By Robert Riddell and Daniel Fitzpatrick of Gadens
Christmas is almost here again and most people will be looking
forward to enjoying a well earned break. Many offices will be
closing for the year on Thursday week, if not before. Many will not
re-open until well into January.
Unfortunately for some, one thing that does not take much time
off over Christmas is the Building and Construction Industry
Security of Payment Act (the Act ). Apart
from public holidays, weekends and the days between Christmas and
New Year, the time for providing payment schedules and adjudication
responses continues to run.
For example, if your office were to close on 18 December 2008
and you are served with a payment claim under the Act the following
day, the 10 business days to provide a payment schedule in response
would expire on Monday, 11 January 2009. Many will only be
returning to work that day. Being served late in December with an
adjudication application would be even worse, as the Act only
allows five business days for lodging a response (or two days after
the adjudicator notifies acceptance of his or her appointment,
whichever is the latter).
So much for natural justice!
History demonstrates that there are some who are quite prepared
to set that trap. The starkest illustration of this is perhaps the
2003 decision in Walter Construction Group v CPL (Surry
Hills), where the developer was found liable for almost $14
million after failing to respond in time to a claim served on 20
Failing to provide a response in time can you leave you liable
under the Act to pay the entire amount of the claim, whetherthat
amount is payable under the contract or not.
Some have attempted to argue that a payment claim is not served
until it comes to the respondent's attention. Nice try, but no
cigar! It matters not that your doors are closed or your mail box
is not being cleared (or both). Time starts to run from the date
the payment claim lands on your doorstep or is received into your
fax machine's memory.
Indeed, facsimiles are a service hot spot. The facsimile machine
need not even print out the claim! A satisfactory transmission
report at the senders end and oral evidence as to the faxing of the
payment claim led the court in Zebicon Pty Limited v Remo
Construction Pty Limited to find that the claim was received
into the memory of the respondent's facsimile machine
(satisfying section 31(2)of the Act). Too bad if the claimant fed
the claim into its fax machine upside down!
It is important to have a procedure to check for incoming
correspondence over the Christmas period. You may also consider
turning the fax machine off.
Under the Act, claims can be served on an ordinary place of
business or other premises provided for in the construction
contract, whether they are open or not. The Corporations
Act authorises service on a company's registered office.
So if you use an accountant or other advisor as your registered
office you should ensure that they have a process in place to check
for any payment claims served over the break.
A simple procedure to check for claims can avoid receiving an
unwanted Christmas present in the New Year. If you have any
concerns in relation to a document you receive, we recommend you
seek advice from us as soon as possible to avoid a situation where
your time to provide a response has expired.
On behalf of the partners and staff of gadens
lawyers we take this opportunity to wish you and your
families an enjoyable and relaxing Christmas and New Year, and we
look forward to working with you again in 2009.
This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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