Core-Form P/L v Pajo Projects P/L - [2020] SADC 80

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CORE-FORM P/L v PAJO PROJECTS P/L & ANOR
[2020] SADC 80
Reasons for Decision of Her Honour Judge Schammer
29 June 2020
INDUSTRIAL LAW - SOUTH AUSTRALIA - REGULATION OF PARTICULAR MATTERS UNDER PARTICULAR STATUTES - WORKMEN'S LIENS - ENFORCEMENT
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - REMOVAL - OTHER MATTERS
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - PERFORMANCE OF WORK - REMEDIES FOR BREACH OF CONTRACT
Core-Form Pty Ltd (applicant) carries on work as a building work contractor.
Joseph Sommariva (second respondent) is the holder of a builder’s licence and the sole director of Pajo Projects Pty Ltd (first respondent).
The first respondent is the registered proprietor of a 40% interest in land comprised in Certificate of Title Register Book Volume 6119 Folio 314 (land). 250 East Pty Ltd (250 East) is the registered proprietor of a 60% interest in the land.
In or about May 2017, the first respondent as developer and the second respondent as builder, entered into a contract to develop and build a multiplex apartment complex on the land. In performance of that contract, the second respondent entered into sub-contracts with the applicant to carry out building works on the land. The applicant claims that invoices it issued to the second respondent, pursuant to those sub-contracts, remain outstanding.
On 25 March 2020, the applicant, by its solicitors, purported to serve the respondents with a Notice of Demand under s 10(2) of the Worker’s Liens Act 1893 (SA) (Act) (Demand) and a Notice of Charge under s 7(3) of the Act (Charge), by email sent to the respondents’ solicitors. On that same day, the applicant, by its solicitors, lodged, for registration, a worker’s lien over the land in respect of the outstanding contract price. The Lien was registered on 27 March 2020. The Demand and the Charge were personally served on the respondents on 1 April 2020. Proceedings were issued to enforce the Lien and the Charge on 8 April 2020.
By application dated 25 May 2020 (FDN 4) made pursuant to s 32 of the Act, the respondents seek orders, inter alia, cancelling the Lien, directing the Registrar-General forthwith to remove the Lien from the Certificate of Title and setting aside the Charge.
The respondents contend that the Lien is invalid on one or any of the following grounds:
1. That the part owner of the land, 250 East, had never been served with the Lien, the Demand or any other document or process.
2. The Lien is not available (unenforceable) as the outstanding contract price had not ‘become due’ at the time the proceedings were issued, as it had not remained unpaid for seven days after the Demand ‘was given to the person liable to pay the same’ or posted in accordance with s 10(2)(a) of the Act.
3. The Demand was the second notice of demand for the purposes of s 10(2)(a) of the Act, in that a previous notice of demand had been issued on 30 April 2019.
As to the Charge, the respondents claim that it must fail, as there are no monies owed as between the respondents with respect to the relevant sub-contracts. Further, it was submitted that the proceedings to enforce the Charge had been issued less than seven-days after the giving of the Demand in accordance with s 10(2)(a).
The applicant denies the Lien and/or the Charge are unenforceable on any of the grounds as alleged by the respondents.
Held
The effect of the application is to summarily dismiss the causes of action relied upon by the applicant to enforce the Lien and the Charge.
I am satisfied that it is reasonably arguable that the Lien and the Charge are valid.
Notwithstanding the prejudice alleged by the respondents, I am not satisfied that it is just, in all the circumstances, to cancel the Lien and/or set aside the Charge.
Orders
1. FDN 4 is dismissed.
2. I will hear the parties as to costs.
Worker’s Liens Act 1893 (SA) ss 2, 4, 5, 6, 7, 10, 12, 15, 32; Limitation of Actions Act 1948 (SA) ; Federal Court of Australia Act 1976 s 31; Acts Interpretation Act 1915 (SA) ss 22, 27; Real Property Act 1886 (SA) s 191; Motor Car Act 1958 (Vic) s 80; Migration Act 1958 (Cth) ss 430, 478; Environmental Protection Act 1994 (Qld) ; Building and Construction Industry Security of Payment Act 2009 (SA) ss 13, 15, referred to.
Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; Spencer v Commonwealth of Australia (2010) 241 CLR 118; Davies v Minister for Urban Development and Planning (2011) 109 SASR 518; Cosenza and Anor v Roy Morgan Interviewing Services Pty Ltd [2020] SASC 65; Kleentex (Thailand) Co Ltd v Corporate IM Pty Ltd [2012] SASC 71; G, RE v Department of Correctional Services [2017] SASC 96; Collins v Djunaedi [2016] SASCFC 48; Badge Constructions (SA) Pty Ltd v Rule Chambers Pty Ltd [2007] SASC 417; MSP Group v Fernleigh Gardens Estate [1996] SADC 3509; Bradto Pty Ltd v State of Victoria (2006) 15 VR 65; Marriott Industries Pty Ltd v Mercantile Credits Limited; Maesbury Plumbers Pty Ltd (1991) 160 LSJS 288; Excelsior Land Holdings Pty Ltd and Ors v Allan Sheppard Constructions Pty Ltd [2012] SASCFC 84; Bull v Attorney-General (NSW) (1913) 17 CLR 370; Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622; IW v City of Perth (1997) 191 CLR 1; New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act (2016) 260 CLR 232; Schaeffer v Schaeffer (1994) 36 NSWLR 315; McMahon v Permanent Custodians Ltd [2013] NSWCA 275; Kennedy v Australian Fisheries Management Authority [2009] FCA 1485; Roclin Investments Pty Ltd v Makris (1974) 7 SASR 485; Longreef Pty Ltd v Leighton Contractors (South Australia) Pty Ltd (1991) 160 LSJS 270; United Group Resources Pty Ltd ABN 17 114 888 201 v Calabro (No 4) [2010] FCA 791; Howship Holdings Pty Ltd v Leslie [No.2] (1996) 41 NSWLR 542; Metacorp Pty Ltd v Andeco Construction Group Pty Ltd [2010] VSC 199; Fazio (Executor) v Passmore [2011] FCA 273; Roberts v Beet [1988] VR 118; R v Deputies of the Freemen of Leicester (1850) 15 QB 671; WACB v Minister for Immigration and Multicultural and Indigenous Affairs (1850) 15 QB 671; FKP Commercial Developments Pty v Albion Mill FCP Pty Ltd [2017] QSC 322; Capper v Thorpe (1998) 194 CLR 342; Singer v Trustee of the Property of Munro and Anor (Bankrupts) [1981] 3 All ER 215; Kestel v Superannuation Complaints Tribunal [2010] FCA 1300; Jessett Properties Ltd v UDC Finance Ltd (1992) NZLR 138; Midland Bank plc v Serter [1995] 1 Fam Law R 1034; Ellison v Sandini [2018] FCAFC 44; DCC Holdings (UK) Ltd v Revenue and Customs Commissioners [2010] UKSC 58; Marshall v Kerr (1993) 67 TC 56; Ceneavenue Pty Ltd v Martin [2008] SASC 158, considered.

CORE-FORM P/L v PAJO PROJECTS P/L & ANOR
[2020] SADC 80
Introduction

By application dated 25 May 2020 (FDN 4), Pajo Projects Pty Ltd (ACN 158 823 119) and Joseph Sommariva (respondents) seek orders, inter alia, cancelling a worker’s lien registered by Core-Form Pty Ltd (ACN 602 188 922) (applicant) over the whole of the land comprised in Certificate of Title Register Book Volume 6119 Folio 314 (land), directing the Registrar-General forthwith to remove the lien from that Certificate of Title and setting aside a charge claimed under the Worker’s Liens Act 1893 (SA) (Act).
The application is made pursuant to s 32 of the Act and is supported by the affidavit of the second respondent sworn on 25 May 2020 (Sommariva affidavit).
