In Parkview Constructions Pty Ltd (Parkview) v Total Lifestyle Windows Pty Ltd t/as Total Concept Group (Total)  NSWSC 194 (7 March 2017) [the Parkview case], the NSW Supreme Court considered what constitutes valid service in writing under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the SOPA Act).
Hammerschlag J’s decision that the standalone delivery of a USB stick does not constitute valid service under the SOPA Act, emphasises the perils of improper service and an inherent risk in relying on new technology.
Facts of the case
The course of events in the Parkview case are summarised as follows:
- Parkview engaged Total to undertake the design, supply and installation of glass windows at the Woolooware Bay Town Centre in NSW.
- On October 11, 2016, Total served Parkview with a payment claim under section 13(1) of the SOPA Act.
- On October 25, 2016, Parkview issued Total with a payment schedule in response to the payment claim in the proposed sum of nil under s14 of the SOPA Act.
- It then followed that November 8, 2016 was the final day for Total to issue an adjudication application under section 17 of the SOPA Act.
- On November 8, 2016 at 1:38pm Total:
- uploaded an adjudication application to Hightail (the internet based storage provider of the authorised nominating authority being ABC Dispute Resolution (ABC); and
- uploaded to Hightail links to the relevant documents.
- The submissions Total uploaded to Hightail were not the version of submissions upon which Total intended to rely, and at 2:11 pm, Total uploaded to Hightail revised submissions.
- On November 8, 2016 Total then uploaded the adjudication application and documents upon which it purported to rely on onto a Universal Serial Bus (USB stick) and posted the USB stick to Parkview’s physical address. The covering letter to Parkview stated that the USB stick was sent by way of service, contained all the documents in full and that hard copies would follow in the post.
- The USB stick was received by Parkview on November 9, 2016 and was only accessed on November 10, 2016 (this date would prove to be critical).
- Under 20(1) of the SOPA Act, Parkview had five business days to submit its response after receipt of an adjudication application.
- On November 17, 2016, Parkview served its adjudication response.
- Total submitted that Parkview by serving its adjudication response on November 17, 2016 was effectively out of time as the USB stick was posted on November 8, 2016 and received by Parkview on November 9, 2016.
- The adjudicator held that Parkview’s adjudication response was out of time.
- Parkview then issued proceedings at the New South Wales Supreme Court.
As described by Hammerschlag J, the ‘litany of errors’ in the Parkview case were as follows:
- The material Total uploaded to Hightail on November 8, 2016 did not contain all the documents upon which Total intended to rely. It was missing Section 3 (witness statements).
- On November 10, 2016, the hard copy folder of documents Total served on ABC did not contain copies of the revised submissions but the original submissions as uploaded to Hightail at 1:38 pm. Effectively ABC received different adjudication applications from Total as the documents it received in hardcopy were different from those documents uploaded to Hightail.
- Parkview received one version of documents for the adjudication application and ABC received another.
Despite the litany of errors, what gave rise to the adjudicator’s determination being quashed was the significant issue of whether delivery of the USB stick alone constituted service in writing for the purposes of sections 173(a) and 17(5) of the SOPA Act.
Pursuant to section 20(1) of the SOPA Act, Parkview had five business days upon receipt of the adjudication application to serve its adjudication response on Total.
Under section 27 of the SOPA Act, November 8, 2016 was the final day that Total had to issue its adjudication application and serve it on Parkview.
Total posted the USB stick to Parkview on November 8, 2016 and Parkview did not receive the USB stick until November 9, 2016.
However, Parkview did not access the USB stick’s contents until November 10, 2016.
Accordingly, the delay in receipt of the USB stick and the accessing of its content proved critical. Hammerschlag J found that for the purposes of section 17(3)(a) and 17(5) the standalone delivery of a USB stick does not constitute service of something in writing for the purposes of the SOPA Act.
Hammerschlag J found that Parkview were within time to serve its adjudication response and that the adjudicator erred in the decision making process under 22(d) of the SOPA Act.
The findings in the Parkview case are as follows:
- Under section 17(3)(a) of the SOPA Act an adjudication application must be in writing.
- Under section 17(5) of the SOPA Act a copy of an adjudication application must be served on a respondent.
- Hammerschlag J deduced that the use of the word “copy” under section 17(5) makes it clear that written words which constitute the adjudication application are to be communicated to the respondent.
- By using the words “an adjudication” and then the words “the adjudication”, section 19(1) of the SOPA Act, makes it clear that the written word which constitutes the adjudication application made to the authorised nominating authority are those to be referred to the adjudicator (Total had served different copies of the adjudication application on ABC and Parkview).
- For the purposes of sections 17(3)(a) and 17(5), the standalone delivery of a USB stick does not constitute service of something in writing under the SOPA Act.
- Access to the written information contained on the USB stick can only be accessed when compatible technology allows access to the USB stick, and it cannot be a given even in today’s era that the technology will be available or access will be immediate.
- Parkview’s adjudication response was within time on November 17, 2016 as delivery alone cannot be served in writing but when the USB stick’s contents were reasonably accessed and its contents were only accessed on November 10, 2016.
- Parkview’s adjudication response was in time and the adjudicator acted not in accordance with 22(2)(d) in disregarding Parkview’s response.