Fredon Infrastructure Pty Ltd v Hitachi Rail GTS Australia Pty Ltd

[2024] NSWSC 1244

Supreme Court

New South Wales

Medium Neutral Citation:

Fredon Infrastructure Pty Ltd v Hitachi Rail GTS Australia Pty Ltd [2024] NSWSC 1244

Hearing dates:

25 September 2024; further written submissions 30 September 2024

Date of orders:

4 October 2024

Decision date:

04 October 2024

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Payment claims delivered on 21 February 2024; payment schedules not delivered within 10 business days; defendant liable to pay claimed amount

Catchwords:

AGENCY — authority of agent — actual authority – where defendant’s subcontracts manager’s Job Description stated responsibilities to “manage”, “process” and “receive” payment claims – whether defendant’s subcontracts manager had actual authority to receive plaintiff’s payment claims on behalf of the defendant

AGENCY — authority of agent — apparent authority – where defendant’s former subcontracts manager represented to employee of the plaintiff that he had authority to receive payment claims on behalf of the defendant – where new subcontracts manager played same role as former subcontracts manager – whether defendant’s subcontracts manager had apparent authority to receive plaintiff’s payment claims on behalf of the defendant

BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – service of payment claims – where plaintiff and defendant were parties to construction contracts – where plaintiff’s payment claims were from time to time addressed to defendant’s nominated representative and defendant’s subcontracts manager via agreed electronic document management system – whether payment claims solely addressed to defendant’s subcontracts manager via agreed electronic document management system were effectively served – whether proper construction of the contracts required plaintiff to serve payment claims on defendant’s nominated representative

BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – service of payment claims – where plaintiff’s employee sent updated payment claims to defendant’s subcontracts manager via agreed electronic document management system – whether those payment claims may be taken to have been served on that day, or the following day when defendant acknowledged receipt

BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – withdrawal of payment claims – where plaintiff’s earlier payment claims were withdrawn at defendant’s suggestion – payment claims withdrawn by agreement

CONTRACTS — construction — where on plaintiff’s construction of the contracts certain provisions would be void by reason of Building and Construction Industry Security of Payment Act 1999 (NSW), s 34 – where relevant contractual provisions are nonetheless available for the purpose of construing what the parties intended by the words used – contracts do not require plaintiff to serve payment claims on defendant’s nominated representative

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999 (NSW)

Electronic Transactions Act 2000 (NSW)

Evidence Act 1995 (NSW)

Cases Cited:

Argyle Building Services Pty Ltd v Dalanex Pty Ltd (No 2) [2022] VSC 452

Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72; [1975] HCA 49

Demex Pty Ltd v John Holland Pty Ltd [2022] QSC 259

Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480

G&S Engineering Services Pty Ltd v MACH Energy Australia Pty Ltd [2019] NSWSC 407

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602

Kuhl v Zurich Financial Services Australia Limited (2011) 243 CLR 361; [2011] HCA 11

NC Refractories Pty Ltd v Consultant Bricklaying Pty Ltd [2013] NSWSC 842

Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; [1990] HCA 32

Oliveri Legal Pty Ltd t/as Oliveri Lawyers v Cassegrain Tea Tree Oil Pty Ltd [2024] NSWCA 74

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35

Rodrigues v customOz Services Pty Ltd [2023] NSWSC 379

Sass Developments Pty Ltd v Bivoltsis [2024] VCC 798

Taylor Construction Group Pty Ltd v Adcon Structural Group Pty Ltd [2023] NSWSC 723

Category:

Principal judgment

Parties:

Fredon Infrastructure Pty Limited (Plaintiff)
Hitachi Rail GTS Australia Pty Ltd (Defendant)

Representation:

Counsel:
D Hume (Plaintiff)
F P Hicks SC / D Byrne (Defendant)

Solicitors:
CDI Lawyers (Plaintiff)
Marque Lawyers (Defendant)

File Number(s):

2024/241547

JUDGMENT

1. The plaintiff, Fredon Infrastructure Pty Ltd, and the defendant, Hitachi Rail GTS Australia Pty Ltd, were parties to two construction contracts dated 4 May 2022 and 2 September 2022 for carrying out of work by Fredon in respect of the Victoria Cross and Crows Nest Metro Stations (“the Contracts”). ^[1]

   1. Where necessary, I will refer separately to the “Victoria Cross Contract” and the “Crows Nest Contract”.

2. The Contracts were, relevantly, in the same terms. The Contracts were originally between Fredon and Thales Australia Ltd but were novated to Hitachi shortly after their execution. The effect of the novation was to substitute references to “Thales” in the Contracts to “Hitachi”.

