SUPREME COURT.

Taranaki Daily News, 6 March 1918, Page 6

SUPREME COURT.

RESERVED JUDGMENTS, THEATRE BUILDING CASES. Following are the reserved judgments given 'by His Honor, ilr. Justice Edwards, in the claims against the Taranaki Amusements, Ltd. (owners) and Chappell and Woolly (the building contractors), in connection with the erection 0/ Everybody's Theatre, which were heard at the last sitting of the Supremo Court at New Plymouth- The claims were as follows: — : The Carara Ceiling Co., Ltd. (Mr. A. H. Johnstone) £454 14s Sd; X'ixon an Nixon (Mr. J. 11. (Juilliam) £l4O 19s 3d; Thomas A. Berridge (Mr. J. H. Quilliam), £SB 12s ; and West and Sons (Mr. P. E. Wilson), £94 9s 3d. [Sr. AH. Bennett represented the defendants. Bis Honor said the claims were "The Wages .Protection and Contractors' Liens Act, 1908," by four different sets of sub-contractors against the same defendants. The defendants are tho building owners of a picture theatre and the contractors for the building. The claims were consolidated by order of the Court at the instance of defendants with the consent of the plaintiffs. The work in respect of which the claims were made was performed, and the sum 9 claimed were admittedly owing to them By Chappell and Woolley, the contractors for the erection of the building. Defendants admitted the formalities required for the prosecution of such claims have been complied with by plaintiffs. The total claims amounted to £749 as 2d. Defendants admit they have in hand moneys amounting to £557 19s !ld which but for plaintiffs' liens, would be payable to the contractors, and so arc applicable to payment of plaintiffs' claims rateably. Tho question to be decided is whether or m>t in the circumstances now to be stated, the defendants are liable to pay the full amount of those claims. The contract price for tho building was £5253 10s. Counsel for plaintiffs contend that defendants were bound by the 59th section of sub-section 2 of the Statute to retain, until 31. da* after the completion of the building onefourth of the contract price, namely £1320 19*!, which would have been far more than sufficient to discharge all the claims in full. The contract had to b completed in 22 weeks from January 17, 1910. The contract was entered upon and up to October 14, 1910. Progress payments were from time to time made bv the defendants to the contractors on the certificates of the architects. Up to that time defendants had retained in hand one-fourth of tho amount certified by the architects. The course then taken by defendants was stated clearly by their counsel, who said: "At this stage the contractors were three month, late in completion of their contract and , ivere in serious difficulties. The company had to (a) cancel the contract, when neither sub-contractors rtor lienors would have been entitled to any money from the company, or (b) to complete the contract- at the least possible expense. The company adopted the sec* ond course and completed tho contract through the contractors under the supervision of the architect, a special clerk Of works being brought on to the worksThe sub-contractors were allowed to continue their work without any notice oi a change in the position, and without payment by the company or the contractors for the work done by them.

Tlio statement of counsel was supple* mented by evidence to the effect that in consequence of the financial, embarrassment of the contractors defendant company arranged to pay wages of all the workman employed in the Work upon production of time sheets, and also other pressing claims against the contractors and thereby enable the building to be completed. The company's cheque was paid to the contractors who paid the moneys to persons entitled to receive them. In that way. from October 14, 1010, the sum of .€ll7O was paid by defendants to sub-contractors with out anv certificate from the architect and without retaining in hand any percentage of the amount payable to, the contractors. Tn addition, wages of workman on the building amounting to £1230 J 3s were paid by defendants. The total sum paid to the sub-contractors and workmen after October 14, 1910, was £2421 2s, and those pavmonts had reduced the sum which should have been retained for the 31 daTS after completion of the contract, to £057 10a 9d. Counsel for defendants claimed they were justified in procuring completion of their building in the manner stated, as that was the 'best and cheapest way < securing the completed buildine. It'had also been claimed that as the charge given bv the 51st section of the Statute to a sub-contractor is merely a charge on moneys payable by the employer to his contractor, and as in the present ease the contractors could claim from the defendants no more than the sunof .•C557 10s fid, the aggregated claims of plaintiffs cannot exceed that sum. His Honor reviewed the cases cited in support of that contention, and said that his judgment in re William? 17, N.Z. L.R. 712. had been adopted by all the judges of the Court, and that it may therefore be treated as setting the law on the points with which it deals. Dealing with the question now in dispute his Honor said: "The true meaning of all the sections taken together appears to bo that the lion or charge is created by this Act, and not by the notice, but that until the notice is given the charge is a floating charge, and is liable to lie defeated to the extent and in the manner provided by the Statute. If the charge is created by the Statute, then it can be defeated onlv in the manner prescribed fljy the statute." (P. 723 of (Report). Alj the authorities in point, including that of the Court of Appeal, arc therefore against the contention of counsel for the defendants in the present case. I may observe that this construction of the Statute not only does not do any injustice to the building owner in such cases .is the present, 'but it precludes injustice from being done. The contention by defendants that plaintiffs liad really benefitted by the course taken iby defendants was obviously fallacious. It is true that defendants might have taken the workout of the hands of the contractors and in that case no further moneys would have become due to the contractors to whicli a lien could attach. It is also true that ipossibly in that case some sub-contractors to whom the money was owing at that Btage would have suffered a loss. But defendants must then have completed the work at their own expense. They could noi then have claimed in these proceedings to have completed it at the cost of the sub-contractor Counsel for defendants had iilso raised the further objection that when work is pax want to separata contract and

