Western Australia has seen its first case where a respondent has been held liable to pay a claimed amount under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (WA SOP Act or Act) because it did not provide a payment schedule within time. The respondent was found liable to pay an additional $17,221,066.55 (excl. GST) on top of the amount that it certified as payable.
The case rested on a technical argument about when the payment claim was considered to be served when sent via email. The respondent lost this argument and, consequently, was found to have given its payment schedule one business day late.
The case is Western Australia’s first demonstration of the harsh consequences of not complying with strict timing requirements of the Act and sends a message to respondents to ensure they are up to speed on how the Act works. It is also encouraging to potential claimants, who may want to take advantage of the avenues available to them under the Act.
Martinus Rail Pty Ltd v Co-operative Bulk Handling Ltd [2025] WASC 373
Facts
Martinus Rail Pty Ltd (Martinus) and Co-operative Bulk Handling Ltd (CBH) were parties to a contract under which Martinus was engaged to construct a rail siding and associated infrastructure at Broomehill in Western Australia.
Clause 47.4 of the contract provided that if certain communications are received on a non-business day, they are taken to be received at 9:00am on the next business day.
On Saturday, 31 August 2024, Martinus emailed a payment claim to CBH’s representative claiming payment of $22,646,617.21 (excl. GST).
On 24 September 2024, CBH emailed Martinus a payment schedule certifying the amount of $5,425,550.66 (excl. GST) as payable. The date of 24 September 2024 was 16 business days after 31 August 2024.
Martinus subsequently invoiced CBH for the full claimed amount of $22,646,612.21 (excl. GST) on the basis that CBH had not provided a payment schedule within time. CBH refused to pay this amount.
Parties’ contentions
Martinus contended that CBH was liable to pay the full claimed amount because it had not provided a payment schedule within 15 business days as required by the WA SOP Act.[1]
Martinus contended that the payment claim was served on 31 August 2024 and the payment schedule was given on the 16th business day after this on 24 September 2024 (with the 15-business day period having ended on 20 September 2024).
CBH argued that the time of service of the payment claim was governed by clause 47.4 of the contract and that, given the payment claim was emailed on a Saturday, the date of service under the Act was the next business day (which would have made the payment schedule within time).
The Court had to determine whether, upon a proper construction of the Act, clause 47.4 could be applied to deem the statutory payment claim as having been served on the next business day after it was sent.
Relevant statutory provisions
Regulation 23 of the Building and Construction Industry (Security of Payment) Regulations 2022 (WA) (Regulations) addresses the time when documents are considered to have been given under the Act. Pursuant to regulation 23(d), documents given by email (or other form of electronic communication) are taken to be given when the email is “taken to be received by the person in accordance with the Electronic Transactions Act 2011 (WA) [(ETA)] section 14”.
Section 14(1) of the ETA provides that “unless otherwise agreed between the originator and the addressee … the time of receipt of the electronic communication is the time when the electronic communication becomes capable of being retrieved by the addressee at an electronic address designated by the addressee”.
The time when it is capable of being retrieved is assumed to be when it reaches the addressee’s electronic address.[2]
CBH argued that the words “unless otherwise agreed” in section 14(1)(a) of the ETA were incorporated into the Act to the effect that the time for service was governed by clause 47.4 of the contract (which would deem service to be on the next business day after it was sent). Martinus disagreed with this construction of the Act.
Findings of the Court
Palmer J decided in favour of Martinus, finding that regulation 23 and section 14(1)(a) of the ETA should not be construed to give statutory force to an agreement as to a deemed date of service for the purposes of the WA SOP Act.
His Honour found that words “unless otherwise agreed” in section 14(1) do not expressly provide for the time of receipt of an electronic communication, and nor they expressly provide that a communication is received when the parties have agreed it is taken to be received.[3] This meant that the statutory provisions did not give force to the deeming effect of clause 47.4 to determine when Martinus’ payment claim was served.
Palmer J also found that this construction is consistent with the object and policy of the WA SOP Act to provide an effective and fair process for security payments,[4] noting that this object is primarily achieved by establishing an expedited procedure for making claims for progress payments, for responding to those claims and for adjudication of disputed claims.[5]
To ensure expedition, the time to respond to payment claims is strictly limited by the Act. If CBH’s construction were correct, it would have had the potential to undermine this expedited procedure because it would permit parties to agree to defer the start of the relevant time period in which the respondent was required to respond.