The application is opposed. The applicant relies on affidavits sworn by Joshua James Davies on 1 June 2020 (Davies affidavit) and Jarrad Rohrlach on 28 May 2020 (Rohrlach affidavit).
The application was heard on 4 June 2020, with both counsels’ oral submissions supported by a written Summary of Argument.
Factual Background
The applicant carries on work as a building work contractor.[1]
[1] Statement of Claim at [1.2].
The second respondent is the holder of a builder’s licence and is the director of the first respondent.[2]
[2] Statement of Claim at [3.2] and [3.3], admitted in Defence at [3].
The first respondent is the registered proprietor of a 40% interest in the land. 250 East Pty Ltd (250 East) is the registered proprietor of a 60% interest in the land.[3]
[3] Exhibit ‘JS01’ to the Sommariva affidavit.
In or about May 2017, the first respondent as developer and the second respondent as builder entered into a contract to develop and build a multiplex apartment complex on the land (Head Contract).[4]
[4] Statement of Claim at [4], admitted in Defence at [4].
In performance of the Head Contract, the second respondent entered into sub-contracts with the applicant dated 22 November 2017 and 7 May 2018, to carry out building works at the land.[5] The applicant claims that invoices it issued to the second respondent pursuant to the sub-contracts remain outstanding in the sum of $188,248.20 (outstanding contract price).[6] The second respondent denies that it is indebted to the applicant pursuant to the sub-contracts.
[5] Statement of Claim at [5], admitted in Defence at [5].
[6] Statement of Claim at [10].
On 25 March 2020, the applicant, by its solicitors, purported to serve the respondents with a Notice of Demand under s 10(2) of the Act (Demand) and a Notice of Charge under s 7(3) of the Act (Charge), by email sent to the respondents’ solicitors, FEG.[7] On that same day, the applicant, by its solicitors, lodged, for registration, a worker’s lien over the land in respect of the outstanding contract (Lien). The Lien was registered on 27 March 2020.[8]
[7] Exhibit ‘JS04’ to the Sommariva affidavit.
[8] Exhibit ‘JJD-5’ to the Davies affidavit.
On 25 March 2020, FEG advised the second respondent that they had received the email from the applicant’s solicitors and the Notices thereunder.[9] In accordance with the second respondent’s instructions, by email dated 26 March 2020, FEG advised the applicant’s solicitors that they did not have instructions to accept service on behalf of the respondents and requested the applicant’s solicitors arrange for service on the parties directly.[10]
[9] Sommariva affidavit at [17].
[10] Exhibit ‘JS05’ to the Sommariva affidavit.
In a letter dated 30 March 2020 (the 30 March letter), sent by FEG to the applicant’s solicitors on that date, FEG stated:[11]
…As conveyed to you, we did not hold instructions to accept service of the Notices on behalf of either Pajo Projects Pty Ltd or Mr Sommariva at the time when your email was received.
Please be advised that we have now spoken with each of Mr Sommariva and Pajo Projects Pty Ltd and hold instructions to act for each of these parties moving forward. To this end we ask that you issue all future correspondence in relation to each of the Lien and the Charge to this office.
Having reviewed the Notices, we are instructed to write to you put your client on notice of fundamental flaws in each of the Lien and the Charge which render those documents invalid and unable to be relied upon for the purpose of enforcement proceedings…
[11] Exhibit ‘JS06’ to the Sommariva affidavit.
The 30 March letter went on to outline numerous reasons why the Demand (and/or Lien) was purportedly invalid and could not be relied upon by the applicant for the purpose of enforcement proceedings. One of the apparent flaws identified was that the Demand was neither given to the second respondent nor sent by registered post to him as required by s 10(2) of the Act. In addition, the 30 March letter highlighted purported issues with the validity of the Charge.
On 1 April 2020, a process server engaged by the applicant personally served the second respondent with a copy of the Demand.[12] On that same date, the process server delivered a copy of the Demand and the Charge to the registered office of the first respondent.[13]
[12] Rohrlach affidavit at [1].
[13] Rohrlach affidavit at [2].
Neither the Demand nor the Charge have been served on 250 East.
On 8 April 2020, the applicant issued the proceedings. By the proceedings, the applicant pursues a claim for breach of contract and in detinue, and seeks orders, inter alia, to enforce the Lien and the Charge. At paragraph 14 of the Statement of Claim it is pleaded:
On 1 April 2020, a Notice of Demand was served on the Defendants in respect of the outstanding contract price pursuant to s 10(2) of the WLA.
On 16 June 2020, as had been foreshadowed during the hearing of argument on the application, the applicant filed ‘Revision 1 Statement of Claim’ pursuant to r 69.1 of the Uniform Civil Rules 2020 (UCR), wherein it is expressly pleaded that the respondents were ‘given’ the Demand on 25 March 2020, or alternatively by no later than 30 March 2020.[14] It is further pleaded that if the Lien was unenforceable as at 8 April 2020, such that no proceedings were brought to enforce the Lien within 14 days under s 15 of the Act, the applicant is entitled to an extension of time under the Limitation of Actions Act 1948 (SA) to issue proceedings to enforce the Lien.[15]
[14] Revision 1 Statement of Claim at [13A].
[15] Revision 1 Statement of Claim at [17].
The Act
As to the Lien, the applicant relies on s 5 of the Act, which states:
5—Lien of contractor or sub-contractor
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. (my emphasis)
Section 10 of the Act concerns the procedural requirements for registration and states:
Part 2—Registration and discharge of liens
10—Lien to be registered
(1)A lien under this Act with regard to land shall be available only if registered before the expiration of twenty-eight days after the wages or contract price in respect of which such lien has arisen shall for the purposes of this section have become due.
(2)Any wages or contract price shall for the purposes of this section be deemed to have become due—
(a) 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, or posted in a registered letter addressed to him at his usual or last known place of abode in South Australia:
(b) if either before or after the same shall have become payable, the person liable to pay the same shall have called a meeting of his creditors, or committed an act of bankruptcy, or executed a deed of assignment within the meaning of the Bankruptcy Act 1924 of the Commonwealth, or shall have taken or attempted to take the benefit of any law relating to bankrupts or insolvent debtors, or shall have suffered his goods to be taken in execution or seized under legal process or distress for rent.
(3)A lien shall be registered by the person claiming the same lodging in the General Registry Office a notice executed by the person in a form approved by the Registrar‑General, containing the prescribed information and accompanied by the prescribed fee.
(4)A lien may be registered after the wages or contract price have become payable, although the seven days mentioned in subsection (2) shall not have commenced to run.
(5)Notices of lien under this Act shall state the court in which action will be brought to enforce the same, and any person to whom notice is given may deposit the amount claimed in such court to abide the event of such action, and thereupon the lien shall be deemed to cease. (my emphasis)
Having been registered, a lien will cease, unless an action is brought against the owner or occupier of the relevant land for enforcement of the lien, within 14 days from the registration thereof.[16]
[16] Section 15 of the Act.
As to the Charge, the applicant relies on s 7 of the Act, which states:
7—Charge of worker and sub-contractor
(1)     …
(2)     A sub-contractor shall have a charge on any money payable to the contractor or sub-contractor with whom he shall have contracted for that portion of the contract price payable to the first-mentioned sub-contractor in respect of work done or materials furnished or manufactured for the purposes of the contract of such contractor or secondly mentioned sub-contractor.
(3)     A charge under this section shall attach only to money payable under the contract for the purposes of which the work or materials have been done, supplied, or manufactured, and shall lapse unless an action be brought to enforce the same within twenty-eight days after the wages or contract price in respect of which such charge has arisen shall have become due within the meaning of section 10, subsection (2). Such action shall not be discontinued without the consent of the defendant or an order of the court, and the court on making such order may declare that any charge claimed does not exist or order that it shall forthwith lapse, or that the plaintiff have further time to bring a fresh action to enforce the charge.
