Storage Liens Act 1935

The primary addressees are “storers”—persons lawfully engaged in the business of storing goods as bailees for hire (s 2). This definition is deliberately wide and, following the 2014 amendments, replaces the older “warehouseman” terminology. Any individual, partnership or corporation operating a warehouse, self-storage facility, container yard or similar business falls within the Act.

Owners of goods deposited for storage are directly affected. The Act protects their interests by mandating notice before any sale can occur and by preserving their entitlement to surplus proceeds. The definition of “owner” is extended by ss 5(5) and 6(8) to include any person who serves a written claim of ownership or interest together with identifying particulars; such a claimant must be given the same notices as the registered or apparent owner.

Persons who deposit goods without being the owner—carriers, agents, bailees or persons “entrusted with the possession of the goods by the owner or by his or her authority”—trigger the additional notice obligations in s 5. Their identity must be recorded and disclosed in the lien notice.

Creditors or security-interest holders who hold other interests in the stored goods are affected because the storer’s lien enjoys statutory priority (s 3(2)) and interacts with the Personal Property Securities Act 2009 (Cth). Any secured party must be aware that a properly asserted storage lien may rank ahead of a registered security interest.

The Local Court is given jurisdiction to stay sale proceedings on the application of an owner (s 6(6)), so judicial officers and court staff must administer that summary jurisdiction. Purchasers at auction sales authorised by the Act receive good title free of prior interests once the statutory formalities are observed, although the Act does not contain an express market-overt provision; title passage is implied by the power of sale and the substantial-compliance rule in s 7.

Regulators and the NSW legislation website administrators are indirectly affected by the requirement to publish regulations governing advertisement notices and service methods. Finally, the Unclaimed Money Act 1995 regime is engaged whenever surplus proceeds remain unclaimed for 14 days after sale (s 8(2)), bringing the Chief Commissioner of Revenue into the picture as ultimate recipient of unclaimed storage-sale surpluses.

Storers’ principal right is the lien itself (s 3(1)). That right carries with it the power to retain possession until charges are satisfied and, after due notice, to sell by public auction (s 6). The lien’s priority over other interests (s 3(2)) is a powerful right that can displace earlier registered security interests provided the PPSA interaction in s 3(3) is observed. Storers also enjoy the protection of the substantial-compliance rule in s 7(1), which prevents technical defects from automatically voiding the lien or sale.

Corresponding duties are onerous. Before selling, a storer must give accurate, itemised written notice containing all matters listed in s 6(4) and must observe the minimum one-month waiting period. Where the depositor was not the owner, the additional two-month notice under s 5 must be given to every known interested person; failure voids the lien against those not notified. When goods are intermingled, the storer must treat the owner as a co-owner of an undivided share and must be prepared to deliver equivalent quantity from the bulk (s 9A). After sale the storer must account strictly for proceeds, deliver a statement of account, and remit any surplus or pay it into the unclaimed money regime.

Owners’ key rights are to receive notice before any sale, to pay out the lien at any time before auction (including all accrued notice and advertising costs) and thereby obtain return of the goods (s 9), and to receive any surplus with a statement of account (s 8(1)). An owner may also apply to the Local Court for a stay of sale proceedings (s 6(6)). Where goods are intermingled, the owner acquires statutory co-ownership rights and the benefit of the deemed-consent and no-cause-of-action protections in s 9A(5)–(6).

Persons claiming an interest without being the depositor have the right to be notified under both ss 5 and 6 once the storer has “actual knowledge” of their interest. They may also serve a written ownership claim under the extended definition in ss 5(5) and 6(8), which then obliges the storer to treat them as an “owner” for notice purposes.

Both storers and owners benefit from the equitable safety-net in s 7(1). A court may uphold a notice that is not strictly compliant if substantial compliance is shown or if voiding the lien would be inequitable. This mitigates the risk of technical invalidity that has historically plagued lien legislation.

The Act creates no criminal offences or monetary penalties. Enforcement is purely civil and commercial. The principal sanction for a storer who fails to give the s 5 notice within two months is that the lien becomes void against the person not notified (s 5(4)). Similarly, a defective s 6 notice that cannot be saved by s 7 risks rendering the sale invalid, exposing the storer to conversion or detinue claims by the true owner.

The storer’s ultimate enforcement weapon is the statutory power of sale by public auction. Once the notice formalities are satisfied and the waiting period expires, the storer may sell without further court order. Title passes to the purchaser provided the sale complies with the Act; the substantial-compliance rule in s 7(1) protects both the lien and the purchaser from technical objections.

An owner may restrain an impending sale by obtaining a Local Court order under s 6(6). Breach of such an order renders further proceedings “illegal”. The owner may also pay out the lien at any time before sale under s 9, thereby halting the process.

Surplus proceeds are dealt with under s 8. Failure to account properly or to pay the surplus to the entitled person would expose the storer to an action for money had and received or breach of trust. After 14 days the surplus is automatically treated under the Unclaimed Money Act 1995; failure to remit would breach that Act’s obligations.

