DROPBOX DROPS THE ADJUDICATION BALL AGAIN

14th October, 2020

McCarthy v TKM Builders Pty Ltd & Anor [2020] QSC 301 Delivered 7 October 2020, Supreme Court, Martin J

The Facts

The Building Industry Fairness (Security of Payment) Act 2017 (“BIF Act”) provides for the adjudication of disputes over progress payments in construction contracts. The BIF Act requires that a claimant must give a copy of an adjudication application to the respondent.

Mr McCarthy and TKM entered into a construction contract for a building project. On 15 June 2020, TKM sent an email to Mr McCarthy which (a) attached an adjudication claim form; (b) included a dropbox link to supporting correspondence and submissions.

Mr McCarthy’s evidence was that: (a) he received the email, (b) he did not open the Dropbox link, (c) he did not otherwise receive the documents available at the Dropbox link, and (d) he forwarded the email to his solicitors with instructions for them to respond.

The adjudicator found in favour of TKM on the payment claim in the sum of about $33,000.

Mr McCarthy challenged the adjudication decision in the Supreme Court as being invalid for want of jurisdiction on the basis that he was not given the adjudication application.

Mr McCarthy relied on an earlier Supreme Court decision in Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd & Anor [2014] QSC 30 where the court set aside an adjudication because it was found that sending a dropbox link to the adjudication material did not constitute valid service.

Section 39 of the Acts Interpretation Act 1954 ("AI Act") set out how a document may be served on – or given to – an individual. It provides for personal service which did not occur in this case or by sending it by “post, telex, facsimile or similar facility to, the address of the place of residence or business of the person”.

Outcome

The Court found that Mr McCarthy did not become aware of the contents of the document merely by being referred to a link to a Dropbox file. It was not enough that Mr McCarthy's solicitors saw the submissions when Mr McCarthy forwarded the email. Service must be effected in accordance with s 39 of the AI Act. It followed that Mr McCarthy was not given the adjudication application as required by s 79 of the BIF Act.

As a result, the adjudicator did not have the jurisdiction to make the decision and the Supreme Court set the adjudicator's decision aside.

Take Home Lesson

Dropbox and similar services are convenient, but should be avoided when serving documents otherwise you risk invalidating your entire claim as occurred in the cases mentioned above.

Don't serve documents without the benefit of legal advice. We are well versed in such matters. Any questions please telephone Frank Nardone or Tony Scoglio on 07 3833 2100.