The Importance of Serving Your Payment Claims Correctly

The recent case of Spirito Development Pty Ltd v Sinjen Group Pty Ltd, shows the importance of serving payment claims clearly and correctly under the Security of Payments Act.

In April 2019, Sinjen subcontracted Spirito for Plastering services under a Master Sub-Contract. The works progressed with Spirito issuing payment claims regularly from May to November 2019, and Sinjen paying a portion of each payment claim. The Sub-Contract was terminated on 16 January, 2020 and no further reference dates arose under the Sub-Contract after that date.

Service of Payment Claims by different emails

Spirito asserts that it served two (2) payment claims by different emails.

Payment Claim 5

During the hearing, Spirito argued that this payment is constituted by two invoices (Payment Claim 5) however;

The first is invoice 1130 date 25 September 2019, sent by email at 5:22pm on 25 September 2019.

The second is invoice 1131 dated 25 September 2019, sent by email at 5:35pm on 25 September 2019.

Payment Claim 6

As with Payment Claim 5, Spirito argued that this payment claim (Payment Claim 6) is also constituted by two (2) invoices.

The first is invoice 1132 dated 25 October 2019, sent by email at 5:40pm on 25 October 2019.

The second is invoice 1133 dated 25 October 2019, sent by email at 6:15pm on 25 October 2019.

Judgment

The Court noted that there was nothing in the covering emails or the invoices to suggest that each pair of invoices was intended to constitute a single payment claim.

Spirito relies solely on the proximity in time to support its argument that each pair of invoices should be treated as a single payment claim.

However, the Court held that were the emails attaching discrete invoices are separated in time even by only a few minutes, and there is nothing on their face to confirm that they constitute a single payment claim, they must be viewed as separate payment claims.

The Court also held that ” two invoices sent in the same envelope, or in the same facsimile, or in the same email will often (but not necessarily always) be considered a single payment claim. Even where the invoices are sent under two separate emails, there may be something in the emails or invoices themselves to show they form part of a single claim. For example they may be headed “Payment Claim XX, Invoice 1 of 2″ and then Payment Claim XX, Invoice 2 of 2″, or something to that effect”.

As a result, invoices 1131 and 1133 did not form part of Payment Claims 5 and 6 (respectively) and therefore invalid.

Takeaway Points

• Put all invoices which intend to constitute one payment claim in one email.
• Name the invoice as “Payment Claim XX, Invoice 1 of 2” and then Payment Claim XX, Invoice 2 of 2″.

Level Playing Field Lawyers are here to assist you in issuing your final payment claims.

If you have any questions or queries please feel free to email us at [email protected] or call us on 9041 4674.