3. The Contracts nominated Mr Euan Noble as the “Thales Representative”.

4. It is Hitachi’s case that the effect of the Contracts was that all notices, including payment claims within the meaning of s 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”), were to be sent to Mr Noble as, by then, the “Hitachi Representative”.

5. On 21 February 2024, Fredon sent to officers of Hitachi two payment claims for $1,806,265.39 in the case of the Victoria Cross Contract and $816,612.71 in the case of the Crows Nest Contract (“the 21 February 2024 Payment Claims”). ^[2]

   2. Where necessary, I will refer separately to the “21 February Victoria Cross Payment Claim” and the “21 February Crows Nest Payment Claim”.

6. What divides the parties is whether the 21 February 2024 Payment Claims were effectively served and, if they were, whether they are taken to have been served on 21 February 2024 or, rather, on the following day, 22 February 2024.

7. The latter question is vital as Hitachi served its payment schedule pursuant to s 14 of the Act in response to the 21 February 2024 Payments Claims on 7 March 2024: 10 business days after 22 February 2024, but 11 business days after 21 February 2024.

8. Thus, if the 21 February 2024 Payment Claims were effectively served on 21 February 2024, Hitachi served its payment schedule out of time,^[3] with the result that Hitachi is liable to pay Fredon the claimed amount. ^[4]

   3. See s 14(4)(b)(ii) of the Act.

   4. See s 14(4) of the Act.

9. Fredon raises an alternative issue as to whether payment claims served by Fredon on 15 February 2024 (“the 15 February 2024 Payment Claims”) ^[5] were withdrawn by it earlier on 21 February 2024. Although Mr Hume, who appeared for Fredon, emphasised that alternative issue in his written submissions, he pressed it only faintly in oral submissions. For the reasons I set out below, it is clear that Fredon did, with Hitachi’s consent, withdraw the 15 February 2024 Payment Claims with the result that the substantive issue between the parties relates to the 21 February 2024 Payment Claims.

   5. As necessary, I will refer separately to the “15 February Victoria Cross Payment Claim” and the “15 February Crows Nest Payment Claim”.

The course of events

10. On 6 May 2022, two days after the date of the Victoria Cross Contract, there was a “kick-off meeting” in respect of the Victoria Cross Contract.

11. Ms Zena Borg, a Senior Cost Controller of Fredon, attended the meeting.

12. Ms Borg gave this evidence about that meeting in her affidavit:

“I recall that the meeting was organised by Mr Sanjaya Indrarathna, who at that time had the role of Subcontracts Manager for Thales.

I do not recall everything that was said during the meeting. However, I recall that, during the meeting, Mr Indrarathna said words to the effect that:

(a)    all commercial correspondence, notices and claims sent by Fredon to Thales should be sent to him as the Subcontracts Manager and

(b)    he was the “post-box” for anything commercial sent by Fredon to Thales.”

13. There was a further “kick-off meeting” on 23 September 2022 in relation to the Crows Nest Contract. Ms Borg gave this evidence about that meeting:

“I recall that the meeting was organised by Mr Indrarathna, who at that time still held the role of Subcontracts Manager for Thales.

I do not recall everything that was said during the meeting. However, I recall that, during the meeting, Mr Indrarathna said words to the effect that all commercial correspondence, notices and claims sent by Fredon to Thales should be sent to:

(a)   him as the Subcontracts Manager; and

(b)   Chitra Shende as the Contracts Administrator for Thales.”

14. Between the dates of the “kick-off meeting” and February 2024, Fredon sent 12 payment claims to Hitachi under the Victoria Cross Contract and 14 payment claims to Hitachi under the Crows Nest Contract.

