Pavey & Matthews Pty Ltd v Paul

Facts

Pavey & Matthews Pty Ltd, a licensed builder, performed building work for Barbara Paul pursuant to an oral contract that was unenforceable under s 45 of the Builders Licensing Act 1971 (NSW) because it had not been made in writing and signed by the parties. After completing the work, Pavey & Matthews sued Paul for payment on a quantum meruit basis. Paul resisted the claim on the ground that the unenforceability of the oral contract precluded any recovery.

Issues

1. Whether a quantum meruit claim for work done and materials supplied under an unenforceable contract is grounded in implied contract or in unjust enrichment. 2. Whether the unenforceability of the oral contract under the Builders Licensing Act 1971 (NSW) barred a restitutionary quantum meruit claim.

Holding

The High Court (Deane and Gaudron JJ, Mason and Wilson JJ dissenting in part) held that a quantum meruit claim is founded on the law of restitution — specifically the principle against unjust enrichment — and not on any implied contract, and that the statutory unenforceability of the oral agreement did not bar recovery on that basis.

Ratio decidendi

A claim for quantum meruit for work done and accepted arises independently of contract, being grounded in the obligation imposed by law to restore a benefit unjustly retained; the unenforceability of an underlying contract does not preclude such a restitutionary claim where the defendant has received and accepted the benefit of the plaintiff's performance.

Obiter dicta

Deane J (with whom Gaudron J agreed) expressed the view that unjust enrichment is a unifying legal concept underlying a variety of personal obligations recognised in Australian law, and that it should be acknowledged as a distinct and principled basis of liability rather than being assimilated to implied contract theory. Mason and Wilson JJ, while concurring in the result, expressed reservations about wholly displacing the implied contract analysis.

Significance

Pavey & Matthews is the foundational Australian authority establishing that restitutionary claims rest on unjust enrichment as an independent source of obligation distinct from contract, and it remains the starting point for all subsequent High Court development of Australian restitution law.

Key authorities

• Moses v Macferlan Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676considered
• Deglman v Guaranty Trust Co of Canada Deglman v Guaranty Trust Co of Canada [1954] SCR 725considered
• Renard Constructions (ME) Pty Ltd v Minister for Public Works Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234cited
• Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32considered
• Craven-Ellis v Canons Ltd Craven-Ellis v Canons Ltd [1936] 2 KB 403considered
• Sinclair v Brougham Sinclair v Brougham [1914] AC 398considered