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[1938] HCA 65
High Court of Australia
1938-07-01
McTiernan JJ, Rich J
Original judgment source is linked above.
LIMITED - ' Z : zs , . APPELLANT; DEFENDANT, AND BARNES E S E f 5 c é . ResponDENT. PLAINTIFF,
ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES.
Contractors' Debts - Liability of contractor in respect of material supplied to sub- contractor - Contractors' Debts Act of 1897 (N.S.W.) (No. 29 of 1897), sec. 18.
Statute - Consolidating Act - Adoption of construction placed wpon Acts consolidated. Precedent - Overruling decision which has stood for a long period.
Sec. 18 of the Contractors' Debts Act of 1897 (N.S.W.) provides that "a contractor who sublets any part of the work shall be responsible to the extent provided for by this Act for the wages of the workmen employed by, and for material, or material and work and labour supplied for the sub-contractor ; and a workman employed by, or a tradesman supplying material, or material and work and labour for a sub-contractor, may proceed against the contractor, as in this Act provided, as if he had been directly employed by, or had directly contracted with him."
Held, by Latham C.5., Dixon and McTiernan JJ. (Rich J. not deciding, on the ground that it was undesirable to upset the long-settled interpretation of the section), that sec. 18 only extends the procedure available under the other provisions of the Contractors' Debts Act of 1897 to a case where there js a sub-contractor in addition to a contractor, a contractee, and a workman or tradesman ; and does not impose upon a contractor an unrestricted personal liability for the debts of a sub-contractor in respect of wages or materials or
work and labour, So /eld notwithstanding that the contrary interp had been placed upon the statutory provisions consolidated in the Conti Debts Act of 1897.
Ex parte Monie, (1883) 4 L.R. (N.S.W.) 138, Ex parte Johnston, ( 2.W.N. (N.S.W.) 58, and Ex parte Road Maintenance and Contracting Co, Re Jordan, (1936) 36 8.R. (N.S.W.) 362; 53 W.N. (N.S.W.) 124, on this
Decision of the Supreme Court of New South Wales (Full Court): J vy. Conerete Constructions Pty. Ltd., (1938) 55 W.N. (N.S.W.) 154, reve
In an action brought in the Supreme Court of New South W the plaintiff, William Henry Barnes, claimed from the defend Concrete Constructions Pty. Ltd., the sum of £348 Os. 4d.
The declaration set forth that before and at the time of the m complained of the defendant was constructing certain worl Challis House, Martin Place, Sydney, by virtue of a contract en into between the defendant and another person, and before a1 the time aforesaid had sublet part of such work to a sub-co1 named F. Keller, and thereupon the plaintiff sold and deliy certain materials amounting in all to the sum of £348 0s. 4d. to K who in consideration of that sale and delivery promised to the said materials, all of which materials were used by Kell performing that part of the work above mentioned which had sublet to him, and the moneys due for such materials accrued and payable to the plaintiff not earlier than three months be 23rd December 1937, and neither Keller nor the defendant had p to the plaintiff the said sum or any part thereof and the remained wholly due and unpaid.
contractual or other obligation by the defendant to the p and (c) that it did not allege that the plaintiff had obtained tificate under the provisions of the Contractors' Debts Act of] (N.S.W.). For a second plea the defendant pleaded that it, notice that the plaintiff was unpaid, paid all moneys due by Keller the sub-contractor.
The plaintiff jomed in demurrer and cross-demurred to the ant's second plea on the grounds (a) that it confessed but did not al
the cause of action ; and (6) that the fact that the defendant, before notice that the plaintiff was unpaid, paid all moneys due by it to Keller, the sub-contractor, was no defence to the cause of action.
The defendant joined in demurrer on the cross-demurrer.
The Full Court of the Supreme Court followed the decision of that court in Hx parte Road Maintenance and Contracting Co. Ltd. ; Re Jordan (1), which was based upon the decision in Ex parte Monie (2), and gave judgment for the plaintiff on the demurrer and on the cross-demurrer : Barnes v. Concrete Constructions Pty. Ltd. (3).
From that decision the defendant, by leave, appealed to the High Court.
K. A. Ferguson, for the appellant. Apart from sec. 18 thereof the whole scheme of the Contractors' Debts Act of 1897 (N.S.W.) is to enable a workman or tradesman to recover moneys which are actually due to the employer or the tradesman's contractee respec- tively, and no more. The provisions of sec. 18 differ from those of the other sections in that in sec. 18 the defaulting party is the sub- contractor and not the contractor. The other provisions of the Act provide for cases in which there are three parties ; sec. 18 provides for cases in which there are four parties, and, at most, means that an employee or tradesman may sue a contractor direct, without, perhaps, first obtaining a certificate, "to the extent provided for by this Act." Under that section, and having regard to the words "to the extent provided for by this Act," a contractor who sub- contracts is liable for the cost of materials and the wages of his sub-contractor's employees to the extent that a contractor is liable under the earlier provisions of the Act. The liability of the appellant is to pay no more than the extent of the moneys due or accruing due to the sub-contractor. The words, "as in this Act provided," in sec. 18 are words of limitation and really import the provisions of sec. 11, the only difference being that in sec. 18 assignment is not mentioned. In enacting the Contractors' Debts Act the legislature adopted the corresponding statute in force in New Zealand. This was done after provisions similar to the provisions in sec. 18 had
S.R. (N.S.W.) 362; 53 (2) (1883) 4 LR. ( N. (NS.W.) 124, (3) (1938) 55 W.N. (N.S.W
been judicially interpreted in Carlisle v. Brogden (1) and Oak Durk (2). The interpretation there given should be applied t 18 (Harding v. Commissioners of Stamps for Queensland (3) ) : Mackay v. Davies (4) ; Crates on Statute Law, 4th ed. (1936), [Dixon J. referred to Barry v. City of Melbourne (5) and bourne Corporation v. Barry (6).] The position at the date when the Contractors' Debts Act 0 came into force was that Ha parte Monie (7) - where upon a ¢ sideration of the section corresponding to sec. 18 the court decided that the Act created the relationship of master and sery, and Ex parte Johnston (8) - where the question was whethe that case there had been a subletting - had been overru Ex parte Thompson (9). Ex parte Road Maintenance and Co Co. Ltd. ; Re Jordan (10), in which Ex parte Monie (7) was approy was wrongly decided upon this point.
Windeyer K.C. (with him Webb and S. G. O. Martin), respondent. An important limitation which appeared preamble to the earlier Contractors' Debts Act and in the New Ze statute and upon which the decisions by the New Zealand cow were expressly based, was omitted from the preamble to the 0 tractors' Debts Act of 1897 (See Melbourne Corporation v. Barry (Ul This omission had the effect of making the last-mentioned Act m wider in its application. Sec. 18 introduced new rights; it duced the principle that a contractor shall be responsible for er that the wages of the employees of a sub-contractor shall to them, and that a supplier of materials to a sub-contractor ' be paid, either by the sub-contractor, or, in default thereof, by him the contractor. The words "to the extent provided for by th mean to the extent provided in this Act in other cases. Them has been provided for in sec. 49 (5) of the Industrial Arbitration
Z. Sur. 169, (7) (1883) 4 LR. (N.S.W.) 1: Jur. (N.S. Wy 15. N,
(3) (1898) A.C. 769, at p. (4) (1904) 1 C.LR. 483, i ms 491, 492. (10) (1936) 36 8. (N.8.W.)