(4)     ....
(5)     A charge under this section shall not avail as to any moneys bona fide paid over without notice of such charge.
(my emphasis)
The Application
Summary – respondents’ position
The respondents submitted that the Lien was invalid, and therefore should be cancelled, on one or any of the following grounds:
1That the part owner of the land, 250 East, had never been served with the Lien, the Demand or any other document or process (Invalidity No. 1 and 2).[17]
2The Lien is not available (unenforceable) as the outstanding contract price had not ‘become due’ at the time the proceedings were issued, as it had not remained unpaid for seven days after the Demand ‘was given to the person liable to pay the same’ or posted in accordance with s 10(2)(a) (Invalidity No. 3).
3The Demand was the second notice of demand for the purposes of s 10(2), in that a previous notice of demand had been issued on 30 April 2019 (Invalidity No. 4).
[17] Being the ‘nub’ of the submissions described under both of the sub-headings ‘Invalidity No. 1’ and ‘Invalidity No. 2’ in the Respondents’ Summary of Argument.
The respondents also raised a combination of issues relating to alleged typographical and mathematical errors in the Demand and the fact it was not addressed to the second respondent’s current address (Invalidity No. 5). This ground was not pursued by the respondents on the hearing of the application.
As to the Charge, the respondents claimed that it must be set aside, as there are no monies owed as between the respondents with respect to the relevant sub contracts.
Further, it was submitted that for the same reasons expressed with respect to Invalidity No. 3 as to the Lien, the proceedings to enforce the Charge had been issued less than seven-days after the giving of the Demand in accordance with s 10(2)(a).
The applicant denied the Lien was invalid or that the Charge should be set aside on any of the grounds as alleged by the respondents.
Section 32
The application is brought pursuant to s 32 of the Act which provides:
32—Claim or registration may be cancelled
Any person alleging that he is prejudicially affected by a claim, lien, or charge, or by registration under this Act, may at any time apply to the court to have such claim or registration cancelled or the effect thereof modified, and such order may be made as may be deemed just.

The respondents alleged significant prejudice because of the continued existence of the Lien. The second respondent has deposed that there are contracts for sale on eight of the 14 apartments constructed on the land, that two purchasers wish to settle when the apartments are completed and that the project is scheduled for completion in or about August 2020. It is claimed that those contracts will be breached if the Lien remains on the title. There are contractual obligations to repay a financier (and the real estate agent) from the proceeds of sale. It is claimed that the continued existence of the Lien may put many millions of dollars at risk.[18]
[18] Sommariva affidavit at [7]-[11] and [13].
Counsel for the respondents made no submissions directed to the appropriate test to be applied by the court pursuant to s 32 of the Act.
Counsel for the applicant submitted that the application has the effect of a summary judgment application with respect to the statutory causes of action pleaded by the applicant to enforce the Lien and the Charge, albeit not expressly stated as such.
The relevant rule relating to applications for summary judgment is UCR 144.2(2), which states:
(2)The Court may, on application by a party, give summary judgment against an applicant—
(a)     on a claim if there is no reasonable basis for prosecuting the claim;
(b)     on a cause of action in a claim if there is no reasonable basis for prosecuting the cause of action; or
(c)     on a separate issue that arises in a claim if there is no reasonable basis for contesting that issue.
There are numerous authorities which deal with the interpretation of other similar provisions and the interpretation of the phrase ‘no reasonable basis’.
In Ceneavenue Pty Ltd v Martin (Ceneavenue), Debelle J, with whom Duggan and Anderson JJ agreed, held, when considering the interpretation of then r 232 stated:[19]
The test in r 232(2) requires the court first to identify the issues to be tried and then to assess whether the claim or defence has reasonable prospects of success. In the case of an application for summary judgment by a plaintiff against a defendant, it is doubtful, therefore, whether there is a material difference between that test and the former test as it had been expressed in Fancourt. That is because the question whether there is a real question to be tried denoted that the task for the court was to determine whether the issues at the trial are real or fanciful and have reasonable prospects of success.
The question whether there is no reasonable basis for the claim or defence must be determined in a summary way. It is entirely inappropriate for there to be a mini trial on that question. It must, therefore, be evident or obvious that the party defending the application for summary judgment has no reasonable basis for the claim or the defence. While adversarial argument will assist in the determination of that question, the question should be capable of ready resolution without prolonged argument. A prolonged argument might suggest that there is a reasonable basis for the claim or the defence.
[19] (2008) 106 SASR 1, 21 [81]-[82].
Debelle J concluded:[20]
… r 232(2)(a) does not represent a significant departure from the previous practice in relation to an application for summary judgment by a plaintiff on the ground that the defendant has no arguable defence. On an application for summary judgment by a plaintiff, the court will examine whether the asserted defence is real or fanciful. It will consider whether the defence is bona fide. It will assess whether the respondent has a real as opposed to a fanciful case. It will have regard to the injunction in Fancourt which is in similar terms to that in Agar v Hyde. The applicant for summary judgment must show that it is clear that the other party has no arguable case. The test does not require the court to determine whether the defendant will succeed. Instead, the court must consider only whether the ground or grounds relied on by the defendant are reasonably arguable. The test in r 232(2)(a) is not, I think, materially different from the test whether there is a real question to be tried.
[20] Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1, [92] (Debelle J, with whom Duggan and Anderson JJ agreed).
In Spencer v Commonwealth of Australia (Spencer),[21] the High Court was dealing with a similar albeit not identical provision relevant to summary judgment applications in s 31A of the Federal Court of Australia Act 1976. That section provided, inter alia, that for summary judgment to be granted the court must be ‘satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding’. In a joint judgment of Hayne, Crennan, Kiefel and Bell JJ their Honours stated:[22]
First, the central idea about which the provisions pivot is ‘no reasonable prospect’ (emphasis added). The choice of the word ‘reasonable’ is important. If s.31A is to be seen as deriving from Rule 24.2 of the Civil Procedure Rules 1998 of England and Wales, its provisions underwent an important change in the course of their translation from that jurisdiction to this. The English rule speaks of ‘no real prospect’; s.31A speaks of ‘no reasonable prospect’. The two phrases convey very different meanings …
The inquiry required in this case is whether there is a ‘reasonable’ prospect of prosecuting the proceeding, not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.
[21] (2010) 241 CLR 118.
[22] Ibid at [51]-[52].
Their Honours further concluded:[23]
How then should the expression ‘no reasonable prospect’ be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antimony intended to capture most or all of the cases in which it cannot be said that there is ‘no reasonable prospect’. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like ‘no reasonable prospect’ is to be avoided.
[23] Ibid at [58].
In Davies v Minister for Urban Development and Planning (Davies),[24] Bleby J found that the decision in Ceneavenue had, in effect, been overtaken by the decision of the plurality in Spencer.[25] Bleby J said:[26]
Notwithstanding the decision of the Full Court of this Court in Ceneavenue Pty Ltd v Martin, I regard the later decision of the plurality of the High Court in Spencer as binding authority on this Court and I propose to follow it. The Full Court in Ceneavenue has been shown by the plurality to have been wrong in substituting a meaning for the text of r 232(2) which it does not bear.
(Citation omitted.)
[24] (2011) 109 SASR 518.
[25] (2010) 241 CLR 118.
[26] Davies v Minister for Urban Development and Planning (2011) 109 SASR 518, [43], citing Spencer v The Commonwealth (2010) 241 CLR 118, [58]-[60]: “full weight must be given to the expression as a whole”.