transaction is a separate contract and is governed 'by the limitation of time for giving notice of claim of charge, and for commencement of ]>roeee<lings to support such claims. In support of the contention counsel cited the cases of in re A. and T. Hurt, 21 NZ.LR. 540: Iloicl v. Barnett, 22 X.Z.LR., !>g/ ; and llailey and Ewing v. >Searle, 24 KZ.L.R., inT, His Honor said lie understood the objection is raised with respect to a portion of Berridge's claim. The principle v.'bicli regulates such questions is, however. applicable to all claims. In Bcrridge's case the plaintiff contracted to supply to the contractors for the building such shingle as was required in its construction at a fixed price. The plaintiff also contracted to supply a horse team and dray to be used in the evcavation of the site of the building and for other purposes connected with the building at the fixed price of 2s fid p<" hour. Both services were to be performed from time to time when required by the contractors. The ordinary course of business between the plain'' and the contractors was that monthly accounts for both services were rendered by plaintiff. His Honor reviewed the authorities quoted, and held that they were directly opposed to the objection of defendant's counsel. His Honor therefore llieTd that the several plaintiffs were entitled to judgment against the defendants for the several amounts claimed by thein respectively, namely, Tho Carara Ceiling Co., Ltd., £454 34s 8d; Nixon mini Nixon, £l4O 19s sd; Thomas A. Berridge, £;iS 12s; and West and Sons, £94 IBs 3d and they must have judgment accordingly. These amounts are not in all eases those claimed in the written proceedings, which in some eases were reduced by agreement or by admissions at the trial. Plaintiffs respectively are also entitled to an ord«r defendants for payment of their costs. ' the trial counsel had all agreed to Icr.vc the question of costs entirely to the Court. Section 90 of the Act gives tho Court power to award costs without the smallest indication of any principle upon which that power is to be exorcised, I can discern no other principle than to treat the proceedings as though thev were actions in the ordinarv form. Plaintiffs respectively- will therefore have an order for costs accordingly. FAMA STONEWOOD CO.'S CASE. The following judgment was given by his Honor in tho ease of the Fama Stonewood Co, Ltd. (Mr. McConnell) against the Taranaki Amusements Co., Ltd. The proceedings were begun in the Magistrate's Court, and had subsequently been removed to the Supreme Court, to' recover the sum of £2OO for certain work done by plaintiffs for defendants. His Honor said: The proceeding is in the form prescribed and purports to be under the provision of ilie Wages Protection and Contractors' Liens Act, 11I0S, but plaintiffs do not now claim the special benefits given by that Act, and , the only question for determination is whether or not the plaintiffs are entitled to judgment in the ordinary form for the amount claimed- Tho material facts of the case are as follow: Prior to lUlli the defendants determined to arect a picture theatre, at Xew Plymouth, to be called ''Everybody's.'' They employed Messrs Grierson and Aimer, of Auckland, to act as their architects. In June, 1010, the architect communicated with Messrs .Andrews, of Cliristchurch, who appear to conduct the plaintiffs' business there, with a view to ascertaining tho cost of laying certain flooring in the proposed building with a manufacture of the plaintiffs known as ''Fama Flooring." On January 8, 1010, the plaintiffs sent to Grierson and Aimer a written tender for the proposed work at the price of £l7O. On January 12 defendants entered into a contract with Chappell and Woolley, builders, Auckland, for the erection of the proposed theatre- At the foot of the printed form of contract there appeared in .print these ivords: ''Appoint the said Grierson and Aimer architects in connection with the works referred to herein, and authorise him to prepare all necessary plans, specifications, documents and copies, and to exercise all the powers and authorities necessary to be exercised by him as architect v.nder any contract or arrangement prepared by or through him.'' Amongst the printed general conditions, which were embodied in the contract, is the following: IG. Prime Cost. —The words 'prime cost' or the initials 'P.C.' applied in the specilications to goods to be obtained and fixed by the contractor shall mean, unless otherwise stated in the specifications, the actual price in the district of Xew Plymouth, and to all lump sums mentioned in the specifications the contractor shall add such prolit as he may consider himself entitled to. In the event of the architect arranging with some person other than the contractor, tor the expenditure of such sums, or of a contract being let therefor wit'll some person other than the contractor, the contractor shall not be held responsible for any work done or materials supplied, or for any damage done by the carrying out of such'work. The contractor shall he entitled to a reasonable remuneration based upon the value of all work done or executed before the date fixed for completion, or within any extension thereof, and not included in the original contract., to cover any cost or trouble to which the contractor may be put on account thereof.'' The specification contained the follow- ; ing clause with reference to the work to be done: "Fama Flooring—Allow in tenders the sum of £240 net to cover the cost of fama flooring, which shall he laid in two colors in the vestibule, gallery around vestibule, landing on lower main staircase, lounge, stairs from lounge to circle, and stairs from auditorium to stage, by the Fama Stonewood Co., Ltd., Cliristchurch, The Fama 'flooring on ,'andings to be laid up to the marble margin. Fama floor-covering to finish %in. thick." ]t will be observed j that although the price stated for the work in the plaintiffs' tender of January S, four days earlier than the date of the contract, this clause treats the cost at £240. Oricrson, who gave evidence for defendants, said he wanted to obtain a price for the work from plaintiffs in order to embody it in the specifications for tho building; the first price given was £240; that tenders were too high, and that after talking the matter over With plaintiffs' representatives tho allowance for the Fama flooring was reduced to £l7O. Grierson's attention jwas not drawn to the fact that at the dafe of the contract tho tender for £l7O bad been received from the plaintiffs, and the discrepancy remains unexplained. Evidently the specifications had been drawn at an earlier date to enable tenders to be called, and Grierson, when the contract was signed, forgot to make tho alteration in the cost of the Fama flooring. The evidence, which is very scfappy, does not show' wiiat happened with regard to plaintiffs' tender after Chappell and Woolley's tender

