Case in brief Australia examines the legitimacy of quantum meruit claims following contract termination for repudiation In Mann v Paterson Constructions Pty Ltd [2019] HCA 32, the High Court of Australia has clarified the ongoing controversy as to the remedial options available to a contractor that has terminated a contract following a repudiation by the principal. Mann v Paterson Constructions Pty Ltd: the facts The appellants, Peter and Angela Mann, engaged the respondent, Paterson Constructions Pty Ltd (Paterson), to construct two double story town houses on their Langtree Court property in Blackburn, Melbourne. The terms of the engagement were recorded in a written construction contract. Construction commenced in March 2014, but the town houses were not completed by the due date for completion in December 2014. Unit 1 was completed and handed over to the Manns in March 2015. In April 2015, before the completion of the second unit, the Manns said that Paterson had refused to return to site until payment of an invoice for variations was paid and that works completed were defective. They argued that this amounted to a repudiation of the contract which they then purported to accept. Paterson’s position was that the Manns had unlawfully terminated the contract, that unlawful termination itself amounted to a repudiation which Paterson then purported to accept. Whatever the case, one thing was certain – the contract had been terminated one way or another. In the first instance, Paterson was successful in seeking relief on a quantum meruit basis. That judgment was upheld by the Supreme Court of Victoria. Special leave to appeal was granted for the Manns to challenge that decision in the High Court of Australia. There were two key issues before the High Court. First, whether a contractor was entitled to sue on a quantum meruit after terminating the contract for repudiation, and second, if the contractor was so entitled, whether the contract price operated as a ceiling on the amount able to be claimed on a quantum meruit basis, even where the contract had been terminated. The position prior to Mann In a case where a contract had been terminated following a repudiation of that contract, the innocent party was entitled to elect to sue for damages on the basis of breach of contract or on a quantum meruit basis. Damages awarded on a quantum meruit basis might exceed what would be recoverable under a breach of contract action. This is the position followed by much of the common law world.