When a building contract ends before a progress stage is complete, the agreed stage price may offer a convenient figure. It does not necessarily establish the reasonable value of the work performed.
In A.M.O. Rifat Holdings Pty Ltd v Dib [2026] VSCA 124, defective structural brick columns affected completion of the base and subsequent frame stages. The builder had not accrued the relevant contractual stage-payment entitlements and pursued recovery on a quantum meruit basis. The proceedings also concerned an invalid cash-payment side agreement; the valuation issue is the focus here.
A price limit is not a valuation
The Court’s treatment of quantum meruit followed the principles in Mann v Paterson Constructions. In the relevant circumstances, the contractual price for a divisible stage limits recovery. The builder still has to prove the fair and reasonable value of the work undertaken.
One proposed calculation took the stage price and deducted the estimated cost of completing the stage. The Court did not accept that this established reasonable value. A contract price can reflect negotiated risk, cash flow and payment allocation; the balance remaining to finish a stage is not necessarily the market value of what has been delivered.
“A stage price is useful contractual evidence. It is not a substitute for measuring and valuing the work actually performed.”
Following the evidence
A forensic quantity surveyor needs to identify the work claimed, the stage to which it relates, its condition and whether it has already been paid for. Measurements, subcontractor accounts, invoices, market rates and project records each answer different questions. An invoice establishes that an amount was charged; it does not, without more, establish reasonable value.
Defective work complicates the assessment. The expert should identify the nature and effect of the defect and adopt a valuation treatment consistent with the legal assumptions. A blanket deduction of rectification cost may be no more reliable than the stage-price-minus-completion-cost method.
“Every figure in the valuation needs a traceable basis. The difficult part is often establishing which work the documents refer to and what value that work provides.”
The builder’s evidence did not establish the value claimed, and leave to appeal on the relevant quantum meruit issue was refused. For lawyers instructing a quantum expert witness, the useful early question is whether the available records can support an independent assessment of reasonable value rather than merely a reconciliation of payments and invoices.
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A.M.O. Rifat Holdings v Dib examines quantum meruit, unfinished building stages and valuation evidence, with practical insights for construction lawyers instructing a quantum expert witness.