Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Bonnici v Signature Plumbing and Excavating Pty Ltd [2021] NSWCATAP 133 Hearing dates: 6 May 2021 Date of orders: 14 May 2021 Decision date: 14 May 2021 Jurisdiction: Appeal Panel Before: G Curtin SC, Senior Member D Goldstein, Senior Member Decision: Appeal dismissed Catchwords: BUILDING AND CONSTRUCTION – contract – assignment – termination – rights accruing before termination date – accrued rights survive termination – onus of proof – appellant failed to discharge onus of proof that work requested or done after termination date Legislation Cited: None cited Cases Cited: McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457; [1933] HCA 25 Texts Cited: Carter, Peden & Tolhurst, Contract Law in Australia, LexisNexis Butterworths, 5th edition, 2007, [17.37] Halsbury's Laws of Australia, online edition, [65-1805], [110-11550] Category: Principal judgment Parties: Martin Bonnici (Appellant) Signature Plumbing and Excavating Pty Ltd (First Respondent) MCN Constructions Pty Ltd (Second Respondent) Representation: Appellant (Self Represented) A Bitic (First Respondent) Second Respondent (No Appearance) File Number(s): 2021/00056115 (AP 21/07769) Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 21 January 2021 Before: G K Burton SC, Senior Member File Number(s): HB 20/36542 REASONS FOR DECISION 1. This is an appeal by a contractor from orders of the Tribunal ordering him to pay the first respondent subcontractor ("Signature") the sum of $21,300 for work done by Signature at Kirrawee, NSW. 2. For the reasons that follow the appeal is dismissed. Background 1. Signature undertook plumbing work for the appellant at residential premises at Kirrawee pursuant to a written contract dated 9 April 2019 (the "Subcontract"). 2. Clause 11.1 of the Subcontract said: "Automatic termination: The Agreement (the Subcontract) will automatically terminate on the Termination Date or on job completion, unless the Termination Date is changed by agreement in writing (including by email between the Parties)." 1. The Termination Date was defined to be 9 October 2019 or "agreed future date". 2. Clause 11.6 of the Subcontract said: "The accrued rights, obligations and remedies of the Parties are not affected by the termination of this Agreement. 1. Clause 18(b) of the Subcontract said: "Assignment: This agreement is personal to the Parties. A Party must not assign or deal with the whole or any part of it right or obligations under this Agreement without the prior written consent of the other Party (such consent not to be unreasonably withheld). Any purported dealing in breach of this clause is of no effect." 1. On an unspecified date, but apparently during the time that Signature performed work at the site, the appellant and the second respondent ("MCN") agreed between themselves that MCN would take over the Kirrawee job from the appellant on the same contract (presumably with the owner or developer of the land), and with the same sub-contractors (which included Signature). That then happened. 2. Although the parties did not evidently turn their minds to these questions at the time, the agreement between the appellant and MCN to which we have just referred purported to incorporate (what lawyers call) an assignment of the appellant's rights under the Subcontract. 3. It is legally possible for contracting parties to assign (or transfer) their rights under contracts, but it is not possible for them to assign their obligations – Carter, Peden & Tolhurst, Contract Law in Australia, LexisNexis Butterworths, 5th edition, 2007 at [17.37]. That is, it was not legally possible for the appellant to assign (or transfer) any obligation he owed Signature to pay it for work done under the Subcontract to MCN. 4. Further, cl 18(b) of the Subcontract prohibited an assignment in the absence of Signature's prior written consent. It is evident that the Tribunal found that no prior written consent had been sought or given. Clauses such as cl 18(b) are effective – see Halsbury's Laws of Australia, online edition, at [65-1805]. 5. While the agreement (assignment) between the appellant and MCN may have been legally effective in some respects, the agreement could not and did not purport to assign any obligation the appellant had to pay Signature under the Subcontract. The result is that the appellant remained liable to Signature for any amounts arising under the Subcontract. 6. It was possible for all three parties to agree that MCN be substituted for the appellant in the Subcontract (what lawyers call a "novation"). If this had happened MCN would have become solely liable to Signature for payment of work done under the Subcontract, and the appellant would not have been liable. However, there was never agreement for this to happen between all three parties. 7. Suffice to say that Signature performed work under the Subcontract. It issued invoices from time to time to either the appellant or to MCN. Some were paid. Some were not. 8. Signature commenced proceedings in the Tribunal against both the appellant and MCN for four invoices, being dated: 1. 29 September 2019 for $1,100; 2. 9 December 2019 for $1,100; 3. 24 December 2019 for $15,800; and 4. 14 January 2020 for $3,300. 1. The Tribunal made directions for the parties to lodge with the Tribunal and serve on the other parties the evidence upon which they wished to rely at the hearing. The appellant and Signature did so, but MCN did not. 2. At the hearing Signature and MCN appeared, but the appellant did not. In relation to the appellant the Tribunal said: "The (appellant) did not respond to two attempted calls on the nominated mobile and there was no voicemail facility, only an offered automated record of the ringing phone line which was not of use in this context." 