(5) (1922) V.L.R. 577, at p. 597. W.N, NSW) 12h q (6) (1922) 31 CLR. 74, at pp. 183 (11) (1922) 31 C.L.R., at p. 18 et seq.
1912 (N.S.W.) (See Miller v. Simpson (1)). Ex parte Monie (2) H- ©. or A.
makes it clear that what the Act contemplates is two remedies : (a) an ordinary action in which the person concerned may obtain
a judgment, and (b) a certificate which would enable the person srrucrioxs
to proceed. This was not interfered with by the decision in Ex parte Thompson (3). On the contrary, so far as the right to sue is con- cerned, Hx parte Monie (4) was affirmed in Ex parte Thompson (5). Decisions of the courts which have regulated the affairs of the community for many years should not be disturbed (Hanaw vy. Ehrlich (6) ).
[Rrcu J. referred to West Ham Union v. Edmonton Union (7).]
Larnam C.J. The long title of the Contractors' Debts Act is: "An Act to consolidate the Acts for better securing the payment of debts due to workmen, tradesmen and others." The object of the Act is to secure payment to workmen for work and labour done, or to tradesmen for material supplied or work and labour done and material supplied, where the person with whom they are in contrac- tual relations does not pay them but where that person is entitled to receive from third persons payment for the work and labour done or the goods supplied.
In the present case the plaintiff Barnes supplied goods to one Keller in respect of which Keller became liable to pay to him the sum of £348 Os. 4d. Keller did not pay. The goods were supplied for the purpose of a sub-contract which Keller had with the defendant company, which was doing work under a building contract made between the company and a building owner. Upon the basis of these facts the plaintiff sued the company for the amount owed to
(1) (1929) A.R. (N.S.W.) 82. (4) (1883) 4 L.R. (N.S.W.) 138. (2) (1883) 4 L.R. (N.S.W.), at p. 141. (5) (1893) 14 L.R. (N.S.W.) 402; 10 (3) (1893) 14 (N.S.W.) 402; 10 W.N. (N.S.W.) 11 W.N, (N.S.W.) 114, (6) (1912) A.C. 39, at pp. 41, 42, (7) (1908) A.C. 1, at p. 6.
him by Keller. The defendant demurred on the specific that the declaration disclosed no contractual or other obligatio the defendant to the plaintiff and that the declaration did not all that the plaintiff had obtained a certificate under the Contr Debts Act. The defendant also pleaded that the defendant, notice that the plaintiff was unpaid, had paid all moneys due by' defendant to the sub-contractor Keller. The plaintiff cross-den to the plea. The Full Court of the Supreme Court gave judg for the plaintiff on the demurrer and on the cross-demurrer.
The declaration does not allege that the plaintiff and the d had any dealings with each other. There was no contract between them. The plea states that the defendant has fully p formed the only contract which he made - the contract with K Apart from statute, there could, in such circumstances, be no lis of the defendant to the plaintiff. It is contended by the pla that the Contractors' Debts Act imposes an obligation upon the def dant to pay him in full for the material supplied to Keller.
The question which is raised by this appeal is whether the C tractors' Debts Act was rightly interpreted in Ex parte Monie (1) case decided in 1883, and followed in Ex parte Road Maint and Contracting Co. Ltd.; Re Jordan (2) (Davidson J. and in the present case. In those cases it has been held th workman, employed by a sub-contractor who has failed to his wages, may recover his wages by a direct action agai contractor, who is next in the chain to the sub-contractor, taking any proceedings against the sub-contractor and with going beyond the contractor to a building owner or other Claims by workmen to wages are limited by the Act to sixty wages. There is no corresponding limitation in the case of ¢ for material supplied or for work and labour done and n supplied. If the decisions mentioned are right, the contractor without any limitation at all as to amount, be compelled to paj supplier of material to the sub-contractor even though he has alre fully paid the sub-contractor. The present case relates supply of material.
(1) (1883) 4 L.R. (N.S.W.) 138. (2) (1936) 36 S.R. (N.S.W.) 362; 53 W.N. (N.S.W.) 124.
The Act (1879) originally applied only to claims by workmen for wages. It was extended in 1888 to include claims by tradesmen for material supplied and work and labour done and material supplied, It will be convenient, in discussing the Act, to speak of workmen, except in the case of secs. 4 and 5, which apply only to work and labour, and sec. 6, which applies only to material and to material and work and labour done.
See. 3 of the Act provides for the issue of a certificate to a workman which will enable him, after establishing the liability of his employer (the contractor) to pay him wages, to recover his wages from a third person (the contractee) with whom his employer has made a contract of which the work of the workman is part, or to which it isincidental. The initial words of sec. 3 are: "If in any proceeding at law in any court of competent jurisdiction, any sum is found due and payable by the defendant for work and labour . . . done
by the plaintiff.' The basis of the scheme of the Act is that a competent court finds that a sum is in fact due and owing by a defendant to a plaintiff in a proceeding at law in a court of competent jurisdiction. The proceeding may be by summons or plaint (sec. 14) and the condition of any further proceedings against the third person is that the plaintiff obtains judgment against the defendant (sec. 16). This section provides that in the event of the plaintiff obtaining judgment he shall proceed by notice in the form of the third schedule. That notice is a notice that a certificate has been issued to him in accordance with the terms of sec. 3. The "proceeding at law " mentioned in sec. 3 is not a proceeding under the Act. It is a proceeding under a contract which is enforceable by reason of the common law or some statute other than the Act. The Act does not provide for this proceeding at law. It assumes that proceeding, and then provides for a proceeding which depends upon the granting of a certificate which may be used against a third person.