15. All but three of those payment claims, being three payment claims in relation to the Victoria Cross Contract in October 2023, were addressed to Mr Noble, as well as to Mr Indrarathna, Mr Indrarathna’s successor, Ms Erika Green, and, on a number of occasions, Ms Chitra Shende.

16. The three Victoria Cross Contract payment claims sent in October 2023 were addressed to Ms Green. ^[6]

    6. And to others.

17. So far as the evidence reveals, there was no dispute in relation to any of those payment claims.

18. On 15 February 2024, Ms Borg, for Fredon, sent to Mr Noble and Ms Green the 15 February 2024 Payment Claims. The first was for $1,806,265.39 under the Victoria Cross Contract. The second was for $915,163.19 under the Crows Nest Contract.

19. As required by the Contracts, these documents were delivered through an electronic Document Management System known as “Aconex”.

20. As these payment claims were sent to Mr Noble, as well as to Ms Green, there is no dispute that they were effectively served.

21. Ms Borg deposed that:

“On or around 21 February 2024, I received a telephone call from Chitra Shende. I recall that, during the telephone call:

(a)   Ms Shende stated words to the effect that the payment claims I had submitted on 15 February 2024 in respect of the Victoria Cross and Crows Nest Station Contracts should be formatted so that the order of the items in the claims corresponded to payment schedules that [Hitachi] had issued in December 2023;

(b)   Ms Shende stated words to the effect that the payment claim I had submitted on 15 February 2024 in respect of the Crows Nest Station Contract contained incorrect figures for the amounts previously paid and assessed by [Hitachi];

(c)   Ms Shende further stated words to the effect that the payment claims I had submitted on 15 February 2024 in respect of the Victoria Cross and Crows Nest Station Contracts should therefore be withdrawn and re-submitted; and

(d)   I said in response words to the effect that I would withdraw and re-submit both claims.”

22. After that conversation, at 9:58am on 21 February 2024, Ms Shende sent Ms Borg a message using the Aconex system explaining why she contended that there were “incorrect” figures in the 15 February 2024 Crows Nest Payment Claim. Ms Shende did this as a reply to Ms Borg’s Aconex message on 15 February 2024 serving the 15 February 2024 Crowns Nest Payment Claim.

23. However, although Ms Borg had sent the latter document to Ms Shende, Ms Green, and Mr Noble, in her 9:58am Aconex message on 21 February 2024 Ms Shende removed Mr Noble as a recipient of the message.

24. A short time later, at 10:32am on 21 February 2024, Ms Shende sent Ms Borg an Aconex message explaining how she contended that Fredon’s 15 February 2024 Victoria Cross Payment Claim should be reformatted. Again, Ms Shende removed Mr Noble as a party to that communication.

25. At 3:37pm on 21 February 2024, Ms Borg sent, by Aconex an “updated” payment claim under the Crows Nest Contract to Ms Shende, with a copy to Ms Green. Ms Borg did this by way of an Aconex reply to Mr Shende’s 9:58am Aconex communication. As Mr Noble was not a party to the latter, he was also not a party to the former. The “updated” 21 February 2024 Crows Nest Payment Claim was for $816,612.71, rather than $915,163.19 as claimed in the 15 February 2024 Crows Nest Payment Claim. ^[7]

    7. Nothing turns on the difference between these two figures.

26. A short time later, at 3:40pm on 21 February 2024, Ms Borg sent Ms Shende, copied to Ms Green, a “revised” payment claim under the Victoria Cross Contract. This was for the same figure as in the 15 February 2024 Victoria Cross Payment Claim: $1,806,265.39.

27. At 8:33am on 22 February 2024, Ms Borg received a voicemail from Ms Green, sent from Ms Green’s mobile telephone:

“Hi Zena, it’s Erika Green returning your call. Apologies I left my personal phone home yesterday… look I’m in meetings all day today but I would like to confirm that we did get receipt of your updated claims so we’ll start getting onto those and reviewing as soon as we can.”

28. Hitachi served payment schedules in response to the 21 February 2024 Payment Claims on 7 March 2024: 10 business days after 22 February 2024, but 11 business days after 21 February 2024.

Were the 15 February 2024 Payment Claims withdrawn?

