Ambir v Paspalis Hotel Investments Pty Ltd - [2003] NTSC 22

Ambir v Paspalis Hotel Investments Pty Ltd [2003] NTSC 22
PARTIES:AMBIR PTY LTD
v

PASPALIS HOTEL INVESTMENTS PTY LTD

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:11 of 2003
DELIVERED:  18 March 2003
HEARING DATES:  27 February 2003
JUDGMENT OF:  MARTIN CJ
CATCHWORDS:

WORKMENS LIEN
Application to set aside registration of workmens lien – procedural defects – plaintiff’s failure to obtain order enabling a fresh action – “once a lien ceases it ceases forever” – coincidence between contract price and land over which lien claimed must be established – purpose of legislation is to enable contractors to secure payment of contract price by encumbering owner’s property.
Workmens Liens Act 1998 (NT), s 5, s 10(2)(a)&(d), s 10(3), s 15 and s 16
Land Titles Act 2000 (NT), s 138 and s 139(1)
Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (1986) 86 FLR 329 at 341.
REPRESENTATION:
Counsel:
Plaintiff:R Bruxner
Defendant:J Reeves QC
Solicitors:
Plaintiff:Hunt and Hunt
Defendant:Cridlands
Judgment category classification:      B
Judgment ID Number:  mar0310
Number of pages:  11

mar0310
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Ambir v Paspalis Hotel Investments Pty Ltd [2003] NTSC 22
No. 11 of 2003

BETWEEN:
AMBIR PTY LTD

Plaintiff
AND:
PASPALIS HOTEL INVESTMENTS PTY LTD

Defendant

CORAM: MARTIN CJ
REASONS FOR JUDGMENT
(Delivered 18 March 2003)

In these proceedings the plaintiff seeks, inter alia, orders enforcing certain liens under the Workmens Liens Act 1998 (NT) (“the Act”) registered by it on the estate or interest of the defendant in certain land in Darwin. By this application the defendant seeks orders that the registration be cancelled and consequent relief.

