Rams Developments P/L v Pacific Ventures P/L & Ors No. DCCIV-00-160
[2001] SADC 5
•22 January 2001
RAMS DEVELOPMENTS PTY LTD
v PACIFIC VENTURES PTY LTD
AND SOUTHWICK DEVELOPMENTS PTY LTD
[2001] SADC 05
JUDGE VANSTONE
CIVIL
This is an appeal against orders made by a Master on 23 October 2000.
The proceedings arise from a building dispute between the plaintiff builder - who is the respondent before me - and the two defendant companies who entered into a contract to have three houses built for them by the plaintiff.
The appeal is in the nature of a re-hearing: O’Brien Lovrinov Crafter v Corradini (1999) SASC 159. In order to understand the nature of the appeal it is necessary to set out some of the history of the matter.
The building contracts relating to the three houses were entered into on 14 June 1999. The contract was in writing. At that time the property upon which the three houses were to be built comprised one certificate of title only, but subsequently the land was subdivided into three allotments, each with a separate title.
On 3 February 2000 the plaintiff lodged a lien over the original title which was Certificate of Title Register Book Volume 5605 Folio 963.
On 11 February 2000 the plaintiff issued proceedings seeking damages for breach of the building contracts with the defendants. Whether those proceedings amounted to “an action..... for enforcement of the lien” as required by Section 15, Worker’s Liens Act, 1893 is a matter of dispute. On the same day the Registrar-General of the Lands Titles Office issued three new certificates of title and noted on each the existence of the lien claiming the sum of $217,440.
The defendants filed a defence and counterclaim on 23 March 2000.
On 8 May 2000 the defendants applied to the Master for the following orders:
1.... That this application be heard specially returnable.
2.... That the Lien registered over Certificate of Title Register Book Volume 5605 Folio 963 known as and described as 31 to 33 Seaview Road, Tennyson in the State of South Australia by the plaintiff on 3 February 2000 cease.
3.... In the alternative, that the plaintiff withdraw the said lien.
4.... That the plaintiff pay the defendant’s costs of and incidental to this application.
5.... Such further Orders as this Honourable Court deems fit.
The application was brought pursuant to Section 32 of the Worker’s Liens Act, 1893.
Before that application was fully argued and on 29 June 2000, an order was made on the application of the defendants (and by consent) pursuant to Section 32 Worker’s Liens Act, allowing modification of the lien so that allotment number 1 (Volume 5733 Folio 819) could be sold and all the proceeds paid to the mortgagee.
Then by application dated 18 August 2000 the defendants applied to the Master for various orders including the following:
2. That the Plaintiff’s claim be struck out.
3...... That judgement be entered on the Plaintiff’s claim in favour of the Defendants.
The application to strike out the statement of claim was based on asserted deficiencies in its form. On appeal it was not sought to challenge that refusal.
That application and certain of the orders sought in the application of 8 May were fully argued before the Master and a decision was delivered on 23 October 2000. The following orders were made:
1...... I refuse the applications to strike out the plaintiff’s claims and for judgment for the defendants or for the liens registered by the plaintiff to be cancelled.
2. I order that the lien number 8831106 with respect to Certificates of Title Register Book Volume 5733 Folios 820 and 821 be modified to the effect that the lien on each such title is to be reduced to the sum of $180,720.00.
1. .... I direct the defendants to lodge minutes of order for settling and give liberty to either party to apply to attend before me to speak to the minutes and in relation to costs of and incidental to this application if so advised.
2. I give liberty to the plaintiff if so advised, to amend the statement of claim in terms of the matters referred to on the plaintiff’s behalf during argument, and the defendants are at liberty to amend their defence if so advised in consequence of any such amendment.
The defendants’ appeal against orders 1, 2 and 4 was lodged on 6 November 2000. On 1 December 2000 the plaintiff filed a cross-appeal, but that has been overtaken by a subsequent order made by the Master on 4 December 2000.
On that day orders in the following terms were made at the request of the defendants and by consent:
“The Defendants by their counsel having undertaken that the cancellation of the lien by this order does not have the effect of removing the foundation of the Plaintiff’s claim to enforce the lien and to seek declarations in respect thereof and the Defendants having this day lodged at Court an unconditional banker’s guarantee in the form attached to these minutes for an amount of up to $217,440.00 to abide the outcome of this action and so as to secure the cancellation of the lien claimed by Plaintiff in respect of Certificates of Title Register Book Volume 5733 Folios 820 and 821 THE COURT ORDERS:
1...... That the lien number 8831106 with respect to Certificates of Title Register Book Volume 573 Folios 820 and 821 be cancelled.
