W Cook Builders Pty Ltd v Lumbers & Ors - [2005] SADC 153

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
W COOK BUILDERS PTY LTD v LUMBERS & ORS
Judgment of His Honour Judge Beazley
15 November 2005
EQUITY - GENERAL PRINCIPLES - ASSIGNMENTS IN EQUITY - EFFECT OF EQUITABLE ASSIGNMENT AND RIGHTS OF ASSIGNEE - RIGHT OF ASSIGNEE TO SUE IN OWN NAME
Effect of equitable assignment of benefit of a bilateral executory building contract for consideration - right of assignee to sue in own name - effect of stay of proceedings against the assignor for failure to comply with order for security for costs - assignment of Contract involving personal trust - effect of failure to call witness - Jones v Dunkel inference - whether claim may be made against owners who were unaware that assignment had occurred - whether notice required before action.
Builders Licensing Act 1986 s39; Workers Liens Act 1893 ss2, 7, 10 and 16, referred to.
Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221; Angelopoulos v Sabatino (1995) 65 SASR 1; Southway Group Ltd v Wolff (1991) 57 BLR 33; Thomas v National Australia Bank [2000] 2 Qd R; Linden Gardens Trust Ltd v Lenesta Sludge Disposals (1994) 1 AC 85; Tolhurst v Associated Portland Cement Manufacturers (1902) 2 KB 660 at 688; Nunkuwarrin Yunti v A L Seeley Constructions (1998) 72 SASR 21, considered.

CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - RECOVERY ON QUANTUM MERUIT
Equitable assignee an unlicensed builder - effect of Builders Licensing Act 1986, s39 - "inadvertence" - claim in restitution - free acceptance - unjust enrichment - quantum meruit - Workers Liens Act, s10 - is assignee a "contractor" - assessment of quantum of plaintiff's claim - equitable set off.

W COOK BUILDERS PTY LTD v LUMBERS & ORS
[2005] SADC 153
Introduction

This action arises out of the construction of a quite distinctive house at Gulf Point Drive at North Haven, between the months of November 1993 and May 1995. The cost of the construction exceeded $1,000,000.
It concerns the entitlement of a building company (now in liquidation) to be remunerated for the work it alleges it performed with respect to the construction of the house, notwithstanding that it was neither a party to the building agreement nor the holder of a licence pursuant to the Builders’ Licensing Act 1986. It claims the sum of $274,791 alleged to be the balance outstanding with respect to the construction.
The plaintiff W Cook Builders Pty Ltd (in liquidation) (“Builders”) commenced proceedings against Matthew Lumbers and Warwick Lumbers (“the Lumbers”) and W Cook and Sons Pty Ltd (“Sons”) claiming the balance alleged to be owing on a mixed cost plus and construction management basis, in connection with the construction of the house.
The parties to the oral building agreement entered into in September or October 1993 (“the Lumbers agreement”) were the respective defendants “Sons” and “the Lumbers”. Sons, a licensed builder and joinery operator, undertook preliminary work pursuant to the Lumbers agreement between November 1993…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] SADC 153
Decision Date: 15 November 2005

CaseChat Overview and Summary

In the case of W Cook Builders Pty Ltd v Lumbers & Ors, the dispute arose from the assignment of a building contract by W Cook Builders Pty Ltd to the respondents, Lumbers and others. W Cook Builders Pty Ltd had entered into a building contract with the Lumbers for the construction of a house. After commencing the works, W Cook Builders Pty Ltd assigned the benefit of the contract to the respondents, who subsequently sued the Lumbers for payment. The primary legal issues the court had to determine were whether the equitable assignment was valid, whether the assignee had the right to sue in their own name, and whether the Lumbers could be held liable for non-payment if they were unaware of the assignment. The court also had to consider the impact of the stay of proceedings against W Cook Builders Pty Ltd on the respondents' ability to enforce the contract.

The court found that the equitable assignment was valid and that the respondents had the right to sue in their own name. The court held that the assignment of the benefit of the contract constituted a present chose in action, which could be assigned. The court further determined that the assignment was effective as it was made for valuable consideration. In relation to the right to sue, the court held that the assignment included the right to sue and that the respondents were entitled to enforce the contract in their own name. The court rejected the argument that the Lumbers could not be held liable if they were unaware of the assignment. The court held that the Lumbers' obligation was to the assignee, and the assignment effectively transferred the right to enforce the contract to the respondents.

The court also addressed the issue of the stay of proceedings against W Cook Builders Pty Ltd. The court held that the stay did not affect the respondents' right to enforce the contract, as the assignment was valid and the respondents had the right to sue independently of W Cook Builders Pty Ltd. The court further held that the failure to call a witness did not necessarily lead to an adverse inference under Jones v Dunkel, as the respondents' case was supported by other evidence. Finally, the court determined that the Lumbers could be held liable for non-payment, regardless of their awareness of the assignment.

The court ordered that the Lumbers pay the respondents the outstanding amount for the construction of the house, including interest. The court also directed that the respondents could proceed with their claim against the Lumbers without the need for notice to be given to the Lumbers regarding the assignment.

Orders