Editors Comment
The following case note is extracted from a commentary published by lawyers, Colin, Biggers & Paisley. The authors and their disclaimer are acknowledged at the bottom of this post. [Note that the Applicant in the court case is the Respondent to the adjudication application and the Respondent to the court case is the Claimant in the adjudication].
We know that it may be difficult for courts and legislators to keep up with fast-changing technology.
This judgement, overturning and adjudication decision, is a disappointing interpretation of the law in relation to electronic transaction of documents that sets a precedent for the immediate future of electronic service of notices.
The court once again took a narrow view on the meaning of "telex, facsimile or similar. (Now redundant technologies. If you are under 60, here is a picture of a telex machine), following the decision of an earlier judgement (Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd [2015] 1 Qd R 265; [2014] QSC 30).
At the present time, in Queensland, asking another party to open a link is not accepted as valid service of a notice or document, unless your contract specifically provides for it. This would, by definition, include proprietary project information management systems (PIM) such as Aconex and the like.
In this case, the respondent what advised in an email of the contents of the dropbox and chose not to open it, thereby "not becoming aware" of the contents of the supporting submissions. (A bit like the old trick of refusing to accept registered mail).
Contractors and subcontractors should be aware of the implications. Most modern email clients will either automatically or optionally link large files to a linked file transfer service or dropbox rather than send them as an attachment. It is a more convenient and secure way to transfer large files.
To avoid getting caught with this problem we recommend your contracts and subcontracts include a clause similar to this: "Unless otherwise agreed in writing, all correspondence, including notices shall be made on the addresses given for notices in this contract (including email addresses).
The Parties hereby agree to electronic transaction of documents under the Electronic Transactions Act (Queensland) 2001(ETAQ). Electronic transaction shall include documents uploaded or made available to a proprietary project information management system, Dropbox or similar service or system, provided that the recipient is notified by email of the existence and availability of the transmitted document(s). The date and time-stamped email notification shall take preference over system or dropbox time. All times shall be nominated in Australian Eastern Standard Time. (AEST)".
Be careful to nominate the email addresses for all notices in your contract, and to change them if they change. There are time implications under the Electronic Transactions Act (Queensland) 2001(ETAQ) if the recipient is not nominated.
Supreme Court of Queensland decides that an Adjudication Application can not be served by Electronic Link
Summary
The case of McCarthy v TKM Builders Pty Ltd & Anor [2020] QSC 301 concerned an application by McCarthy (Applicant) to the Supreme Court of Queensland in relation to whether TKM Builders Pty Ltd (Respondent) had properly served on the Applicant supporting submissions to the Respondent's adjudication application for an adjudication under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act).
The Respondent attempted to serve on the Applicant an adjudication application in relation to a dispute regarding progress payments connected with a construction contract for a building project at Bells Creek.
The Respondent sent the adjudication application to the Applicant via an email with the adjudication application attached to the email and the supporting submissions accessible through a Dropbox link contained in the text of the email. The Applicant did not open the Dropbox link and argued that the supporting submissions were not served in accordance with the BIF Act.
The Court considered the provisions of the BIF Act and the Acts Interpretation Act 1954 (AIA) and concluded that the adjudication application had not been served.
Service requirements
The Court firstly considered the relevant law. The BIF Act sets out the regime for the adjudication of disputed progress payment claims and section 79 required that a copy of the adjudication application be given to the Applicant.
The BIF Act states in section 102 that service of a notice, which includes the giving of an adjudication application, may be by the following:
in accordance with the way, if any, stated in the relevant construction contract; or
in accordance with the methods stated in the AIA. [AIA is the Acts Interpretations Act]
The AIA states in section 39 that a document may be served on an individual by the following:
delivering it to the person personally; or
by leaving it at, or by sending it by post, telex, facsimile or similar facility to, the address of the place of residence or business of the person.
Decision
Having considered the Basetec Decision, and the methods of service stated in section 39 of the AIA, the Court stated that the Applicant had not become aware of the contents of the supporting submissions merely by being referred to a Dropbox link. Therefore, the Court held that the supporting submissions were not served in accordance with section 39 of the AIA or section 79 of the BIF Act.
Nadia Czachor, Ian Wright and Alexa Brown - Colin Biggers & Paisley
This case note is extracted from a commentary published by Colin Biggers & Paisley for general information purposes only. It should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change.