Security of payment – Importance of proving service

The recent case of Equinox Construction Pty Ltd v Henning & Anor [2021] QSC 223 confirms the importance of providing sufficient evidence to prove ‘service’ of an Adjudication Application under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act). Inability to confirm proper service will likely result in the Adjudication decision being voided by the courts. ?

Facts

Mr Henning served a payment claim on Equinox who failed to pay the claim or issue a payment schedule. Mr Henning submitted an Adjudication Application under the BIF Act, and allegedly posted a copy of the Adjudication Application to Equinox.

The Adjudicator made a determination in favour of Mr Henning and notified Equinox of its decision. Equinox claimed that it had not received a copy of the Application. Equinox applied to the court for the Adjudication Decision to be voided for jurisdictional error on the basis it had not received a copy of the Adjudication Application as required under the BIF Act.

Discussion

The court held the Adjudication Decision was void, and in doing so, referred to the decision of Niclin Constructions[1], where it was found that ‘service’ of an Adjudication Application was required for a valid Adjudication Decision.

Section 79(3) of the BIF Act requires a Claimant to ‘give’ a copy of the Application to the Respondent. Mr Henning claimed that he attended a post office ‘in order to’ send the Adjudication Application to the Respondent’s address ‘as per the QBCC’s Licence Search’ at that time, however he did not actually exhibit a copy of this search to his affidavit. The QBBC records were later supplied after a request for further submissions.

The court noted other deficiencies in both Mr Henning’s and Equinox’s evidence:

1.????The photograph presented by Mr Henning showed the envelope that enclosed the Adjudication Application with a handwritten address on it and the post office’s clock in the background. The photograph was of ‘such poor quality’ that the court was unable to conclude whether there was a clock in the background and what date and time the clock showed;

2.????The envelope bore a ‘postage paid’ marking but Mr Henning did not state how the postage of the envelope was actually paid or calculated.?The court could not definitively conclude whether the pre-paid envelope covered the cost of posting its contents, or whether the envelope had to be additionally franked to cover its postage, and how Mr Henning paid for its postage;

3.????The address on the envelope was not identical to the address on Equinox’s purchase order referred to in Mr Henning’s affidavit;

4.????The address on the envelope was not identical to Equinox’s registered office address as per the ASIC records;

5.????Mr Henning did not explain how he posted the envelope (i.e. whether he had placed it in a red post box or handed it over the counter at Australia Post);

6.????Equinox claimed that its registered address had always been its accountant’s address, and that it had moved addresses, however there were inconsistencies on when that date occurred;

7.????The accountant failed to provide details of its old or new address stated in the application for redirection of mail;

8.????The redirect mail form failed to provide sufficient details of the old or new address stated in the application for redirection and the photocopy did not capture all necessary details to substantiate when the form was completed; and

9.????Both the QBCC and ASIC records failed to reflect the dates in which Equinox’s accountants had moved.

Section 39A of the Acts Interpretation Act 1954 (Qld) (AIA) provides that service is taken to have been effected at the time at which a letter would be delivered in the ordinary course of post, unless the contrary is proved. The court noted that Mr Henning did not set out the steps under the AIA.

Decision

The court said inferences could have been made from Mr Henning’s affidavit that a reasonable person would have followed through with their stated intentions. However, the court concluded that there was ‘insufficient proof’ that the Adjudication Application had been ‘given’.

In making its decision, the court acknowledged that Mr Henning did not make an actual statement regarding whether he had posted the Adjudication Application at the post office, or whether he had placed it in a red post box and that Mr Henning only attended the post office ‘in order to’ post it. Lastly, he did not explain whether he had purchased the pre-paid envelope or how the prepaid postage was to be used.

This case serves as a pertinent reminder to ensure you document service once effected, by preparing a written statement (with clear steps outlining the actions taken), taking quality photographic evidence or recording adequate tracking information.

Lamont Project & Construction Lawyers

Our Team have the industry knowledge and experience to assist both Principals and Contractors in any Security of Payment issue. If you would like to discuss any matters raised in the above article as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.

The contents of this article is for information purposes only; it does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.

Contact:?Peter Lamont?or Natalie McNeill

Email:[email protected] or [email protected]

Phone:?(07) 3248 8500

Address:?Suite 1, Level 1, 349 Coronation Drive, Milton Qld 4064

Postal Address:?PO Box 1133, Milton Qld 4064

[1] Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor [2019] QCA 177.