Electronic service of payment claims: WASCA confirms statutory receipt rules prevail over contractual deemed receipt provisions – Co-Operative Bulk Handling Ltd (ABN 29 256 604 947) v Martinus Rail Pty Ltd [2026] WASCA 82
By Tingjing Wang and Alan Skinner
Electronic service of payment claims: WASCA confirms statutory receipt rules prevail over contractual deemed receipt provisions – Co-Operative Bulk Handling Ltd (ABN 29 256 604 947) v Martinus Rail Pty Ltd [2026] WASCA 82
The Western Australian Court of Appeal has confirmed an important point about electronic service under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (“SOP Act”) and the Building and Construction Industry (Security of Payment) Regulations 2022 (WA) (“SOP Regulations”): contractual deemed receipt provisions do not determine when an electronically communicated payment claim is received for the purposes of reg 23(d).
The decision confirms, in substance, the approach taken by Palmer J at first instance in Martinus Rail Pty Ltd v Co-Operative Bulk Handling Ltd (ABN 29 256 604 947) [2025] WASC 373.
The dispute concerned the timing of receipt of a payment claim sent electronically on a Saturday.
Martinus, the respondent on appeal and plaintiff at first instance, argued that the claim was made when it became capable of retrieval. CBH, the appellant on appeal and defendant at first instance, argued that under the parties’ contract, communications received on a non-business day were deemed to be received at 9:00 am on the next business day.
The central question was whether a contractual deeming provision could alter the statutory point at which a payment claim is taken to be “given” or “made” under the SOP Act and SOP Regulations.
Palmer J’s first instance reasoning
At first instance, Palmer J held that the SOP Act establishes a strict statutory framework directed to timely payment, prompt response and certainty.
His Honour treated reg 23(d) as linking the time of receipt of an electronic communication to s 14 of the Electronic Transactions Act 2011 (WA) (“ETA”). However, critically, his Honour did not accept that this allowed a contractual deemed receipt provision to control the operation of the SOP Act.
Palmer J accepted the distinction drawn in interstate authorities between:
· a contractual deeming clause which may have effect between parties as a matter of contract; and
· the statutory rules which determine when a payment claim is made or received for the purposes of the security of payment legislation.
That distinction was central. A private contractual rule about deemed receipt may regulate contractual rights and obligations, but it does not necessarily govern the statutory regime.
Palmer J also accepted that the phrase “unless otherwise agreed” in s 14 of the ETA does not itself confer statutory force on private agreements. Rather, it operates to disapply the statutory timing rules where the parties have agreed otherwise. The legal force of the agreed rule remains contractual, not statutory.
The Court of Appeal’s reasoning
The Court of Appeal reached substantially the same conclusion but gave further textual attention to the phrase “in accordance with” in reg 23(d).[1]
Regulation 23(d) provides that the time of receipt of an electronic communication is taken to be “in accordance with” s 14 of the ETA.
The Court considered the purpose of reg 23 as a whole. It identified the object of reg 23 as prescribing receipt by reference to the point at which the document was under the recipient’s control, and when the recipient should have been aware of it.[2]
That purpose is consistent with the statutory receipt rules in s 14(1)(a) and (b), which focus on when an electronic communication reaches the recipient’s designated information system or otherwise becomes capable of being retrieved.
By contrast, a contractual deemed receipt provision may not necessarily align with that purpose. For example, a contract may provide that an email received on a non-business day is deemed to be received at 9:00 am on the next business day. That was, in substance, the basis of CBH’s argument: it contended that the contractual deeming provision operated as an exception contemplated by s 14 of the ETA and therefore displaced the statutory time of receipt that would otherwise apply.
