The Queensland Supreme Court has recently annulled a Security of
Payments adjudication on the basis that the claimant served its
submissions using Dropbox.
What is Dropbox?
Dropbox is a free internet facility for file sharing. It is one
of many file sharing sites on the internet.
Wikipedia says: "Dropbox is a file hosting service
operated by Dropbox, Inc., headquartered in San Francisco,
California, that offers cloud storage, file synchronization, and
client software. Dropbox allows users to create a special folder on
each of their computers, which Dropbox then synchronizes so that it
appears to be the same folder (with the same contents) regardless
of which computer is used to view it. Files placed in this folder
also are accessible through a website and mobile phone
In the case of Conveyor & General Engineering v
Basetec  QSC 30, Basetec, a supplier of pre-assembled
pipe rack units for water treatment facilities, claimed that
Conveyor & General Engineering (CGE) owed it money for the
supply of these units on two projects. Basetec served payment
claims on CGE under the Queensland Security of Payments legislation
(Building and Construction Industry Payments Act 2004,
commonly referred to as "BCIPA"). CGE served payments
schedules disputing the claims.
Exchange of payment claims and payment schedules gives the
claimant the option of seeking adjudication, initiated by serving
an adjudication application. Basetec did this by emailing CGE's
solicitors, attaching two applications. The email contained two
Dropbox links. The Dropbox links directed the recipient to Dropbox
files, which contained Basetec's written submissions in support
of the applications. BCIPA requires written submissions to be
served with the adjudication application. CGE did not access the
Dropbox files or read the submissions, until the time for a
response had passed.
The adjudicator accepted the application and the submissions and
adjudicated in favour of Basetec.
CGE challenged the adjudication on the basis that it had not
been served effectively.
The Supreme Court agreed. The Court examined three relevant
Section 103 provides that in addition to service authorised by
other legislation, notices may be served in accordance with the
construction contract in question. Although these parties had
previously exchanged documents by Dropbox, it was not a method of
service provided for by the contract between them, so this did not
Acts Interpretation Act 1954.
Section 39 provides for service by "sending it by post,
telex, facsimile or other similar facility". In relation
to Dropbox, the Court found that "it cannot be said that
the documents in the Dropbox file were ... 'sent' to
CGE's office". Therefore, even if email or Dropbox
was a "similar facility", which was doubtful, there was
no proper service under the Acts Interpretation Act.
Section 11 provides that information required to be given in
writing under State law can be given by an electronic
communication, but only where the information is useable for
subsequent reference and "the person to whom the
information is required to be given consents to the information
being given by an electronic communication".
Here, although these parties had previously exchanged documents
by Dropbox, CGE had not consented to service of an adjudication
application by Dropbox. The judge also found that Dropbox was not
an electronic communication within the definition in ETQA - Dropbox
is a website where the documents may be found, and not itself
electronic communication. So ETQA was of no help to Basetec
The Court held that the adjudication application had not been
properly served and that the adjudicator's decision in favour
of Basetec was of no effect.
Relying on Dropbox or any other file sharing service to
serve legal documents is risky. Despite their relative
inconvenience, more traditional means of service, such as personal
or postal service, are more likely to be legally effective. As the
law stands at the moment, these are the methods that should usually
In construction projects, payment claims under Security of
Payment legislation may be served as provided for by contract.
Often, the many participants in the construction project -
architects, engineers, project managers, builder, contractors,
subcontractors etc etc - use file sharing facilities such as
Dropbox as an extremely useful central repository of the voluminous
documentation required for the modern construction project.
If the parties want payment claims under Security of
Payment legislation to be made in this way as well, the
construction contracts and subcontracts must contain specific
provisions allowing it.
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.
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