29. A payment claim can be withdrawn by agreement. ^[8]

    8. NC Refractories Pty Ltd v Consultant Bricklaying Pty Ltd [2013] NSWSC 842 at [39] (Hammerschlag J, as the Chief Judge in Equity then was); Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602 at [17] (McDougall J); see also Taylor Construction Group Pty Ltd v Adcon Structural Group Pty Ltd [2023] NSWSC 723 at [37] (Rees J) and Rodrigues v customOz Services Pty Ltd [2023] NSWSC 379 at [36]-[37] (Rees J).

30. It appears that there is no authority in this Court that a payment claim can be withdrawn unilaterally. In Victoria, there is authority to the effect that a payment claim cannot be withdrawn unilaterally. ^[9] That may be because of a difference in the wording between the Act and its analogue in Victoria.

    9. Argyle Building Services Pty Ltd v Dalanex Pty Ltd [2022] VSC 452 at [94]-[101] (Delany J); Sass Developments Pty Ltd v Bivoltsis [2024] VCC 798 at [45] (Macnamara J).

31. However that may be, it is not necessary that I decide the issue because the evidence that I have set out above shows that, ^[10] in this case, Fredon’s 15 February 2024 Payment Claims were withdrawn at Hitachi’s suggestion and with Fredon’s agreement.

To whom could Fredon deliver the 21 February 2024 Payment Claims?

10. At [21]-[26].

The Requirements of the Contracts

32. Hitachi submits, as its primary position, that on their proper construction, the Contracts “required Fredon to serve any payment claims on Hitachi’s nominated representative, Euan Noble”. ^[11]

    11. See the submissions of Mr Hicks SC and Mr Byrne, who appeared for Hitachi.

33. This is not the effect of the Contracts.

34. Indeed, if it were, the Contracts would to that extent be void by reason of s 34 of the Act, as the Contracts would, in those circumstances, purport to exclude or modify the effect of s 31 of the Act which permits service by other means.

35. Clause 36.17 of the Contracts provided, relevantly:

“36.17 Notices and Other Communications

(a)   All notices … and documents required or permitted under this Agreement will be duly served if in writing, and hand delivered or sent by pre-paid post, facsimile, email, pre-paid courier to the recipient’s address, facsimile number or email address set out in the Agreement Details … and directed to the attention of the Contractor’s Representative or the Thales Representative (as applicable).

…

(c)   The provisions of this clause are in addition to any other mode of service permitted by law.” (Emphasis in original.)

36. The “Thales Representative” referred to at the end of cl 36.17(a) was, as I have said above,^[12] Mr Noble.

    12. At [3].

37. The “Agreement Details” referred to in cl 36.17(a) are set out in the Contracts in “Part A – Agreement Details”.

38. Item 14 in the Agreement Details was:

Item	Description	Details
14	Thales Representative Clause 14.1	Euan Noble, Project Manager Email: [email protected] Mobile: xxxx xxx 064

39. Clause 36.17 is a facultative provision. Its effect was that if a document of the kind described was transmitted in one of the means described to, ^[13] relevantly, Mr Noble as the Thales Representative, the document “will be duly served”.

    13. Albeit not by email: see Sch 3, cl 3.1(a)(iii) discussed below at [45], [53]-[54].

40. The clause facilitated service but was not an exclusive code for service, as the provision in cl 36.17(c) makes clear.

41. Clause 36.18 dealt with the Aconex system and provided in cl 36.18(d) that Fredon must give any notice that it is entitled or required to give to Hitachi by lodging it upon the Aconex system. That is how Fredon delivered the 21 February 2024 Payment Claims.

42. Clause 36.18(e) provided:

“(e)   If either [Fredon] or [Hitachi] is unable to use the Document Management System as a result of the failure of the Document Management System, or if required by this Agreement, [Fredon] or [Hitachi], as the case may be, must use one of the alternative means of communication set out in Clause 35.17(a).”

43. It is common ground that the reference in the last line of this clause to “Clause 35.17(a)” is a drafting error and should be read as a reference to cl 36.17(a). ^[14]

    14. There being no cl 35.17(a) in the Contracts.

44. The use of the word “must” in this subclause appears to have the effect that, in the circumstances posited in the subclause, the requirements in cl 36.17(a) were mandatory. However, cl 36.18(e) was only engaged if the parties were “unable” to engage the Aconex system or, if “required by this Agreement”. The parties were able to use Aconex on 21 February 2024. Neither party pointed to any such “requirement” in the Contacts that the communication means in cl 36.17(a) “must” be used.

