Building law: ‘Mann v Paterson Constructions Pty Ltd’: The end of the rescission fallacy

Travis Shueard, Seamus Brand
(2020) 42(2) Bulletin (Law Society of South Australia) 30-31

Travis Shueard, Seamus Brand, ‘Building law: ‘Mann v Paterson Constructions Pty Ltd’: The end of the rescission fallacy’ (2020) 42(2) Bulletin (Law Society of South Australia) 30-31

Abstract

The High Court recently handed down its decision in 'Mann v Peterson Constructions Pty Ltd', dismissing the "rescission fallacy" as a poor basis for 'quantum meruit' claims. This "fallacy" should no longer be implemented in Australian law. The decision means that building and construction lawyers will now be restrained by the "ceiling price" of a contract when making claims of quantum meruit. Accordingly, the right to seek compensation as quantum meruit will be unavailable where the contract provides for an accrued right of payment at the time of repudiation. While the decision will lead to practical complications (e.g. contracts which allow for provisional payments), the decision does mean that parties will generally be unable to issue a quantum meruit claim hoping to extract far larger amounts than for what the contract otherwise provides."