As outlined recently by Justice Livesey in Cosenza and Anor v Roy Morgan Interviewing Services Pty Ltd,[27] the Supreme Court has not resolved the difference in opinion as espoused by the Full Court in Ceneavenue and Bleby J in Davies.[28] Justice Livesey referred to what was said by Kourakis CJ in Collins v Djunaedi, namely:[29]
In the case of a summary judgment application, there is a reasonable basis for a claim, or a positively pleaded defence, when there is an evidential foundation for facts upon which arguable propositions of law would result in judgment for the plaintiff or the defendant as the case may be. In cases in which the defendant merely denies the claim, there must be reasonable grounds on which to contend that the plaintiff will not discharge its onus of proof or make good the propositions of law on which it relies. In the case of a SCR 232 application, the evidential basis or grounds must at least be pleaded.
[27] [2020] SASC 65 at [29].
[28] Kleentex (Thailand) Co Ltd v Corporate IM Pty Ltd [2012] SASC 71, [19] (White J); G, RE v Department of Correctional Services [2017] SASC 96, [25]-[26] (Judge Roder).
[29] [2016] SASCFC 48, [17] (Kourakis CJ, Stanley and Parker JJ agreeing).
The power to dismiss an action or a defence summarily is not a power to be exercised lightly. As observed by Bleby J in Davies:[30]
The Court must be cautious not to do a party an injustice by summarily dismissing the proceedings where, for example, contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. However what amounts to no reasonable basis will ultimately be decided through a succession of decided cases.
[30] Ibid at [44].
In Badge Constructions (SA) Pty Ltd v Rule Chambers Pty Ltd,[31] the Supreme Court was dealing with an appeal against a Master’s decision cancelling a lien. It was determined by the Master that the appellant (Badge) could not invoke s 5 of the Act to issue the lien, as the contract price had not yet ‘accrued due’ under the terms of the contract. The original application for the lien to be cancelled was made under s 32 of the Act.
[31] [2007] SASC 417; per Gray J at [73], per White J at [89] and [90].
In upholding the Master’s decision on appeal, the Supreme Court proceeded on the basis that to be successful in the appeal, Badge needed to establish that there was a reasonable basis for the lien lodged by them, or, as described by Gray J, that there was ‘an arguable case’ that moneys were due and payable under the contract.
The effect of an order cancelling the Lien will be to summarily dismiss the statutory cause of action to enforce the Lien. Similarly, if an order is made to set aside the Charge, it will have the effect of summarily dismissing the statutory cause of action to enforce the Charge.
Having regard to the manner in which the application was argued, I consider, that if I am satisfied there is no reasonable basis for the statutory cause(s) of action prosecuted by the applicant seeking to enforce the Lien and/or the Charge, then the orders should be made as sought.
However, as stated, the application is made pursuant to s 32 of the Act, not UCR 144.2. If I am not satisfied that the test for summary judgment has been met, can the application, nevertheless, succeed?
There is a paucity of reported cases on s 32 of the Act. However, in MSP Group v Fernleigh Gardens Estate,[32] Judge Lunn determined that where a respondent establishes that he is prejudicially affected by a lien, s 32 gives the Court a discretion on interlocutory proceedings to cancel or modify the lien as may be just. This must involve a balancing exercise between the applicant having a right to security for its alleged claim, against the prejudice caused to the respondent by having a lien in the terms claimed, maintained upon the title in the period in which it takes to bring the action to trial and to determine finally the rights of the parties.
[32] [1996] SADC 3509.
In my view, if there is a reasonably arguable case that the Lien (and/or the Charge) is not invalid, I must determine whether the balance of convenience favours the maintaining of the Lien and/or Charge or whether the orders should be made in the interests of justice.
As to the balance of convenience in the context of injunctions, I note what was said by the Victorian Court of Appeal in Bradto Pty Ltd v State of Victoria,[33] namely:
…whether the relief sought is prohibitory or mandatory, the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’…
[33] (2006) 15 VR 65 at 73.
The prejudice deposed to by the second respondent in his affidavit is prejudice likely to be suffered to ‘the Project’ rather than either respondent, as such. There was no documentary evidence, in the nature of contracts of sale, letters from banks or real estate agents or the like, to support the matters deposed to by the second respondent.
Notwithstanding the deficiencies in the material before me, I consider it likely that, at the very least, any breach of sale contracts with prospective buyers of the apartments due to the presence of the Lien on the title, on its face, will result in some prejudice to the first respondent, in the sense that such contracts must involve, in some way, a transfer of its ownership of the land.
However, the effect of cancelling the Lien and setting aside the Charge will be to preclude the applicant from any right to enforce either the Lien or the Charge, in circumstances where their validity is reasonably arguable.
As such, in my view, balancing all relevant considerations, if I am satisfied that the validity of the Lien (and/or the Charge) is reasonably arguable, then the interests of justice would demand that the status quo be maintained, and that the application be dismissed.
Interpretation of the Act - principles
Section 22 of the Acts Interpretation Act 1915 (SA) states:
22—Construction that would promote purpose or object of an Act to be preferred
(1)Subject to subsection (2), where a provision of an Act is reasonably open to more than one construction, a construction that would promote the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) must be preferred to a construction that would not promote that purpose or object.
(2)This section does not operate to create or extend any criminal liability.
The purpose of the Act is to confer protection on contractors, sub-contractors and workers who do work or supply materials for use on land, by the creation of a statutory lien on the land and a statutory charge on the moneys payable. The legislation is therefore beneficial, or remedial, in character.[34]
[34] Marriott Industries Pty Ltd v Mercantile Credits Limited; Maesbury Plumbers Pty Ltd (1991) 160 LSJS 288 at 292, per King CJ; Excelsior Land Holdings Pty Ltd and Ors v Allan Sheppard Constructions Pty Ltd [2012] SASCFC 84 at [33].
As such, insofar as the text of the Act may be susceptible to various interpretations, the text should be construed beneficially, in other words, adopting a construction that advances the beneficial purpose of the Act, rather than frustrating or diminishing the attainment of its intended benefits.[35]
[35] Excelsior Land Holdings Pty Ltd and Ors v Allan Sheppard Constructions Pty Ltd [2012] SASCFC 84 at [33].
However, this means ‘not that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow.’[36] The interpretation to be adopted ‘must be restrained within the confines of the actual language employed and what is fairly open on the words used’.[37] The interpretation must not be unreasonable or unnatural.[38]
[36] Bull v Attorney-General (NSW) (1913) 17 CLR 370, at 384, per Isaacs J.
[37] Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638.
[38] IW v City of Perth (1997) 191 CLR 1 at 12.
As outlined by Gageler J in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act:[39]
The principle that beneficial legislation is to be construed beneficially is a manifestation of the more general principle that all legislation is to be construed purposively. Application of that more general principle to New South Wales legislation is mandated by the requirement of s 33 of the Interpretation Act 1987 (NSW) that a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not. Neither in its general application nor in its particular manifestation can that principle be applied other than on the understanding that legislation “rarely pursues a single purpose at all costs” and that “[u]ltimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling”. (citations omitted)
[39] (2016) 260 CLR 232 at [92].
Further, it is only if more than one interpretation is available or if there is uncertainty as to the meaning of the words used that the beneficial approach is to be adopted. If the words used admit only one outcome, that must be the meaning attributed to those words.[40]
[40] Schaeffer v Schaeffer (1994) 36 NSWLR 315 at 319-320; McMahon v Permanent Custodians Ltd [2013] NSWCA 275 at [52].
It must also be noted that a provision which on its face appears to have a beneficial purpose, may in fact be limited in its operation because it represents a compromise between competing interests.[41]
Lien
[41] Kennedy v Australian Fisheries Management Authority [2009] FCA 1485 at [44]-[46].
Invalidity No. 1 and Invalidity No. 2
There is no dispute that 250 East has never been served with the Lien or the Demand, nor is 250 East referred to on any of the lien documents. The respondents submit that as a result the Lien in invalid, as 25 East is ‘the owner’ of the land within the meaning of the Act as defined by s 2 of the Act namely ‘the owner of the legal or equitable fee simple of land’.
The Lien was registered over the whole of the land, but refers only to the first respondent, not 250 East, as lienee.[42]
[42] Exhibit “JJD-5” to the Davies affidavit.
