Services

HG Building and Construction Alert: Potential pitfalls of serving documents electronically 9 April 2014

The recent decision in Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd & Another [2014] QSC30 in the Queensland Supreme Court has highlighted the potential pitfalls of relying upon service of documentation by electronic communication.

In this Alert, Partner Adam Carlton-Smith and Special Counsel Charles Sullivan explain the Court’s decision, and outline how parties can ensure that documents served by electronic means are held as served.

Key take away points

  • If parties want to avoid arguments regarding service by electronic means (including use of facilities such as drop box), then specific provision should be made to this effect in the contract. 
  • Failing to provide such provision may leave parties open to the risk that the document will be held not to have been served until it has been accessed by the parties. 
  • In circumstances where there are strict time limits, having a document held not to have been served may effectively grant another party an extension of time or invalidate any action taken before a time limit had properly expired.

Conveyor v Basetec

The decision

This case concerned an application to have a decision by an adjudicator under the Building & Construction Industry Payments Act (BCIPA) set aside on the basis of jurisdictional error.

The adjudicator had determined that he was precluded from considering any submissions lodged by the Respondent, Conveyor & General Engineering Pty Ltd (CGE), in the adjudication. He did so on the basis that submissions were received after the time limits required by BCIPA.

The Court ruled that the adjudicator erred in concluding that CGE was out of time to provide an adjudication response. The Court also held that in the circumstances, the adjudicator’s refusal to permit an adjudication response amounted to a lack of jurisdiction on the part of the adjudicator.  Consequently, the adjudication decision was set aside. 

BCIPA has strict time limits for the submission of claims and responses to it, and for subsequent referrals to adjudication.

Background

On 23 August 2013, Basetec sent an email to the lawyers for CGE attaching three documents. Those documents were two adjudication applications and a letter to the Institute of Arbitrators & Mediators Australia. Within the email itself was also a copy of an email which Basetec had forwarded to the Institute of Arbitrators and Mediators Australia on that same day. That email stated (in part):

“Please find attached letter, adjudication application forms as well as drop box links below for the two adjudication applications”.

Below this statement, there appeared to be two drop box links. 

The solicitors for CGE read the email and its attachments, but did not seek to look at the documents which were within the drop box files. 

On 26 August, Basetec sent an email to CGE which was essentially identical to that which had been sent to CGE’s lawyers on 23 August. Again, the drop box links were specified in the copy of the email which had been sent to the Institute. The CGE representative read only the email and attachments, and did not seek to look at the documents which were within the drop box files. 

Neither CGE nor its lawyers became aware of the contents of the drop box files until Monday 2 September 2013. These files contained, amongst other things, submissions to the adjudicator and some documentation described as evidence of the contract.

The adjudicator concluded that the adjudication application had been served by the email sent to CGE’s lawyers on 23 August. He advised his parties of his acceptance of the adjudication application on 28 August. Consequently, pursuant to section 24(i) of BCIPA, the adjudicator held that the deadline for an adjudication response form CGE was 30 August 2013. 

No response was provided on behalf of CGE until 2 September 2013. The adjudicator held that this was out of time and refused to consider the submissions.

Is a dropbox an acceptable electronic communication?

The critical issue is whether, given the use of the drop box facility and the emails, Basetec had duly served the adjudication application. 

The contract between the parties did not make provision for the service of documents, nor was there any suggestion that the parties had agreed that the adjudication application could be served as it was (notwithstanding that the parties had used drop box in earlier correspondence).

McMurdo J also held that he did not consider that section 39 of the Acts Interpretation Act allowed for service by email. 

However, the Judge was content to allow that section 11 of the Electronic Transactions (Queensland) Act 2001 did allow for the adjudication application to be served by email. 

Critically, he nevertheless held that in the circumstances, section 11 did not authorise the service of the adjudication application inclusive of the material within the drop box for two reasons:

  1. CGE had not agreed to be electronically served; and
  2. the material within the drop box was not part of an electronic communication as defined. None of the data, text or images within the documents in the drop box was itself electronically communicated, or in other words, communicated by “guided or unguided by electromagnetic energy”. The Judge found that there was an electronic communication of the means by which other information in electronic form could be found, read and downloaded at and from the drop box site. 

The key issue was that the Judge found that if the material had been attached to the email, rather than delivered by the use of drop box, it would have been an electronic communication and therefore service would have been successful. 

The Judge also held that the documents in the drop box file could not be said to have been left at or sent to CGE’s office (at least until CGE went to the drop box site and opened the file) and probably not until its contents had been downloaded to a computer at CGE’s relevant office.

The Judge also dealt with the issue of whether, when the email and its attachments were opened by the addressees on 23 and 26 August, the material was then served in its entirety. He held that, while it was unambiguous that the documents when read on 23 and 26 August informed them that there were other documents as part of the application and their location, this was not sufficient to constitute service. 

While actual service does not require the recipient to read a document, it does require something in the nature of the receipt of the document. The purported service by the use of the drop box facility, whilst it may have been practical and convenient for CGE as a means of being directed to the documents and being able to make use of them, did not result in a person to be served becoming aware of the contents of the document until 2 September 2013 when CGE or its representatives reviewed the documentation for the first time.

For more information about the service of documentation by electronic means, please contact HopgoodGanim’s Building and Construction team.

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