International Construction Law Review
ENRICHMENT-BASED CLAIMS FOR A QUANTUM MERUIT IN CONSTRUCTION DISPUTES
DAVID SAWTELL1
Barrister, Lamb Chambers, Lamb Building, Temple, London (davidsawtell@lambchambers.co.uk)
ABSTRACT
Both common law and civilian systems have developed enrichment-based liability as a source of obligations for construction operations falling outside a contractual relationship. This paper compares English with Australian, South African and German construction law for such claims where there is an anticipated contract that does not materialise, the contract has been terminated for repudiatory breach or where works are carried out outside the scope of a variation clause. It considers what the relationship is between the enrichment remedy and the contract or bargain that the parties entered into.
Contract law is the primary reference point in most studies of the legal obligations of parties engaged in construction operations.2 Some works, however, are conducted outside a contractual relationship. In England and Wales, claims for money for works that are conducted extra-contractually have, since the mid-twentieth century, been characterised as claims in “unjust enrichment”, with the remedy being a quantum meruit. Civil law systems also recognise a source of obligations falling outside either contract or delict arising from a party’s unjustified enrichment.
A contractual claim and an extra-contractual claim are “fundamentally different”.
3 The purpose of unjust enrichment is to “correct normatively defective transfers of value”, while in respect of the law of unjustified enrichment in South Africa it has been said that the “basic function of the law of unjustified enrichment is to restore economic benefits to the plaintiff, at whose expense they were obtained, and for the retention of which by the defendant there is no legal justification.”4 In the English Supreme Court case of HMRC v ITC, Lord Reed emphasised that “legal
1 MA (Cantab) MPhil (Cantab) MSc (King’s College, London), Barrister (Lincoln’s Inn).
2 This article is based on the author’s dissertation submitted in part fulfilment of the MSc in Construction Law and Dispute Resolution at King’s College, London. I am extremely grateful to my dissertation supervisor, Professor Anthony Lavers, for his support, guidance and insight throughout.
3 Benedetti v Sawiris (HL) [2013] UKSC 50; [2014] AC 938, paragraphs 85, 147 (Lord Reed); [2013] 3 WLR 351; [2013] 4 All ER 253; 149 Con LR 1.
4 HMRC v The Investment Trust Companies (HL) [2017] UKSC 29; [2018] AC 275; [2017] 2 WLR 1200, paragraph 42; [2017] 3 All ER 113 (Lord Reed); Visser D., Unjustified Enrichment (Cape Town, 2008) (hereafter “Visser”), 4.
102