When the workman has obtained judgment against his employer for wages he may apply to the judge or justice for a certificate in the form of the second schedule (sec. 3). This certificate states that in pursuance of the Act the judge or magistrate certifies that a speci- fied sum was found to be due and payable by the defendant (employer)
Ww ConcrErE Con- STRUCTIONS Pry. Lrp. v. BARNES.
to the plaintiff (workman) for work and labour done. The certi! does not refer to any third person, and the issue of the certific does not impose any liability upon any third person. No proof, any liability of the third person is required before the certifica may be issued. Up to this stage there is only an ordinary proce to recover wages in a competent court. The plaintiff obviously to prove his case in the ordinary way. If he suspects that employer may not be able to pay him and believes that he may able to obtain payment by utilizing the provisions of the Act} may obtain a certificate, but he is not required to offer any e affecting any person other than his employer - the contractor. If the defendant employer is a contractor who is entitled payment for the work done under a contract with a third person h remaining provisions of the Act became applicable. The workmar
tractor) a certificate in the form of the sixth schedule (sec. This section provides that where a certificate has been granted "against" a contractor the contractor shall on demand fumnish to
the contractee of the work upon which the workman is employed This certificate does not impose any liability whatever upon contractee, who has not yet been heard. The contractee is the person to whom reference has already been made. Sec. 7 pi
that if the work done is work which is part of or incidental to v for the doing of which moneys may be due or accruing due to defendant (that is, the employer), in the Act denominated contractor, under an express or implied contract with any tl person, the plaintiff (the workman) may obtain payment of the sw mentioned in the certificate out of such moneys by serving on th third person (called the contractee) a notice in the form of the th schedule together with a copy of the certificate. The third sched gives the contractee notice that the work done by the workmal respect of which he has already recovered judgment against contractor) has been done in performance of an agreement enter into with the contractee by the contractor, and it requires contractee to pay the amount specified in the certificate " out ¢ any moneys now due or from time to time becoming due " from
contractee to the contractor under the said agreement (sec. 7 and H. C. or A.
third schedule). The notice further informs the contractee that on his failing to pay the money on demand he will under the Act be
liable to legal proceedings at the suit of the workman to obtain snucroxs
judgment. Three persons are now concerned: (a) the workman, who is an
employee of the contractor and who is a. plaintiff who has established his claim for wages against the contractor ; (b) the contractor, who has employed the workman, has failed to pay him his wages, has had judgment given against him, and who is bound by a contract with the contractee by reason of which contract the work has been done; (c) the contractee - a third person who made the contract with the contractor by reason of which the contractor procured the work to be done by the workman.
The effect of serving the notice and the copy of the certificate is specified in sec. 8. Upon such service all moneys "* due or to accrue due as aforesaid from the contractee to the contractor to the amount of the workman's or tradesman's debt specified in the certificate shall be deemed to be effectually assigned by the contractor to such workman or tradesman " subject to any prior assignment which was binding at the time of service. The statute, therefore, operates to make a statutory assignment of such moneys, namely, "' moneys due or to accrue due " to the contractor to the amount specified. If there are no such moneys due or to accrue due no obligation of any kind is imposed upon the contractee.
Sec. 1] is the provision which enables a workman to enforce the obligation which, in the circumstances stated, the Act imposes upon the contractee. It provides that "if the contractee fails to pay as aforesaid, the workman or tradesman may sue for and recover in his own name the moneys assigned as aforesaid as if the assignment of the debt due to the contractor were valid at law." There is an express provision in sec. 11 that the contractee shall have the benefit of any defence which would have been available against the con- tractor, except any defence which is founded upon an act of the contractee after service of the notice and copy certificate. It is clear that under this provision the liability of the contractee to the workman is limited by his liability to the contractor. If no moneys
a ConcreTe Con- STRUOTIONS Pry. Lrp. v Baryxs.
are due or to accrue due from the contractee there is no liabi which the workman can enforce.
There are certain further limitations affecting the liability of contractee. They appear in secs. 4, 5 and 6. Sec. 4 provides a certificate is not to be given if the workman could have a |i upon a movable chattel in respect of his wages. Sec. 5 limits ¢ amount recoverable by a workman by means of the certifica sixty days' wages. Sec. 6 requires that proceedings under the 4 in respect of material or of material and work and labour shall b instituted within three months after the debt accrued due to th tradesman.
Thus the Act provides a quite clear and intelligible system whi enables a workman to recover from a third person who owes mo to his employer the amount of the wages which his employer fail
The provisions (except those mentioned in secs. 4, 5 and 6) equally to workmen and to tradesmen.
Hitherto only three persons have been under consideration ; 1 workman, the contractor (his employer) and the contractee. is an obscure section which raises the difficulties with whi court has to deal upon this appeal. It introduces a fourth
sublets any part of the work shall be responsible to the provided for by this Act for the wages of the workmen employ
supplying material, or material and work and labour for a contractor, may proceed against the contractor, as in this / provided, as if he had been directly employed by, or had di contracted with him." Sec. 18 is intended to make the provisions of the Act applicable in a case or cases in which others those provisions would not, or might not, be applicable. divided into two parts. The first part imposes responsibility " the extent provided for by this Act." The second part enti workman or a tradesman to proceed "as in this Act prov Thus the object of the section is to make the other provisions
Act, whatever they may be, applicable in the case or cases which are identified or defined by the other words of the section. Thus the form and construction of this section are suited to the extension of the other provisions of the Act to a specific set of circumstances, not to the enactment of a new provision which would operate independently of the rest of the Act.
As already stated, in Ex parte Monie (1) and in Ex parte Road Maintenance and Contracting Co. Ltd.; Re Jordan (2), it was held that sec. 18 entitles a workman to recover judgment directly against a contractor for wages due to him by a sub-contractor as well as to obtain a certificate against a fourth person as contractee. It was held that the final words of the section entitle the workman to proceed against the contractor as if the contractor were his employer for all the purposes of the Act, though not for the purpose of other Acts such as, for example, the Masters and Servants Act - as to which see Ex parte Thompson (3). The result is that the contractor can be compelled to pay as if he was the defaulting sub-contractor, and that it is immaterial that he has already paid the sub-contractor. A contrary view was taken in New Zealand in the cases of Carlisle vy. Brogden (4) and Oakes v. Durk (5).
These decisions in New South Wales appear to me to give no proper effect to the words " to the extent provided for by this Act" or to the words "' as in this Act provided." It appears to me to be evident that the responsibility created by the section is a respon- sibility limited as to extent by other provisions of the Act, and that the right to proceed against a contractor which is given by the section | is a right to use, in a case where there are four persons in the legal chain, a procedure provided by the other provisions of the Act. But the decisions in question do not accept all the limitations of respon- sibility imposed by the Act, and they interpret the section as con- ferring a right to proceed against the contractor as if the other Provisions of the Act did not exist and without any regard to them.
The section contemplates (a) a workman or tradesman, (b) a sub-contractor, (c) a contractor, (d) another person (called a " third
(1) (1883) 4 LR. (N.S.W.) 138. (3) (1893) 14 LR. (N.S.W.) 402; 10 (2) (1936) 36 S.R. (N.S.W.) 362; 53 W.N. (N.S.W.) Hd. W.N. (N.S.W.) 124. (4) (1874) 1N.Z. Jur. 169.
