Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd - [1987] HCA 10 - HCA 1982 case summary — Zoe

[21]

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. (The Liens Act operates in the Northern Territory by virtue of s. 3 of The Northern Territory Justice Act 1884 S.A., s. 7 of the Northern Territory Acceptance Act 1910 Cth and s. 57 of the Northern Territory (Self-Government) Act.) Burgundy Royale is not an "owner" of Lot 5335. That term is defined by s. 2 of the Liens Act to mean "the owner of the legal or equitable fee simple of land". But Burgundy Royale is an "occupier". That term is defined to include a lessee of land. Section 6 of the Liens Act provides that a contractor's lien shall not extend "beyond that portion of the contract price payable by the owner or occupier under the contract and unpaid at the time when the owner or occupier shall receive notice of the lien or of its registration ". Jennings registered its liens by lodging notices of lien in the office of the Registrar-General in respect of the several amounts which it claimed to have become due and payable. That was done in conformity with s. 10(3) in order to satisfy the requirement of s. 10(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. A memorandum of each notice was registered on the relevant folio of the register book. The notices had the effect of caveats by reason of s. 12 of the Liens Act which provides: A notice lodged in respect of land under the provisions of the Real Property Act shall be deemed to be a caveat forbidding the registration of any dealing with the estate or interest sought to be affected by the lien, unless such dealing shall be expressed to be subject to the claim of the person lodging the notice, 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. It is said that the liens or lodgments of the notices of lien have conferred on Jennings such an estate or interest in the land as to enable it to prevent Burgundy Royale from surrendering Crown Lease Term No. 115 without Jennings' consent: see s. 92 of the Real Property Act N.T.. If this be so, the presence on the register of the notices of lien has prevented Burgundy Royale from obtaining the grant of an estate in fee simple pursuant to condition 7 and from completing its obligation to effect a sub-division of Lot 5335 and to transfer to the Darwin City Council an unencumbered title to the Performing Arts Centre.

[25]

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 primary ground advanced by Burgundy Royale as warranting an order of cancellation under s. 32 was derived from the provisions of s. 48: Nothing in this Act contained shall create or give any right or remedy against land vested in Her Majesty or in any person for or on behalf of the Government or increase or change the liability of Her Majesty, or of any person procuring the performance of work for or on behalf of the Government and, except as between the contractors, sub-contractors, and workmen, this Act shall not apply to such work. The argument which prevailed before Kearney J. and before the Court of Appeal (O'Leary C.J., Rice and Asche JJ.) was that no right or remedy had been created in favour of Jennings or given to it which might be enforced in any of the seven actions for the reason that what was sought in the actions was a right or remedy "against land vested in Her Majesty". Jennings conceded that Lot 5335 was Crown land and that the Crown was the owner of the reversion of the lease. In the courts below, the Crown's interest in Lot 5335 was seen to stamp on that land the character of "land vested in Her Majesty". Their Honours applied the reasoning in Hawkins v. Minister for Lands (N.S.W.) [1] . In that case the question was whether land over which a perpetual lease had been granted was within the definition of "Crown lands". By the relevant statutory definition, "Crown lands" meant "lands vested in His Majesty and not permanently dedicated to any public purpose or granted or lawfully contracted to be granted in fee simple under the Crown Lands Acts". Dixon J. said [2] : No doubt the reversionary interest in the Crown is slight and it may be said to be technical. But a rent is reserved, there are special conditions, the interest is capable of surrender and, for non-payment of survey fees, of forfeiture. It is difficult to find any ground for giving to the word "vested" anything but its legal meaning. It can hardly be confined to "vested in possession." The reference in the exclusionary part of the definition to land granted in fee simple tends strongly against the view that after the grant of a limited interest in possession land is no longer "vested" in the Crown for the purposes of the definition. In my opinion land subject to a Crown lease in perpetuity may still be "vested in His Majesty". See also per Latham C.J. [3] ; McTiernan J. [4] ; and Williams J. [5] . We are not concerned in the present case with a definition which excludes land "granted in fee simple", but the reasoning in Hawkins does not rest solely or chiefly on the exclusion contained in the definition there considered. The reasoning in Hawkins establishes, as their Honours rightly held in the Supreme Court, that Lot 5335 might properly be described as land vested in Her Majesty. But that does not conclude the question. The critical question is whether the land "against" which the Liens Act creates or gives a right or remedy is land vested in Her Majesty. To answer that question it is necessary to identify what the statutory right or remedy is given against. 1. (1949) 78 C.L.R. 479. 2. (1949) 78 C.L.R., at p. 492. 3. (1949) 78 C.L.R., at p. 487. 4. (1949) 78 C.L.R., at p. 496. 5. (1949) 78 C.L.R., at p. 499.

