General market evidence does not prove project loss and estimated costs are not quantum
The decision in Vadakkumkaraputhaveedu v Kulowall Construction Pty Ltd [2023] WASAT 29 provides a clear reminder of two fundamental principles of quantum that are often overlooked in practice.
The Tribunal rejected the builder’s claim without ever undertaking a valuation exercise. The failure was evidentiary, not technical.
General market evidence does not prove project loss
The builder relied on general industry conditions, including COVID-19 disruption, labour shortages, supply constraints and supplier letters referring to increased costs. The Tribunal held that this material did not establish loss on the project in question.
It was incumbent on the builder to demonstrate, with cogent evidence, how those general conditions translated into actual cost or delay on this specific build. Reliance on industry-wide material, “common knowledge”,or general supplier communications was insufficient ([30]–[35]).
The Tribunal made clear that general market conditions do not, of themselves, prove that a particular project suffered recoverable loss. Quantum must be project-specific and evidence-based, not inferred from broader economic trends ([35]).
For quantity surveyors, the message is orthodox but important. Market movement, indices and industry disruption may provide context, but they do not establish quantum unless they can be causally linked to the project and supported by records.
Estimated costs are not quantum
A further and decisive issue was that the builder described the claimed price increase as a “rough estimate”, with actual costs still to be accurately ascertained ([36]).
The Tribunal treated this as fatal. A claim for additional payment must be based on actual incurred cost. Provisional figures, estimates or allowances are not quantum. They may inform commercial negotiations, but they do not satisfy the evidentiary burden required to recover money under a contract ([22]–[24]).
Quantum cannot be deferred. It must be capable of proof at the time it is claimed. Where a figure is acknowledged to be an estimate, there is no quantum to assess.
Conclusion
This case reinforces two basic principles that remain central to quantum analysis.
First, general market evidence does not prove project loss.
Second, estimated costs are not quantum. They dismiss the claim.
At Accura Consulting, our team of experts work with clients to create a tailored solution to problems. If you have an issue and want expert support, get in touch.
Back to News and Insights
Related News and
Insights from Accura