1938; Ww ConcreTa Con- STRUCTIONS Pry. Lrp, v. Barnzs.
person " in sec. 7) in the position of a building owner, with whom tl contractor has made a contract. In my opinion it is clear enough that the other provisions of th Act would enable the workman to secure payment from the cor tractor, because he could sue the sub-contractor as his employer and after obtaining judgment, obtain a certificate and serve it upon th contractor who, as a contractee under the prior provisions of tl Act, would thereupon become bound to pay the workman out of th moneys due or to accrue due by him to the sub-contractor. It m } therefore be argued that the object of sec. 18 cannot be merely t impose a liability under the Act upon the contractor - the pi provisions of the Act having already accomplished that objec But it must be recognized that difficulties might have arisen in #l case of four persons unless a provision like sec. 18 had been inelud in the statute. It might have been argued that the Act applied on to cases where three persons were concerned, and there might been uncertainty as to whether the workman was entitled to ob a remedy against a person who was in fact a contractor but who, i order to be made liable under a certificate, would have to be tres as a contractee. Further, it might have been argued that a sul contractor could not be a contractor within the meaning of the A Upon this view a reason appears for the inclusion of the first p of sec. 18. The first part of sec. 18 makes a contractor responsible for th wages of the workman employed by a sub-contractor " to the ext provided for by this Act," that is, as I have suggested, by the pt visions of the Act other than sec. 18. Those provisions do not en any liability between an employer and a workman whom he emplo} The liability of the employer to pay wages depends upon a conti which is enforceable at common law or possibly under the Ind Arbitration Act or possibly under the Masters and Servants Act. only responsibility which the Act creates and to which the first p of sec. 18 can refer is a responsibility to pay upon a certificate. is the responsibility which is imposed upon a contractor und first part of sec. 18. The responsibility is a responsibility "t extent provided for by this Act." These words introduce, in case of wages, first the exclusion of liability where there could h
been a lien (sec. 4), secondly the sixty days limitation (sec. 5). In my opinion they also introduce the third limitation created by or referred to in secs. 7, 8, 9 and 11, namely, the limitation in amount of the liability of a person who is treated as a contractee to the amount of moneys which are due or to accrue due from the contractee to the contractor - that is, in the case of sec. 18, to the person there called the sub-contractor. It is difficult to suggest any reason, based upon the words of the first part of sec. 18, why the two former limitations 'should be included and the third excluded. Indeed, the words 'must, I think, be interpreted as including all the limitations, or none. If they include none, they become meaningless. Thus, to sum up, the first part of sec. 18 prevents a contractor arguing that he cannot be treated as a contractee because he is a contractor, and it also -excludes any contention that a sub-contractor is not a contractor within the meaning of the Act. Further, the words " to the extent provided for by this Act" introduce all the limitations to which I have already referred. The second part of sec. 18 provides that the workman or tradesman "may proceed against the contractor, as in this Act provided, as if he had been directly employed by or had directly contracted with him." This part of the section is complementary to the first part. The first part declares the responsibility of the contractor where there are a head contractor, a contractor, a sub-contractor and a workman. The responsibility of the contractor is limited in extent by the Act. But this provision only takes the workman as far as the contractor
. L where there is a sub-contractor, a contractor can be made responsi
for wages, but only to the extent provided for in the Act. that responsibility has been declared, viz., by a certificate, the se part of the section then comes into operation. That respon is to be regarded as if it were a responsibility arising from a contract between the workman and the contractor. If there ] been such a direct contract, the contractor could have been su upon the contract, and if judgment were obtained, a ce (limited as to amount by all the provisions of the Act as well as b the amount of the judgment) could have been granted against th person with whom the contractor had contracted - the contract Thus the second part of sec. 18 provides the machinery which mak it possible for a workman to obtain a certificate against a head contractor.
The workman cannot skip any link in the legal chain. He ignore his employer, the sub-contractor, and, without giving hims opportunity to raise any defence to the claim for wages, simply s the contractor. He must first sue the sub-contractor. If he g judgment for say £20 for wages against him, he may obtain a i cate for £20. He may then serve the prescribed notice and a copy certificate upon the contractor. If the contractor owes the sil contractor only £15, then the contractor becomes liable to pay workman £15, subject to defences which he may have against t] sub-contractor (sec. 11). If the contractor pays, or so far as he paj the workman, there is an end of the matter. But so far as he fail to pay what he ought to have paid, the workman is given, by 18, an opportunity of recovering against the head contractor. section first declares the responsibility (to the extent provided
to pay him a sum of £15 as for wages. The second part 0 section then enables the workman to proceed against the contré as in the Act provided as if he had been directly employed by
responsibility already created by the section. It provides a mea of using or relying upon that responsibility "' as in this Act provided Thus, in the example taken, the workman may " proceed against
the contractor as if he had been directly employed by him and may obtain a judgment against him for £15, representing a responsibility for wages declared by the section. The requirements of sec. 3 are then satisfied. After obtaining this judgment he may then under the provisions of the Act obtain a certificate and use it against the head contractor, who will thereupon, subject to defences available to him against the contractor, become liable to pay the workman £15, if he, the head contractor, owes that amount to the contractor in relation to the work done (sec. 7).
Thus sec. 18 extends the scheme of the Act, with all its obviously just limitations as to the extent of vicarious liability, to cases where four persons are concerned.
The view adopted in Ex parte Monie (1) not only does not, as I think, give sufficient effect to the terms of the section, but it produces very unjust results. Attention has already been called to the fact that it compels a contractor to pay a workman or supplier of goods even though, without any misconduct on his part, he has already fully paid the sub-contractor who employed the workman or bought the goods. But further, the contractor has no means whatever of protecting himself against such a consequence. No statement made to him by the sub-contractor can protect him: Compare Industrial Arbitration Act 1912 (N.S.W.), sec. 49 (5) (inserted by Act No. 16 of 1918, sec. 16), where, in a section imposing a vicarious liability for wages, it is provided that a statement in writing that there are no wages owing is a complete protection. Again, the application of the decision in Ex parte Monie (1) produces strange discriminations between workmen and tradesmen who deal with a contractor and those who deal with a sub-contractor. The former have a remedy against a third person only to the extent to which that person may owe money to the contractor, and then only subject to defences available to the third person against the contractor, for example, set-off. But the workmen or tradesmen employed by or supplying goods to a sub-contractor are (according to Ex parte Monie (1) ) not so limited. The fact that the sub-contractor has been fully paid or that the contractor has a set-off against him is immaterial in their ease. No reason can be suggested for such a distinction. Finally,
if the second part of sec. 18 is regarded as imposing a substan liability, independent of the other provisions of the Act, as upc direct contract of employment or of sale of goods, still more rema able results follow. If the contractor is to be treated as if h actually made such a contract, he becomes liable upon the con itself. If the goods sold are to be taken in instalments, he wo become liable to receive and pay for future instalments. H be liable for any breach of the contract. If part of the co for the supply of the goods consisted in the rendering of ser the sub-contractor, then the contractor would be bound to prov those services or to pay damages for not doing so. All these co tions support the conclusion which I have reached that see, not do any more than extend the other provisions of the Act case where there is a sub-contractor in addition to a head contra a contractor and a workman or tradesman. The result is that I find myself unable to agree in the view by the majority of the Full Court. c But it is argued for the respondent that even if this court sh be of opinion that the decision in Bx parte Monie (1) was the court is not at liberty to act upon such an opinion. The ( tractors' Debts Act was re-enacted in 1897 and it is urged th legislature must be taken to have adopted the construction upon the Act of 1879 by Ex parte Monie (1) in 1883: See the cited in Halsbury's Laws of England, 1st ed., vol. 27, p. 142, inelud Greaves v. Tofield (2), where James L.J. said: '" The safe and known rule of construction is to assume that the legislature wl
using well-known words upon which there have been well decisions uses those words in the sense which the decisions attached to them." ;
This argument has made me hesitate in reaching the con which I have stated. But there are, in my opinion, circumstal which make it proper to reject the argument in the present case. the first place, the judgments in Ex parte Monie (1) are not suppo! by any detailed reasoning based upon the terms of the sectio question. No reference whatever is made to the words " extent provided for by this Act." Further, the significance z
(1) (1883) 4 L.R. (N.S.W.) 138. (2) (1880) 14 Ch. D, 563, at p. 57
effect of the decision is by no means apparent from the case itself. The case was not one in which a tradesman sued for the price of material supplied. It was a case of a workman suing for wages. There is nothing to show that the court realized, or to support the inference that Parliament understood, that the decision meant that a contractor could be made liable, to an unlimited amount, for goods found to have been supplied to a sub-contractor ; that this liability could be established against the contractor without the establishment of any liability against the sub-contractor - who alone, apart from the tradesman, would in many cases know whether the goods had been supplied or not ; and that it was immaterial that the contractor had already paid the sub-contractor. Thus Hx parte Monie (1) cannot be regarded as a fully reasoned decision. I refer to the dissenting judgment of Davidson J. in Ex parte Road Maintenance and Contracting Co. Ltd.; Re Jordan (2) and to the statement of Jordan ©.3. in the same case (3) expressing doubt as to the meaning of sec. 18.
