Australian Court Rules on SOP Act Review and Service Rules

The recent decision in Tackelly No 8 Pty Ltd as trustee for Tackelly No 8 Trust v Reward Interiors Pty Ltd t/as Reward Group [2025] NSWSC 300 has important implications for practitioners operating under SOP Act (WA).

It clarifies the time for service of review application and other documents and considers whether an adjudicator is in jurisdictional error by failing to determine a review application due to late service. This ruling is particularly relevant of those preparing review applications under the security of payment regime in any state in Australia.

Background

This dispute concerned the validity of an adjudication application and a review application under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOP Act). Interestingly, the Supreme Court of New South Wales has the power to hear cases in another state of Australia due to the cross-vesting powers of each state.

Tackelly No 8 Pty Ltd (Tackelly) entered into a contract with Reward Interiors Pty Ltd (Reward) in December 2023 for a hotel redevelopment in Perth.

Reward terminated the contract on 3 September 2024. At the same time, Reward submitted a payment claim for approximately $10.6 million and sought the release of two performance bonds.

Tackelly then responded on 17 September 2024, asserting Reward owed it over $1.3 million and denied the bond release.

Reward subsequently applied for adjudication on 16 October 2024, and Tackelly responded with an adjudication response on 31 October 2024. On 25 November 2024, the adjudicator awarded Reward $2.6 million and ordered the bond release.

Dissatisfied with the award, Tackelly made an application for review of the decision by the Adjudicator on 2 December 2024, which was served via a secure online file transfer (Mimecast drop box). Tackelly failed to properly serve the application within one day, as required by section 42(3) of the SOP Act. Reward subsequently challenged the adjudicator’s jurisdiction on that basis.

On 13 January 2025, the review adjudicator agreed that he lacked jurisdiction to determine the review application.

There were a number of questions the Court had to consider. The most interesting question, which has a substantial practical effect, is whether the review adjudicator fell into jurisdictional error in determining that he did not have jurisdiction because the review application had not been given in accordance with s 42(3)?

Decision

Tackelly contended that the review adjudicator erroneously found that he lacked jurisdiction on the basis that service was not adequately effected and that this was a jurisdictional error. The Court agreed.

In coming to that conclusion, the Court identified two sub issues to be determined:

1. Was Reward “given” a copy of the adjudication review application within the meaning of s 42(3) of the SOP Act?
2. Was compliance with the requirement to “give” a copy within one day of lodgement a jurisdictional fact that needed to be satisfied to enliven the adjudicator’s jurisdiction?

Relying on various NSW cases,¹ the Court determined that since the application was not immediately accessible without Reward being able to access the fire transfer (Mimecast) link, download and open the review application, Tackelly did not “give” the application to Reward within one day in accordance with section 42(3) of the SOP Act.

This reason is quite nuanced and shows that the terms of the SOP Act will be strictly applied.

Tackelly tried to run an alternative argument that the adjudication review application was served in accordance with section 14 of the Electronic Transactions Act 2011 (ETA), which was not accepted by the Court.

Finally, the Court needed to determine the question of whether strict compliance with the one-day timeframe in s 42(3) of the SOP Act was a pre-condition to the review adjudicator’s jurisdiction. The Court drew comparisons of the wording in other sections of the SOP Act, the Queensland, New South Wales and Victoria approaches and considered the object of the SOP Act, which is the “speedy resolution of payment claim disputes.“

The Court favoured the New South Wales approach. It held that the review adjudicator made a jurisdictional error as it is for the adjudicator to ensure procedural fairness to the recipient when service is late.²

Key takeaways

This case provides clarity on a few nuanced points, which could make or break a review application.

It is striking that in an era of rapid technological advancement, and in construction disputes where documents are routinely voluminous, the addition of a file transfer link to an email to serve a document could result in non-compliance with the service requirements of the SOP Act. This means that when serving a document, in particular a review application, the service requirements should be followed strictly. We often recommend service be effected by email and by physical copy, to avoid any question of service.

Whilst the Court in this case has determined that strict compliance with the time in which the review application was served is not a pre-condition to an adjudicator’s jurisdiction, we would still advise that parties should strictly comply with these requirements.

Lastly, in the unfortunate circumstance an application or review application is served late under the SOP Act, a party may want to consider including an argument of procedural fairness so that an adjudicator will not determine an application for lack of jurisdiction.

Footnotes:

1. [2025] NSWSC 300; referring to: Conveyor & General Pty Ltd v Basetec Services Pty Ltd [2014] QSC 30; Parkview Constructions Pty Ltd v Total Lifestyle Windows Pty Ltd [2017] NSWSC 194. Note: Parkview concerned the service via USB required the additional step of accessing, opening and viewing the contents within the USB. Justice Hammerschlag (as his Honour was then) concluded that the USB did not constitute service in writing under the Building and Construction Industry Security of Payment Act 1999 (NSW).
2. [2025] NSWSC 300, [109].