The applicant submitted in the circumstances of this case, there was no requirement for it to claim a lien over 250 East’s interest in the land, or to serve 250 East with any relevant documents.
It submitted that the Lien arose under s 5 of the Act, by virtue of the applicant’s sub-contract with the second respondent, rather than under s 4. Section 4 of the Act states that ‘the worker…shall have a lien for his wages for such work on the estate or interest in land of the owner or occupier…’
Conversely, s 5 of the Act states that ‘a…sub-contractor shall have a lien for the contract price…on the estate or interest in land of any owner or occupier’, but only where the work was done with the assent, express or implied, of the owner or occupier and/or the materials were used or intended to be used in or about work done or intended to be done to land, with the assent, express or implied, of the owner or occupier.
The applicant submitted that as such, it was permissible for it to claim the Lien only over the first respondent’s interest in the land, it being ‘any owner’ for the purposes of s 5 and in circumstances where the work was done with the first respondent’s assent. 250 East was not a party to the Head Contract and there was no evidence, therefore, that the work was done with their assent.
Further, the applicant submitted this was consistent not only with a beneficial construction of the Act, but with well understood principles that each tenant in common may, in general, deal with their undivided share as he or she wishes.
I agree with those submissions.
I note that in respect of caveats under s 191 of the Real Property Act 1886 (SA), it has been held that they only operate over the land which is actually subject to the interest claimed in the caveat, and not to the whole of the land in any certificate of title.[43]
[43] Roclin Investments Pty Ltd v Makris (1974) 7 SASR 485.
Section 12 of the Act states:
12—Notice to be deemed caveat
A notice lodged in respect of land under the provisions of the Real Property Act shall be deemed to be a caveat for the purposes of section 191 of that Act, and the provisions of the Real Property Act relating to caveats shall, so far as applicable and so far as consistent with this Act, apply to every such notice.
As such, once notice of a lien is lodged, it is deemed to be a caveat forbidding the registration of any dealing with the estate or interest in land sought to be affected by the Lien. The interest in the land sought to be affected by the Lien is the interest of the first respondent, not that of 250 East.

Further s 6 of the Act states:
6—Extent of lien
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 purposes 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. (my emphasis)
Having regard to the wording of s 5, s 6 and s 12 of the Act, I am satisfied that a sub-contractor may claim a lien over the estate or interest in land of an owner of land, in other words, only over that interest in land held by an owner as tenant in common.
Invalidity No. 3
The respondents submit that the Lien is unenforceable as the proceedings were issued less than seven days after the respondents were personally served with the Demand, such that the requirements of s 10(2)(a) of the Act were not met.
For the purposes of the application only, there is no dispute that the outstanding contract price is both ‘accrued due’ (for the purposes of s 5) and ‘payable’ for the purposes of s 10(2)(a).
However, s 10(1) imposes a further requirement, namely that the contract price has ‘become due’. It is a pre-condition for the enforcement of the Lien that a valid demand be made to support the Lien, as envisaged by s 10(2).
In Longreef Pty Ltd v Leighton Contractors (South Australia) Pty Ltd, King CJ concluded:[44]
Although a lien has arisen by reason of the contract price or part thereof having accrued due under the terms of the contract, it is not available, that is to say not capable of enforcement or valid as a security, until it has “become due” for the purposes of section 10. That will occur if one or other of the events enumerated in section 10(2)(b) has occurred, or if the price is unpaid for seven days after notice has been given under section 10(2)(a). That notice can only be given validly after the price is payable, that is to say after the entitlement has arisen under the contract, thereby bringing the lien into existence, and the time for payment has arrived. The lien, if it has acquired a valid existence by reason of the price having accrued due, may be registered pursuant to section 10(4) prior to the section 10(2)(a) notice, but the action to enforce it cannot be commenced until the lien is “available” under section 10(1).
[44] Ibid at 276.
In accordance with authority, the applicant agreed with a proposition advanced by the respondents that the Lien can only be made available, and therefore enforced by the applicant, if the contract price on which it has arisen was unpaid for seven days after the Demand ‘was given to the person liable to pay the same’ or posted in accordance with s 10(2)(a).[45]
[45] Marriott Industries Pty Ltd v Mercantile Credits Limited; Maesbury Plumbers Pty Ltd (1991) 160 LSJS 288; Excelsior Land Holdings Pty Ltd and Ors v Allan Sheppard Constructions Pty Ltd [2012] SASCFC 84.
The Demand was personally served on the second respondent, being ‘the person liable to pay’ the outstanding contract price, on 1 April 2020. The respondents submitted that was the day that the Demand ‘was given to the person liable to pay the same’ within the meaning of s 10(2)(a), such that the proceedings to enforce the Lien, having been issued on 8 April 2020, were issued a day before the outstanding contract price was deemed to become due in accordance with s 10(2).[46]
[46] Acts Interpretation Act 1915 (SA); s 27(1).
The respondents argued that notwithstanding that the respondents’ solicitors had been instructed to act as at 30 March 2020, as outlined in the 30 March letter, the applicant elected to personally serve the second respondent with the Demand. It was submitted that two other courses were available to the applicant – namely it could have served the Demand on the respondents’ solicitors on or after 30 March 2020, or posted the Demand in a registered letter to the second respondent addressed to him at his usual or last known address. It was submitted that until seven days had passed after one of those three alternatives had occurred, the requirements of s 10(2)(a) had simply not been met, and the Lien was unenforceable. As the applicant had elected the first course, only six days, not seven had passed as at the date the proceedings were issued, such that the Lien could not be enforced.
The applicant submitted that to construe s 10(2)(a) in this way was to improperly read into the provision a requirement for ‘personal service’ of the Demand on the respondent, in circumstances where the provision only required the second respondent be ‘given’ the Demand.
The applicant submitted that as the Act was beneficial legislation, it should be interpreted generously to ensure the applicant is not denied a promised benefit conveyed by it. In that respect, it was submitted that it was not appropriate to ‘read in’ to s 10(2)(a), a requirement that the Demand be personally served. As the provision only required the Demand to be ‘given’, it was submitted that regard could be had to the definition of ‘give’ (and therefore ‘given’) in the Concise Oxford English Dictionary, namely: [47]
Freely transfer the possession of; cause to receive or have; communicate or impart a message…
[47] Oxford University Press, 11^th ed.
The applicant contended that on 25 March 2020, or at the very latest, by 30 March 2020, the second respondent had received both the Demand and the Charge via his solicitors. It submitted that on a beneficial construction of s 10(2)(a) of the Act, the second respondent had therefore been ‘given’ the Demand at least seven days prior to the issue of the proceedings. It was submitted that it was irrelevant whether or not the solicitors in fact provided the second respondent with a copy of the Demand on either of those days. Rather, it was submitted that the requirement the Demand be ‘given’ was satisfied, within the meaning of the dictionary definition of the word, upon the second respondent becoming aware of the existence of the Demand and its contents at that time, in the sense that its existence and contents had been communicated or imparted to him.
The applicant also relied on decisions addressing the issue of informal service.
In United Group Resources Pty Ltd ABN 17 114 888 201 v Calabro (No 4) (Calabro)[48] McKerracher J in the Federal Court was required to determine numerous motions declaring that various respondents, who had instructed solicitors to enter conditional appearances to the proceedings, had not been personally served with those proceedings. In dismissing the motions, McKerracher J considered several authorities which emphasised the purpose for which personal service was required, namely to ensure the relevant documents came to the notice of the intended recipient.[49]
[48] [2010] FCA 791.
[49] Howship Holdings Pty Ltd v Leslie [No.2] (1996) 41 NSWLR 542 at 544 per Young J and Metacorp Pty Ltd v Andeco Construction Group Pty Ltd [2010] VSC 199 per Vickery J.
