The NSW Supreme Court in the case of BCFK Holdings Pty Ltd v Rork Projects Pty Ltd recently considered the Principal’s (BCFK) appeal of an adjudication decision in favour of the builder (Rork) in respect of works to a childcare centre in Balmain, Sydney.
On 12 July 2022, the builder issued a payment claim (first claim) but did not proceed to adjudication on that claim because there was some doubt as to whether it had effectively been served on the Principal under the NSW SOP Act.
Instead, on 20 August 2022, the builder served a second payment claim on the Principal and proceeded to adjudication on the second claim. The parties agreed for the purposes of the adjudication of the second claim that the Contract had been terminated on 12 May 2022.
At issue on appeal in respect of the first claim was, whether despite being served incorrectly on the Superintendent it ultimately came to the attention of the Principal and triggered the operation of the Act. This was significant in the context of the adjudication of the second claim because, if the first claim did trigger the operation of the Act, the second claim was likely invalid because of the effect of s13(1C) of the NSW SOP Act – which stipulates “a payment claim” may be served on and from the date of termination.
Citing the NSW Court of Appeal authority in Falgate Constructions which held “a document will be served in accordance with the requirements of [the Act] if it actually comes to the attention of the person to be served”, the Court held the first claim was effectively served on 18 July 2022 when it came to the attention of the Principal’s sole director and triggered the operation of the Act.
Considering the interpretation of s13(1C) of the NSW SOP Act, the Court held it was the Parliament’s intention that after a construction contract has been terminated, only one payment claim may be served on and from the termination date.
As a result, the second claim was invalid and the adjudicator’s decision void.