2.That the question of costs be reserved.
3. .... Liberty to apply to either party at short notice if necessary.
Three grounds of appeal were argued. The first complained of the Master’s failure to cancel the lien under Section 32 Worker’s Liens Act, the second of his failure to declare that the lien “ceased’ by reason of failure to take out proceedings properly viewed as being “for enforcement of the lien”, and the third related to the modification of the monetary amount reflected in the lien.
The defendants’ first argument was that the plaintiff had no right to a lien either against the original Certificate of Title or against the subsequently issued titles and that the Master erred in refusing to cancel the lien. In justification of its right to a lien the plaintiff relied on Section 5 of the Worker’s Liens Act. It provides as follows:
“5..... A contractor or sub-contractor shall have a lien for the contract price, so far as accrued due, on the estate or interest in land of any owner or occupier in each of the following cases:
(a) Where the work is done, with the assent, express or implied, of the owner or occupier to the land or to any fixture thereon:
(b) Where the materials are, with the assent, express or implied, of the owner or occupier, used or intended to be used in or about work done, or intended to be done, to the land or to any fixture thereon.”
17.............. The expression “contract price” is defined in Section 2 of the Act:
“Contract price” means the money payable to any contractor or sub-contractor for any work, or materials furnished or to be furnished in connection with work, under any contract, and whether such price has been fixed by express agreement or not.”
On the face of it the rights conferred by Section 5 would be available to the plaintiff, it having contracts with the defendants requiring it to do the building work and stipulating contract prices, and evidence having been provided that certain amounts had “accrued due”. However Mr Jenner, who appeared for the defendants, argued that Section 6(2) of the Building Work Contractors Act, 1995 operated to reduce the plaintiff’s position to that of a contractor claiming quantum meruit for the work carried out. That was so he said because the plaintiff was not licensed to perform work of the value stipulated under each contract. There has been no reply filed by the plaintiff denying the alleged deficiency in the plaintiff’s building licence.
Section 6(2) of the Building Work Contractors Act, 1995 provides as follows:
“A person required by this Act to be licensed as a building work contractor is not entitled to any fee, other consideration or compensation under or in relation to a contract with another on whose behalf the person performed work as a building work contractor unless -
(a) the person was authorised to perform the work under a licence; or
(b) a court hearing proceedings for recovery of the fee, other consideration or compensation is satisfied that the person’s failure to be so authorised resulted from inadvertence only.”
Both Mr Jenner and Mr Wilkinson, who appeared for the plaintiff, compared the wording of Section 6(2) with its predecessor, Section 39 Builders Licensing Act, 1986. In the newer provision the ambit of the disentitlement has been expanded from “any fee or other consideration” to “any fee, other consideration or compensation”. However, Mr Jenner did not rely on this alteration. His argument was that even under the earlier legislation, where contracts were rendered unenforceable by operation of Section 39, such contracts could not give rise to a right to a secured position under the Worker’s Liens Act.
Mr Wilkinson argued that Section 6(2) of the Building Work Contractors Act, 1995 did not render a contract void; rather it became unenforceable. He submitted that work done pursuant to such a contract was still “in connection with work, under any contract”. (See the definition of “contract price” set out above). Mr Wilkinson’s argument was accepted by the Master.
I have doubts as to whether an issue as fundamental to the plaintiff’s claim as this could properly be determined as an interlocutory matter by way of an application pursuant to Section 32.
But the defendants’ appeal faces another even more fundamental difficulty. The plaintiff contends that in view of the Master’s orders of 4 December 2000 cancelling the lien, any appeal against his earlier refusal to do so - and indeed any appeal against earlier orders modifying the effect of the lien - is incompetent. As Mr Wilkinson put it, “there are no legs left in the application appealed from”. The substantive orders sought in the application of 8 May 2000 having been obtained, although by a different means, there is nothing left for an appellate court to consider.
Acceptance of this agreement would dispose of all three grounds of appeal. Mr Jenner’s response to the argument did not, as I see it, meet the difficulty. He argued that upon a finding that the Master’s decision was wrong I could amend the appeal in terms of the relief sought (which was cancellation of the lien or, in the alternative, modification of it) and utilize Rule 97.1 (i) to reverse or vary the Master’s orders of 4 December, which he said were incidental to the decision under appeal.
In my view for the reasons advanced by Mr Wilkinson, the appeal is indeed incompetent. I find that in asking the court for an order that the lien be cancelled and in providing security for the plaintiff’s claim in the form of an unconditional bankers guarantee, the defendants effectively abandoned their rights under Section 32 Worker’s Liens Act.
Accordingly the appeal is dismissed. I will hear the parties on costs.
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