Konstas, Elias & Anor v Southern Cross Pumps & Irrigation Pty Ltd & Anor [1996] FCA 536

Konstas, Elias & Anor v Southern Cross Pumps & Irrigation Pty Ltd & Anor [1996] FCA 536

Even assuming that the pure benefit and burden principle could apply in Australia, the applicants had no arguable contractual case against the first respondent because the 1991 irrigation contract had been fully executed before the Sale Agreement and clause 9.1(a) could not transfer any practical commercial benefit with which the alleged liability could be associated. Any assignment would therefore operate only to transfer a liability, which could not be assigned without novation. The non-contractual claims were not pressed against the first respondent, so the Application and Amended Statement of Claim had to be dismissed as against it.

Jurisdiction
Australia
Judgment Date
03 July 1996
Procedural Posture
Application by the First Respondent to Be Removed as a Party and to Have the Application and Amended Statement of Claim Dismissed as Against It / Notice of Motion Under O 6 R 9 and O 20 R 2 of the Federal Court Rules
Outcome
The first respondent's application was granted with costs; the Application and Amended Statement of Claim were dismissed as against the first respondent.
Legal Topics
['removal of Party' 'strike Out or Dismissal for No Reasonable Cause of Action' 'assignment of Contractual Benefit' 'assignment of Contractual Burden' 'novation' 'benefit and Burden Principle']
['practice and Procedure' 'equity' 'contracts'] ['removal of Party' 'strike Out or Dismissal for No Reasonable Cause of Action' 'assignment of Contractual Benefit' 'assignment of Contractual Burden' 'novation' 'benefit and Burden Principle']

Case Brief

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Procedural Posture

Application by the First Respondent to Be Removed as a Party and to Have the Application and Amended Statement of Claim Dismissed as Against It / Notice of Motion Under O 6 R 9 and O 20 R 2 of the Federal Court Rules

Legal Issues

  1. 1 ['Whether the first respondent should be removed as a party under O 6 r 9 of the Federal Court Rules.' 'Whether the Application and Amended Statement of Claim disclosed a reasonable cause of action against the first respondent or were frivolous, vexatious or an abuse of process under O 20 r 2 of the Federal Court Rules.' 'Whether clause 9.1 of the Sale Agreement assigned to the first respondent any contractual liability under the 1991 irrigation contract.' 'Whether, if a benefit of contract was assigned, any burden or liability under that contract was also assigned to the first respondent under a benefit and burden principle.' 'Whether any benefit remained to be assigned where the 1991 contract had been fully executed before the Sale Agreement.']

Ratio Decidendi

Even assuming that the pure benefit and burden principle could apply in Australia, the applicants had no arguable contractual case against the first respondent because the 1991 irrigation contract had been fully executed before the Sale Agreement and clause 9.1(a) could not transfer any practical commercial benefit with which the alleged liability could be associated. Any assignment would therefore operate only to transfer a liability, which could not be assigned without novation. The non-contractual claims were not pressed against the first respondent, so the Application and Amended Statement of Claim had to be dismissed as against it.

Court Disposition

The first respondent's application was granted with costs; the Application and Amended Statement of Claim were dismissed as against the first respondent.

Orders

  • ['The Application and Amended Statement of Claim be dismissed as against the first respondent.' "The applicants pay the first respondent's costs of the Notice of Motion."]