45. Schedule 3 of the Contracts was entitled “Construction obligations” and included cl 3.1 which provided, relevantly:

“3.1   Security of Payment Legislation

(a)   For the purposes of the Security of Payment Legislation [Fredon]:

…

(iii)   [agrees that] despite any other provision of this Agreement, service of a notice or document under the Security of Payment Legislation via email will not be valid; and

(iv)   [agrees that] the principal place of business or such other address for service of documents pursuant to the Security of Payment Legislation for:

(A)   [Hitachi] is as set out in the Details section of the Agreement; and

(B)   [Fredon] is as set out in the Details section of the Agreement,

each as varied in accordance with this Agreement.” (Emphasis in original.)

46. Clauses 3.1(a)(iv)(A)-(B) referred to the “Details section” of the Contracts.

47. This may be contrasted with the “Agreement Details” referred to in cl 36.17(a), to which I have referred at [37] above. These were contained in “Part A – Agreement Details” on pages 7 and 8 of the Contracts and included the reference to Mr Noble’s email address that I have set out at [38] above.

48. The preceding page of the Contracts, page 6, was entitled “Details” and is in the following form:

49. Although the Contracts had definition sections, neither “Agreement Details” nor “Details section” is defined.

50. However, the reference in cll 3.1(a)(iv)(A)-(B) to the “Details section” of the Contracts must be a reference to what appears under the heading “Details” on page 6, rather than a reference to “Part A – Agreement Details” on pages 7 and 8.

51. That is for two reasons.

52. The first is the parties have used two different expressions, “Agreement Details” and “Details section”, and must have intended the reference to the “Details section” of the Contracts to be a reference to something different to the “Agreement Details”. There was a section headed “Agreement Details” which must be what is referred to in cl 36.17(a) where that exact expression is used. There was also a “section”, lower case, headed “Details”, which must be what the parties were referring to at Sch 3, cl 3.1(a)(iv)(A) when they used the expression “Details section”.

49. Second, Sch 3, cl 3.1(a)(iii) provides that service under the “Security of Payment Legislation via email will not be valid”. That clause is void by reason of s 34 of the Act, as it is inconsistent with the provision in s 31(1)(d) of the Act which, in terms, permits service of a document by or under the Act by email.

50. The provision is, nonetheless, available for the purpose of construing what the parties intended by the words used in the Contracts,^[15] and confirms the parties could not have intended that the “Details section” of the Contracts be a reference to the “Agreement Details” as, relevantly, that part of the Contracts sets out email details of the Thales Representative.

    15. See my judgment in G&S Engineering Services Pty Ltd v MACH Energy Australia Pty Ltd [2019] NSWSC 407 at [89]-[90] and the authorities cited therein.

51. Although the wording of Sch 3, cll 3.1(a)(iv)(A)-(B) is awkward, its effect is again facultative and does not require that service of documents under the Act be effected at the address in the “Details section” of the Contacts.

52. Overall, I see nothing in any of these provisions having the effect of requiring Fredon to serve any payment claim on Mr Noble.

Actual authority of Ms Green and Ms Shende

57. Ms Green’s contract of employment with Thales, and thus on novation of the Contracts, with Hitachi, described her as the “Subcontracts Manager”.

58. The document described Ms Green’s duties and responsibilities as being those contained in “your Job Description”.

59. That Job Description included:

“The Sub-Contractor Manager will be responsible for the management of supplier contracts within a specified Thales project. …

…

As a Sub-Contractor Manager, you are accountable [to]:

…

• Manage payment application through to invoice closure (monitoring actual costs against planned/estimates), and process and payment applications in accordance with the contracted agreement;

…

• Receive, assess and negotiate contractual claims …” (Emphasis added.)

60. Ms Shende’s “Job Description” described her position as “Contract Administrator”. That Job Description stated, under the heading “Purpose of the Position”:

“… to support the subcontract manager [i.e., here, Ms Green] in the management contracts and claims between Thales’ installation subcontractor and Thales.”

