Quantum Meruit and Small Claims

Being a forum limited to monetary claims of less than $10,000.00 the Small Claims Division predominantly deals with smaller commercial disputes.

Although the Small Claims Division is run with less of a focus on technical issues it remains a court of law and legal principles apply to each case heard in that Division. By their nature, smaller disputes have their own issues when it comes to recovering a debt or enforcing legal rights. One common such issue is determining the legal basis for the liability claimed. It is not enough for a plaintiff to simply assert to the court “here is an unpaid invoice – grant me a judgment against the defendant in the sum of the invoice”. It remains fundamentally necessary for the plaintiff to prove their “cause of action”. A cause of action is the legal basis of the claim, for example:-

1. In a claim seeking payment of goods supplied the plaintiff must prove the contract and the sum owing;
2. In a claim for costs of repair to a motor vehicle following a collision the plaintiff must prove the negligence of the defendant and prove the loss/costs of repair

As the commercial transactions which give rise to a Small Claims Division are smaller, the parties will often not have put in the time and effort to properly set out the terms of the contract between them – whether for work to be performed, or goods supplied, etc.

In circumstances where there is no proper contract in place (whether written, oral or implied) or where the agreement that the parties thought was the operative contract is actually void (for example, because of the effect of applicable legislation that was not complied with) a plaintiff will have great difficulty in successfully prosecuting a claim in contract to recover payment for work that the plaintiff has properly performed for the defendant and which the defendant has obtained the benefit of.

In such cases it may be possible for the plaintiff to make a claim of quantum meruit. Quantum meruit is a Latin term which means “as much as he has earned”. A claim in quantum meruit permits the plaintiff to prove that the plaintiff has performed work for the defendant, that the work was performed at the request of the defendant and prove the reasonable value of the work performed. That is, the usual elements of offer, acceptance and consideration that are required in a contract claim, along with proving the terms of the contract and relevant compliance and breaches are not required in a quantum meruit claim.

That said, a claim in quantum meruit is not available if there is indeed a contract between the parties, as the contract governs the matters that must be proved. However, it is possible for a plaintiff to also plead an alternative “fall back” quantum meruit claim in cases where there may be some concern as to whether a contract was in fact entered or is void, so that if the court finds there is no contract the plaintiff can run a quantum meruit claim rather than simply lose the case.

If you are owed money and need some advice as to recovering the debt get in touch with one of our debt recovery lawyers by contacting your nearest Prime Lawyers office.

We have debt recovery and litigation lawyers located at Sydney, Parramatta, Chatswood, Sutherland and Wollongong.