Service on a superintendent of a payment claim may constitute service upon the Owners according to the latest decision of Justice McDougall, nothwithstanding that in Emag Justice Einstein held that service upon the owners was an essential ingredient of a valid claim under the Building and Construction Industry Security of Payment Act:

In Emag Constructions Pty Ltd v Highrise Concrete Contractors (Aust) Pty Ltd [2003] NSWSC 903, his Honour said at [38] that service in accordance with the Act "is critical as it governs the commencement of the time limitations following such service." It was critical, his Honour said, because "[t]he consequence of non-compliance with the time limitation periods is harsh."

Justice McDougall found that the parties must be taken to have been aware of the Act and that although there was “nothing in the contract that expressly authorizes the service of payment claims under the Act on RHM [the superintendent] so as to effect service on the owners corporation”.

The judge reasoned that a contractual progress claim, when bearing the annotation “this is a payment claim made pursuant to the BCISoP Act”, and delivered according to the contract, amounted to an authorization by principal for service of payment claims upon the superintendent. His Honour reasoned that as the Principal in a prior adjudication – using the same solicitors – had not taken the service issue they were effectively estopped from raising that issue on this later occasion. The Owners Strata Plan 56587 v Consolidated Quality Projects [2009] NSWSC 1476.

The above case is to be compared with the decision in Reed v Eire [2009] NSWSC 678 (22 July 2009) where in an impeccably precise treatment of the relevant legal authorities, Justice Macready reached a view that effective service of a payment claim had been achieved when the respondent acknowledged receipt of the claim by return email. The unsuccessful respondent in the adjudication had just relied on a disputed service and failed to include either in its payment schedule or in its adjudication response a substantive response to the Applicant’s payment claim. Amongst other elements, this case establishes that reading an email containing a payment claim otherwise in accordance with the Act, will if proved, be effective for the purposes of the Act whether contract provides for email service or not.