The Security of Payment legislation has strict time limits applying and if a party does not comply with the time limits important rights can be lost or onerous obligations imposed.

For this reason service of claims, applications and other documents under the legislation assumes a great importance but proving service is an issue that can be often overlooked. In the New South Wales case of Kittu Randhawa v. Monica Benavides Serrato [2009] NSWSC 170 the issue was whether the adjudicator's notice of acceptance of his appointment was served on the principal: if it was served then the principal was bound by the adjudication determination which found against her, if not then the adjudication determination would be invalid. The principal's evidence in court was:

"On 28 February 2008 I received an application for adjudication from the contractor. This was delivered by courier.

The next I heard of the adjudication was on 17 March 2008, which stated that the matter had already been determined by the adjudicator. I rang the authorised nominating authority to question why I had not been informed of the date of the hearing. I was advised that they had faxed the documentation over to me. I advised them that I did not own a fax machine, therefore it was impossible for me to have received the documentation."

The principal's evidence was, or at least implied, that she did not receive the adjudicator's notice of acceptance. The contractor, however, produced evidence from Australia Post that it "presumed that the notice of acceptance was delivered some time on 5 March 2008" from its records.

In New South Wales there is other legislation (Evidence Act and the Interpretation Act) which contains rebuttable presumptions that there is delivery of a letter to the designated address when posted. Under the Security of Payment legislation all that was needed to be established was delivery to the principal's address, not proof of actual receipt by her: in this case the presumption of delivery contained in the Evidence Act and Interpretation Act was sufficient - the evidence of the principal that she did not receive the notice was not enough to rebut the presumption of delivery by post.

In Victoria the presumption of delivery by post is in the Security of Payment legislation itself (section 50(2)(a)) so a similar result would likely apply in Victoria provided the contractor could provide proof of posting.

South Australia Comes Closer To Having Security Of Payment Legislation

A bill to introduce security of payment legislation into South Australia has been progressing through the South Australian Parliament.

If enacted, the Building and Construction Industry Security of Payment Bill 2009 will implement a scheme of security of payment almost identical to that in force in New South Wales.

Debate in Parliament about the Bill was adjourned on 5 March 2009 and it is not certain when it will be resumed. If passed the legislation will likely have a lead time of at least several months to allow time for the industry to familiarise itself with the requirements before they come into operation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.