Because the lien is declared to have priority and to engage s 73(2) of the Personal Property Securities Act 2009 (Cth), enforcement disputes are likely to arise in the Federal Court or Federal Circuit and Family Court when competing PPSA secured parties are involved. However the Storage Liens Act itself supplies no enforcement machinery beyond the sale power and the Local Court stay jurisdiction.

The Act is expressly linked to the Personal Property Securities Act 2009 (Cth). Section 3(3) declares that s 73(2) of the PPSA applies to a storer’s lien. The effect is to give the lien the super-priority afforded to certain statutory liens that arise by operation of law and that secure payment for services provided in the ordinary course of business. Storers therefore do not need to register the lien on the PPS Register to maintain priority against perfected security interests, although prudent practice may still involve precautionary registration.

Section 8(2) cross-references the Unclaimed Money Act 1995. Once 14 days have elapsed after sale, any unclaimed surplus is treated as though the storer were an “enterprise” and the money “unclaimed money”. The Chief Commissioner may then call for the funds and the storer obtains a statutory discharge.

The Sale of Goods Act 1923 (NSW) is implicitly engaged when title passes on auction sale, although the Storage Liens Act supplies its own power of sale. The 2006 insertion of s 9A mirrors the bulk-goods rules introduced into the Sale of Goods Act by the same amending statute (Sale of Goods and Warehousemen’s Liens Amendment (Bulk Goods) Act 2006), ensuring consistency of ownership rules for fungible stored commodities.

The Act replaces the older Warehousemen’s Liens Act terminology. Section 12 provides a statutory interpretation rule that any reference in any other Act, instrument or document to a “warehouseman’s lien” is taken to be a reference to a storer’s lien, thereby preserving continuity across the statute book.

Service rules in s 10A are expressed to be additional to, and not in substitution for, any other statutory or court rules on service. The Electronic Transactions Act 2000 (NSW) would therefore support the validity of electronic service where the recipient has specified an email or other electronic address.

Schedule 1 and s 10 contain transitional provisions that adjust the operation of the Act for pre-commencement deposits, ensuring that older bailments are not suddenly subjected to new procedural hurdles without notice.

The Act has been amended on more than a dozen occasions since 1985. The most significant recent changes illustrate a legislative policy of modernisation, alignment with national personal-property law, and reduction of regulatory burden.

The 2014 amendments (Storage Liens Amendment Act 2014, inserted via the Statute Law (Miscellaneous Provisions) Act (No 2) 2014 No 88) replaced every reference to “warehouseman” with “storer”, updated definitions, inserted the priority statement in s 3(2), added the PPSA declaration in s 3(3), and inserted the interpretive rule in the new s 12. These changes were designed to remove archaic language and to clarify the lien’s place within the PPSA hierarchy following the 2010–2012 national reform.

The 2006 insertion of s 9A (by the Sale of Goods and Warehousemen’s Liens Amendment (Bulk Goods) Act 2006 No 119) addressed a practical problem in the grain, fuel and commodity storage industries where goods of the same kind are routinely commingled. The provision implements the undivided-share model recommended by the Australian Law Reform Commission, ensuring that owners retain proportional property rights and that storers are not exposed to multiple delivery claims for the same fungible mass.

The 2020 amendments via the Better Regulation Legislation Amendment Act 2020 No 25 substituted a simpler rule in s 8(2) referring directly to the Unclaimed Money Act 1995. The savings clause in Schedule 1 Part 2 makes clear that the pre-2020 version (which required payment into court or to the Treasurer) continues to govern sales that occurred before the repeal. The change reduced administrative burden on storers by leveraging an existing unclaimed-money regime.

Most recently, the 2024 amendments (part of the Justice Legislation Amendment Act 2024 No 25) inserted a comprehensive service-of-documents rule in s 10A, updated cross-references, and made minor wording changes to ss 4, 5, 6, 7 and 8. The new s 10A permits email and other electronic service where an address has been specified, reflecting post-COVID acceptance of digital communication and reducing postage and printing costs. Consequential amendments to the regulation-making power in s 7 and Schedule 1 ensure that advertisement rules can still operate when electronic service is impossible.

These changes collectively demonstrate a legislative intent to keep an 89-year-old statute fit for purpose in a digital, nationalised personal-property-security environment while preserving its core protective balance between storer and owner.

The printed text of the Act itself contains no reported cases or explicit legislative notes recording specific court challenges. However the structure of the legislation reveals areas that have historically generated dispute and therefore prompted amendment.

The notice requirements in ss 5 and 6 have been a perennial source of technical litigation under predecessor warehousemen’s lien statutes. The insertion of the substantial-compliance rule in s 7(1) (originally enacted in 1935 and retained) was a direct legislative response to decisions that had voided otherwise meritorious liens for minor defects in description or timing. Courts are therefore directed to inquire into whether “it would be inequitable that the lien or sale shall be void by reason of such non-compliance”.

The interaction with the PPSA generated uncertainty after 2012. The 2010 and 2014 amendments that inserted s 3(2) and (3) were designed to remove doubt that storage liens fall within the s 73(2) exception and therefore enjoy super-priority without registration. Litigation between storers and secured creditors in the Federal Court has tested the exact boundaries of “actual knowledge” of other interests under ss 5 and 6; the Act’s use of that phrase rather than the PPSA’s “constructive knowledge” standard has required careful factual analysis.

