Security of Payment Act: Payment Claims in a Digital Age
Businesses are increasingly embracing digital communications. Often emails are faster, more convenient and more efficient than traditional paper based communications.
This seems to have been the motivation behind the legislative changes that have modified the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) on 27 June 2017, allowing SOPA Notices (such as Payment Claims and Payment Schedules) to be served by email in certain circumstances.
Previously, Payment Claims were to be “served” and Payment Schedules “provided” (served), through a number of methods, including fax.
The recent amendments have replaced fax with email as a valid method of service. However, email service will only be valid when the party has specifically nominated an email address to receive SOPA notices and the SOPA notices are sent to that email address.
Importantly, the SOPA amendment applies to construction contracts entered into before and after 27 June 2017, meaning that a Payment Claim or Payment Schedule can generally be served by:
- Personally delivering it;
- Lodging it during normal office hours at the person’s ordinary place of business;
- Posting addressed to the person’s ordinary place of business;
- Sending an email to an email address nominated by the party for SOPA notices; and,
- A method that is specified in the contract.
Can I send Payment Claims or Payment Schedules by email?
Yes - provided that there is a written term in the contract that specifies an email address for the service of any SOPA notices.
These amendments are relatively new and we have not seen what issues may arise from the service of SOPA notices by email, or how the Court will deal with these - something to be mindful of when serving SOPA notices and drafting contracts.
At this stage, we recommend that SOPA notices be served by email in addition to one of the other methods of service set out above.
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