Aberdine Pty Ltd v Vineyard Estate Management Pty Ltd No. Scciv-00-964

ABERDINE PTY LTD & YORK CONSULTANTS PTY LTD V VINEYARD ESTATE MANAGEMENT PTY LTD
[2001] SASC 442
Appeal From A Master (Ex Tempore)]

LANDER J. Listed before me this morning is an appeal from a decision of a Master of this Court. I shall refer to the parties as they appeared before the Master.
On 14 May 2001, the defendants made an application for the cancellation of a lien which has been registered on the estate and interest of the first defendant on land at Wrattonbully.
The first defendant is the registered proprietor of land at Wrattonbully which is being developed as a commercial vineyard for sale to the first defendant as investors. The second defendant is a vineyard manager in New South Wales.
The plaintiff claims, in its Second Amended Statement of Claim, that in or about May 1999, the plaintiff and the defendants agreed to enter into a vineyard investment scheme. It is alleged that the terms of the scheme required the first defendant to purchase the land and to hold land on trust for the investors. The second defendant would be the project vineyard manager and would market and finance the scheme.
The plaintiff would carry out certain work and supply labour and machinery in connection with the work for the preparation of the land for planting, trellising, the supply of rootlings and planting of the vineyard.
The plaintiff claims that it has performed its obligations under the vineyard services contract, in that it has carried out the work, supplied labour and machinery, necessary to complete the development of the land as a commercial vineyard.
The plaintiff claims that there was a variation to the vineyard investment scheme and a further variation to the vineyard services contract, but those variations seem unimportant for the purpose of this appeal.
The plaintiff claims that the work it carried out was performed with the consent of the first defendant for the purpose of advancing the vineyard investment scheme. It is claimed by the plaintiff that the work done by the plaintiff pursuant to the contract between the plaintiff and the second defendant was done in pursuance of the second defendant’s obligation to the first defendant under its contractual arrangements.
The plaintiff claims that the second defendant is indebted to it in the sum of $251,697.80.
The plaintiff claims it gave notice on 29 September 2000 to the second defendant demanding payment of the amount to which I have referred, but that that amount remains unpaid. It also claims, by notice dated the same day, served on the first defendant, a statutory lien on the estate or interest of the first defendant in the land at Wrattonbully. The plaintiff lodged a notice of lien with the Registrar-General whereby the plaintiff claimed the lien against that estate. The plaintiff also asserts that on the same day, it served on the first defendant a notice claiming a charge under the Workers Liens Act 1893 (SA) (the Act) on any contract monies payable by the first defendant to the second defendant.
The defendants have filed a joint defence. They admit that the second defendant agreed to act as marketing consultant and introduce investors to the vineyard project. The second defendant also was to retain the plaintiff to complete the installation of a vineyard on the land.
The second defendant admits that it retained the plaintiff to complete the installation of the vineyard and to carry out certain works. It also admits that it would pay the plaintiff for those works, when it had determined such works had been carried out properly, and upon receipt of written proof of the plaintiff contracting for payment of the said works.
The defendants allege that the plaintiff was in breach of its contract with the second defendant in that it did not carry out the works competently and in a proper and workmanlike manner; incurred expenses without the approval of the second defendant; did not complete the installation of the vineyard for the cost identified; purported to engage contractors in the name of the second defendant; did not carry out the works in a cost efficient manner; did not disclose it owned hire equipment; refused to provide full particulars of the written documentation evidencing the incurring and payment of costs for contractors; and lacked business experience.
The defendants allege that as a result of those breaches the second defendant terminated the contract, which termination the plaintiff accepted.
The defendants expressly assert that there are no monies owing between the second defendant and the first defendant. It is further alleged that there are no monies due and payable by the defendants to the plaintiff.
The second defendant has counter-claimed in relation to the alleged breach of contract by the plaintiff. It claims as a result of the plaintiff’s breach, it has suffered damage to the extent of $694,778.03 and further damage in excess of $600,000 but yet to be quantified.
The first defendant’s application to the Master was made pursuant to s 32 of the Act, which allows a person who alleges he is prejudicially affected by a claim, lien or charge, or by registration under the Act, to apply to the Court to have any such claim or registration cancelled. The Court has a discretion to make such orders as may be deemed just.
The Master dismissed the application. The first defendant has appealed from that dismissal.
The following matters are not in dispute. The plaintiff was a contractor to the second defendant and carried out work pursuant to a contractual arrangement between the plaintiff and the second defendant on the first defendant’s land. The work was done with the assent of the first defendant, either express or implied. In those circumstances, the plaintiff has satisfied the necessary conditions under s 5 of the Act. Indeed, the first defendant does not argue otherwise. Section 5 provides:
“5.A contractor or sub-contractor shall have a lien for the contract price, so far as accrued due, on the estate or interest in land of any owner or occupier in each of the following cases:-
(a)Where the work is done, with the assent, express or implied, of the owner or occupier to the land or to any fixture thereon:
(b)Where the materials are, with the assent, express or implied, of the owner or occupier, used or intended to be used in or about work done, or intended to be done, to the land or to any fixture thereon.”
