The Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) imposes a strict time limit for responding to a payment claim. Under Queensland rules the respondent has fifteen business days in order to respond to a payment claim with a payment schedule. Under the equivalent New South Wales legislation, it is only ten business days (Prescribed Period). If a payment schedule is not served within the Prescribed Period, the respondent loses the opportunity to respond entirely.
Recent NSW Supreme Court judgments show some of the pitfalls practitioners may encounter when serving documents within the Prescribed Period.
Demex Pty Ltd v John Holland Pty Ltd [2022] QSC 259
Relevant Facts
Demex sent a payment claim to John Holland by email on 25 September 2021, a Saturday.
On 12 October 2021, John Holland responded by providing Demex with a payment schedule.
It should be noted here that while the proceeding was commenced in the Supreme Court of Queensland, it appears that the relevant construction contract was subject to the laws of New South Wales.
While there were other arguments in play, the dispute ultimately turned on the question of whether John Holland’s payment schedule was provided to Demex within the ten business day Prescribed Period under the New South Wales rules.
Section 36(1) of the Interpretation Act 1987 (NSW) provides in respect of the reckoning of time, that if in any Act or instrument a period of time, dating from a given … act or event … is prescribed or allowed for any purpose, the time shall be reckoned exclusive of … the day of that act or event.
John Holland argued that because the payment claim was provided to them on a non business day (Saturday), it should be deemed to have been served on the following Monday and therefore (in accordance with Section 36 of the Interpretation Act) the first day of the Prescribed Period would be the following Tuesday. Under this view of the universe, the final day of the ten day period would be 12 October 2022.[1]
Demex argued that there was no provision under the contract, legal principle or law that prevented service of their payment claim on a Saturday and that therefore the first day of the Prescribed Period would be the following Monday. Under this view of the universe, the final day of the ten day period would be 11 October 2022 and therefore John Holland’s payment schedule was served out of time and is invalid.
Decision
The Court found that John Holland’s argument that the payment claim should be deemed to have been served on the Monday did not hold water.
Demex were correct in arguing that without some contract provision to the contrary, a payment claim may be served on the weekend.
Despite this, the Court did eventually rule that the payment claim was in fact served on John Holland on the Monday, and therefore its payment schedule was provided to Demex in time.
This is because while Demex had shown that it had sent its payment claim to John Holland by email on Saturday, 25 September 2021, they failed to prove that it had been received by John Holland’s email address on that same date. John Holland argued that the onus was on Demex to prove when the email was received by John Holland and it had adduced no evidence on that point. The Court agreed and found that the evidence before it was only sufficient to show that the payment claim had been received by John Holland on the Monday and no earlier.
Takeaways
This case is a good reminder that a respondent to a payment claim must take extreme care to make sure that it responds with its payment schedule within the Prescribed Period. A miscalculation of even one day can be fatal.
Secondly, as a general rule payment claims and payment schedules should not be served by email. Instead hard copies should be served at a company’s registered office or served personally. This will put to bed any argument about whether or when they were received.
Finally, it provides an interesting lesson in respect of ensuring that each fact in dispute is properly addressed by evidence. It should not be presumed that the Court will take judicial notice of a fact, even something as simple as whether an email is received soon after it is sent. Further, it might pay to brief, at least, a junior barrister who predominantly practices in the State whose laws are to be applied. In this case such a person may have been aware of s161 of the Evidence Act 1995 (NSW) which contains a rebuttable statutory presumption that an email is received at its destination at the time it was sent.
If you would like to discuss this article in more detail, please contact Tony Mylne or Francis Joseph.
[1] For the benefit of the sharp eyed it should be noted that this period included a public holiday.
Individual liability is limited by a scheme approved under professional standards legislation (personal injury work exempted).