A payment claim will generally be validly served if it is
received at any office.
The NSW Court of Appeal has recently confirmed that the
"ordinary place of business" for the purpose of serving a
payment claim need not be an organisation's site office:
Downer EDI Works Pty Ltd v Parsons Brinckerhoff Australia Pty
Ltd  NSWCA 78.
It is likely that, given the similarities between the
legislation considered and existing legislation in Queensland,
Tasmania, Victoria and South Australia, this decision will have a
wider impact in these states also.
Large organisations with multiple offices should be particularly
wary of any payment claims received as this decision ensures that
in most circumstances claims will likely be taken to have been
validly served if received at any one of their offices.
What happened here?
Downer EDI Works Pty Ltd and Parsons Brinckerhoff Australia Pty
Ltd were parties to a construction contract. Parsons faxed Downer a
payment claim under the Building and Construction Industry Security
of Payment Act 1999 (NSW). One fax was sent to Downer's
Melbourne office, the other to its office in Broadmeadow, NSW. The
Melbourne office is Downer's registered head office and the one
in Broadmeadow is a regional office. There was also a site office
Downer argued that Parsons had failed to serve the claim
properly because neither the Broadmeadow nor the Melbourne office
was its "ordinary place of business". Rather, Downer
argued that the claim should have been served at the Glendale site
office. This it was argued, would ensure there was some connection
between the transaction which was the subject of the payment claim
and the relevant works site office. Downer argued that, where there
were multiple offices, "ordinary place of business"
referred to that location having the closest connection to the
works the subject of the relevant construction contract.
On appeal, the only issue was whether the Melbourne or
Broadmeadow Office was Downer's ordinary place of business.
What did the Court decide?
The Court of Appeal held that Downer could have more than one
ordinary place of business for the purpose of the service of
payment claims. Further, the ordinary place of business for the
receipt of such claims need not be that office with the closest
connection with the works the subject of the claim.
The Melbourne office was considered Downer's ordinary place
of business for the purposes of serving a payment claim. Parsons
had therefore properly done all that was necessary in serving a
payment claim on the Melbourne office. It was not necessary that
the claim be served on the site office with the closest connection
to the relevant works the subject of the claim.
Does that mean every office may be an "ordinary place of
No. This decision does not extend the definition of
"ordinary place of business" to every place where the an
organisation carries on any kind of business. The
Court did suggest that where a business' operations include
construction and non-construction related activities, it may well
be that the ordinary place of business is the office with some
relevant operational connection with the construction work in
What steps should be taken?
To avoid doubt, contracting parties should ensure that
contracts clearly identify the relevant address and contact details
for the service of payment claims and other formal notices;
where an organisation has multiple offices, appropriate
procedures should be put in place to ensure that appropriate
persons actively keep an eye out for payment claims and, when
received, ensure that claims are promptly given to the relevant
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