Whether the plaintiff has a lien will, of course, depend on whether or not any of the contract price has accrued due within the meaning of s 5. The second defendant of course asserts that no sum has accrued due, because no sum was payable under the contract by reason of the plaintiff’s breach of contract. Indeed, it is the first defendant’s contention that the plaintiff is indebted to the second defendant. That is not, of course, a matter that can be decided on an interlocutory application. That is a matter which has to be decided at the trial.
Section 6 of the Workers Liens Act provides:
“Liens under subsection (1) of section 4 or under section 5 shall not, in cases other than those of workers employed by the owner or occupier, extend beyond that portion of the contract price payable by the owner or occupier under the contract for the purpose of which the work or materials are done, furnished or manufactured and unpaid at the time when the owner or occupier shall receive notice of the lien or of its registration, whichever shall first happen, nor extend at all to cases where there is no such contract binding the owner or occupier to pay a contract price.”
It is s 5 which gives the right to the contractor’s lien. It is s 6 which delimits the extent to which that lien may be enforceable against the owner or occupier of the land to which the lien is said to attach: Longreef Pty Ltd v Leighton Contractors (South Australia) Pty Ltd (1991) 106 LSJS 270.
Section 6 limits the owner’s liability to have a lien registered on the land to the extent of the amount payable by the owner to the contractor, and unpaid at the time when the owner receives notice of the lien or its registration. It specifically provides that a lien shall not extend to any case where there is no contract binding an owner or occupier to pay a contract price.
The statutory lien which is given under s 5 is governed by s 6, and it does not extend beyond the amount of the contract price payable by the owner to the contractor, and unpaid at the time when the owner receives notice of the lien or its registration. Nor does it extend to any case where there is no contract binding on the owner or occupier to pay a contract price. Thus there are two concepts: the amount must be accrued and must be payable.
There is no plea in this Statement of Claim that any monies are owing by the first defendant to the second defendant. Nor is there any plea that there is a contract binding upon the first defendant to pay a contract price to the second defendant. On the other hand, the defendants have pleaded in para.18 of their defence:
“The defendants say there are no monies owing between York and Aberdine and rely upon Section 6 of the Workers Lien Act and seek orders pursuant to Section 32 of the said act to have the registration of the Lien cancelled.”
The plaintiff was on notice as early as the filing of the defendants’ defence that the plaintiff had failed to assert that there were any monies owing by the first defendant to the second defendant. Thus, the plaintiff was on notice at the time of the filing of the defence that the first defendant would argue that the provisions of s 6 would apply, and no lien could arise in respect of the first defendant’s estate or interest in the land at Wrattonbully.
The defendants wrote to the plaintiff’s solicitors on 23 February this year pointing out the deficiency in the plaintiff’s statement of claim. In an affidavit filed on 5 June Mr Meads, a director of the second defendant, asserted that he had searched the books and records of the defendants and that he could find no record of any contract between the first defendant and second defendant in relation to the work carried out by the plaintiff. In a further affidavit sworn on 13 August 2001, Mr Meads repeats that assertion.
When this matter came on before the Master the defendants filed a summary of argument dated 30 August 2001. In relation to this aspect of the application, the defendants wrote:
“The plaintiff’s pleadings do not disclose a contract. It is essentially a quantum meruit case. The pleadings and evidence do not establish a contract price was due or payable in the relevant sense. The plaintiff having not satisfied the act (sic) must fail and no order pursuant to s 32 of the Workers Liens Act 1993 should be made.”
That submission was repeated in a document filed in October 2001. That was the argument advanced before the Master.
The plaintiff filed a notice of appeal in which it made it clear that the sole issue on this appeal was that the Master’s decision was wrong because there was no assertion in the plaintiff’s Statement of Claim that there was a contract between the first defendant and the second defendant, or that monies were due by the first defendant to the second defendant.
It is difficult to conceive how the defendants and in particular the first defendant could have done more to put the plaintiff on notice of the first defendant’s defence to the plaintiff’s claim against it under the Act.
When this matter came on before me, I pointed out to counsel for the plaintiff that if the construction of the section, contended for by the first defendant, was correct the plaintiff’s claim for a lien against the first defendant’s interest in the Wrattonbully land had to fail. This is because it had not asserted that there was a contractual liability on the first defendant to the second defendant or that any monies were either presently payable or at any time payable by the first defendant to the second defendant.
Counsel for the plaintiff argued that the construction to which I have referred was wrong and that the words ‘the contract price payable by the owner or occupier under the contract for the purposes of which the work or materials are done furnished or manufactured’ were there referring to a contract between the plaintiff and the second defendant, not a contract between the first defendant and the second defendant. I indicated during his submissions that, in my opinion, that construction was plainly contrary to a reading of s 6.
