Boccamazzo v Kangaroo Corner Farm Pty Ltd - [2020] WASC 234

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   BOCCAMAZZO -v- KANGAROO CORNER FARM PTY LTD [2020] WASC 234
CORAM:   MASTER SANDERSON
HEARD:   19 MAY 2020
DELIVERED          :   22 JUNE 2020
PUBLISHED           :   22 JUNE 2020
FILE NO/S:   CIV 1489 of 2020
BETWEEN:   GIUSEPPE BOCCAMAZZO
Applicant
AND
KANGAROO CORNER FARM PTY LTD
First Respondent
REGISTRAR OF TITLES
Second Respondent

Catchwords:

Caveat - Maintaining caveat based on claim of equitable lien - Turns on own facts

Legislation:

Transfer of Land Act 1893

Result:

Caveat extended

Category: B

Representation:

Counsel:

Applicant	:	P N Poliwka
First Respondent	:	C P K Russell
Second Respondent	:	No appearance

Solicitors:

Applicant	:	Poliwka Legal
First Respondent	:	Greenstone Legal
Second Respondent	:	No appearance

Case(s) referred to in decision(s):

Bride v The Registrar of Titles [2015] WASC 11
Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171

MASTER SANDERSON:

This is the applicant's application pursuant to s 138C of the Transfer of Land Act 1893, for the extension of a caveat over certain property located in Forest Hill. The action was brought because the first respondent, as the owner of the land, caused the second respondent to issue a 21‑day notice. The applicant says it has an equitable lien over the land or at least there is a serious question to be tried as to whether or not it has an equitable lien.[1] It also says the balance of convenience favours the extension of the caveat.[2] The legal principles applicable were not in dispute. Both parties were content to rely on the principles set out by Edelman J in Bride v The Registrar of Titles [2015] WASC 11.
[1] Applicant's outline of submissions filed 8.05.2020 [7] ‑ [13].
[2] Applicant's outline of submissions filed 8.05.2020 [19] ‑ [26].
There is one preliminary matter which should be mentioned at the outset. The caveat lodged by the applicant was an absolute caveat. A reading of the evidence makes it clear any caveat on the property should be a subject to claim caveat. Counsel for the applicant conceded this at the commencement of the hearing. At the conclusion of the hearing, counsel for the first respondent sought an order amending the caveat forthwith. By agreement between the parties, I made that order. So the question then is whether the caveat in its amended form can be maintained.
The relevant circumstances can be summarised in this way. The applicant is an earthmover who was engaged to perform earthmoving works at the direction of Claire Pragnell and Michael Jackman. These two persons were at all material times directors and shareholders of both the first respondent and a company known as O.S.I.B Pty Ltd (OSIB). OSIB was licensed by the Department of Environmental Regulation to conduct a wastewater treatment plant on the Forest Hill property.[3]
[3] Applicant's outline of submissions filed 8.05.2020 [14].
A dispute has arisen between the parties as to the way in which the applicant performed work on the Forest Hill property.[4] This is the subject of separate District Court proceedings. There is also a dispute as to which entity authorised and is liable to pay for the work undertaken by the applicant. There is an argument as to whether Ms Pragnell and Mr Jackman authorised the work in their own right, or on behalf of the first respondent or on behalf of OSIB.[5] The first respondent points out no invoice was ever issued to the first respondent and there is nothing in the evidence to connect the applicant and the first respondent.[6] That is the first line of defence of the first respondent - there is no arguable case any work undertaken by the applicant was done pursuant to a contract between the applicant and the first respondent. On that basis, the first respondent says the application ought be dismissed.
[4] Applicant's outline of submissions filed 8.05.2020 [15].
[5] Applicant's outline of submissions filed 8.05.2020 [16].
[6] First respondent's outline of submissions in opposition filed 15.05.2020 [9], [12].
The second line of defence relates to the argument the applicant has an equitable lien over the property. The leading authority on the relationship between equitable lien and caveats in this State is the Court of Appeal's decision in Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171. Newnes JA (with whom Pullin JA agreed) put the position this way:
In Hewett v Court (1983) 149 CLR 639, Deane J described an equitable lien as 'a right against property which arises automatically by implication of equity to secure the discharge of an actual or potential indebtedness' (663). His Honour set out the circumstances which are sufficient (albeit, not necessarily essential) for the implication, independently of agreement, of an equitable lien between the parties in a contractual relationship. Those circumstances are (668):
(a)there be a potential or actual indebtedness on the part of the party who is the owner of the property to the other party arising from the payment or promise of payment either of consideration in relation to the acquisition of the property or an expense incurred in relation to it;
(b)that property (or arguably property including that property) be specifically identified and appropriated to the performance of the contract; and
(c)that the relationship between the actual or potential indebtedness and the identified or appropriate property be such that the owner would be acting unconscientiously or unfairly if it were to dispose of the property to a stranger without the consent of the other party or without the actual or potential liability having been discharged.
An obvious, and in my view insuperable, difficulty confronts the respondent in respect of its claim in respect of this caveat; namely, that there is no evidence of any actual or potential indebtedness of the appellant to the respondent in respect of the landscaping work. Ordinarily a sub‑contractor will have no contractual relationship with the owner, even where the sub‑contractor is a nominated sub‑contractor: Hampton v Glamorgan County Council [1917] AC 13. The respondent acknowledges that its contract was a sub‑contract with Link Projects. Link Projects entered into that sub‑contract in its own right as a principal, not on behalf of the appellant. There was no contract between the respondent and the appellant in respect of the landscaping work, and the respondent has no claim against the appellant for the payment of any amount owing to it under the sub‑contract.
