Quantum Meruit After Mann v Paterson: Lessons from A.M.O Rifat Holdings v Dib

Last Updated on 19/08/2026 by Damin Murdock and Malak Amgad

Mann v Paterson fundamentally changed how builders approach quantum meruit claims in Australia. Before that case, builders were often able to recover the reasonable value of work performed after a contract ended, even when that amount exceeded the contract price. The High Court significantly restricted that approach, emphasising that contractual rights and agreed pricing should ordinarily govern the parties’ relationship. However, Mann v Peterson left several practical questions unanswered, and the Victorian Court of Appeal has now addressed many of those issues in A.M.O Rifat Holdings Pty Ltd v Dib [2026] VSCA 124. 

A.M.O Rifat Holdings Pty Ltd v Dib provided valuable insight into quantum meruit claims, the evidence required to establish those claims, and the consequences of entering into payment arrangements that circumvent the statutory protections contained in the Domestic Building Contracts Act 1995 (Vic) (DBCA).

In this article, we outline the core facts of the case, the significance of the ruling, and actionable takeaways to keep your future protected from legal risk.

Case background

A.M.O Rifat Holdings, the builder, entered into a large domestic building contract to build a 3-storey home for a contract price of $1.6 million. Simultaneously, the parties signed a “side agreement” requiring the owners to pay $110,000 in cash instalments. The contract moved away from the standard progress payment, opting instead for a customised payment structure under “Method B” of the DBCA, in which 10% of the contract price was allocated to each of the ten stages of the building. 

As construction progressed, disputes arose over the quality and completion of stages, progress payments and defects. The builder claimed to have completed multiple stages, while the owners claimed that the building was defective and withheld payment. This triggered a domino effect: the builder stopped work, and ultimately terminated the contract for non-payment, while the owners counter-claimed for defective work and invalid termination. 

Following termination, the builder claimed that it had completed substantial work for which it had not been paid. Because the parties disputed whether the contractual stages had been validly completed and whether further progress payments had become due, the builder sought approximately $365,000 on a quantum meruit basis, arguing that the owners had received the benefit of the work performed notwithstanding the contractual dispute. On the other hand, the owners contended that the builder had not established any entitlement to additional payment, and argued that the separate cash payment was contrary to the DBCA.

The Court’s Decision

• The evidentiary burden of Quantum Meruit claims

Quantum meruit is a restitutionary remedy, meant for benefits conferred to one party in situations where it would be unjust for these benefits to be retained without payment. In this case, the builder argued that although contractual payment milestones had not resulted in payment of all completed work, the owners had nevertheless received the benefit of substantial construction works. It therefore sought to recover the reasonable value of those works independently of the contractual payment mechanism.

To establish the builder’s claims, the builder relied on subcontractor invoices, supplier accounts and other records showing the costs incurred during construction. 

The Court found that although these documents established that the builder incurred expenses, they did not demonstrate the value of the benefit received by the owners. The Court made a distinction between the builders’ internal costs and the objective value of completed work. Construction expenditure may include inefficiencies, rectification work, supervision costs or expenses that do not increase the value of the work received. This is why the Court held that evidence of expenditure is not sufficient to establish a quantum meruit claim, and that the builder is required to prove the objective value of the benefit conferred on the owners. The builder in this case failed to establish those matters, and its claim for quantum meruit was dismissed.

• The qualification of the side agreement 

The Court also considered the validity of the parties’ separate cash payment agreement, holding that the side agreement contravened section 40 of the DBCA. The Court found that allowing parties to impose additional payment obligations through collateral agreements would undermine that statutory framework of the DBCA. The Court therefore concluded that the side agreement was void and unenforceable.

The decision reinforces an important principle for builders and homeowners alike. Even where both parties willingly agree to an alternative payment arrangement, that agreement may still be unenforceable if it is inconsistent with the established statutory protections.

Consequently,  the Court concluded that the builder was not entitled to retain the $50,000 already received under the unlawful agreement. 

Real-life implications

A.M.O Rifat Holdings Pty Ltd v Dib reflects a broader shift in construction law towards evidence-driven claims. Instead of looking at quantum meruit as a remedy meant to compensate builders for expenses incurred during construction when disputes arise, the Court emphasised that any claims must be supported by strong evidence highlighting the benefits received by the owner. 

From a litigation perspective, the decision is likely to influence how domestic building disputes are prepared from the outset. Builders should maintain comprehensive project documentation throughout the construction process. While records of expenditure remain important, they should be supported by evidence demonstrating the extent of completed works, the benefit conferred on the owner and the objective value of those works. Where disputes appear likely, obtaining independent quantity surveying or valuation evidence at an early stage may significantly strengthen a future claim.

Although the decision applies Victorian legislation, it is likely to be influential in other Australian jurisdictions. The Court’s application of the High Court’s principles in Mann v Paterson provides practical guidance that construction lawyers, builders, developers and expert witnesses are likely to rely upon when assessing future quantum meruit claims and disputes arising from terminated building contracts. By way of example, in New South Wales, pursuant to s 92 of the Home Building Act 1989 (NSW) (the HBA), a builder must not demand or receive payment unless the residential building work is insured under a home warranty insurance policy. Despite this section, in Field v Dettman [2013] NSWCA 147, it was held that where an owner has already paid the builder in circumstances where there was no insurance, the HBA does not have any remedy for the owner to seek a refund of the money already paid. This seems to undermine the protections that ought to be afforded to owners under the HBA, and it will be interesting to see if the A.M.O Rifat Holdings Pty Ltd v Dib alters the NSW position regarding owners obtaining a refund for money already paid for unlicensed or uninsured building works.

If you are involved in a domestic building dispute or require advice regarding claims, payment disputes or your rights under the Domestic Building Contracts Act, feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube, LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favorable Google review.  

DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.