In view of the difficulty of discovering a reasoned basis for the decision in Ex parte Monie (1) and of the fact that the court did not contemplate the effect of the decision in cases relating to the supply of materials, I am of opinion that it is the duty of this court to declare the meaning of the Act as it sees it, and not to act upon the assumption that Parliament has adopted as the law the conse- quences which would flow from following the decision in the present case.
In my opinion the appeal should be allowed. There should be judgment for the defendant upon the demurrer and upon the cross- demurrer.
The section now under consideration was, as it then stood, inter- preted in Ex parte Monie (1) and Ex parte Johnston (4). In Ex parte Thompson (5) Windeyer J., as he then was, explained the "meaning of the judgment of the then Chief Justice Sir James Martin in
(1) (1883) 4 LR. (N.S.W.) 138. (3) (1936) 36 s.R. (N.S.W.), at_p. (2) (1936) 36 S.R. (N.S.W.), at pp. 370 ; 53 W.N (N.S.W.), at p. 126, 375, 376. (4) (1886) 2 W.N. (NS.W.) 58.
(5) (1893) 14 LR. (N.S.W.), at p.405; 10 W.N. (N.S.W.), at p. 115.
Ex parte Monie (1). The first two decisions were given more thi fifty years ago and have been acquiescediin ever since, altho Act was amended in 1888 and consolidated in 1897. In the in case the Supreme Court has in Ex parte Road Maintenance and 0 tracting Co. Ltd.; Re Jordan (2) adhered to the decision in Ez p Monie (3). Neither the judge of the Supreme Court who dissent in Ex parte Road Maintenance and Contracting Co. Ltd. ; Re Jord (4) nor my colleagues appear to agree upon one single interp) of the section complete in all its parts and involving no diver of application, although the substantial result of the interpretati adopted by the majority in this court may be the same. I sh refrain from publishing any infallible nostrum for arriving a interpretation. I shall not adopt the role of a prophet, Davus su non Oedipus. In the circumstances and amid such a diversity opinions it cannot be said that the original interpretation " manifestly erroneous " (Lancashire and Yorkshire Railway Co, Bury Corporation (5)), or " plainly wrong" (West Ham Union' Edmonton Union (6) ). It is, therefore, I think, undesirable to up an interpretation which has been settled so long that people may supposed to have acted according to it for a considerable time ai on the strength of which many transactions may have been adj and rights determined (West Ham Union v. Edmonton Union In this case at any rate I decline to be an iconoclast. In my opinion the appeal should be dismissed with costs.
Drxon J. Sec. 18 of the Contractors' Debts Act of 1897 has re an interpretation by which it imposes upon a contractor a din liability to the workmen employed by a sub-contractor and to t tradesmen who supply him with material. The liability to a y man is for the payment of wages for a period not exceeding si days in all. The liability to a tradesman is for material suppli or for work and labour done and material provided, limited, a understand, to the indebtedness of the sub-contractor accruing 4
(1) (1883) 4 L.R. (N.S.W.), at p. 142. (5) (1889) 14 App. Cas. 417, (2) (1936) 36 S.R. (N.S.W.) 362. 419. : (3) (1883) 4 L.R. (N.S.W.) 138. (6) (1908) A.C., at p. 5.
(4) (1936) 36 S.R, (N.S.W.), at pp. (7) (1908) A.C,, at pp. 4, 8.
within three months of the institution of the proceedings for its recovery from the contractor.
The question we have to decide is whether this interpretation should stand.
Sec. 18 of the Act is a special provision dealing with the liabilities of sub-contractors to workmen and tradesmen, that is to say, with cases in which there is an owner or other person letting a contract, a contractor who in turn sublets a contract to a sub-contractor, and a workman or tradesman of the sub-contractor whom he fails to pay.
The general provisions of the Act relate to the liabilities of a contractor and refer to three persons, the workman or tradesman, the contractor, and a third person with whom he contracts, called by the Act the contractee. These general provisions do not say that the contractee shall be the owner or other person or body for whom the works or building contracted for are constructed or erected. It is not stated that he must stand in any special relation to the works and it is compatible with the terms of the provisions that he may himself be an intermediate contractor and not a building or constructing owner. But, if in this way a fourth party happens to exist, the general provisions of the Act ignore the fact and deal only with the mutual relations of three parties; while sec. 18 in terms contemplates the existence of four and applies only in such a case.
The general provisions of the Act provide a means whereby workmen employed by a contractor and tradesmen supplying him with material may have recourse to the moneys accrued or accruing due to him under the contract for the purpose of obtaining payment of unpaid wages, or of the unpaid price of the material supplied.
The statute is based on a New Zealand enactment of 1871, and the provisions when first adopted in New South Wales by the Contractors' Debts Act 1879 (42 Vict. No. 22) were limited to workmen. Tradesmen were included by an amendment made ten years later (52 Viet. No. 3).
The plan of the general provisions may be described briefly. They enable the workman or tradesman to obtain from a court before which in proceedings at law a sum is found to be due to him by the contractor for work and labour done or materials provided,
pees ConorETB Con- STRUCTIONS Pry. Lrp. v Barnes.