There is a further difficulty in that there is a substantial body of authority that the expenditure of work and materials under a construction contract does not of itself confer on an unpaid contractor any interest in the land on which the work is done: Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93, 104 105; HG & R Nominees Pty Ltd v Caulson Pty Ltd (2000) V ConvR 54 630 [64,519]; Kang v Kwan [2002] NSWSC 1187 [202]; Kirfield Limited v First Trade Consulting Pty Ltd [2005] WASC 277 [50] [55]; and on appeal First Trade Consulting Pty Ltd v Kirfield Limited [2006] WASCA 174 [14]. In this case, that principle seems to me to be applicable to the respondent's landscaping sub‑contract [54] ‑ [56].
It is instructive to look at the relevant facts in the Perron Investments decision. Tim Davies Landscaping Pty Ltd was a sub‑contractor to Link Projects Australasia Pty Ltd (in liquidation). Link Projects contracted with Perron Investments. Tim Davies Landscaping supplied material for landscaping purposes. The contract between Link Projects and Tim Davies Landscaping contained what is known as a Romalpa clause. Such a clause says that unless and until the supplier of goods is paid for those goods, the goods remain the property of the supplier. In this case, Tim Davies Landscaping had supplied to Link Projects certain goods which were then located on Perron Investments' property. Tim Davies Landscaping argued in the circumstances it had an equitable interest in the land to which the goods were affixed. As McLure JA noted (at [14]), there was a dispute as to whether a Romalpa clause can give rise to an equitable interest in land. Her Honour determined as that question was arguable and that Tim Davies Landscaping had established there was a serious question to be tried and the caveat could be maintained.
Newnes JA regarded the inclusion of the Romalpa clause in the contract between Link Projects and Tim Davies Landscaping as irrelevant. His Honour put the position this way:
In the present case, where there is simply no evidence that Oldfield Knott knew that the respondent and Link Projects would, or were likely to, enter into, or had entered into, a contract on the terms of the quotation, no question could arise as to whether, through Oldfield Knott as its agent, the appellant had agreed to the terms of the contract or had consented to the inclusion of the Romalpa clause in the contract between Link Projects and the respondent. In the absence of any such evidence, the respondent's case must necessarily fail. The evidentiary basis for it is simply absent. It is unnecessary to consider whether such agreement or consent on the part of the appellant is capable of giving rise to the interest in the land claimed by the respondent [52].
It is the applicant's contention it is arguable the work it undertook was for the first respondent. In support of its application the applicant relied on an affidavit of Giuseppe Boccamazzo sworn 15 April 2020. At par 10 of that affidavit, Mr Boccamazzo says:
10.It remains my position, as pleaded in the Soc and Reply that:
(a)By 23 April 2018, I completed earthmoving works on the Land. Prior to starting those works, Ms Pragnell and Mr Jackman said to me words to the effect payment would be made for the performance of those works.
(b)I performed this earthmoving work at the request and direction of Ms Pragnell and Mr Jackman. I followed their directions which included them saying to me words to the effect that I was to move earth between markers placed on the Land by a surveyor. At that time, I believed that the surveyor was engaged by the owner of the Land.
(c)At the time I performed earthmoving work on the Land, I believed Ms Pragnell and Mr Jackman were the owners of the Land or acted on behalf of the owner of the Land. I had no reason to believe, and did not believe, I was performing work for other than the owner. Neither Ms Pragnell nor Mr Jackman said they were not the owners of the Land.
(d)Prior to 23 April 2018, two payments of $22,400 and $55,000 were paid in respect of the work that I was performing on the Land. No payment has been made in respect of the last two invoices (totally $133,540) in respect of the work that I performed on the Land.
In opposition to the application the first respondent relies on an affidavit of Claire Louise Pragnell sworn 30 April 2020. Ms Pragnell details two meetings took place between her, Mr Jackman and Mr Boccamazzo.[7] Ms Pragnell says the first meeting took place between 23 September 2016 and 1 November 2016[8] - in other words, she is not entirely sure of the date. She notes that the first respondent was not incorporated until 2 September 2016 and she and Mr Jackman were not appointed directors of the first respondent until 18 August 2017.[9] Between par 16 and par 23 of her affidavit, Ms Pragnell recounts the discussions she and Mr Jackman had with Mr Boccamazzo. Although she does not say so directly, the implication appears to be that Mr Boccamazzo was informed that the waste treatment plant to be conducted on the Forest Hill property was to be operated by OSIB under the trading name of 'Great Southern Liquid Waste'. The purpose of these paragraphs seems to be to provide background to explain the contractual relationship the first respondent says was entered into between the applicant and an entity other than the first respondent. Ms Pragnell notes that at the first meeting no agreement was reached.
[7] Affidavit of Claire Louise Pragnell filed 30.04.2020 [16], [24].
[8] Affidavit of Claire Louise Pragnell filed 30.04.2020 [16].
[9] Affidavit of Claire Louise Pragnell filed 30.04.2020 [17].
The second meeting, according to Ms Pragnell, took place between 2 June 2017 and 3 July 2017.[10] The applicant was engaged to undertake earthmoving works on or around 11 October 2017.[11] By that time the first respondent was the registered proprietor of the Forest Hill property, registration having occurred on 31 August 2017. Ms Pragnell goes on to say that no invoice was ever rendered to the first respondent.[12]
[10] Affidavit of Claire Louise Pragnell filed 30.04.2020 [24].
[11] Affidavit of Claire Louise Pragnell filed 30.04.2020 [34].
[12] Affidavit of Claire Louise Pragnell filed 30.04.2020 [35].
Mr Boccamazzo filed a supplementary affidavit sworn 8 May 2020. Essentially, he joins issue with Ms Pragnell. He says he was not aware OSIB was the operator of the waste management facility. Mr Boccamazzo says at par 8 of his affidavit as follows:
8.At no time did Claire Pragnell or Michael Jackman say to me words to the effect that:
(a)they were not the owners of the Land;
(b)they did not act on behalf of the owner of the Land; or
(c)they acted for a company that was the lessee of the Land;
(d)the Land was to be purchased by Michael Jackman's parents.