Finally, Palmer J also stated that “even if [he was] wrong and what the parties did have a binding effect for the purposes of the Act and they agreed something inconsistent with the Act, then that provision would be rendered void by s 111 of the Act”[6] (which prohibits contracting out of the Act). In other words, the deeming provisions about the time for service could also be of no effect on the basis that they are inconsistent with the Act and therefore contravene the “no contracting out” provisions in section 111 (although argument was not specifically advanced on the basis that the contractual clause was void for this reason). [7]
In light of the above, the date of service of the payment claim was 31 August 2024 when the payment claim was sent. CBH therefore did not serve its payment schedule within 15 business days and was liable to pay the full claimed amount.
Implications and comments
The case is Western Australia’s first instance where a respondent has been found liable to pay the claimed amount due to its failure to provide a payment schedule within time.
It therefore serves as Western Australia’s first reminder (or wake-up call) for respondents that they need to be across the legislation and ensure timeframes are met so that they are not subject to the Act’s harsh consequences (in this case an additional $17,221,066.55 (excl. GST) liability on top of the certified amount). Additionally, it may be encouraging to claimants as a demonstration of how the Act can be used to their advantage.
A further point worth noting is that the respondent in this case did not deliberately delay in assessing the payment claim or otherwise act wrongfully. In fact, to the contrary, the respondent made a genuine attempt to comply with the Act and it was only due to a technical point regarding service that the payment schedule was one business day late. It is difficult not to empathise with the respondent in these circumstances, or viewpoints that the legislation is overly harsh or draconian and unnecessarily denies procedural fairness.
As to specific learnings:
First, parties need to pay careful attention to the provisions concerning service which address both the means by which documents must be given and time they are taken to be received. This case concerned one such provision, but there are others that need to be considered.[8]
Second, respondents should take a conservative approach when calculating the last day for a payment schedule to be given under the Act. If there is any doubt between dates, the earlier date should be chosen.
Third, the Act does not provide that parties to a contract may agree when a payment claim is given under the Act (and such terms cannot extend the time for giving a payment schedule). This may include terms that:
- deem a payment claim to be served on the next business day (as clause 47.4 provided in this case);
- deem early payment claims to be served on a specified future date of the month (e.g. that payment claims served before the 20th day in a month shall be deemed as served on the 20th day of the month); [9]or
- deem payment claims served after 5:00pm (or other time) as being served on the next day or business day. [10]
Fourth, there is a distinction between a contractual payment claim and a statutory payment claim under the Act. While the terms of the contract may apply to the validity or deemed date of service of a contractual payment claim, that does not mean they also apply to a statutory payment claim.
Fifth, more broadly, parties need to be cognisant of when the terms of the contract will affect timeframes and entitlements under the Act and when they do not. This will be governed by the provisions of the Act. For example, parties may agree to make the time for providing a payment schedule less than 15 business days, but not to a longer period.[11] In general, contractual terms will be void to the extent they are inconsistent with the Act.[12] The terms of the contract will only affect the parties’ statutory rights where provided for by the Act.
Sixth, if a payment claim is served on the weekend then “day 1” for calculating the time for providing a payment schedule starts the following Monday (unless it is a public holiday or a day that falls between 22 December and 10 January, inclusive, as per the definition of “business day” under the Act).[13]
[1] Section 25(1) of the WA SOP Act requires a payment schedule to be given before the earlier of the time required by the construction contract and 15 business days after the payment claim is made. Section 26 provides that the full claimed amount becomes payable if a payment schedule is not given within time.
[2] ETA, s 14(2).
[3] Martinus Rail Pty Ltd v Co-operative Bulk Handling Ltd [2025] WASC 373(Martinus v CBH) at [152].
[4] Martinus v CBH at [164] – [169].
[5] WA SOP Act, s 3(2).
[6] Martinus v CBH at[172].
[7] Martinus v CBH at [100].
[8] For further discussion, see: Andrew Blyth, “Payment Disputes Under the Building and Construction Industry (Security of Payment) Act 2021 (WA)” (available at www.blythlegal.com/sopahandbook), pages 30 – 33.
[9] All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 (discussed in Martinus v CBH at [53] – [64]).
[10] Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWSC 606; & Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161, discussed in Martinus v CBH at [72] – [79] & [80] – [86] respectively.
[11] WA SOP Act, s 15(1).
[12] WA SOP Act, s 111.
[13] “business day means a day other than – (a) a Saturday, Sunday or public holiday; or (b) any other day that falls between 22 December in any year and 10 January in the following year (inclusive)” (WA SOP Act, s 4(1)).