High Court Determines That Contracts Are Paramount

In an important decision for the construction industry the High Court dismissed a claim of unjust enrichment by a contractor against the owner of the project in question.

In Lumbers v W Cook Builders (in liq) (2008) 247 ALR 412 the only construction contract the owner (Lumbers) had entered into was with a company related to but separate from W Cook Builders. In the Court's analysis there was no contractual relationship between W Cook Builders and the owner as W Cook Builders had agreed to carry out the relevant work under a subcontract with its related company, not the owner.

There had been a view in some parts that a claim for unjust enrichment could be made against someone further up the contractual chain who had received the benefit of the work done notwithstanding the absence of contractual relationship between the two parties. The decision of the High Court in this case has effectively rejected that theory.