The Court rejected that approach. It reasoned that, if reg 23(d) were read as allowing contractual agreements about time of receipt to operate, those agreements would not necessarily conform to the object of reg 23. Further, there was nothing in the text of reg 23(d) limiting such agreements to those consistent with that object. That contextual consideration supported the conclusion that reg 23(d) was not intended to pick up contractual deemed receipt rules.[3]
The significance of “in accordance with”
The Court of Appeal’s treatment of the phrase “in accordance with” is particularly important. The Court accepted that the phrase can have a range of meanings, including “consistently with”, “in harmony with”, “under”, “by”, “pursuant to” or “by virtue of”. In the context of reg 23(d), and having regard to the fact that the statutory rules in s 14(1)(a) and (b) are precisely consistent with the object of the other provisions of reg 23, the Court held that “in accordance with” means “in accordance with the legal effect of s 14”: “[t]he application of a prescribed statutory rule is obviously done ‘in accordance with’ the legislation which prescribes the rule”.[4]
That distinction matters because s 14 has two different aspects.
First, s 14(1)(a) and (b) contain statutory rules for determining the time of receipt of an electronic communication. Those rules operate by force of statute.
Secondly, the chapeau to s 14(1) recognises that the originator and addressee may agree otherwise. However, the Court of Appeal held that the application of an agreed rule is not obviously done “in accordance with” s 14 merely because s 14 contemplates such an agreement as an exception to the statutory rules. The reason is that the legal effect of the agreed rule derives from the parties’ agreement, not from the legislation itself.
Accordingly, the Court of Appeal held that reg 23(d) applies the statutory rules in s 14(1)(a) and (b). It does not apply a contractual deemed receipt rule merely because s 14 contemplates that parties may agree otherwise.
The Court of Appeal also observed that this construction supports the policy of the SOP Act, which is directed to an expedited procedure for making progress claims, responding to claims and adjudicating disputed claims.[5] If contractual deeming provisions could alter the statutory timing of receipt, parties may face uncertainty about when time begins to run for payment schedules and adjudication steps.
However, the Court of Appeal was careful not to rely too heavily on general policy considerations.[6] It acknowledged that a different regulatory choice could have been made. For example, the regulations could have provided that an electronic communication received on a non-business day is taken to be received at the commencement of the next business day.
The point was that reg 23 did not adopt that approach. Instead, it fixed receipt by reference to when the document came under the recipient’s control, and when the recipient should have been aware of it.
Consistency with the earlier analysis
The Court of Appeal’s reasoning is largely consistent with the analysis of Palmer J’s decision at first instance. The first instance analysis correctly identified the core issue as whether private agreement could displace or modify the statutory regime. It also correctly identified that while a contractual deeming clause may operate as between the parties in contract, that does not mean it governs the statutory time of receipt under the SOP Act.
This reflects a broader principle recognised by the High Court in CFMMEU v Personnel Contracting Pty Ltd (2022) 275 CLR 165. There, the High Court cautioned that, while parties have legitimate freedom to define their contractual rights and duties, that freedom does not extend to attaching a label inconsistent with the rights and duties otherwise fixed by law. To allow parties to do so would elevate private agreement into a power to alter the operation of statute — A point that was noted in my earlier LinkedIn post on Martinus Rail Pty Ltd v CBH [2025] WASC 373.
The Court of Appeal’s reasons add an important textual refinement. The phrase “in accordance with” in reg 23(d) does not import every consequence contemplated by s 14. Rather, it imports the statutory rules which have legal effect by force of s 14 itself.
The decision has practical significance for principals, contractors, subcontractors and lawyers advising on security of payment disputes.
Where a payment claim is served electronically, the time of receipt is likely to be determined by the statutory rules in s 14(1)(a) and (b) of the ETA, as applied by reg 23(d), rather than by a contractual deemed receipt provision.
Parties should therefore be cautious about relying on contractual clauses which deem communications received on the next business day, or at some other artificial time, when calculating statutory time limits under the SOP Act. The safer approach is to assess when the electronic communication reached the recipient’s designated system, or otherwise became capable of being retrieved by the recipient.
The broader lesson is that contractual machinery cannot be assumed to alter statutory rights and obligations under the security of payment regime. Party autonomy remains important, but it does not extend to rewriting statutory timeframes where the legislation and regulations prescribe their own rules.