1. The Tribunal considered the documentary evidence which had been lodged and served by the appellant (which included a statement by the appellant), and Signature, and heard some oral evidence from MCN. 2. In relation to MCN the Tribunal said: "On the evidence I am satisfied that the (MCN) accepted that, as between him and the (appellant), he took over the job from the (appellant) on the terms of the existing contracts including the contract between (Signature) and the (appellant). (MCN) therefore became liable to (Signature) to pay for the contract work, apart from the invoice for the section 73 certificate (the invoice dated 9 December 2019) which the (appellant) separately requested. (Signature) has proved the amount of unpaid invoices. 1. MCN was a party to this appeal but did not appear at the hearing of the appeal. 2. The Tribunal said that the appellant accepted liability for the second invoice dated 9 December 2019. 3. In relation to the invoices dated 29 September 2019, 24 December 2019 and 14 January 2020, the Tribunal found that Signature had not agreed to the assignment and so had not agreed to "give up his rights" under the Subcontract against the appellant. We interpret this to mean that the Tribunal found that Signature had not agreed to any assignment or any novation. 4. The Tribunal found, at least implicitly, that Signature had proved the amounts in the invoices was owing under the terms of the Subcontract (at [13] of its reasons) and so found in favour of Signature for the total of the four invoices, being $21,300. The Appeal 1. The appellant appeals on the following grounds: 1. The Tribunal erred in failing to find that the Subcontract had terminated automatically on 9 October 2019 pursuant to cl 11.1 and therefore there was no liability for the invoices which all post-dated that date. 2. The invoices were addressed solely to MCN and two contractors (being the appellant and MCN) could not both be liable for the same invoices. Therefore, as MCN was liable, the appellant could not be liable for those invoices. 3. The appellant had not appeared at the hearing because he was incapacitated. 4. The appellant had a cross-claim against Signature for defective work. Ground 1 1. The accepted legal principle is that accrued rights survive termination of a contract including a subcontractor's accrued right to recover a sum fixed by the subcontract – see Dixon J in McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476–7; 1933] HCA 25; Halsbury's Laws of Australia, online edition, at [110-11550]. 2. Indeed, this was provided for by cl 11.6 of the Subcontract (set out at [6] above). 3. Therefore, if Signature did work under the Subcontract and before the Termination Date, it was entitled to be paid for that work by the appellant even if the invoices for that work were dated after the Termination Date. 4. For the defence now raised by the appellant to succeed, he bore the burden of proving to the Tribunal that the work to which the disputed invoices related was done after the Termination Date. 5. He did not do so. 6. On the appeal he relied upon the "logic" that invoices are issued soon after work is completed, and he relied on a spreadsheet showing the dates of various invoices. The spreadsheet does not show when the work was requested or done, and the "logic" referred to amounted to speculation rather than proof. 7. The disputed invoices themselves do not reveal, expressly or impliedly, when the work to which they refer was done. 8. There was no other evidence identified by the appellant, or apparent to us, that proved this work was requested or done after the Termination Date. Therefore, the appellant failed to prove his defence and therefore failed to prove that the Tribunal erred. 9. Had there been some proof to that effect, we would still need to have been satisfied that this defence was raised at the hearing in some way, or at least notice of it had been previously been given to Signature. That is because Signature may have evidence to the contrary of that put forward by the appellant (to the effect the work had been done before the Termination Date) or he may have been able to assert that the Termination Date had been extended pursuant to the definition of Termination Date (see at [5] above). 10. However, as we are satisfied there is no evidence of the date the work was done, and as that disposes of the appeal, we need not consider the matter further. Ground 2 1. It is possible for two contractors to both be liable for the same debt and so this ground fails. Ground 3 1. The appellant said he did not appear at the hearing because he was incapacitated. 2. He did not provide us with any evidence proving this incapacity despite the Appeal Panel directing him on 5 March 2021 to lodge with the Appeal Panel and to serve on the other parties any evidence which had not been given to the Tribunal but upon which he wished to rely on the appeal (which would include evidence as to incapacity). 3. The ground could only succeed on the basis of procedural unfairness, but given the lack of any evidence of incapacity we need not consider the matter further. Suffice to say that even had the appellant provided some evidence of incapacity that would not necessarily mean that he would establish procedural unfairness. Ground 4 1. As there was no claim brought by the appellant against Signature for alleged defective work in the Tribunal such a claim could not be advanced for the first time on appeal. Orders 1. As each ground of appeal has failed, we make the following order: 1. Appeal dismissed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 May 2021