[29]

Burgundy Royale submits that the Crown does have an equitable interest in Crown Lease Term No. 115 and reference is made to three supposed sources of that interest. It is said that the interest arises from the terms of the Development Agreement, from the provision of funds for the construction of the Performing Arts Centre, and from Burgundy Royale's obligation to transfer an unencumbered title to the Performing Arts Centre to the Darwin City Council when construction is complete and a separate unit title has issued. Emphasis is placed on cl. 8(c) of the Development Agreement requiring funds received from the Territory to be held in trust until applied to the cost of construction of the Performing Arts Centre, on cl. 22(b) requiring Burgundy Royale to provide the Darwin City Council with chilled water and hot water for airconditioning purposes, and on cl. 22(c) requiring Burgundy Royale to grant to the Darwin City Council a registrable long-term lease at a nominal rent of fifteen car parking spaces in the Darwin Centre carpark. Although the Development Agreement provides expressly for moneys awaiting application to defray the costs of construction of the Performing Arts Centre to be held in trust, Burgundy Royale alone is responsible for paying the builder. Burgundy Royale is responsible to the builder, not as trustee or agent for the Territory but on its own account. Under the Development Agreement, Burgundy Royale alone is responsible for all aspects of the building contract: see cll. 3, 4, 6. The Development Agreement does not imply that, when Burgundy Royale applies moneys held in trust under cl. 8(c) to pay the builder, it is paying its debts with the Territory's money: on application of the money in payment of the builder the money is, as between Burgundy Royale and the Territory, money which the Territory pays to Burgundy Royale or money which the Territory authorizes Burgundy Royale to apply as its own by paying it to the builder. The trust is merely the mechanism to ensure that Burgundy Royale has the money on hand to make timely payment of the costs of construction of the Performing Arts Centre and to ensure that the money belongs to the Territory until the builder is paid and that the Territory obtains the yield on the money pending payment.

[30]

It was submitted that the Territory was in a position akin to that of a purchaser of property in whom is vested an equitable interest in the property. There are difficulties in the way of accepting this submission. In the first place, it is by no means clear that the Territory would have been entitled to a decree of specific performance, and it is therefore doubtful whether (in the absence of such an entitlement) the Territory could have acquired an equitable interest: McWilliam v. McWilliams Wines Pty. Ltd. [7] ; Perri v. Coolangatta Investments Pty. Ltd. [8] . However that may be, it is clear that the Darwin City Council, not the Territory, is to take the benefit of the provisions of the Development Agreement as to the Performing Arts Centre. If the Territory was entitled to a decree compelling Burgundy Royale to complete the construction of the Performing Arts Centre, to surrender the lease, to obtain a unit title to the Centre and to transfer it to the Darwin City Council, any equitable interest in Lot 5335 that might arise would be vested in the Darwin City Council not in the Territory. Nor is any equitable interest vested in the Territory by the Territory's providing money to Burgundy Royale to pay for the construction of the Performing Arts Centre. Burgundy Royale relied on Plimmer v. Wellington Corporation [9] and Olsson v. Dyson [10] , but, as the judgment of Ungoed-Thomas J. in Ward v. Kirkland [11] (approved in Olsson v. Dyson) demonstrates, the equitable principle illustrated by Plimmer's Case has no application unless it would be unconscionable for a party to assert his legal rights. There is nothing unconscionable in Burgundy Royale taking the benefit of the money provided by the Territory in accordance with the terms of the Development Agreement. The ongoing obligations with respect to the provision of chilled water and hot water and the granting of a lease of car parking spaces create no equitable interest in the Territory. There is thus no ground for holding that the Territory has an equitable interest in Crown Lease Term No. 115. That lease is not "land vested in Her Majesty".

At a glance

Court

Decision date

Before

Source

Judgment (45 paragraphs)

Parties

Cited By (2)