The scheme of the Act is that:
(a)A 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 the case where work is done, with the assent, express or implied, of the owner or occupier to the land or any fixtures thereon, and where materials are, with the assent, express or implied, of the owner or occupier, used or intended to be used in or about the work done, or intended to be done, to the land or to any fixture thereon (s 5);
(b)such a lien shall be available only if registered before the expiration of 28 days after the contract price in respect of which it has arisen shall have become due s 10(1);
(c)any contract price shall become due if unpaid for seven days after the same, being payable, shall have been demanded by notice in writing, signed by the person claiming the same and given to the person liable to pay the same, s 10(2)(d);
(d)a lien shall be registered by the person claiming the same lodging with the Registrar-General a notice in the prescribed form or on a form to similar effect, s 10(3);
(e)every lien shall cease unless an action shall be brought against the owner or occupier for enforcement of the lien within 14 days from the registration thereof, s 15.
It is provided in s 16 that the Registrar-General upon proof to his satisfaction that any person who has registered a lien and brought the action as required has discontinued the action, without an order of the court giving further time to bring a fresh action to enforce the lien … shall record in the Register if the lien is registered there or otherwise on the notice of the lien a memorandum that the lien has ceased, and upon such entry the lands affected by such notice shall be discharged from the lien.
It is common ground that the defendant is the owner of the land in respect of which certain notices of lien were registered, and that the plaintiff was a contractor with the defendant within the meaning of the Act.
In purported compliance with s 10(2)(a) of the Act a “Notice of Demand” was served upon the defendant on or about 18 December 2002. The demand was made by the plaintiff in respect of the sum of $725,778.50:
“being the balance of the contract price now due and payable in respect of work done and materials supplied by it to you for the purposes of building work at lots 7266, 7287, 7288 Town of Darwin.”
The particulars provided were:
“·     Invoice number 0116-C3-6, $443,508.02
·       Invoice number 0116-C2-7, $251,203.95
·       Invoice dated 19/11/02 Blue Heeler Bar, $31,066.53.”
The last of those invoices does not relate to any of the specified lots.
On 18 December 2002 the plaintiff lodged with the Registrar-General three notices for registration of a lien, one each in respect of lots 7266, 7287 and 7288. In each case the amount claimed was $725,778.50, the total particularised in the demand.
The date after which the amounts claimed in the first demand, if valid, became due was 27 December 2002 (Interpretation Act, s 28(2)).
The statement of claim endorsed upon a writ issued on 24 December 2002 claimed that the plaintiff and defendant had entered into written agreement, one in respect of what is termed “the Villa Contract” and the other in respect of what is termed “the Motel Contract”. Those contracts are said to have been for building works on lots 7266, 7287 and 7288. It sought enforcement of the lien over those lots only.
On 14 January 2003 the plaintiff discontinued that action without an order of the court referred to in s 16. On 21 January it served another Notice of Demand in which it claimed $737,521.73:
“being the balance owing in respect of works completed and materials supplied by it to you for the purposes of building work at lots 7266, 7287, 7288 and 7267 Town of Darwin”.
The particulars were:
“·     Invoice number 0116-C3-6, $443,508.02
·       Invoice number 0116-C2-7, $251,203.95
·       Materials supplied, $11,743.23
·       Blue Heelers
·       Invoice dated 19/11/02 Blue Heeler Bar, $31,066.53.”
The item for “materials supplied” is new, the lot relating to the Blue Heeler bar is included in the properties specified (see later).
On the same day a second batch of notices for registration of liens were lodged with the Registrar-General. There were two on this occasion, the first over the interest of the defendant in lots numbered 7266, 7287 and 7288 which, the notices disclose, are each contained in separate Certificates of Title. The amount claimed in that notice is $706,455.20 being the sum total of the first three items in the particulars to the demand, including for materials supplied. The other notice lodged was in respect of lot 7267, contained in a separate Certificate of Title, and the amount there claimed was $31,066.53, the sum particularised under the heading “Blue Heelers”.
The last day upon which liens based upon the first demand were “available” by registration, adjusted in accordance with the Interpretation Act, was 24 January 2003.
The present action was commenced on 3 February 2003. The amended statement of claim filed on 24 February 2003 alleges that the defendant was the registered proprietor of lots 7266, 7287 and 7288 town of Darwin which is described as “the Palm City Resort Site” and that the defendant was the registered proprietor of lot 7267 town of Darwin described as the “Blue Heeler Site”. It is then said that there were two contracts, one “the Motel Contract” and another “the Villa Contract” entered into between the plaintiff and the defendant for the building of motel rooms and villas on the Palm City Resort Site. A further contract is alleged to have been entered into between the plaintiff and the defendant for the carrying out of various works to the Blue Heeler property under what is called “the Blue Heeler contract”.
The amount claimed in the statement of claim as a debt in respect of the Motel Contract is $443,508.02 and in respect of the Villa Contract, $251,203.95, a total of $694,711.97, and under the Blue Heeler contract, $31,066.53. (The figure of $694,711.97 appears to be the sum of the first two items in the particulars of the demand). No mention is made of the demand for “materials supplied” in this context.
However, it is raised in pleas for conversion and detinue in relation to plant, equipment and materials which the plaintiff says it took onto the Palm City Resort site and which it is unable to recover due to the defendant’s acts. The amount claimed in respect of plant and equipment is $18,147.75, and for materials, $11,743.23 which the plaintiff alleges had not been incorporated into the works (that latter sum coincides with the demand for “materials supplied”).
The defendant says that the notices of lien registered on the second occasion are invalid because of procedural defects and relies as well upon the plaintiff’s failure to obtain an order enabling it to bring the fresh action.
