In A.M.O. Rifat Holdings Pty Ltd v Dib [2026] VSCA 124, the Court of Appeal of the Supreme Court of Victoria considered the approach to valuing a builder’s quantum meruit claim in relation to incomplete works in the context of a milestone-based contract.

Pursuant to the terms of a Master Builders contract, Mr and Mrs Dib, the owners, engaged A.M.O. Rifat, the builder, to construct a residential property. The contract entitled the builder to claim milestone payments upon completing each stage of the works. Disputes arose during the course of the project resulting in the builder terminating the contract. The builder subsequently commenced proceedings in the Victorian Civil and Administrative Tribunal seeking (among other things) approximately $365,000 in respect of the incomplete work performed, on a quantum meruit basis.

Where a contract is terminated and the builder’s contractual entitlement to payment has not yet accrued in respect of the works performed up to the date of termination, they may sometimes seek to pursue a ‘quantum meruit’ claim to recover a fair and reasonable sum for the work performed.

At first instance in VCAT, the Tribunal held that the builder had no entitlement to further payment on the basis of its quantum meruit claim.

On appeal, the builder submitted that the Court of Appeal should value its quantum meruit claim by applying:

• the ‘usual approach’, where the Court attributes fair value to the work on the basis of invoices; or
• the ‘contract approach’, where value is determined by taking the amount that would be paid under the contract for the relevant stage of work, and subtracting an amount for the costs to complete that stage.

The Court noted that, in the context of a milestone-based contract, the law does not prescribe a fixed way to value an incomplete work stage on a quantum meruit basis. The Court referred to the High Court of Australia’s significant decision on quantum meruit in Mann v Paterson (2019) 267 CLR 560. The Court observed that in Mann, the HCA did not resolve the question or prescribe a fixed methodology for identifying a ‘fair and reasonable rate’ of remuneration for the services. However, Mann did contemplate that the amount recoverable upon a quantum meruit claim in these circumstances should not exceed the contract price.

Applying these principles, the Court of Appeal found that the common way to value a quantum meruit claim is by reference to the charges commonly made for like services, and that the builder did not provide an adequate or proper factual basis for the Court to do this. It was not appropriate to adopt the builder’s ‘contract approach’, as it was more akin to a contractual damages claim and not a quantum meruit claim for the fair and reasonable sum for work performed.

Ultimately, while the Court refused the builder leave to appeal for reasons relating to limitations of the builder’s evidence and procedural issues, the Court nevertheless affirmed that the correct approach to valuing a quantum meruit claim in these circumstances is by reference to charges commonly made for like services, but capped at the relevant contract amount.

The decision can be found here.