June 2017 SOP Amendments – Sending Payment Claims or Payment Schedules by Email or Fax

With the increasing use of emails both for communications and for sending and receiving documents, it is becoming common for businesses to send tax invoices by email.  Perhaps in light of this growing trend, there have been some recent amendments to the Building and Construction Industry Security of Payment Act 1999 (NSW) in relation to how notices under the Act can be served.

The amendments, which came into effect on 27 June 2017, create a new provision in Section 31(d) allowing for service of notices “by email to an email address specified by the person for the services of notices of that kind.”

In addition, the provision on Section 31(c) permitting service by facsimile transmission to person’s ordinary place of business has been removed.

The prescribed methods for serving documents under the Act remains non-exhaustible and still include any manner of service as may be provided under a Construction Contract.  However, where the method of service is not prescribed by the Act or the Construction Contract the validity and/or timing of the service will be open to challenge in an Adjudication or other proceedings under the Act.

With security of payment laws timing is everything.  Getting service of Payment Claims and Payment Schedules right is, therefore, crucial to effectively using these laws.

What does this mean for you?

  1. If you are a party to a Construction Contract within the meaning of the Act, the amendments mean that serving a Payment Claim or Payment Schedule by fax is no longer a valid method of service unless the Construction Contract specifically says that you can serve by fax.
  2. A Payment Claim or Payment Schedule can now confidently be served by email to an email address provided that the other party has specified the email address for service of notices of that kind.

How to protect yourself

  1. Make sure your Construction Contract expressly provides for the methods of service that you intend to use and specify an email address for service.
  2. If you intend serving notices by fax, make sure this method of service is specifically allowed by the Construction Contract.
  3. Where an online project management platform is intended to be used for submitting invoices and serving notices, this should be specified as a method of service in the Construction Contract to avoid uncertainty as to whether service is valid.
  4. Even if the Construction Contract does not provide for service by email, you can now serve notices by email if the person has specified an email address for notices of that kind.  This direction should be obtained in writing.
  5.  Naturally, if there is any doubt as to whether a person has specified an email address for receiving notices under the Act, for example, if you do not have a clear direction in writing, then in addition to serving by email you should also serve the document by another method allowed by Section 31 of the Act, such as personal delivery or by post to the person’s ordinary place of business.
  6. If serving notices by email, you should always request a “delivery receipt” and a “read receipt” to assist you in proving service if it is disputed.

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By Felicity Donald,
Special Counsel

Felicity Donald