Can You Prove Service of a Valid Payment Claim?

All rights under the Building & Construction Industry Security of Payment Act flow from this service of a valid Payment Claim.

In NSW, without limitation, a Payment Claim pay be served by:

  • Delivering it to the person personally,
  • Lodging it during normal office hours at the persons ordinary place of business,
  • Sending it by post or facsimile addressed to the persons ordinary place of business,
  • In such other manner that might be provided under the construction contract concerned.

I recently reviewed a case where a contractor had obtained a Judgment for over $200,000 on the basis that the other party to the contract had not provided a Payment Schedule within the allowed time following service of the Payment Claim. The default Judgment was subsequently challenged and in the proceedings to set the Judgment aside it was asserted that the Payment Claim, which had been sent by post only, had not been received on the alleged date or at all.

If sufficient doubt can be raised in relation to service by post, then the whole intention of the Building & Construction Industry Security of Payment laws can be subverted by the other party by simply denying any valid Payment Claim was received.

Unless you make contracts that expressively provide for the method of service of notices and serve Payment Claims in accordance with one (1) or more of those methods, by far the preferred method of service is by facsimile transmission. All Payment Claims should be served by facsimile transmission with copies of the relevant facsimile confirmation sheets printed and kept on the file as proof of service.

Having a successful facsimile transmission confirmation sheet will help avoid any doubt in relation to whether and when a Payment Claim was served. The cost and risk of having to prove postal service of a Payment Claim on the balance of probabilities before a Judge on a particular date or at all where service can not be proved easily can:

  • significantly undermine your ability to rely on the Act when you need to, and
  • undermine the significant bargaining power that you may otherwise have had in any negoitations with the other party.

For more information about Valid Payment Claims download our Security of Payment Guide or call and speak to one of our Building & Construction lawyers today.

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By Sam Roberts,
Managing Director, Accredited Specialist (Commercial Litigation)

Sam Roberts