Co-operative Bulk Handling Ltd (ABN 29 256 604 947) v Martinus Rail Pty Ltd [2026] WASCA 82

Tom French  |  Sasha Thomas  |  Helen Do

Key takeouts

A contractual clause deferring the time at which a notice or claim is taken to have been given or received (deeming provision) will be of no effect to the extent that it purports to apply to statutory payment claims and payment schedules given under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOP Act).

Respondents cannot rely on deeming provisions to determine the time a statutory payment claim sent by email (or any other electronic form of communication) was received and must calculate the deadlines for providing a payment schedule and remitting payment by reference to the time the payment claim was capable of being retrieved by the addressee.

A principal that fails to respond to a payment claim in the time required by the SOP Act will be liable for the full claimed amount.

Background

On Saturday 31 August 2024 at 4.35 pm, Martinus Rail Pty Ltd (Martinus) sent an email attaching a statutory payment claim seeking payment of $22,646,617 to Co-operative Bulk Handling Ltd (CBH). CBH’s representative opened the email on Monday 2 September 2024.

The contract contained a deeming provision under which emails sent on a non-business day were taken to be received at 9.00am on the next business day. Relying on that provision, CBH treated the payment claim as having been received on 2 September 2024 and calculated that its payment schedule was due on 24 September 2024.

CBH served its payment schedule on Tuesday 24 September 2024, rejecting the claim in full and asserting Martinus owed CBH $5,425,550.

Martinus asserted that the contractual deeming provision did not apply to statutory payment claims under the SOP Act, and CBH’s payment schedule was therefore given out of time. It commenced debt recovery proceedings in the Supreme Court of Western Australia, where it sought to recover the whole of the claimed amount.

The primary judge accepted Martinus’ interpretation of the legislation, holding that CBH’s interpretation would permit parties to avoid the otherwise compulsory statutory time periods imposed by the SOP Act. The judge found that CBH had failed to serve a payment schedule within 15 business days after the payment claim was made and awarded Martinus thefull amount claimed.

CBH appealed, arguing that regulation 23(d) of the Building and Construction Industry (Security of Payment) Regulations 2022(SOP Regulations) requires the time of receipt of an electronic communication to be determined by applying the statutory rules in s 14 of the Electronic Transaction Act 2011 (WA) (ETA), which expressly permits parties to agree a different time of receipt.

Decision

The Court of Appeal dismissed CBH’s appeal and upheld the primary judge’s decision that the payment schedule had been served out of time.

The Court of Appeal rejected CBH’s argument and upheld the primary judge’s interpretation of regulation 23(d) of the SOP Regulations. It held that although s 14 of the ETA allows parties to agree different rules for determining receipt of electronic communications, the words ‘in accordance with’ in regulation 23(d) of the SOP Regulations mean ‘in accordance with the legal effect of’ s 14 of the ETA; in other words, that regulation 23(d) refers to the statutory rules in ss 14(1)(a) and 14(1)(b), not to any alternative agreement or contractual arrangement between the parties.