Similarly, in Fazio (Executor) v Passmore, Siopis J stated:[50]
The main purpose of the service of originating civil process on a respondent, is to inform the respondent of the complaint or claim which affects him or her; and to provide that person with an opportunity to be heard in relation to the complaint or claim. That purpose is achieved if the complaint or claim comes to the attention of the respondent, and the respondent responds to the service of the summons by entering an appearance. The filing of the notice of appearance evidences that the complaint or claim, has come to the respondent’s attention and the respondent intends to be heard in relation thereto. That the originating process may have been served in circumstances amounting to a trespass, does not derogate from this fact, nor does it undermine the essential purpose of the service of a summons.
Meaning of ‘given’
[50] [2011] FCA 273 at [55].
There is no authority as to the appropriate interpretation of the words ‘notice in writing given to the person liable to pay the same’ as used in s 10(2)(a), nor does the Act define the words ‘give’ or ‘given’. I was not directed to any particular authority which may assist in the interpretation of the provision.[51]
[51] Save for those pertaining to informal service previously mentioned.
In Roberts v Beet,[52] the Supreme Court of Victoria had cause to interpret the meaning of s 80F(3) of the Motor Car Act 1958 (Vic) which stated:
A document purporting to be a copy of any certificate given in accordance with the provisions in ss (2) and purporting to be signed by a person authorised by the Chief Commissioner of Police to operate breath analysing instruments shall be prima facie evidence in any proceedings referred to in ss (1) of the facts and matters stated therein, unless the accused person gives notice in writing to the informant, a reasonable time in the circumstances before the hearing that he requires the person giving the certificate to be called as a witness. (my emphasis).
[52] [1988] VR 118 per O’Bryan J.
The accused person purported to give such notice by letter, served by post. It was submitted by the informant that the use of the verb ‘gives’ in that provision, required personal service of the notice. Reliance was placed on the Macquarie Dictionary definition of the verb ‘to give’, namely ‘to deliver freely; hand-over; to deliver to; to present to’.
Judge O’Bryan noted that Stroud’s Judicial Dictionary, Vol 2 at 11164 said that ‘the primary meaning of the word ‘give’ appears to have been the placing of a material object in the hands of another person’.[53]
[53] Ibid at 121.
In rejecting the informant’s contention, O’Bryan J determined that the phrase ‘to give notice’ of something, did not imply the delivery of the notice personally by one person to another person. He referred to the words of Lord Campbell, Chief Justice in R v Deputies of the Freemen of Leicester, namely:[54]
In general, when personal service is required by an Act, it is said so in express words; but here the words used are; give or give notice in writing unto such Deputy, which have no such force.
[54] (1850) 15 QB 671.
Of course, in both Roberts v Beet and R v Deputies of the Freemen of Leicester, the court’s interpretation involved an analysis of the specific purpose of the legislation, which guided the courts in their interpretation. Further, the terminology used in each of those cases does not precisely mirror that of s 10(2)(a).
In WACB v Minister for Immigration and Multicultural and Indigenous Affairs, the High Court considered the interpretation of s 478 of the Migration Act 1958 (Cth),[55] which, at the time, stated:
(1)An application under s 476 or 477 must
(a) be made in such manner as is specified in the Rules of Court made under the Federal Court of Australia Act 1976; and
(b) be lodged with the Registry of the Federal Court within 28 days of the applicant being notified of the decision.
(2)The Federal Court must not make an order allowing, or which has the effect of allowing, an applicant to lodge an application outside the period specified in para (1)(b).
[55] Not being remedial or beneficial legislation, impacting on the rights of refugees.
The High Court considered the interpretation of the phrase ‘notified of the decision’ in light of the subject, scope and purpose of the relevant provisions of the Act. In doing so, Gleeson CJ, McHugh, Gummow and Heydon JJ had regard to s 430D(2) of that Act which required the Refugee Review Tribunal (RRT) to ‘give the applicant and the Secretary a copy of the statement prepared under subsection (1) within 14 days after the decision concerned is made’.
They stated:[56]
At the relevant time, the word "give" used in s 430D(2), the applicable provision in this case, was not defined. Accordingly, it is the ordinary meaning of the word, understood in its context, that must be considered. The context is that the RRT must give the applicant a copy of the written statement. In that setting, to give a document ordinarily requires its physical delivery, not some act of constructive delivery of possession which, at general law, may suffice to transfer property in a chattel. It will not be enough to communicate to the applicant orally that the document has arrived, or to communicate the gist of the document, or even to read the document to the applicant. What is required is that the written statement be physically given to the applicant. Only once this has occurred can it be said that s 478(1)(b) is enlivened and time begins to run....
[56] [2004] HCA 50 at [37].
Again, the subject, scope and purpose of the legislation was critical in the High Court’s interpretation of the provision.
In FKP Commercial Developments Pty v Albion Mill FCP Pty Ltd,[57] Jackson J was required to consider whether a vendor had given written notice to a potential purchaser of certain particulars of the land to be sold. The notice was required under the Environmental Protection Act 1994 (Qld).
[57] [2017] QSC 322.
In that case, Jackson J held:[58]
…The meaning of a statutory requirement to give notice in various contexts is a well worked field of legal discourse. Depending on that context, it may be that the person to be given notice (“recipient”) must be made aware of the matter, or the attention of the recipient must be drawn to documents containing the matter, whether or not they become aware of the matter, or acts calculated to draw the attention of the recipient to the matter or documents containing the matter may be enough.
[58] Ibid at [53].
Jackson J at [54] then referred to Capper v Thorpe,[59] wherein the High Court said:
Where a statutory provision, such as s 6, requires a document to be ‘served’, the statutory command is ordinarily perceived as requiring the contents of the document to be delivered to the person to be served. However, unless the statute says so, a document may be ‘served’ although it is not personally served. Thus, it may be served by posting it to the person required to be served. In many statutory contexts, a document may also be ‘served’ when it is brought to the notice of the person who has to be served. At all events, it will be ‘served’ in such contexts if the efforts of the person who is required to serve the document have resulted in the person to be served becoming aware of the contents of the document. (footnotes omitted)
[59] (1998) 194 CLR 342 at [21].
Jackson J went onto hold that although written notice of specified matters was required in that case, there were no other requirements as to the form the notice must take. Therefore, where it could be shown that the defendant did access the disclosed information and was aware of it, notice had been ‘given’. It was not a case where the means of giving the written notice missed the target, or the means of the giving of the notice was so obscure that it amounted to giving no notice at all.
Authority of Agent (Solicitor) to Receive Notice
The general principle is that if notification is in question, notification to an agent is only notification to the principal, if the agent had authority to receive the notice and at the time of its receipt, was acting as agent and the notice related to something material to the transaction performed by the agent.[60]
[60] FKP Commercial Developments Pty v Albion Mill FCP Pty Ltd [2017] QSC 322 at [85].
As for solicitors, the same position was put by Waldron J in Singer v Trustee of the Property of Munro and Anor (Bankrupts), who held:[61]
It is, of course, common fallacy to think that solicitors have an implied authority on behalf of their client to receive notices. They may have express authority so as to receive them, but in general a solicitor does not have any authority to accept a notice on behalf of their client.
[61] [1981] 3 All ER 215 at 218.
Similarly, it cannot be said that a solicitor has authority other than in respect of the matter in which the solicitor holds instructions.[62]
Imputation of knowledge of agent (solicitor)
[62] Kestel v Superannuation Complaints Tribunal [2010] FCA 1300 at 15.
The general principle is that notice given to or knowledge acquired by an agent is imputed for his principal, only if the agent was, at the time, employed on the principal’s behalf.[63]
[63] Jessett Properties Ltd v UDC Finance Ltd (1992) NZLR 138 at 143.
