Payment claims handed to a mine’s gatehouse at 5.15pm were served the next day

What happened

Source: the judgment on NSW Caselaw. Numbers in [brackets] are the judgment’s paragraphs.

1. February to August 2020 — Forefront, the contractor, enters into four contracts with CMOC, the mine operator, to provide services at the Northparkes copper and gold mine [2].
2. 3 February 2021, 5.15pm — A Forefront employee hands four payment claims, totalling $6,161,020.35, to the officer on duty in the Access Control Room at the mine’s gate [5], [6]. The claims are addressed to the mine operator’s company representatives. The contract says notices must be marked for the Company Secretary [25], [26].
3. The mine operator’s representative, Mr Plowes, is not at the mine that day. He sees the claims on 4 February [36].
4. 4 February 2021 — The contractor also delivers the claims through Aconex [7].
5. 18 February 2021 — The mine operator serves its payment schedules. That is within 10 business days of 4 February, but 11 business days after 3 February [9].
6. The contractor suspends work, relying on s 15(2)(b) of the Act [12]. If the claims were served on 3 February, the contractor is owed $6,161,020.35. If they were served on 4 February, the contractor accepts that it is owed no more than $180,912.05, which has been paid [10], [11].
7. 11 May 2021 — The court holds that the claims were served on 4 February, and that the contractor was not entitled to suspend work [82], [83].

The rule

In 2021, s 31(1) of the Act allowed a document to be served in these ways: by delivering it to the person personally, by lodging it during normal office hours at the person’s ordinary place of business, by post, by email to an address the person had specified, or in the way the contract provides [13].

Delivering it personally to a company. Leaving a document with any employee on the premises is not enough. The document must come to the attention of a person who is responsible for dealing with it [23], [24]. In this case, that did not happen until 4 February [37].

Lodging it during normal office hours. Lodging also needs more than leaving the document with any employee [43]. “Office hours” are the hours the administrative or clerical staff normally work. They are not a mine’s 24-hour operating hours [49], [54]. At this mine, office hours ran from 7–7.30am to about 4–4.30pm, so 5.15pm was outside them [68], [69].

The contract’s method. Clause 47.2 of the contract said that a notice delivered by hand after 4pm is taken to be given at the start of business on the next business day [75], [77]. The court held that this clause is not void under s 34 of the Act (the section that stops a contract from excluding or changing the Act). The clause did not modify s 31. It gave effect to s 31(1)(e), which allows service in the way the contract provides [80], [81].

What it means for you

If you serve a claim by hand: hand it to the person the contract names, or to the person responsible for dealing with it. Do it during the hours the other side’s office staff work. Read the contract’s notice clause to find its cut-off time. In this case the cut-off was 4pm, so a delivery at 5.15pm counted as delivery on the next business day [75], [77].

If you serve a company: s 109X of the Corporations Act lets you leave a document at the company’s registered office, or deliver it to a director who lives in Australia. The contractor did not use that method here [21], [22].

If you receive claims: if there is any doubt about the day a claim was served, count your 10 business days from the earliest day it could have been served. In this case the payment schedules were in time only because the court accepted the later date [9], [82].

Before you suspend work: check the service date first. The contractor’s suspension relied on a service date that the court did not accept [83].