionary right", citing John Holland Pty Ltd v Roads and Traffic Authority of New South Wales [2007] NSWCA 140.

The court rejected Rohrig's fourth ground, finding that Gambaro's position was arguable as the portion of the adjudicated amounts paid to Rohrig that Gambaro claimed as an overpayment could be treated separately to the consideration payable under the contract. On Gambaro's case, the payments were not made in exchange for Rohrig's performance of the obligations under the contract, so there was no consideration. Chief Justice Holmes noted that a failure of consideration could extend to a "payment for a purpose which has failed as, for example, where … a contemplated state of affairs has disappeared." Applying this reasoning to the facts, she considered that the state of affairs under which the overpayment was made (being the statutory obligation under Qld SOP Act to make the payment), had arguably disappeared to allow the actual contractual entitlement to be determined, resulting in an absence of consideration for the overpayment.

Chief Justice Holmes ordered parts of Gambaro's pleadings to be struck out, with leave to re-plead.