61. The Job Description also stated that Ms Shende was accountable for:

“• On a day to day basis your role will focus on Install contract administration and management of all internal and upstream claims.

…

• Assessing subcontractor … claims …

…

• Escalating the pass through of claims …”

62. Ms Green’s Job description showed that, as between Ms Green and her employer, Thales and then Hitachi, she had actual authority to “manage” and “process…payment applications”. Ms Green also had actual authority “receive … contractual claims”. Ms Shende’s role was to support Ms Green. Ms Shende’s actual authority included to “assess” subcontractor claims. Ms Green thus had actual authority to “manage” and “process” Fredon’s 15 February 2024 Payment Claims and to receive the 21 February 2024 Payment Claims. Ms Green did all those things by being a party to the Aconex communications of 21 February 2024, to which I have referred. Ms Shende supported Ms Green in those tasks, and herself “assessed” Fredon’s 15 February 2024 Payment Claims.

63. Ms Green thus had actual authority to receive payment claims generally, and did, with that actual authority, receive on behalf of Hitachi the 21 February 2024 Payment Claims.

Apparent authority of Ms Green

64. If a principal represents to a contractor that the principal’s agent has authority to receive a document, and the contractor serves a document on that agent in reliance on that representation, the agent will be taken to have apparent authority to receive the document. ^[16]

    16. Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503 (Diplock LJ); Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 198 (Dawson J), 211-212 (Gaudron J) [1990] HCA 32; Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 at 78 (Gibbs, Mason, and Jacobs JJ); [1975] HCA 49; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [36] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Oliveri Legal Pty Ltd t/as Oliveri Lawyers v Cassegrain Tea Tree Oil Pty Ltd [2024] NSWCA 74 at [46]-[50] (Mitchelmore JA, Gleeson JA agreeing).

65. As I have set out above, ^[17] Ms Borg’s evidence was that, at the kick-off meeting for the Victoria Cross Contract, Mr Indrarathna instructed her to send claims to him, as Subcontracts Manager, and that at the kick-off meeting for the Crows Nest Contract, instructed her to send claims either to him as Subcontracts Manager, or to Ms Shende as Contracts Administrator.

    17. At [10]-[13].

66. From January 2023, Mr Indrarathna was replaced as Subcontracts Manager by Ms Green.

67. Ms Green played the same role as Subcontracts Manager as had formerly been played by Mr Indrarathna. Their Job Description was the same.

68. Ms Borg gave unchallenged evidence that she understood from these matters that Ms Green and Ms Shende had authority to receive the 21 February 2024 Payment Claims.

69. There was debate before me as to what authority Mr Indrarathna had to direct Ms Borg to send claims to Ms Green or Ms Shende.

70. However, that authority clearly emerges from the words of his Job Description which was the same as those of Ms Green.

71. As I have set out above, the Job Description shows that Ms Green’s, and thus Mr Indrarathna’s, role included management and processing of payment applications, receipt, and assessment of contractual claims. ^[18]

    18. See [59] above.

72. Thus, Mr Indrarathna’s statements to Ms Borg at the kick-off meetings amounted to a representation by Thales that Ms Green and Ms Shende had authority to accept payment claims. ^[19]

    19. See above fn [13].

73. There is no dispute that if that is so, Ms Borg, and thus Fredon, relied on that representation by submission of the October 2023 payment claims to which I have referred at [15]-[17] above to Ms Green and, more particularly, by Ms Borg’s submission of the 21 February 2024 Payment Claims.

Conclusion on authority

74. Ms Green and Ms Shende were authorised by Hitachi to receive the 21 February 2024 Payment Claims.

75. Delivery of the 21 February 2024 Payment Claims to Ms Green and Ms Shende by Aconex was thus delivery to Hitachi.

When were the 21 February 2024 Payment Claims delivered?

76. Ms Borg sent, via Aconex, to Ms Shende and Ms Green, the 21 February 2024 Crows Nest Payment Claim at 3:37pm, and the 21 February 2024 Victoria Cross Payment Claim at 3:40pm.