Further, as outlined in Midland Bank plc v Serter:[64]
…a solicitor, like any other agent, may be instructed specifically to act for a party for one particular purpose in relation to a transaction, but not to act for him generally for other purposes. Thus it is only knowledge which he acquires when carrying out that part of the transaction in which he is instructed to act as agent which is to be imputed to the party who for that purpose is his principal…
Discussion/Findings
[64] [1995] 1 Fam Law R 1034 at 1046-1047.
As previously stated, the Act is beneficial legislation, intended to confer protection on contractors, sub-contractors and workers who do work or supply materials for use on land, by the creation of a statutory lien on the land and a statutory charge on the moneys payable.
The objects and purpose of s 10(2) were outlined by King CJ in Marriott Industries Pty Ltd v Mercantile Credits Limited; Maesbury Plumbers Pty Ltd (Marriott Industries).[65] In expressing the opinion that s 10(2) of the Act, imposed an additional pre-condition to the right to enforce a lien or to rely upon it as security, King CJ stated:[66]
I am not unmindful of the argument put to us that, on the construction which I adopt, the giving of the notice of demand after registration of the lien serves no useful purpose. It is impossible to be dogmatic, of course, about the purpose which the drafter had in mind, but I can understand that the drafter may have felt that, at least where the land owner or occupier is liable to the lienor for the wages or contract price, the land owner or occupier should have the opportunity of complying with a formal notice of demand before the lien becomes available for enforcement. The purpose is not so clear where the person liable is not the owner or occupier. Perhaps the drafter did not apply his mind to that situation or perhaps it was felt that even in that situation, the lien should not be available for enforcement until the person liable has failed to comply with a formal notice of demand…
[65] Supra note 45.
[66] Ibid at 294.
A purpose of s 10(2) is to enable the person liable to pay the outstanding contract sum, in this case, the second respondent, to comply with a formal notice of demand, for example by payment to the lienor or into court, during the seven-day window, with the resulting effect being to cancel the lien, and avoid enforcement proceedings being taken against them.
Further, s 10(2) is a deeming provision. It exists so as to avoid there being any uncertainty as to when an amount has ‘become due’ for the purposes of enforcement proceedings.
In Ellison v Sandini,[67] Jagot J (with whom Siopis J agreed), accepted that the approach to construction of a deeming provision was that taken by Lord Walker in DCC Holdings (UK) Ltd v Revenue and Customs Commissioners, namely: [68]
For my part, I take the correct approach in construing a deeming provision to be to give the words used their ordinary and natural meaning, consistent so far as possible with the policy of the Act and the purposes of the provisions so far as such policy and purposes can be ascertained; but if such construction would lead to injustice or absurdity, the application of the statutory fiction should be limited to the extent needed to avoid such injustice or absurdity, unless such application would clearly be within the purposes of the fiction. I further bear in mind that, because one must treat as real that which is only deemed to be so, one must treat as real the consequences and incidents inevitably flowing from or accompanying that deemed state of affairs, unless prohibited from doing so.
Neuberger J developed this reasoning in a passage in Jenks v Dickinson [1997] STC 853; 878,69 TC 458 that I find helpful:
It appears to me that the observations of Peter Gibson J, approved by Lord Browne-Wilkinson, in Marshall indicate that, when considering the extent to which one can “do some violence to the words“and whether one can “discard the ordinary meaning“, one can, indeed one should, take into account the fact that one is construing a deeming provision. This is not to say that normal principles of construction somehow cease to apply when one is concerned with interpreting a deeming provision; there is no basis in principle or authority for such a proposition. It is more that, by its very nature, a deeming provision involves artificial assumptions. It will frequently be difficult or unrealistic to expect the legislature to be able satisfactorily to [prescribe] the precise limit to the circumstances in which, or the extent to which, the artificial assumptions are to be made.
[67] [2018] FCAFC 44.
[68] [2010] UKSC 58 at [38]-[39], approving what was said by Peter Gibson J in Marshall v Kerr (1993) 67 TC 56 at [38].

Section 10(2)(a) contains no explicit requirement for the ‘notice in writing’ to be personally served on the person liable to pay the contract price. Had that been an intended requirement, it could have been expressly stated as such. Rather the provision provides two alternative reference dates for the commencement of the seven-day notice period – either – from the date the notice in writing was given to the person so liable, or from the date that notice was posted in a registered letter to the usual or last known address of that person. The latter option contains no guarantee that the notice in fact comes to the person’s attention on that date, thus supporting the view that something less than ‘personal service’ is required to comply with the provision.
I am satisfied that it is arguable that s 10(2)(a) does not require ‘personal service’ of the Demand. Further, to construe the provision in the manner as argued by the respondents in my view may lead to an injustice, having regard to the purpose intended by s 10(2)(a).
In accordance with the authorities cited, I am satisfied that the service of the Demand on FEG on 25 March 2020, being at a time when FEG had no instructions to act, or to accept service of those documents on behalf of the second respondent, did not constitute the giving of written notice to the second respondent as required by s 10(2)(a) of the Act.[69]
[69] Sommariva affidavit at [18]; Exhibit ‘JS05’ to the Sommariva affidavit.
However, the second respondent became aware of the Demand (and the Charge) on 25 March 2020.[70] Thereafter, on 30 March 2020, FEG wrote to the applicant’s solicitors advising not only that they were now instructed to act on behalf of both respondents, but requesting that all future correspondence with respect to the Lien and the Charge be sent their office. In that letter, FEG outlined their instructions were to write to the applicant’s solicitors to outline, in detail, what were considered to be fundamental flaws in the Lien and the Charge. Those flaws included the fact that the Demand was not directed to the second respondent’s proper address, being a matter personal to the second respondent.[71]
[70] Sommariva affidavit at [17].
[71] Exhibit ‘JS06’ to the Sommariva affidavit.
As such, in order to provide those instructions, on a date between 25 and 30 March 2020, the second respondent must have known not only of the existence of the Demand (and the Charge), but of the content of the Demand. Although there was no specific evidence before the court on this issue, the only reasonable inference that can arise from the fact of those instructions and the contents of the 30 March letter, is that either FEG provided a copy of the Demand (and Charge) to the second respondent on or before 30 March 2020, or they verbally informed him of its contents, in precise detail, on or before that date.
Given the ease with which copies of documents can be provided by way of email, and that the Demand and Charge were emailed by the applicant’s solicitors to FEG, I consider it likely that FEG provided a copy of both the Demand and the Charge to the second respondent, probably by way of a forwarded email, between 25 and 30 March 2020.
In making that finding I acknowledge that there is no evidence, on oath, before me on this issue, either from the second respondent or from anyone at FEG. I refer to what was said by the Full Court in Ceneavenue Pty Ltd v Martin[72] (Debelle J with whose reasons, in this respect, Duggan and Anderson JJ agreed), with respect to applications for summary judgment, namely:
The question whether there is no reasonable basis for the claim or defence must be determined in a summary way. It is entirely inappropriate for there to be a mini trial on that question. It must, therefore, be evident or obvious that the party defending the application for summary judgment has no reasonable basis for the claim or the defence. While adversarial argument will assist in the determination of that question, the question should be capable of ready resolution without prolonged argument. A prolonged argument might suggest that there is a reasonable basis for the claim or the defence. Comparison with the requirements in rules in other jurisdictions providing for summary judgment confirms these propositions.
[72] [2008] SASC 158; (2008) 106 SASR 1 at [82].
In my view, it is reasonably arguable that as, in all likelihood, the second respondent had a copy of the Demand on or prior to 30 March 2020, he had, in fact been ‘given’ a notice in writing as required by s 10(2) as at that date. There is no requirement in s 10(2)(a) for the notice to be served personally on the second respondent, or for the notice to be ‘given’ by the applicant directly to the second respondent. If a copy of the Demand was in the second respondent’s possession as at 30 March 2020, in my view he could not assert he had not been ‘given’ the same as at that date.
