12Assignment ceases to operate on discharge of debt

#### 12 Assignment ceases to operate on discharge of debt 12 Assignment ceases to operate on discharge of debt > > (1) If the debt owed to an unpaid person by a defaulting contractor is discharged, or the judgment or order that resulted in a debt certificate being issued in respect of the debt is set aside, any assignment effected by operation of this Act in connection with that debt ceases to operate. > > > (2) If only part of the debt is discharged, the assignment effected in respect of that part of the debt ceases to operate. > > > (3) This section does not affect any payment or dealing that is made by a principal in good faith before the principal receives notice, and sufficient evidence of, the discharge of the debt or the setting aside of the judgment or order. To the extent necessary to give effect to such a payment or dealing, the assignment effected by operation of this Act is taken to continue in force. > > Note— > > If a principal makes a payment to an unpaid person (as required by section 9), instead of paying the defaulting contractor, without knowing that the debt owed to the unpaid person has been discharged by the defaulting contractor, this section protects the principal from being required by the defaulting contractor to make the payment to the defaulting contractor.