An application for summary judgment brought by the first and second defendants against the plaintiff. The application was based on the survival and effect of a non-assignment clause in a contract.
Homes by CMA (CMA) provided plans to the first and second defendants for the construction of a residence. The first and second defendants entered into a written contract with CMA. The contract contained a clause which relevantly provided that neither party may assign the contract or any payment or other right, benefit or interest under the contract without the prior written consent of the other party. The first and second defendants’ application for finance with the prospective lender was declined. The first and second defendants subsequently engaged the third defendant to construct a residence.
By a deed of assignment, CMA purported to assign to the plaintiff any property right title and interest in and to the plans, and also any accrued claims or causes of action that CMA had in relation to copyright in the plans and/or the contract. There was no contractual agreement between the plaintiff and the first and second defendants. The plaintiff alleges that the residence ultimately constructed substantially reproduced the plans (as amended) provided by CMA. Further, the plaintiff alleges that the first and second defendants breached certain provisions of the contract between the first and second defendants and CMA.
On the application, the first and second defendants contended that the non-assignment clause in the contract survived termination and meant that the purported assignment should be held to be ineffective. Consequently, the first and second defendants argued that the plaintiff’s claim – premised on the purported assignment – ought to be dismissed.
The application was rejected on the grounds that the primary factual dispute as to whether the contract was validly terminated was not amenable to summary judgment. The Court concluded that it could not be said there were no factual issues which might arise during trial that could impact upon the ultimate legal principle to be applied. Further, to determine whether the prohibition on assignment clause rendered the assignment ineffective required the application of broader principles of contractual construction which was also not amenable to summary judgment.
Oliver Cook appeared for the first and second defendants, instructed by Synkronos Legal.
The judgment is published here.
