Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259

What the court decided

Equity Australia Corporation Pty Ltd engaged Falgat Constructions Pty Ltd to convert a building on its property at Bronte into two town houses [8]. Falgat worked on the site until about 5 December 2003 [8]. On 13 October 2004 it served a payment claim for $232,114.30 under the Building and Construction Industry Security of Payment Act 1999 (NSW) [10]. It was common ground that section 14(4) required Equity to provide a payment schedule on or before 27 October 2004 [11]. Equity said it provided its schedule by delivery on 22 October 2004, and also by post no later than 27 October 2004, while Falgat's case was that it was not provided until 28 October 2004 [11].

Falgat sued for the claimed amount in the District Court, relying on sections 14 and 15 [2], [19]. Nielson DCJ found that the schedule was provided by delivery to Falgat's registered office on 22 October 2004, and also by post on 25 or 27 October 2004 [20]. On the fourth day of the hearing his Honour refused Falgat leave to amend to allege an estoppel, and he then gave judgment for Equity [3], [4]. Falgat had an appeal as of right, so the Court of Appeal granted leave to regularise the position, and it dismissed the appeal with costs [6], [64]. Hodgson JA gave the principal reasons [2], and Hunt AJA agreed with his orders and with those reasons except on matters in paragraphs 55 and 56 [65]. Handley JA agreed with Hunt AJA and, subject to that, with Hodgson JA [1].

The primary judge's findings of fact, which were not challenged on appeal, included the following [28]. Falgat's registered office and place of business was a house in Chiswick, but from August 2004 its mail was redirected to a post office box at Kellyville without Equity being told [29]. A courier placed the schedule under the glass door of the house on the afternoon of Friday 22 October 2004 [31]. A copy sent by express post the same day was redirected and collected from the box on 28 October 2004 [32]. The primary judge was not satisfied that it had not been placed in the box on 27 October 2004 [32].

For the estoppel, Falgat relied on Equity's assertions that it had served the schedule on 27 October 2004 [21]. Falgat alleged that it would have served another payment claim before 5 December 2004 had Equity asserted service on 22 October [33]. The primary judge had held that section 13 would not have permitted another claim for the same amount before that date [34]. Hodgson JA held that this was an error [36]. He adhered to his view in Brodyn Pty Ltd v Davenport that reference dates continued after work ceased, up to the twelve-month limit in section 13(4)(b), and that section 13(6) permitted successive claims for the same work [36]. Equity's counsel did not submit otherwise, and accepted that a further claim for the same amount could have been served by reference to a date at about the end of November 2004 [36].

The error did not vitiate the refusal, because the estoppel case was "very weak" [37]. There was no express representation that the schedule had not also been served earlier [38]. There was also no evidence of detrimental reliance [42]. Given the prejudice to Equity and the lateness of the application, it was correctly refused [46].

On the time of provision, Hodgson JA said that the onus was on Falgat to prove that the schedule was not provided until after 27 October 2004 [51]. He held that section 109X applied even though the Act used the word "provide", because section 109X(7) showed that it applied to a word like "provide" [52]. Leaving a document at the registered office was prima facie service at the time it was left, although if it was left outside office hours while the office was closed, it was at least arguable that service occurred later [54]. The schedule was therefore provided when the courier put it under the door of the registered office, at 4.22pm on 22 October 2004, during normal office hours [56].

The Justices differed on the posted copy, a point that did not affect the orders [65], [69]. Hodgson JA considered that, if the post was diverted, service was effected no later than its actual arrival at the diverted address [55]. Hunt AJA, with whom Handley JA agreed, considered that section 109X continued to operate despite the redirection [1], [66]. On his view, the presumption in section 29 of the Acts Interpretation Act 1901 (Cth) was not displaced by proof of when the document reached the diverted address [67]. Because Falgat had kept using its registered office as its ordinary place of business, Hunt AJA did not regard it as even arguable that the time the document reached the diverted address was the time of service [68]. He disagreed with the last sentence of paragraph 56 of Hodgson JA's reasons, which concerned the box at Kellyville [69].

Although it was not strictly necessary to do so, Hodgson JA gave views on the construction of the Act because clarity was important, and the other Justices joined his reasons on these points [1], [57], [65]. A document that had actually been received and had come to the attention of the person, or of someone with authority to deal with it, was served, provided and received, whether or not any facultative regime was complied with [58]. Payment claims and payment schedules were notices within section 31 [59]. He considered it highly unlikely that the legislature intended that provision occurred only if the document came into someone's hands [60]. He concluded that "provide" did not mean anything different from "serve", and section 31 applied to provision [61]. Mail was received at a registered office or place of business when put into its mail box, without anyone seeing it [62]. In general, receipt under section 17(3)(c) would be satisfied once the document had arrived there and was there during normal office hours [63].

Hodgson JA also said he was not certain that Falgat's adjudication application was invalid on its own case that it received the schedule on 28 October 2004 [43], [44]. He was inclined to the view that where there was doubt whether a schedule was provided in time, a claimant may be able to apply under section 17(1)(a) [44]. As his Honour noted, Falgat had not pressed that approach at the time [45].

Why it matters

Under the Act as it stood in 2004, a payment schedule left at a company claimant's registered office during office hours was provided when it was left. A claimant suing on the basis that no schedule was provided in time bore the onus of proving it. Under the Act as it then stood, and without opposition from Equity, the Court also accepted that after work ceased a claimant could serve a further payment claim for the same amount by reference to a later reference date within the twelve-month limit.

On the time of service of a posted schedule redirected by the claimant, Handley JA and Hunt AJA preferred Hunt AJA's view to Hodgson JA's. That point, and the views on section 13, on construction and on section 17(1)(a), were not necessary to the result. The decision concerned the Act as it stood at the time of the 2004 payment claim, so readers should check the current text of the Act and later authority before relying on it.

Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.