Enforcement under SoPA – Complete Hire and Martinus Rail
In October 2024, the Brief digital journal published my article entitled ‘New Adjudication Act Fails its First Reviews’.
The Brief article reviewed the only two cases to consider the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SoPA); OSB Group P/L v Complete Hire and Sales P/L [2024] WASC 310 & LHRE Group P/L v Complete Hire and Sales P/L [2024] WADC 61. As always, lawyers and their clients awaited with interest to see how the courts would appraise and apply a new Act, in this case, the SoPA.
In both these cases, each plaintiff had carried out construction work under a construction contract for the defendant (the same defendant in each case), and issued a payment claim under the SoPA. The defendant failed to either issue a payment schedule under section 25(1) or pay the amount the plaintiffs had claimed in their payment claims.
By failing to comply with its obligations under the SoPA, the defendant was therefore liable to the plaintiffs in each case, with the plaintiffs’ options to either:
- make an adjudication application against the defendant; or
- commence court proceedings, … to recover the unpaid portion of the claimed or scheduled amount as a debt due to the claimant (section 27(2));
as, under section 26, if a party fails to issue a payment schedule within time, that party then becomes liable to pay the claimed amount by the due date for payment.
It is also noteworthy that section 27(3) & 27(4) list the applicable factors which the court must apply before giving judgment under the SoPA to the unpaid party. These were drafted to make the SoPA effective, and to ensure payment for construction work occurs. They include that the recalcitrant defendant cannot raise any cross claims, or even a defence, as all that is relevant is whether the defendant failed to provide a payment schedule, or failed to pay.
Sections 27 & 26 offered the unpaid parties what appeared to be a rapid option to obtain judgment for their payment claim amounts. The SoPA was introduced to provide better payment protections for contractors working in WA’s building and construction industry to ensure they get paid on time, every time … any disputes can be resolved quickly and inexpensively so works can continue – so, what could possibly go wrong?
In both cases, the available enforcement rights under the SoPA were not applied by the respective courts, which resulted in the defendant avoiding both of its payment obligations under the SoPA. In the Supreme Court matter, a speculative defence was raised, that there was an ACL misleading or deceptive conduct claim which caused an inconsistency between the ACL and the SoPA, which the SoPA must bow down to. In the District Court matter, the defendant relied on previously dormant and undiscovered issues concerning the parties’ identities and possible subsequent assignment.
It appeared from these cases that the SoPA was not sufficiently robust and failing in its intended purposes. This was revisited recently …
In Martinus Rail Pty Ltd v Co-Operative Bulk Handling Ltd [2025] WASC 373 (Delivered 11 September 2025), the plaintiff (similar to the above unpaid parties) elected to proceed under SoPA section 27(2)(a) and … recover from the respondent the unpaid portion of the claimed or scheduled amount owed as a debt due to the claimant in a court of competent jurisdiction;
The focus of this decision was on how the counting of days occurs (see below), and this decision is vital for parties calculating applicable dates when issuing payment claims and responsive payment schedules under the SoPA.
The recalcitrant defendant was much less creative than the defendant in last year’s SoPA cases (see above). In consequence, once the court had determined the timing issues, it routinely affirmed the Adjudication Applicant’s right to …recover the unpaid portion of the Claimed Amount pursuant to s 27(2)(a) of the Act.
The current score is now SoPA 1 Hail Mary 2 although the game is not over yet, as the defendant has appealed the matter to the Court of Appeal.
Counting days under the SoPA
As mentioned, the key issue for decision in this matter was when was the Adjudication Applicant’s payment claim for $22.6m made, having been sent by email around 4.35pm on Saturday 31 August 2024.
As a Saturday, was the 15 business days allowed under Act section 25((1)(b) (for a payment schedule to be issued in response) to be calculated from the:
- Saturday the email was sent; or
- Monday, being the following business day?
The Respondent had issued its payment schedule (certifying $5.4m as owing) on Tuesday 24 September 2024, presumably as Monday 23 September was the King’s Birthday public holiday (and therefore an excluded day under the SoPA).
The building contract contained a fairly typical provision that communications received on a non-business day are taken to be received at 9.00 am on the next business day, although as the SoPA applies, considered not relevant or applicable.
SoPA section 113(2)(d) allows documents to be given by email; the SoPA Regulations at regulation 23(d) allow that, where a document is sent by email, it is taken to have been given when the electronic communication is taken to be received by the person in accordance with the Electronic Transactions Act 2011 section 14.
SoPA section 14(1)(a) gives, unless otherwise agreed, 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 latest comparable case is Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 16, which dealt with similar but not identical provisions. This decision was not without some criticism, as contract deeming clauses are now void in the face of adjudication legislation (although contract deeming clauses which set a shorter period may still be arguable).
The court applied this NSW case was applied, as it would be unlikely that section 14 could permit contracting parties to agree time periods which avoided those time periods in the Act, and would therefore defeat the purpose of the Act, if applied. The reference to the contract deeming provision was considered irrelevant.
The consequence, fatal for the Adjudication Respondent, was that 15 business days was counted from and including Monday 2 September 2024. This period ran out at the end of Friday 20 September 2024 and not the next business day (as had been assumed).
As noted above, the Adjudication Applicant was awarded its entitlement to judgment on the unpaid portion of the Claimed Amount pursuant to s 27(2)(a) of the SoPA, presumably $17.2m, although this decision is currently the subject of an appeal. It is suggested that the appeal will focus on the counting of days issue, rather than the ability to obtain judgment under the SoPA sections 25 – 27.