H.C. or A. a certificate certifying the debt and stating that the work was don 1938.
or the materials provided for a particular building or work of struction. If the work done or the.material provided be the w or part of or incidental to work or material for which any mone may be due to the defendant, that is, the contractor, from a person, that is, the contractee, the workman or tradesman who plaintiff in the proceedings may serve upon the third person tl certificate together with a notice that, inasmuch as the work ¢ material specified in the certificate has been done or provi j performance of an agreement entered into with the third pers the contractor who has failed to pay the workman or trad giving the notice, the third person is required under the Act to the latter on demand the amount specified in the certificate out of any moneys due or from time to time becoming due. Ther such moneys up to the amount of the certificate are to be di to be assigned to the workman or tradesman, and until the
discharged the contractee is bound to satisfy it out of such mont as they become due to the contractor by paying the workman o tradesman upon his application. If the contractee fails to do s the workman or tradesman may sue for and recover in his own nat the moneys so assigned as if the assignment were valid at law} any proceeding which the contractor might have taken, sul however, to any defences on the part of the contractee, defences founded on some act of his own done after service of notice. Two limitations of time are imposed, one which s d the original Act for workmen, and the other, which was added
instituted within three months after the debt to him becomes d There is a provision governing priorities and some incidental
visions, one only of which need be mentioned. It is one whi enables the workman or tradesman when he sues the contra serve, by the court's leave, a notice upon the contractee which | the effect of binding moneys accruing due from the contract the contractor and attaching them in the former's hands pe the plaintiff's obtaining judgment against the contractor and certificate.
Two special provisions of sec. 18 are added to this scheme. Itis ©
sufficiently evident that the purpose of adding them was to give to the workman employed by a sub-contractor and a tradesman who
supplies him with goods some remedy the operation of which would
be, so to speak, higher up than or behind the sub-contractor with whom the workman or tradesman is in immediate privity. But the section is so obscurely expressed that much difficulty has been experienced in saying whether, on the one hand, the remedy is confined to moneys due or accruing due under one or other of the contracts and, if so, whether it is the head contract, or whether, on the other hand, a full personal liability is imposed upon the con- tractor. Sec. 18 is as follows: "A contractor who sublets any part of the work shall be responsible to the extent provided for by this Act for the wages of the workmen employed by, and for material, or material and work and labour supplied for the sub-contractor ; and a workman employed by, or a tradesman supplying material, or material and work and labour for a sub-contractor, may proceed against the contractor, as in this Act provided, as if he had been directly employed by, or had directly contracted with him."
No other provision is contained in the Act as to the responsibility of a contractor for the wages of a sub-contractor's workmen or for his indebtedness to a tradesman. The Act does not provide for "the extent " of that responsibility, nor how a workman of a sub- contractor or a tradesman supplying him with material may proceed against the contractor. It is, therefore, clear that the expressions "to the extent provided for by this Act" and "as in this Act provided " refer to provisions made, not for the case of a contractor and a workman or tradesman or a sub-contractor, but for some other case. It is necessary, in other words, to understand after the expression "to the extent provided for by this Act" some such words as "in the case of," &c., and to understand the like words after the expression "as in this Act provided." But the difficulty is to say in the case of what. The choice lies, I think, between two possibilities only. One is to supply the words "in the case of a contractee." The other is to supply the words "in the case of a workman employed by a contractor or tradesman supplying him with material." If the first is adopted, the earlier part of the
s as the responsibility under which a contractee is placed to a
section means that the contractor who has sublet part of the shall be under a responsibility to the workmen and trad employed by or dealing with the sub-contractor to the same
tractor's workmen and tradesmen. It would mean that th
extent of moneys due or accruing due to the sub-contractor, sidering still the first part of the section alone, no objection co be raised to this meaning except that it attributes to it no gre purpose or operation than that of making an express pro the case of a sub-contractor, a case which might be compreh under the general provisions of the Act if the intermediate cont were regarded in relation to the sub-contractor as a contractee. Ex parte Road Maintenance and Contracting Co. Ltd. ; Re Jordan| the decision followed by the Supreme Court in the present ci Jordan ©.J. said that this suggested meaning would be satis but for the fact that it gives no force to the concluding words " he had been directly employed by or had directly contracted ¥ him." Turning to the second part of the section in which the phn stood are "in the case of a contractee " the later part of the authorizes the sub-contractor's workman or tradesman to p against the contractor, as in the Act provided in the case of a tractee, as if he had been directly employed by or had dit contracted with him. The proceedings provided by the Act case of a contractee are by serving a certificate upon him and st as assignee. Does it necessarily follow that no effect can be g to the words " as if he had been directly employed by or had d ir contracted with him"? If these words are understood as gi the workman or tradesman a new and independent right or be it is, I think, possible to give them an effect not altogether um factory. They may be read as meaning that, having serv certificate upon the contractor, the workman or tradesman } proceed to enforce the liability thus arising as if he were a ser or in contractual privity with him. This would mean that he sue on common money counts in courts competent to enterta in
(1) (1936) 36 S.R. (N.S.W.) 362; 53 W.N. (N.S.W.) 124.
causes of action ; that is to say, a workman could sue for work and Jabour done and invoke among other jurisdictions that created by the Masters and Servants Act, and the tradesman could sue for goods sold and delivered in any competent court.
So much for the considerations upon which the suggestion turns that the section imports the analogy of the contractee. The alterna- tive, as it appears to me, is to imply or understand some such words
s "in the case of workmen and tradesmen directly employed by Upon this understanding
the contractor or contracting with him." of the text, the earlier part of the section must refer to the extent of the additional remedies given to a workman or tradesman for enforcing the ordinary contractual liabilities of the contractor employing him or obtaining goods from him. That liability existed independently of the Act and, as the last section in the Act is careful to say, no remedy for its enforcement is to be prejudiced. The extent to which the Act provides for the responsibility of a contractor as a debtor in respect of the wages of his workmen and of the material supplied to him by tradesmen is by adding the remedy by certificate and notice creating a statutory assignment of moneys payable by the contractee and the remedy by notice amounting to a stop order or attachment pending the obtaining of a certificate. Accordingly, on this footing, the earlier part of the section might be taken to mean that out of moneys payable by the building owner or contractee to the contractor the sub-contractor's workmen and tradesmen should be paid what the sub-contractor owed them, that is, on obtaining a certificate and giving notice. But, upon the same footing, it would be more difficult to interpret the second part of the Act as exposing the contractor to no personal liability. For it uses the words "' proceed against the contractor." If he is to be pro- ceeded against as if he were the direct employer of the workman or purchaser of the goods, it would mean a personal responsibility. On the other hand, the words "as in this Act provided" may be treated as restrictive words, restricting the remedy to proceedings for a certificate. This I understand to be the basis of the dissenting judgment of Davidson J. in Bx parte Road Maintenance and Contract- ing Co. Ltd. ; Re Jordan (1). His Honour was led to the conclusion
H.C. or A. that, upon the true construction of the language used, it was onl
intended to permit a worker employed by a sub-contractor to the contractor for the purpose of obtaining a certificate as to tl balance due for wages, so that he might use it to procure an ment pro tanto of any debt due either to the contractor by bis origi contractee, or due by the contractor to the sub-contractor." The difficulty in this view is that the Act provides for no indepe dent proceedings for a certificate. It simply authorizes or requi a court to grant a certificate to the plaintiff in proceedings insti and maintained at law quite independently of the Act. it does mean that the moneys payable by the contractee to contractor may be intercepted to answer a debt of the sub-cont to his workman or tradesman, and so intercepted whether the tractor has or has not paid the sub-contractor in full, it is to see why it should stop short of imposing a personal liability up him. Jordan C.J. took the words "to the extent provided refer to the limit imposed upon the amount of wages for which certificate might be granted, viz., sixty days' wages. After e ing several suggested meanings of the section, his Honour expres his conclusion as follows : - " The present section to be intended to impose some form of personal liability on a ¢ tractor, who is merely a contractee for the purposes of the e sections. I think that what the Act means is that the contrac shall be responsible to the extent of not exceeding sixty days' for the wages of the workmen employed by a sub-contractor ont job the subject of the contract, that a workman employed by sub-contractor may proceed against the contractor to enforce t responsibility, and that he may, if he chooses, in such pi obtain not only judgment against the contractor, but a ce i enabling him to garnishee summarily moneys payable by the ¢ tractee to the contractor, in the same way as if the contractor ¥ his actual employer. This was, I think, the view taken of the sect by the Full Court fifty years ago in the cases of Hx parte Monie and Ex parte Johnston (2). In Ex parte Thompson (3) it was h not that the workman could not recover from the contra'
(1) (883) 4 LR, (N.S.W.) 138. (3) (1893) 14 L.R. (N.S.W.) 4025. (2) (1886) 2 W.N. (N.S.W.) 58. W.N. (N.S.W.) 114.
