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Damages, quantum meruit

Darin v Olzomer [2011] NSWDC 51. Johnstone DCJ. 20.05.11.

14 The question of the quantification of a quantum meruit claim was most recently considered by the Victorian Court of Appeal in Sopov v Kane Constructions PL (No 2) [2009] VSCA 141.

There, the court held that the proper approach to assessment of a quantum meruit claim is to ascertain the fair and reasonable value of the work performed: "Axiomatically, the measure of the restitutionary remedy is the value of the benefit conferred on the party which received it." [24]

15 The court rejected the notion that the contract between the parties has some continuing influence when the value of the work is being assessed on a quantum meruit, because the quantum meruit remedy rests on the fiction of the contract having ceased to exist. Thus the alternative remedy "ignores the bargain which the parties struck." [21]

16 However, the court went on to say:"It is true that the contract price is relevant on a quantum meruit, but not because of any 'continuing influence' of the contract. The price is merely a piece of evidence, showing what value the parties attributed - at a particular time - to the work which the builder was agreeing to perform." [21]

17 Thus, the contract price, which is struck prospectively, does not operate as a ceiling on the value of the work done, but it may nevertheless act as a guide to the reasonableness of the remuneration claimed. [24]

The court went on to say that the contract price is not the 'best evidence' of the value of the benefit conferred. [26] Nevertheless, proof of the costs incurred in performing the work can be used to establish the value of the work done. [30] Furthermore, the contractor entitled to the quantum meruit was entitled to a margin for profit and overhead. [35]

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