November 6, 2020
The recent Supreme Court of Queensland case of McCarthy v TKM Builders Pty Ltd [2020] QSC 301 (McCarthy) provides a valuable reminder of the importance of effective service for the purposes of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA), particularly in the technology-focused world that we work in.
Ultimately, the Court determined in McCarthy that submissions to an adjudication application provided by way of Dropbox link were not ‘given’ for the purposes BIFA, and as such, the adjudicator did not have jurisdiction to make a determination in the matter.
The circumstances of the matter arose from TKM Builders Pty Ltd (TKM) sending an email to Mr McCarthy (both being parties to a construction contract), stating ‘Please find below link to correspondence and attached adjudication claim lodged with the QBCC today. … [Dropbox link inserted]’. It is important to note that TKM’s submissions were not otherwise attached to the email to Mr McCarthy, and could only be obtained by accessing the Dropbox link.
The Court heard that Mr McCarthy did not open the Dropbox link contained in the email (and did not otherwise receive the documents uploaded to the Dropbox), and forwarded the email to his solicitors with instructions to respond.
In its adjudication application (attached to its email to Mr McCarthy), TKM had ticked ‘yes’ to the question of whether there were submissions attached to its application. However, the Court disagreed stating ‘That answer is not correct given that the submissions were contained in a Dropbox file’, and in relying on s 39 of the Acts Interpretation Act 1954 (Qld), added ‘the submissions were not served personally nor were they left at, or sent by “post, telefax, facsimile or similar facility to, the address of the place of residence or business of the person last known to the person serving the document”’.
During the adjudication (and despite Mr McCarthy’s position to the contrary), the adjudicator determined that ‘Notwithstanding the statutory provisions in respect to the service of documents under the BIF Act [sic] and other legislation, the fact is that it has demonstrated that the respondent was in possession of a copy of the adjudication application and its supporting submissions’, as the Dropbox link to the submissions was provided in the same email attaching TKM’s adjudication application.
Whilst the adjudicator’s position seems plausible, the Court did not agree and stated that Mr McCarthy did not become aware of the contents of the document merely by being referred to a link to a Dropbox file.
In making its determination, the Court followed McMurdo J in Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd [2014] QSC 30 (which concerned BIFA’s predecessor, the Building and Construction Industry Payments Act 2004 (Qld)) where it was held that purported service by the use of Dropbox may have been a practical and convenient way for a party to be directed to, and use the documents, but at least until the other party became aware of the contents of the Dropbox, it did not result ‘in the person to be served becoming aware of the contents of the document’.
The Court determined that as Mr McCarthy was not ‘given’ a copy of the adjudication application for the purposes of BIFA, the adjudicator did not have the necessary jurisdiction to make the decision for payment in favour of TKM.
Key Takeaways
Whilst dealing with a global pandemic, many business and industries have had to increasingly rely on technology for new ways to communicate and conduct business. However, the decision in McCarthy provides an important reminder to parties that the service of documents (particularly under BIFA, as was the case in McCarthy) must strictly comply with the relevant legislative requirements, and may not always include widely used technologies such as digital file-sharing platforms.
Lamont Project & Construction Lawyers
Our Team have the knowledge and experience to assist both Principals and Contractors with any Security of Payment or BIFA related issues. If you would like to discuss any matters raised in the above article as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.
The contents of this article is for information purposes only; it does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.
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