After I had advised counsel for the plaintiff that I would reject his submission in relation to the proper construction of s 6, he applied to adjourn the appeal so that he could seek instructions as to whether or not he should apply to amend the plaintiff’s Statement of Claim to assert that there was a contract between the first defendant and the second defendant, and that monies were payable by the first defendant to the second defendant. Counsel did not assert they were his instructions. He needed to make inquiries as to whether the plaintiff did claim that there was such a contract and that there were monies owing by the first defendant under it. The application was opposed.
Mr Robertson, who appeared for the first defendant, pointed out that the first defendant’s land was subject to this lien at the present time and will remain subject to it until the appeal is disposed of. He also submitted that the plaintiff had been on notice of the defect in its Statement of Claim since the filing of the defence and had been reminded of that defect on the occasions which I have mentioned. In those circumstances, it was said that the matter should not be adjourned and the appeal should be disposed of on the pleadings as they presently stand.
Counsel for the plaintiff argued that unless an adjournment was granted, his client would suffer irreparable prejudice in that the lien would be lost. In those circumstances he said that it would be appropriate to adjourn the matter. Any prejudice, he said, could be compensated for by an order for costs. No doubt the first defendant can be compensated for the costs occasioned by the adjournment of this appeal. That could be done by granting the first defendant its costs on a solicitor/client basis, but that, of course, would not meet all prejudice. The first defendant will still have a lien on its property until such time as the matter can come on again. Unfortunately, because of other commitments, I cannot resume hearing this appeal until February and so the prejudice will continue for some months.
The 1987 Rules of Court introduced for the first time Rules relating to case management and case flow management. The purpose of the Rules is to promote the just and efficient determination of the litigation. The Rules are not intended to defeat a proper claim or defence of a litigant who is genuinely endeavouring to comply with the Rules and procedures of the Court but at the same time the Rules have been formulated for the purposes of promoting the just and efficient determination of the litigation: r 2.01.
Rule 2.02 requires the court to manage and supervise litigation in accordance with a system of positive case flow management with four objects in mind: providing the just determination of litigation; disposing efficiently of the business of the Court; maximising the efficient use of available judicial and administrative resources; and facilitating the timely disposal of business at a cost affordable by the parties.
Rule 2.03 provides that the Court shall have as its goal the elimination of any lapse of time from the date of initiation proceedings to their final determination.
Since 1987 the Courts have managed litigation. Before that time litigation was managed by the parties themselves with the exception of a short period between 1983 and 1987 where the management was shared between the parties and the Courts. The Courts assumed the management of litigation because of the failure of the parties to progress litigation in a timely and expeditious manner. The Courts believed they were better able to manage litigation than the parties and indeed the parties’ legal advisers. The Courts can only continue to assume the responsibility for the management of litigation if that continues to be the case. That will only continue to be the case if the Courts can provide litigants with cheaper and more expeditious justice. This Court therefore has an obligation to ensure that the litigants are provided with cheap and expeditious justice. The Court has an obligation to do justice to all parties in the Court and to ensure that no party is disadvantaged by another party’s failure to adhere to time limits and the procedures of the courts generally.
There seems to me to be little to commend this application for an adjournment. The plaintiff has been on notice of the first defendant’s contention, which was clearly and expressly raised in its defence, since the filing of that defence. It could have at any time applied to amend its Statement Of Claim to include the necessary allegations to support a lien.
The plaintiff’s contention and submissions in relation to the construction of s 6 are plainly at odds with decisions of the Full Court in this Court and with the plain reading of the words.
The delay in the hearing of this appeal will mean that the first defendant’s land will remain subject to a lien. Until recently I would have thought that the application should have been refused. However, the Full Court has recently determined that an application for an adjournment should be granted where the party seeking the adjournment will suffer irreparable harm if the adjournment is not granted and where costs will compensate the opposing party for the adjournment: Cirillo v Citicorp (2001) SASC 349. In that case the party seeking the adjournment was a discharged bankrupt. No inquiry was made as to whether in fact he could meet any order for costs. However, it was assumed that costs would adequately protect the party opposing the adjournment.
It seems to me that this case cannot be distinguished from the decision in Cirillo. I do not think the continuation of the lien for a further two months is sufficient to do so.
In a sense the parties have reassumed the management of the litigation. If parties are to be granted an indulgence on payment of costs the parties and their legal representatives are de facto managing the litigation. If the Court cannot refuse indulgences and visit sanctions apart from costs the Court has lost the capacity to manage litigation.
However, following upon that decision, I think it is necessary in the proper exercise of my discretion to adjourn the matter and the matter will therefore be adjourned to Friday, 1 February 2002 at 9 am
I make the following orders: I direct that the plaintiff file and serve any application it intends to make to amend its Statement of Claim, together with the proposed amendment within 14 days.

[2001] SASC 442

10 December 2001