that the section did not create an actual relationship of master and servant between the contractor and the workman, such as would expose the former to the drastic remedies of the Masters and Servants Act. The Act has been consolidated since these decisions were given ; and I can see no reason for not following them " (1).
The three authorities to which Jordan C.J. refers are, in my opinion, very unsatisfactory decisions ; but I agree that their effect is as his Honour states it. They are unsatisfactory because in neither Ex parte Monie (2) nor in Ex parte Johnston (3) is there any reported examination or explanation of the text of the statute, nor is there any reference to two decisions which had been given upon the New Zealand model (Carlisle v. Brogden (4) and Oakes v. Durk (5) ) in both of which the contractor's liability was limited to the moneys owing by him to the sub-contractor. Further, the actual conclusion in both Ex parte Monie (2) and in Ex parte Johnston (3) was, in Ex parte Thompson (6), admitted to be wrong.
But the question for us is whether, at this date, we are prepared to place some other and, if so, what interpretation upon the provision.
For myself, if the question were untouched by decision, I should feel no difficulty in preferring the construction which I first indicated. That construction would give to the section no greater effect than an express provision making it clear that the workmen and tradesmen of a sub-contractor might, by means of a certificate, obtain what was owing to them from moneys accruing due to the sub-contractor from the contractor in the same way as under the general provisions the workmen and tradesmen of a contractor might obtain what he owed them from the moneys payable to him by the building or constructing owner or contractor. I do not deny that it is a construction which involves some difficulties, but it is open to far less objection than other interpretations, and I believe that it represents the true meaning of the legislature. The interpretation resulting from Monie's Case (2) and Ex parte Johnston (3) appears to me to work injustice, and finding, as I do, that Latham C.J. and McTiernan J. have arrived
(1) (1936) 36 (N.S.W.), at pp. (4) (1874) 1.N.Z. Jur, 169.
369, 370; 53 W.N. (N.S.W.), at (5) (1877) 3.N.Z. Jur. (N.S.) 15.
p. 126. (6) (1893) 14 L.R. (N.S.W.) 402 ; 10 (2) (1883) 4 L.R. (N.S.W.) 138. W.N. (N.S.W.) 114. (8) (1886) 2 W.N. (N.S.W.) 58.
Ww ConcrerE Con- STRUCTIONS Pry. Lrp. v. BaRves.
at the same conclusion as to the effect of the provision I think th
we should place our own interpretation upon it. For these reasons the appeal should be allowed.
McTrernan J. In endeavouring to discover the constructior sec. 18 of the Contractors' Debts Act of 1897 it is necessary to ai
on a contractor for the debts owing by a sub-contractor to workm and tradesmen and gives a right to a workman or tradesman to wh a sub-contractor is indebted to proceed against the contractor. f the extent of the responsibility thereby imposed and the nature the proceeding which the workman or tradesman may take a i the contractor the section refers to the other sections of the / The section states that the contractor shall be responsible for | sub-contractor's debts to workmen or tradesmen "to the provided for by this Act" and that the workman or trad "may proceed against the contractor, as in this Act provided, ai he had been directly employed by, or had directly contracted him." Now, the Act does not in terms provide any extent to wl contractor is to be responsible for the payment of a sub-cont debts for labour or materials. But I think that what th intends is to impose a responsibility on the contractor for such and to assimilate it to the responsibility which the Act as a imposes on a contractee for the debts due by a contractor to workm and tradesmen. It follows that every provision of the Act wl limits or conditions the responsibility of the contractee for debts limits or conditions the responsibility imposed on the contrae for the debts owing by the sub-contractor to workmen and tra It is clear that the responsibility of the contractor for such de not intended to exceed what would be the measure of his sibility if he were a contractee and the debts were those of contractor. One of the limitations of the contractee's responsib is that, where he has paid to a contractor all moneys due and ace due to the contractor, he is not then responsible for the cont debts owing to workmen and tradesmen. In that case there ¥ be no fund in the contractee's hands which, by operation of the 4
61 C.L.R.] OF AUSTRALIA. 235 would be assigned to the workmen or tradesmen. It follows that, H.C. or A. if the contractor has paid the sub-contractor all moneys due and SS accruing due to that party, the contractor is outside the operation Concrere
of the Act. The second part of sec. 18 gives to a workman or tradesman a right which is correlative to the responsibility imposed on the contractor
by the first part of the section. It seems to me that when, and only 4
when, there are moneys due and accruing due from the contractor to the sub-contractor, the workman or tradesman to whom the sub- contractor is indebted for labour or material, as the case may be, "may proceed against the contractor, as in this Act provided, as if he had been directly employed by, or had directly contracted with him." The right given to the workman or tradesman is limited by the words, "as in this Act provided," and it is made to depend on the statutory fiction that there is privity of contract between the contractor and the workman or tradesman to whom the sub- contractor is indebted.