was accepted. Crierson said he did not remember giving any notice to the plaintiffs that their tender had been accepted, and Chappell deposed positively that his firm had never entered into a contract Willi the plaintiffs to lay the floor. So far as tlie evidence shows, nothing further transpired in connection with the matter until October 2S, when Grierson wrote to the plaintiffs' representative in Auckland to the effect that Everybody's Theatre would bo ready for the Fama flooring covering on November 13, that tliev had a big staff working, and would like to have the job fiiiishivd and ready for occupation by the end of November at the very latest. It is therefore, plain that the architect directed the plaintiffs to carry out the work with expedition. When plaintiffs' foreman saw Grierson in order to get the measurements of the work, it was found there was more work than Grierson expected. Plaintiffs' representatives in Auckland then wrote to" Grierson's lirm etating they understood: "You want 140 yards red floor and S9 yards steps and 'landing?. Our quote of January 8 was based on 119 yards red floor* and 73 yards stairs (G2 treads and 8 landings). There are therefore 21 yards red floor and 18 yards stairs in addition to contract, for which we shall have to charge lis 6d and 20s per yard respectively." To that Mi'i Grierson replied, confirming a conversation re the extent of flooring at the thc-atre, saying: ''Plain red flooring !)7 yards, stairs and landings 74 yards; that the figures were approximate and would hn subject to re-measurement upon completion of the work." The plaintiffs' foreman (Boreham) while attending to the work was asked Vy Mr. Nixon, a director of the company, and Mr. Bates, the company's clerk of works, to lay lama flooring on the upper lounge, which was not included in the contract or in the work mentioned in the letters. In duo course a price for the extra work was submitted to Nixon, who said: ."It's a bit stiff, but if it is CI a yard it will have to go on. It will to come out of Grierson's commission'' Nixon had also said that he ordered the extras by resolution of tho directors, and that he was authorised to tell plaintids to go on. Chappell said he did not know who authorised t-lie extra work. On January 12, 1017, plaintids began their present proceedings against the defendants.

