Last Updated on 30/03/2026 by Damin Murdock
In our previous article titled Demanding payment without sufficient home warranty insurance, we discussed the consequences for a licenced contractor who did not obtain sufficient home warranty insurance for building works. In this article, we discuss the exception to the rule. Pursuant to s 94 of the Home Building Act 1989 (NSW) (the “Act”), a court or tribunal may award damages if it considers it to be just and equitable to do so on a quantum meruit basis. Quantum meruit refers to the reasonable value of services provided.
In the case of Pender v Robwenphi Pty Ltd & Anor [2008] NSWSC 1144, the home owner had engaged the first defendant to undertake electrical work at his premises. The defendant did not obtain home warranty insurance for the works done and the plaintiff subsequently refused to pay for the works. The matter was heard before the CTTT which found in favour of the defendant. The plaintiff appealed to the Supreme Court of New South Wales.
The Court exercised its discretion pursuant to s 94 and found in favour of the defendant, considering it just and equitable that it recover monies on a quantum meruit basis for the work done despite its failure to obtain the required contract of insurance. The court held that the CTTT did have regard to relevant matters in the exercise of its discretion.
Those included:
- that the plaintiff would stand to gain the benefit of the work without paying for it should the defendant’s claim be refused;
- that the failure to have a contract of insurance in place had no measurable impact on the resale value of the property;
- the first defendant was unaware of the requirements to obtain home warranty insurance because it practiced principally in industrial and commercial electrical work; and
- there was no conduct on the part of the defendant that was dishonest.
Tips
- If you anticipate doing construction work outside your usual area of practice, seek advice about the law in that area first; and
- Remember that home warranty insurance is necessary in the home building industry.
If you have any questions in relation to this article, please contact Damin Murdock at Leo Lawyers on (02) 8201 0051 or at office@leolawyers.com.au.
DISCLAIMER: This article is not to be taken as legal advice and is general in nature. If you require specific advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) has over 17 years of experience as a commercial lawyer. He helps businesses navigate construction and technology law. Damin has held several big leadership roles, including serving as a director of a national law firm and the Chief Legal Officer for Lawpath.
He has personally helped more than 2,000 startups and small businesses. With over 300 five-star reviews, his clients clearly value his practical advice and simple way of explaining things. Damin has also hosted over 100 webinars that thousands of people have watched to get reliable legal help.
