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  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
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
A bill to introduce security of payment legislation into South
Australia has been progressing through the South Australian
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.
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The article discusses the legislative requirements and then provides some comments on common mistakes made by caveators.
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