His Honor reviewed the correspondence tliat had passed between the parties' solicitors, and which had been put 1)1 as evidence. He said that in pursuance of the arrangement made by correspondence the plaintiff's gave notice on February 10 of their intention to claim a charge upon the moneys payable by the appellants to Chappell and'Woollcy on Form No. 3 of the Third Schedule of the Act. -Nothing further was done in connection with that notice. No step was taken hy the defendants towards settlement of the plaintiffs' claim, and in September In3t it was removed, at the instance of defendants, into the Supreme Court. In a letter dated September 25, 1!)17, the defendants' solicitor informed the plaintiffs solicitor that ''the bondsman -has repudiated liability to our Client company, and it is therefore necessary to have the company's liability (under the liens, etc-) judicially determined.'' The letter concluded: "\Ve still consider that your proceedings arc iriogulai, and we do n»»t o waive our objections to your clients' claim and the proccet.mgs thereon, or any other defence available to our clients, nor do we admit that the subsequent proceedings taken bv your clients personally are in order" His Honor said it had'br-en necessary to ueal with the correspondence, r.s dcfendants contend through their counsel that plaintiffs are estopped bv their notice of September 10. Jf that had been substantiated by the evidence it would be'unnecessavy to consider the case fur. ther. In m v opinion it is quite clear tluilt plaintiffs are not estopped as claimed by the defendants. The position pursuant to the notice of charge was that the present action was pending. . The basis of that action is that the defendants alone are debtors to the plaintiff Defendants' proposal that plaintiffs should claim a lien upon the moneys payable by themselves to Ohappell and Wooller and that the present action should 'e adjourned until the time for hens had expired, was obviously a course beneficial to defendants, as they would be relieved of the immediate defence of the action, and if Ohappell and Woollcy would complete the contract without a loss they would also be relieved of the consequences if judgment should so against them. Plaintiffs acceded to defendants .proposal- _\ o u- defendants sa>: We asked you to make a claim against Chappell and Woollcy and to consent to adjourn the action pendin® against ourselves. You did as we asked* w we *av that hy consenting to our icquest you furnished us with a n effecne defence to the action which you adjourned at our request." This is "impossible. The defendants knew, and the plaintiffs did not, the exact terms of heir contract with Chappell and Wool•ey; and the position of affairs between themselves and their contractors. If either party was deceived and induced to alter tne position to their detriment, Ti,!' aS u ' P la,nt,,rs an <i not defendants. . alleged ground of defence arose after commencement of the action, and tho. defendants are therefore not at liberty to set- it up without the leave of the Court. Such leave has not been obtained, and it is impossible i n the circumstances that it could be granted Another technical, and, in my opinion! m IZ? defe,lce lms ;bc *n M'sod. amtitls began the proceedings claiming A. 200, winch is the limit of the Magistrates jurisdiction. Upon the trial it has been proved that the original contract price was £l7O, and the cost of the extras, if plaintiff chose to claim in full, would -be £32 2s 4d. Plaintiffs, without giMng particulars, claimed £2OO as being the whole sum due to them in reject to the work done. Judgment in the action must he complete satisfaction of the total sum due, whatever that may be- I am not satisfied tlmt there | was ever an irregularity in the original claim, hut at most it can be no more jtltaii an irregularity. To suggest thut such an objection can be taken after the j defendants had first obtained a protracted delay in the prosecution of the action, and had afterwards removed it into this court, and have gone to trial upon it without objection, appears to me to be absurd. The action must therefore be determined, upon its merits. His Honor then referred to the 16th clause of the general conditions of contract, which provided for the architect arranging with some person other than the contractors*for the expenditure of lump sums mentioned in the specifications, or of a contract being let therefor. This, he said, appeared by necessary implication to give the architect- power to make such arrangement or contracts, and the architect had so acted- When' further work was required by the architects to be done, tho plaintiffs* writing to the architect, informed him of prices which they intended to charge, and the architect mads so objection, Plainly (hfii

plaintiffs were looking to the defendants tor payment. His Honor then reviewed the evidence given by Nixon as to supervision' of the building and the. authorising of extras b} plaintifls. To hold that the company directors intended when the work was ordered to leave the plaintiffs to look to Ohappell and Woolley for payment would be to charge them, with a very dishonest action. "In my opinion, therefore, plaintiffs are entitled to judgment for ,the amount claimed." Ilis Honor Said the question of authority was of little value. The remarks of Lord Lorefcurn on the subject in Hempton v. Glamorgan Countv Council (1917) A.C 18 are in point. i n dealing with the same question the judge said": "Tho facts of one case are hardly ever of any value when considering the faet3 of another case, and the same thing may be said in regard to the construction of one contract, which is rarely assisted by reference to the construction of other and different -words." I may, however, say that I think the judgment of the Court of Appeal in Hohbs v. Turner IS T.L.R'. 235 (1902) is as nearly directly in point the plaintiffs' favor a ease of this class can well be expected to be. Judgment was therefore for the : amount claimed (£200), wttb costs, ac--1 ewding to nealt,