77. It is probable, and I find as a fact, that at that time both Ms Shende and Ms Green were present at work. Ms Shende sent Ms Borg her Aconex messages suggesting changes to the 15 February 2024 Payment Claims at 9:58am and 10:32am on 21 February 2024. Further, Ms Borg deposed that she received that Aconex correspondence “after the telephone call with Chitra Shende” that I have set out at [21] above.

78. As both Ms Shende and Ms Green had engaged with Ms Borg that day about the withdrawal of the 15 February 2024 Payment Claims, it is likely their attention was focused, during the day, on the likely submission by Ms Borg of revised payment claims, ultimately the 21 February 2024 Payment Claims.

79. In the voicemail that Ms Green left Ms Borg at 8:33am the following day, 22 February 2024,^[20] Ms Green apologised for the delay in returning Ms Borg’s call by stating that she “left [her] personal phone home yesterday”. I would infer from this that the call that Ms Green was returning was one that Ms Borg had made to Ms Green’s personal phone “yesterday”. Ms Green’s statement in her voicemail to Ms Borg that she wanted to confirm that “we did get receipt of your updated claims” suggests that she was speaking of receipt the previous day.

    20. Set out at [27] above.

80. Hitachi did not call either Ms Green or Ms Shende to give evidence. No explanation has been offered for their absence from the witness box. There is no suggestion that they had left Hitachi’s employment or were otherwise unavailable to give evidence. I conclude from this that neither was able to give evidence supportive of Hitachi’s case. This enables me more confidently to draw the inferences to which I have referred. ^[21]

    21. Kuhl v Zurich Financial Services Australia Limited (2011) 243 CLR 361; [2011] HCA 11 at [63] (Heydon, Crennan and Bell JJ); Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8.

81. Further, Mr Noble said in cross-examination that Ms Green, as Subcontracts Manager, managed a register maintained by Thales that recorded when payment claims were received. The fact that Ms Green was not called to depose as to the contents of that register gives me further confidence that I should draw the inference to which I have referred.

82. I gain further comfort in drawing this inference from the fact that, in its letter serving the 7 March 2024 payment schedule, Thales, under the hand of Mr Noble, referred to the “payment claim submitted by Fredon Infrastructure Pty Ltd on 21th [sic] February 2023 [sic; 2024]”.

83. In these circumstances, I find, as a matter of fact, that the 21 February 2024 Payment Claims were received by Ms Green and Ms Shende on the afternoon of 21 February 2024.

84. In Demex Pty Ltd v John Holland Pty Ltd,^[22] Crowley J was invited to take judicial notice of the fact that an email “… is a means of electronic communication which, unless something goes wrong, is more or less instantaneous”. ^[23] His Honour refused to take such judicial notice and concluded:^[24]

“I do not consider that, without more, I am permitted to take judicial notice of when an email is ordinarily received after sending, nor when an email ordinarily reaches the intended recipient’s address.”

22. [2022] QSC 259.

23. At [124].

24. At [130].

85. I do not see that what I am doing here is taking judicial notice of matters concerning electronic communication. I am reaching a conclusion as to what is the correct inference to draw on the facts before me. The facts in Demex were, in any event, very different from those in this case and concerned an email sent on a Saturday which was first read the following Monday.

Section 13A of the Electronic Transactions Act 2000 (NSW)

86. Section 13A of the Electronic Transactions Act 2000 (NSW) deems electronic communications to be received in certain circumstances.

87. In view of my conclusions as to what in fact happened in this case, it is not necessary to consider what further effect s 13A might have.

88. However, I will do so, albeit briefly.

89. Section 13A provides, relevantly:

“(1)   For the purposes of a law of this jurisdiction, unless otherwise agreed between the originator and the addressee of an electronic communication—

(a)   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, or

(b)   the time of receipt of the electronic communication at another electronic address of the addressee is the time when both—

(i)   the electronic communication has become capable of being retrieved by the addressee at that address, and

(ii)   the addressee has become aware that the electronic communication has been sent to that address.

(2)   For the purposes of subsection (1), unless otherwise agreed between the originator and the addressee of the electronic communication, it is to be assumed that the electronic communication is capable of being retrieved by the addressee when it reaches the addressee’s electronic address.”