The Act, by sec. 3, provides that the workman or tradesman who seeks a statutory assignment under it in order to secure the payment of debts due to him by a contractor should, in the first place, sue the contractor at law and in such a proceeding obtain a certificate in the form provided by the Act for the amount found to be due and payable to him, the amount for which the certificate may be given being subject to special limitations in the Act. The words, "as in this Act provided," refer to, amongst other procedural provisions mentioned in the Act, the mode of proceeding set forth in sec. 3. But as there is no privity at common law between the contractor and the workman or tradesman, to whom the sub-contractor is indebted, the section creates such privity by introducing the fiction of direct contractual relationship so as to enable the workman or tradesman to take proceedings at law against the contractor. The words creating the privity, if read apart from their context, are
capable of meaning that the contractual relationship thus created
is as complete as if the parties were bound by a contract of their own making. But these words are part merely of the sentence comprising sec. 18 and must be considered in relation to the provision of the whole section: Accordingly, the contractual right created in the
not exceed the limits of the correlative responsibility imposed on th contractor by the first part of the section. The measure of tl contractor's responsibility, which may be enforced in pro founded on the statutory contractual relationship, is limited by
the workman or tradesman to proceed against him. It follows, the one hand, that the workman or tradesman cannot proceed against the contractor if the contractor has paid all moneys due o accruing due to the sub-contractor; and, on the other hand, if the contractor has not paid moneys due or accruing due to sub-contractor the workman or tradesman to whom the sub-con tractor is indebted may obtain, in respect of the sub-contra debt to him, a judgment against the contractor (in an amount no exceeding the moneys due or accruing due to the sub-contractor at within the other limits of the Act) under which he may exercise the rights available to a judgment creditor at law; he may addition, obtain a certificate for the amount of the judgment w if he has not obtained satisfaction of his debt, will entitle him! exercise the special statutory remedy of securing an assignment moneys due or accruing due to the contractor from the cont
Although under this construction the contractor has a pe liability sub modo for the debts payable by the sub-contrac workmen and tradesmen, he is not on that account subject to greater financial burden than that which is consequential upon #l obligations assumed by him at common law to the sub-contrac I apprehend that, if he were compelled under the statute to pay t workmen or tradesmen what was due to them by the sub-contrat his indebtedness to the sub-contractor under his contract with hi would be pro tanto discharged. Both the workmen and tradesm to whom a contractor is indebted would, under this constructié have substantially the same remedies. The primary object ft
Act is to enable those creditors to get at the funds in the hands of the proprietor of the work, the contractee, who in the ordinary course of business would find the money to be expended on the job. The
fiction that there is a direct contractual relationship between the srrve
contractor and such workmen and tradesmen as are actually creditors of the sub-contractor is introduced to effectuate that object. The fiction must not be construed as conferring rights beyond those necessary for this purpose (Hill v. East and West India Dock Co. (1), per Earl Cairns). It enables those workmen and tradesmen to sue the contractor to enforce his limited statutory responsibility to them and to get a certificate under sec. 3, which is essential to set the machinery of the Act in motion. Thus, against the contractor per- sonally both sets of creditors have the same kind of remedy, although in the case of those who are actual creditors of the sub-contractor and only statutory creditors of the contractor, their claim must be limited, as has been explained, to the extent to which the Act makes the contractor responsible for their debts. In addition, both sets of creditors have precisely the same remedy, initiated by way of certificate, to have the contractor's debts due to him by the con- tractee compulsorily assigned to the extent necessary to satisfy their -own claims.
The difference between this construction and that which the majority of the Supreme Court placed on sec. 18 in Hx parte Road Maintenance and Contracting Co. Ltd. (2) is to be found in the effect given to the phrase, " to the extent provided for by this Act." In my opinion, the construction which prevailed in that case unduly narrows the scope of that phrase. The phrase, according to its natural and ordinary meaning, makes it necessary to subject the responsibility imposed on a contractor by sec. 18 to all the limitations and conditions which the other sections of the Act impose on a contractee's responsibility for the debts of the contractor. The judgment of the majority in the above-mentioned case accepts one only of such limitations, the limitation of the amount of wages which a workman may recover, as provided by sec. 5, and omits others, as,
(1) (1884) 9 App. Cas. 448, at pp. (2) (1936) 36 S.R. (N.S.W.) 362; 53 455, 456. W.N. (N.S.W.) 124.
H.C. or A. for example, the limitation implicit in sec. 8, which confines
xs this Act," their complete and, as I think, natural operation
tractee's responsibility to cases where money is due or accruit toacontractor. By giving the words, " to the extent provid
contractor's responsibility under the section is limited to the | extent as the contractee's responsibility under the Act, and section, under that construction, provides a remedy for work and tradesmen to whom a sub-contractor is indebted which harmony with the rest of the Act. This construction avoid: 7 discrimination which results from restricting the scope of the as in the construction adopted by the majority in Hx parte Maintenance and Contracting Co. Ltd. ; Re Jordan (1). Uni construction the workmen and tradesmen to whom a sub-contra owes moneys for labour or materials get a kind of remedy whiel not available to the workmen and tradesmen to whom a cot is indebted, the former being thereby enabled to obtain pay of their debts from the contractor, although he has already dis all his obligations to the sub-contractor.
It was contended, on behalf of the respondent, that the consti adopted by the Full Court should not be departed from beca was given in the case of Ex parte Monie (2) and was adhered t the cases of Ex parte Johnston (3) and Ex parte Thompson (4),' has the support also of parliamentary acquiescence. It is true that since the construction was first given, Parliament amended th and later consolidated it without making any change in the lat of the provisions construed by the court. In my opinion, the mentioned cases did not clearly expound the limits of the They leave a fundamental difficulty which Jordan C.J. refer in Ex parte Road Maintenance and Contracting Co. Ltd. ; Re Jo (5). He said: " As to the way in which the statutory respo created by sec. 18 may be enforced in such a case as the pre is not easy to express a confident opinion in view of the loos the language used." It is a matter of doubt what are the imi the construction in which it is said Parliament acquiesced.
(1) (1936) 36 S.R. (N. SW) 362; 53 (3) (1886) 2 W.N. (N.S.W.)
(2) (1883) 4 LR. NS W.) 138. W.N. (N.S.W.) Ld. z (5) (1936) 36 8.R. (N.S.W.), at p. 370; 53 W.N. (N.S.W.), at p. 126
case, the court is not bound to uphold the construction which was put on the section, although it has stood for a number of years, if the court is clearly of opinion that the construction does not express the intention of the legislature (Lancashire and Yorkshire Railway Co. v. Bury Corporation (1) ). With great respect to the eminent judges of the Supreme Court who construed these provisions in Ex parte Monie (2), I do not think that the construction there laid down, as I understand it, is one which is warranted by the language of sec, 18.
Upon the record in this case there is a plea which says that, before notice that the respondent was unpaid, the appellant paid all moneys due by it to the sub-contractor. For the reasons given, this plea is, in my opinion, a good answer to the respondent's declaration, which purports to be based on sec. 18. The appeal should be allowed and judgment given for the appellant on the demurrer book.
Appeal allowed with costs. Order of Supreme Court discharged. Judgment for defendant with costs wpon demurrer and upon cross- demurrer.
Solicitors for the appellant, Baldick, Asprey & Co. Solicitors for the respondent, Martin & Lamport.
(1) (1889) 14 App. Cas. 417. (2) (1883) 4 L.R. (N.S.W.) 138.