To USB or not to USB – Service of Adjudications Applications

Posting a USB stick containing the documents comprising an adjudication application does not constitute service of an adjudication application until those documents are accessed by the respondent, as determined in the recent case of Parkview Constructions Pty Limited v Total Lifestyle Windows Pty Ltd t/as Total Concept Group [2017] NSWSC 194 in the New South Wales Supreme Court.

When serving an adjudication application physically (by hand or by post), the applicant must be acutely aware of the writing requirements. The relatively common practice of providing adjudication applications by including the material on a USB, DVD or CD may not result in service being effected for the purposes of the Act.

Background

Parkview Constructions Pty Limited (Parkview) engaged Total Concept Group (Total Concept) to design, supply and install glazed windows and doors at the Woolooware Bay Town Centre. A payment dispute arose between the parties in relation to a payment claim for $668,177.24 (incl. GST), of which Parkview scheduled $nil for payment.

On 8 November 2016 Total Concept uploaded its adjudication application onto Hightail, the cloud-based online platform to facilitate the electronic provision of materials to the authorised nominating authority, ABC Dispute Resolution Service. A copy of the application was subsequently placed onto a USB stick and posted to Parkview, purportedly by way of service.

On 9 November 2016 Parkview received the USB stick in its post-box. On 10 November 2016 the USB stick was handed to Parkview's Company Secretary. It was on this day the Company Secretary opened the contents of the USB on her computer.

On 17 November 2016 Parkview served its adjudication response, 6 business days after the USB stick was physically received by Parkview (but not accessed).

The Adjudicator determined the adjudication application was served on 9 November 2016 (i.e. upon physical receipt of the USB) and therefore, Parkview was a day late in serving its adjudication response. As a consequence, the Adjudicator disregarded Parkview's adjudication response and found Total Concept was entitled to a progress payment of $539,634.24 (incl. GST). Parkview then commenced proceedings seeking an order in the nature of certiorari quashing the adjudication and a permanent injunction restraining Total Concept from acting on the determination. This Insight only considers the issue of service of the adjudication application argued before the New South Wales Supreme Court.

Decision and Reasons

After what Hammerschlag J described as a "litany of errors" during the service of the adjudication application,1  the court determined service of the adjudication application was effected on 10 November 2016, notwithstanding the USB was physically received by Parkview on 9 November 2016. As such, Parkview's response was lodged within the time permitted by the Act and, in disregarding that response, the Adjudicator committed both a jurisdictional error and a denial of procedural fairness.

His Honour noted that "punctilious compliance" with the Act is required, including the requirement an adjudication application be "in writing" (s 17(3)) and served on the respondent (s 17(5)).

The court examined the definition of "writing" in section 21 of the Interpretation Act 1987 (NSW) and determined the delivery of a USB stick is not to be "equated with the service of writing stored on it".3 Therefore, the adjudication application was not made in writing, as required by the Act,4 until it was accessed by the recipient.

Hammerschlag J noted:

a document will, in the ordinary meaning of the word, be served if the efforts of the person who is required to serve it have resulted in the person to be served becoming aware of the contents of the documents. In the case of an email transmission, or where documents are uploaded to a site…it cannot be said that they have been served until they have been accessed.5

Interestingly, his Honour noted it could not be assumed every recipient of a USB stick had the means to access the information held on the USB stick (even in this day in age).

The author is grateful for the assistance of Karmen Gallegos, Lawyer, in preparing this Insight.

 1At [5].
 2At [51].
 3At [75].
 4Section 17(3)(a) of the Act.
 5At [76].

Alex Whiteside

Outstanding client service is the key to our success.

Alex Whiteside Partner

Alex specialises in providing advice to the construction, infrastructure and mining sector. Alex focusses on providing advice during the delivery, completion and disputes phases of projects.

Alex acts for construction contractors, equipment suppliers and government entities and has extensive experience in drafting and negotiating project documentation, ranging from the Australian Standard suite of contracts through to project specific and PPP documentation.

Alex has a particular focus on disputes, including expert determination, adjudications, arbitration and Court proceedings. Alex has acted for clients in a broad range of construction and mining disputes including scope and variation claims, design, defect and delay/prolongation claims, injunctions and security of payment adjudications and appeals. Alex has significant expertise in Supreme Court actions in the Technology and Construction List.

Alex has completed secondments in the legal teams of Lendlease, Transport Infrastructure & Services and Sydney Trains.

Alex commenced his career advising insurers in relation to professional indemnity insurance policy coverage and claims.

">
see my profile