IMPORTANT TO CONTRACTORS.

Dominion, Volume 1, Issue 207, 26 May 1908, Page 9

IMPORTANT TO CONTRACTORS.

WORKERS' LIEN ACT,

A WANGANUI DECISION,

A decision of considerable importanco to contractors has recently been given by Mr. Justico Cooper at "Wanganui in a case on appeal from a District ( Court decision by Judge Hji'seldcn, with reference' t-o the liability of n contractor under the Contractors' and Workmen's Lien Act, 1592, to pay the wagos of the workmen of a sub-contractor.

I lhe contract was let to Mr. A. Brown to build: a house, the painting of which was sub-let to Mr. J. Campbell, painter, for whom tho appellants in tho appeal case, Mather Bros., worked. Tho sub-contractor 10 w °rkmou their wages, although ho had been paid the full amount due to him' as sub-contractor. Mr. Brown (tho contractor) made tho mistake of paying tho amount in full, as ho should have retained 25 per cent., as provided in the Act, to indemnify unpaid tvorkmon up to 25 per cent, of their wages. Mr. E. Newman, tho owner of the house, had, in accordance with tho Act, retained 25 "per of the money duo Mr.. Brown. Tho point at issuo was whether Mather Bros', were entitled to claim tho lien on the wholo of the 25 per cent, rdtained .employer, or only to tho extent of 2o per cent, of the amount of 'tho sub-contract.

. The questions for tho Court to decido were:

(1) Whether the Act gives a worker of a sub-contractor a lien or charge over tho moneys due from the employer of the contractor, or only on the money payablo by the contractor to tho sub-contractor.

(2) Whether 25 per cent, means 25 per cent, of the slib-oontract moneys, or 25 per cent, of the whole of the Contract sum. . (3) Are the workmen of a contractor tho only, ones able to draw on tho, 25 per cent! retained by tho employer, or are tho workmen of a sub-contractor likewise privileged, and, are thoj latter only limited to tho contractor's 25 per cent, of the retained money ?

His Honour remarked that tho questions were important ones, and-he would have liked them to, go before the Court of Appeal. He reserved the points at issue, but has sinco forwarded, the decision to Wanganui. In his judgment, His Honour held that subsection 5 of the Act meant that the worker wmld not only claim on tho money duefrorti Brown (the contractor), to tho sub-con-tractor, but oil the money due from thb employer to tho contractor. The appeal was therefore allowed,, and an order was mado for tho payment of the flill amount duo to the workers, Mather Bros., out of the moneys paid into Court by tho employer. ■ Tho effect* of this decision is that a workman for a subcontractor is entitled to a lien for wages duo for work done by him, upon any moneys in tho hands of tho omplo.ver Or Contractor. .

The great importance of this finding will no doubt be. realised by tho majority, of contractors; ■ who, it is understood, have considered'up to tho present that tho Contractors' and -Workmen's Lien Act, 1892, only entitled the w'orkors for a sub-contractor to a lion on 25 per 'cent, of tho amount of the sub-contract. '' - ' - . . '• •

It is considered' in' some quarters that'this decision leaves tho door open to collusion between a' sub-contractor and his workers to obtain an advantage over tho claims of ,'othor workers. It is' suggested ..that tho, Act should bo amended in tho direction of giving some protection to contractors, a ltd it ; is pointed out that, until the law is amended, it would be advisable for contractors to be moro; Careful in making payments to subcontractors to ascertain that tho moneys duo to. workers-are being regularly paid. :