90. Assuming that Ms Borg’s Aconex messages on the afternoon of 21 February 2024 were sent to an electronic address other than one “designated” by Hitachi, and thus that the relevant provision in s 13A is s 13A(1)(b), the “time of receipt” of Ms Borg’s Aconex messages of 21 February 2024 would be the time when Ms Green and Ms Shende became aware of the communications, ^[25] and when the communication had “reached” Ms Green’s and Ms Shende’s electronic addresses. ^[26]

    25. Section 13A(1)(b)(ii).

    26. Section 13A(1)(b)(ii) read with s 13A (2).

91. I have found that those events occurred on 21 February 2024.

Section 161 of the Evidence Act 1995 (NSW)

92. Section 161 of the Evidence Act 1995 (NSW) provides, relevantly:

“161   Electronic communications

(1)   If a document purports to contain a record of an electronic communication … it is presumed … that the communication—

…

(d)   was received at the destination to which it appears from the document to have been sent, and

(e)   if it appears from the documents that the sending of the communication concluded at a particular time—was received at that destination at that time.

(2)   A provision of subsection (1) does not apply if—

(a)   the proceeding relates to a contract, and

…

(c)   the provision is inconsistent with a term of the contract.” (Emphasis in original.)

93. Again, in view of my conclusions as to what in fact happened, it is not necessary to deal with this provision.

94. On the copy of Ms Borg’s 21 February 2024 Aconex message forwarding the 21 February 2024 Victoria Cross Payment Claim, it is stated that the message was sent at 3:40pm. Thus, in relation to that message, it “appears from the document” that the document was sent “at [that] particular time”. By operation of s 161, it is thereby to be presumed to have been received “at that destination”, that is by Ms Green and Ms Shende, “at that time”.

95. The copy in the Court Book of the Aconex message that Ms Borg sent three minutes earlier, at 3:37pm, enclosing the 21 February 2024 Crows Nest Payment Claim does not state, on its face, when the message was sent. But all earlier Aconex messages in the relevant Aconex chain state the time of sending, as do numerous other Aconex messages in the Court Book. Although the “native” version of Ms Borg’s 3:37pm Aconex message is not reproduced in the evidence, it seems unlikely that such version is undated. I find that, like the Aconex message sent three minutes later, at 3:40pm, it did “appear from” that message that it was sent at the “particular time” of 3:37pm.

96. I conclude, in those circumstances, that subject to what follows, by reason of s 161, it is to be presumed that Ms Borg’s Aconex messages sent at 3:37pm and 3:40pm enclosing the updated 21 February 2024 Crows Nest Payment Claim and 21 February 2024 Victoria Cross Payment Claim were received by Ms Green and Ms Shende at the time they were sent.

97. Section 161(2) provides that the presumptions in s 161(1) do not apply if there is an inconsistent provision in the relevant contract.

98. Mr Byrne, who conducted this part of the argument for Hitachi, submitted that there was such inconsistency. Mr Byrne pointed to the fact that cl 36.17 of the Contracts provides that a notice sent by email is “taken to be successfully transmitted … at the time that the sender’s computer records that the transmission was successful” and that there was no corresponding provision in cl 36.18 which deals with the Aconex system.

99. I see no relevant inconsistency between those circumstances and those posited in s 161(1). The Contracts are simply silent on the question of when an Aconex message is presumed to have been received.

Exhibit B

100. Mr Hume sought to tender some 70 Aconex communications between officers of Thales, including Ms Green and Ms Shende, with representatives of other contractors in relation to the Victoria Cross and Crows Nest projects, with a view, presumably, to showing some pattern of behaviour concerning payment claims consistent with Fredon’s case.

101. I concluded that, as Mr Hume was not in a position to tender the contracts between Hitachi and those other subcontractors, examination of that material would be devoid of context and would be unfairly prejudicial to Hitachi and, in any event, apt to distract attention from the critical issues in the case and thus to be misleading or confusing. Accordingly, I rejected that material pursuant to s 136 of the Evidence Act.

Conclusion

102. The 21 February 2024 Payment Claims were delivered, effectively, by Fredon to Hitachi on that day. Hitachi’s payment schedule was served out of time. Hitachi is now liable to Fredon for the amounts in those payment claims.

103. The parties should bring in short minutes to give effect to these reasons.

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Endnotes

Decision last updated: 04 October 2024