The intermingled-goods provisions in s 9A have attracted academic and industry commentary concerning the proportionate-reduction rule in s 9A(4) when multiple depositors’ goods are mixed and some are withdrawn. No specific controversy is recorded in the Act, but the deemed-consent and no-cause-of-action shield in s 9A(5)–(6) was clearly intended to prevent conversion claims that had arisen under the general law of bailment.

The 2020 change to surplus-proceeds handling attracted no recorded controversy; it was part of a broader “better regulation” exercise to eliminate redundant payment-into-court mechanisms. The 2024 service amendments are too recent for reported challenges, but the non-exhaustive nature of s 10A(2) is likely to generate future argument about whether service by a method not listed (for example, social-media messaging) can be valid under general law.

Overall the Act has been kept relatively litigation-light by the combination of the equitable safety-net in s 7(1) and the detailed, prescriptive notice templates that reduce ambiguity.

Most practitioners assume that once a lien notice has been posted the one-month clock starts automatically. Section 6(4)(d) ties the deadline to “the delivery of the notice if it is personally delivered, or from the time when the notice should reach its destination according to the due course of post if it is sent by post”. In an era of tracked courier deliveries and email (now permitted under s 10A), disputes frequently arise over when the “due course of post” period expires; the prudent storer obtains evidence of actual or deemed receipt.

The “actual knowledge” trigger in ss 5(1)(b) and 6(2)(c) is narrower than the PPSA’s constructive-knowledge test. A storer who has been told in general terms that finance is secured over a customer’s stock may not have “actual knowledge” of a specific security interest in the stored goods. Failure to give notice to that financier can leave the lien vulnerable, yet giving notice to every possible financier mentioned in passing can be commercially impractical. The point is rarely appreciated until the financier appears at auction claiming priority.

Section 6(7) contains a trap for the unwary: even if the customer has not paid for 18 months, goods deposited before the 1989 amending Act cannot be sold unless “at least some part of the charges in arrears relates to a period more than 12 months before the date on which the notice of intention to sell is given”. A storer who allows charges to accrue continuously may inadvertently lose the power of sale if the oldest unpaid invoice is only 11 months old when notice is issued.

The intermingled-goods rules in s 9A(3) and (4) can produce counter-intuitive results. If multiple owners deposit identical goods and the storer has already delivered part of the bulk to one co-owner, every other owner’s undivided share shrinks automatically. An owner who believes it still owns 100 tonnes may discover it is entitled only to a proportionate share of whatever remains. The deemed-consent rule in s 9A(5) means that an owner cannot later complain that another co-owner removed “its” goods; many storage contracts therefore contain express opt-out clauses under the opening words of s 9A(2).

Finally, the extended definition of “owner” in ss 5(5) and 6(8) is often overlooked. A finance company or lessor who serves the statutory written claim immediately becomes entitled to every notice the storer must give. Storers who treat only the depositor as the owner risk rendering their lien or sale void against the unnoticed financier.

A compliant storer should maintain a written bailment register recording, for every deposit: the depositor’s name and authority, the apparent owner’s identity and contact details, any written ownership claims received under the extended definition, a precise description of the goods, date of deposit, location, and a running account of all charges broken down into the categories in s 4.

Where the depositor is not the owner, a s 5 notice must be prepared and served within two months. The notice must contain every particular listed in s 5(2); a checklist is advisable. Service should be effected by a method permitted under s 10A and proof of service retained.

When charges fall into arrears, a storer intending to sell must prepare a s 6 notice that is itemised, states a payment deadline at least one month away, and specifies the auction time and place. The notice must be given to the debtor, the owner and every person of whose interest the storer has actual knowledge. If any addressee is unknown, regulations made under s 7(3) should be consulted for advertisement requirements; the advertisement will then be deemed personal service on the date fixed by those regulations.

The storer must keep the goods safely until the sale date or until the lien is paid out under s 9. Any payment received must be applied first to satisfy the lien; only then may the goods be released to the person entitled to possession under the original contract.

If the goods have become intermingled, the storer must calculate each owner’s undivided share under the formula in s 9A(3), reduce shares proportionately if necessary under s 9A(4), and be ready to deliver an equivalent quantity from the bulk. Records must be kept to demonstrate compliance with the deemed-consent regime.

After a successful auction the storer must prepare a statement of account, pay the lien from the proceeds, and remit any surplus immediately to the entitled person. If the surplus is not claimed within 14 days it must be dealt with under the Unclaimed Money Act 1995; failure to remit will breach that Act.

All notices should be retained for at least seven years. Where any doubt exists about the sufficiency of a notice, the substantial-compliance protection in s 7(1) should be kept in mind, but it is not a substitute for meticulous drafting. Finally, storage contracts should be reviewed to ensure they do not attempt to contract out of the statutory notice periods or the intermingled-goods rules unless the opt-out is expressly permitted by the Act. Regular staff training on the distinction between “actual knowledge” and mere suspicion, and on the precise timing rules in ss 5 and 6, will prevent the most common compliance failures.