The plaintiff seeks to rely upon both demands, in the alternative. In his submission counsel for the plaintiff said that the first notices lodged for registration of the claimed liens were demonstrably defective, and thus the action to enforce them was discontinued. The reason why the first notices were said to have been defective arose because the notices lodged in respect of each of the three lots, claimed the whole of the sum said to be due and payable, whereas the work giving rise to that demand was spread across the three lots. Further, the amount claimed in the demand included the amount said to have arisen under the Blue Heeler contract which was not carried out on any of those lots. Nevertheless, he said, the original demand was effective to support the second notices, which remedied the defects in the first notices.
The plaintiff says that s 16 only operates in respect of registration of a valid notice of lien and since the notices registered in the first instance were invalid, then s 16 has no operation.
Senior counsel for the defendant relied upon the judgment of Rice J in Blythe Green and Jordain Pty Ltd v Sienna Pty Ltd (1986) 82 FLR 291. As his Honour noted at p 292 a lien had been registered over the subject land on 17 October 1985, but no action to enforce it had been brought against the owner within 14 days as required by s 15 of the Act. The plaintiff executed a second memorandum of lien, on or about 20 January 1986, which was subsequently registered on the subject land and commenced action within the prescribed period thereafter with the view of obtaining enforcement.
His Honour’s review of the authorities, and ruling that so much of the statement of claim as purported to claim a workmens lien be struck out, must be seen in the straight forward facts of that case. The lien had ceased because an action had not been brought against the owner for enforcement of it within the prescribed period and it was not possible to revive it by making a fresh demand. In Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (1986) 86 FLR 329 at 341, Kearney J agreed with the views of Rice J in Blythe Green “that once a lien ceases it ceases forever”. Those cases show that a failure to follow the prescribed statutory steps can be fatal to a lien, and efforts to remedy such a deficiency may not be successful.
Here, the plaintiff says that the lien did not cease. It has a lien for the contract price pursuant to s 5 of the Act; the contract price became due when it remained unpaid for seven days after the same was first demanded. Although the first notices were withdrawn, the second batch of notices were registered within time, and the present action was brought within the period allowed.
Included in the second demand is a sum of $11,743.23 for “Material supplied”, and it is apparently included in the sum claimed in the notice covering the three lots where the total claimed is $706,455.20. It is not, however, claimed in that way in the amended statement of claim where it is now quantified as the plaintiff’s loss for conversion and detinue, not as a contract price.
The statutory lien is for the contract price, accrued due, on the estate or interest of the owner of the land where work is done to the land. A coincidence between the contract price and the land over which the lien is claimed must be established. The contract price becomes due after the same shall have been demanded by notice given to the person liable to pay. The first demand included a sum, which was not coincidental with the land over which the lien was claimed.
The second demand regarding lots 7266, 7287 and 7288 included a sum not being a contract price, as did the second notice over those lots. The contract price becomes due under the statutory scheme when payment has been demanded of “the same”. The contract price means money payable for work done to land by the owner. In my opinion, a demand for a sum other than the contract price is not a demand within the meaning of s 10(2)(a). It must correctly identify the contract price. The amount demanded in relation to the Blue Heeler contract in both the first and second demands was reflected in the amount claimed in the notice in respect of the Blue Heeler property.
A notice of lien lodged with the Register-General is to be taken to be a caveat lodged in accordance with s 138 of the Land Titles Act and thus prevents registration of another instrument affecting the lot over which it is lodged (s 139(1)). The effect of registration necessarily calls for compliance with the law including accuracy in respect of the matters upon which the contractor relies to support the lien. The injunction directed to the Registrar-General to prevent registration of dealing with the land demands a proper foundation in fact and compliance with the procedural requirements of the statute. I do not consider there can be something less than compliance with the statute to secure registration of a lien.
For the reasons given, neither the first nor the second notices meet those requirements in relation to lots 7266, 7287 and 7288. I am not satisfied that in the context of s 16 a registered lien is confined in meaning to a case where all the requirements of the Act have been met. That provision envisages an action to enforce a lien failing which, I infer, embraces circumstances where the registration was not achieved in compliance with the statute.
Bringing of the second action in so far as it seeks enforcement of the liens over lots 7266, 7287 and 7288, without order of the court giving further time, infringes the prohibition in s 16 in that regard. The plaintiff says that the first notices were invalid and thus there was no registration of the liens claimed. It seeks to profit by its own mistake to avoid the consequences of discontinuance in bringing the fresh action without the required order of the court. Acceptance of that argument will leave the way open for a contractor claiming to have a lien to lodge defective notices for registration and upon recognising the error, discontinuing the action to enforce the same and starting again. In the meantime, the owner’s interest in the property is, on the face of it, subject to the effects of the caveat. I consider that was not the intention of Parliament. The purpose of the legislation is to enable contractors to secure payment of the contract price by encumbering the owner’s property in advance of the determination of any dispute. In this context I do not accept the expression, “has registered a lien” is restricted in its meaning to registration of a notice consequent upon compliance with the prescribed procedures in all respects.
The second demand and second notice in regard to the Blue Heeler property, lot 7267, do not appear to be defective and the first action did not seek enforcement of that lien. No order was required under s 16.
I have not been directed to any power to order that registration of a lien be cancelled. The Registrar-General is obliged to record in the Register that a lien has ceased if satisfied that the person who has registered it has failed in an action to enforce it.
I am satisfied that the claim made by the plaintiff for enforcement of the lien registered in respect of lots 7266, 7287 and 7288, is bad in law, and no proper amendment can cure the problems highlighted in this application. The claim is struck out and there will be judgment for the defendant thereon.
I refuse the relief sought by the defendant in respect of the lien registered in respect of lot 7267.
I will hear the parties as to the formal orders and on the question of costs.
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