The real question in this application is whether it is arguable the work undertaken by the applicant on the Forest Hill property, was authorised by the first respondent. Put another way, the question is whether there is a direct contractual relationship between the applicant and the first respondent. If there is, it must have arisen through the agency of Ms Pragnell and Mr Jackman, who were not at the time the contract was entered into directors of the first respondent. If it is not arguable there is such a contractual relationship then no equitable lien arises and the applicant does not have a caveatable interest in the Forest Hill property.
On balance, I am satisfied it is arguable Ms Pragnell and Mr Jackman were acting as agents of the first respondent and as a consequence there existed a contract between the applicant and the first respondent. I would accept that to prove that contractual relationship will be torturous. But there are a number of points that are relevant. First, there is no evidence Mr Boccamazzo ever made enquiries as to who owned the land at the date the contract was entered into - that is, in October 2017. Second, it was never represented to Mr Boccamazzo by Ms Pragnell or Mr Jackman or anyone else they were acting on behalf of the first respondent. Thirdly, there is a dispute between the parties as to Mr Boccamazzo's knowledge of the contracting party. Ms Pragnell says in all the surrounding circumstances, Mr Boccamazzo should have known he was contracting with OSIB. But Ms Pragnell does not anywhere say she made it plain to Mr Boccamazzo, OSIB was in fact the contracting party. Finally, the applicant did not render invoices to the first respondent. Furthermore, the first respondent never paid the first invoice which was rendered - that was paid by a third party.
Bearing all these facts in mind, I am satisfied it is arguable that in October of 2017, through the agency of Ms Pragnell and Mr Jackman, the applicant and the first respondent entered into a contractual relationship. It is then arguable that an equitable lien in favour of the applicant arises over the property. I accept there is a dispute between the parties (using that description in the broadest sense) as to whether any party is indebted to the applicant. That is to say, there is a dispute as to whether work undertaken by the applicant was properly completed. But that is not a dispute that can be resolved on this application. Clearly it is a matter about which issue has been joined and the outcome of that dispute will be resolved in the District Court proceedings.
On balance then, I am satisfied the applicant has a caveatable interest and that the caveat ought be maintained until further order of the court. In reaching that conclusion, I have also given consideration to the balance of convenience and the evidence on that question led by Ms Pragnell. While I would accept there is some inconvenience in the caveat being maintained, I am not satisfied it is such in and of itself to warrant refusing continuation of the injunction.
The parties ought confer as to the precise form of the orders. Subject to hearing from the parties, I am satisfied that costs of this application ought be reserved.
The parties are to file agreed orders, or in the event an agreement cannot be reached, competing minutes of proposed orders by 30 June 2020.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
22 JUNE 2020