In the alternative, if I am wrong, and the second respondent had not personally received a copy of the Demand as at 30 March 2020, FEG was in possession of the Demand as at 30 March 2020. As at that date, they had instructions to act for the respondents with respect to the matter. As such, in my view, it is reasonably arguable that as a matter of law, FEG’s knowledge of the contents of the Demand can be imputed to the respondents as at that date.
Alternatively, having regard to the contents of the 30 March letter, FEG must have, at the very least, brought the fact of the Demand and its contents to the second respondent’s attention, as they had sought, and obtained, detailed instructions from him in respect of it.
As previously stated, the purpose of the provision is to enable the person liable to pay the contract sum the opportunity to do so, or to take other action, before enforcement proceedings are taken. With knowledge of the existence of and contents of the Demand, the respondents elected to instruct their solicitors to write to the applicant’s solicitors, challenging the validity of both the Lien and the Charge. The purpose for the giving of the notice in writing as required by s 10(2) was served.
If similar reasoning is applied to that in Calabro, then as at 30 March 2020, it is reasonably arguable that the second respondent had been ‘given’ the Demand as contemplated by s 10(2)(a).
I also note the decision in Excelsior Land Holdings Pty Ltd & Ors v Alan Sheppard Constructions Pty Ltd.[73] The Full Court of the Supreme Court considered s 10(2)(a) of the Act and determined that although the provision expressly stated that the notice in writing be ‘signed by the person claiming’ the contract price, the provision nevertheless permitted the notice of demand to be signed by a duly authorised agent on behalf of the plaintiff, being in accordance with the general common law principle to this effect. The approach adopted by the Full Court, while informed also by the conduct of the purported lienor thereafter, was contrary to that adopted by the single Judge on Appeal, who had identified five reasons for requiring a strict construction of the section, including the fact that s 10 was in the nature of a ‘code’ of the necessary matters for the enforceability of a lien and that the obligation to deliver a demand suggested an expectation of a degree of formality.
[73] [2012] SASCFC 84.
I am satisfied that it is reasonably arguable that a Demand was given to the second respondent as required by s 10(2)(a) of the Act prior to 1 April 2020, namely on a date between 25 and 30 March 2020.
Invalidity No. 4
The respondents submitted that a notice of demand as described in s 10(2)(a) of the Act was first served on the respondents on 30 April 2019, meaning the Demand was in fact the second such notice. It was submitted that as ‘no worker’s lien was issued or served within 14 days as required by section 15 of the Act’, the Lien was invalid.
Section 15 of the Act states:
15—Liens to cease in certain events
Every lien under this Act upon the estate or interest of any owner or occupier shall cease unless an action shall be brought against the owner or occupier for enforcement of the lien within fourteen days from the registration thereof.
As such, s 15 is concerned with the time taken to issue proceedings to enforce a lien, once registered. In my view, the relevant provision is s 10(1), which provides that a lien will only become available (ie enforceable) if registered before the expiry of 28 days after the contract price has ‘become due’ (ie in accordance with s 10(2)). The respondents’ argument must be that as the Lien was not registered within that 35-day time frame, the s 10(2) Notice having been given on 30 April 2019, it cannot be enforced.
The relevant ‘notice of demand’ dated 30 April 2019 relied upon by the respondents is, in fact, a Payment Claim of that date issued by the applicant to the second respondent in accordance with the provisions of the Building and Construction Industry Security of Payment Act 2009 (SA) (BCISP Act).[74]
[74] Exhibit ‘JS10’ to the Sommariva affidavit.
It is of note that there is no evidence that this document was either personally served on the second respondent or sent by registered post, in accordance with s 10(2)(a), seemingly contrary to the submissions made by the respondents with respect to Invalidity No. 3.
However, there is no prescribed form of notice as per s 10(2). The Payment Claim is a ‘notice in writing’ sent to the second respondent, signed by a director of the applicant and refers to a sum claimed to be outstanding with respect to the sub-contract in a sum of $183,556.20. While this sum is not identical to that referred to in the Demand, I accept, for the purposes of the application, that the amount referred to therein is for the same work and materials as that which are the subject of the outstanding contract price.
Although s 10(2) does not require the ‘notice in writing’ to expressly refer to that section, it is of note that the Payment Claim makes no reference whatsoever to the Act, or to s 10(2) of the Act. Rather, it is apparent from the face of that document that it was issued in accordance with s 13 of the BCISP Act.
The wording used in the Payment Claim includes:
…I have made many attempts to resolve this dispute and collect the outstanding amount and to this date the amount has not been received by myself or the other Directors.
To resolve this problem please pay the outstanding amount via a payment method that has been agreed between the parties no later than 15 days from the date of this correspondence…
The ‘15 days’ referred to therein, is relevant for the purposes of s 15 BCISP Act, which requires a person on whom a payment claim has been served to provide a payment schedule to the claimant within 15 days of such service,[75] otherwise that person becomes liable to pay the claimed amount in accordance with that section.
[75] Or within the time required by the relevant construction contract, whichever is earlier.
If the respondents’ submission is correct, every Payment Claim, if ‘signed by the person claiming’ the contract price, and given to the person who is liable to pay that sum, will inadvertently start ‘time ticking’ under s 10(1) of the Act with respect to any lien for the contract price as referred to therein.
Returning to the purpose of s 10(2) – the notice is intended to start in train a strict time period to enable the enforcement of a lien under the Act. The Payment Claim contains no ‘demand’ for payment of the outstanding monies, as foreshadowed by s 10(2) of the Act. While payment was requested, there was no threat made to commence legal proceedings in the event payment remained outstanding, nor of any anticipated action to be taken under the Act, nor any reference to the Act.
In my view, it is reasonably arguable that the Payment Claim is not a notice for the purposes of s 10(2)(a) of the Act, such that the Demand is the first such notice.
Charge
The respondents submit that the Charge is invalid on two bases, namely:
1That no sum is outstanding as between the respondents for the scope of the work sub-contracted to the applicant, such that there is no money payable for the purposes of s 7(2) of the Act; and/or
2Neither the Demand nor the Charge have been served on the first respondent.
As to the first ground, I agree with the submissions made by the applicant that at this summary stage of the proceedings it is not appropriate for the court to conduct a mini-trial as to whether amounts have been properly paid by the first respondent to the second respondent for the work being the subject of the sub-contracts.
As to the second ground, the Demand and the Charge were served on the registered office of the first respondent on 1 April 2020,[76] having previously been emailed to FEG on 25 March 2020. Mr Sommariva is the sole director of the first respondent.[77]
[76] Rorhlach affidavit at [2].
[77] Sommariva affidavit at [1].
Section 7(3) of the Act states:
(3)A charge under this section shall attach only to money payable under the contract for the purposes of which the work or materials have been done, supplied, or manufactured, and shall lapse unless an action be brought to enforce the same within twenty-eight days after the wages or contract price in respect of which such charge has arisen shall have become due within the meaning of section 10, subsection (2). Such action shall not be discontinued without the consent of the defendant or an order of the court, and the court on making such order may declare that any charge claimed does not exist or order that it shall forthwith lapse, or that the plaintiff have further time to bring a fresh action to enforce the charge.
As such, the same arguments that were made relating to Invalidity No. 3 pertaining to the Lien, also relate to the Charge. For the reasons already outlined, I am satisfied that there it is reasonably arguable that the requirements outlined in s 10(2)(a) have been met by the applicant.
Summary of Findings
It is reasonably arguable that both the Lien and the Charge are valid, such that I am not satisfied that there is no reasonable basis for the causes of action relied upon by the applicant to enforce the Lien and/or the Charge.
Notwithstanding that the respondents allege they are prejudicially affected by the Lien and the Charge, as the effect of making the orders will preclude the applicant from the benefit of the Lien and/or the Charge, I am not satisfied that it is just, in all the circumstances, for the orders to be made as sought by the respondents.
Orders
1FDN 4 is dismissed.
2I will hear the parties as to costs.