It goes without saying that communication by email is fundamental and ubiquitous to commercial life today. The value of email when dealing with the short timeframes prescribed by security of payment legislation is obvious. However, users of the adjudication system are often advised out of a prudent abundance of caution to serve documents such as payment claims or adjudication applications by other means. This is partly because the provisions in all the Eastern State, SA and Tasmanian Acts that set out how documents can be served list everything but email, and also partly because the courts have found service by some more modern means to be invalid – eg, you cannot serve documents by Dropbox (see our previous Update here).
However, a recent decision of Justice Vickery of the Victorian Supreme Court in Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd (No 2) [2015] VSC 500, analysed the provisions as to service in the Victorian security of payment Act and concluded that they are facilitative in nature, do not provide a mandatory or exclusive regime for service of documents and in particular do not exclude emailing as a means of service. The same judge had previously made similar remarks in Metacorp Australia Pty Ltd v Andeco Construction Group Pty Ltd [2010] VSC 199, however in that case there had been an historical custom between the parties of serving and responding to payment claims by email and their contract contained a provision allowing claims to be “given” in any manner, so until now it remained unclear whether emailing was allowed in other circumstances.
Some care still needs to be taken however because the court said that when serving by email, the time of receipt (which can be crucial) is worked out by reference to the Electronic Transactions (Victoria) Act 2000. Equivalent electronic transaction legislation in other States and Territories contain subtly different provisions in this respect and, eg under the Victorian Act, if an email address has not already been ”designated” by the recipient, then they need to “become aware” that the email has been sent. Ie, if serving by email, always follow up with a phone call letting them know. The issue was of importance in Amasya because the respondent has served a payment schedule by email, but the adjudicator considered that was invalid and proceeded on the basis there was no payment schedule; a consequence of which was that the respondent was not entitled to submit an adjudication response.
The decision also dealt with a number of other interesting issues under the adjudication legislation. The court held that the Act does not imply any obligation of good faith in making an adjudication application and that reckless conduct or even sharp practice by a claimant or respondent in the adjudication process would not be enough to infect an adjudication determination so that it might be quashed (in this case the respondent alleged the claimant had made a wildly exaggerated ambit claim).
The court also held that a payment claim could be withdrawn after being served and substituted by a revised claim, or alternatively that the two documents could be treated as one, saying that “a realistic degree of tolerance” needs to be observed to adjust for shortcomings or mistakes made in the course of submitting a payment claim. In this case, the claimant had served a payment claim and then several days later re-served the same claim but with some minor corrections and a bundle of supporting documents. In relation to this issue, Justice Vickery took the opportunity to state that there was a need for reform of the Act and said that the volume of litigation in relation to whether there is a valid payment claim or payment schedule could all be avoided if only the Regulations had prescribed forms for them. The Victorian legislation uniquely states that a payment claim must be in a prescribed form if any, but so far, none has ever been prescribed.
