Zebicon Pty Ltd v Remo Constructions Pty Ltd [2008] NSWSC 1408 (24 December 2008)


Last Updated: 6 January 2009





Zebicon Pty Ltd v Remo Constructions Pty Ltd [2008] NSWSC 1408








24 December 2008



24 December 2008



Zebicon Pty Limited (Plaintiff)

Remo Constructions Pty Limited (Defendant)



McDougall J



Not Applicable



Not Applicable



Not Applicable



M G Rudge SC (Plaintiff)

F P Hicks (Defendant)



Colin Biggers & Paisley (Plaintiff)

Blackstone Waterhouse Lawyers (Defendant)



BUILDING AND CONSTRUCTION - payment claim - served by fax - evidence that recipient machine faulty - whether payment claim "received"



Building and Construction Industry Security of Payment Act 1999

Evidence Act 1995



Blatch v Archer [1774] EngR 2 ; (1774) 1 Cowp 63

Brookhollow Pty Ltd v R and R Consultants Pty Ltd [2006] NSWSC 1

Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259

Firedam Civil Engineering v KJP Construction [2007] NSWSC 1162

Hampton Court Limited v Crookes [1957] HCA 28 ; (1957) 97 CLR 367

Swain v Waverley Municipal Council (29005) [2005] HCA 4 ; 220 CLR 517

Taylor Project Group Pty Ltd v Brick Dept Pty Ltd [2005] NSWSC 439





See paras [48] and [49] of the judgment.










24 December 2008 (ex tempore – revised 24 December 2008)





1 HIS HONOUR: The plaintiff (Zebicon) and the defendant (Remo) are parties to a construction contract made about 28 February 2008. Zebicon served a payment claim, known as payment claim 11, in July 2008. Remo provided a payment schedule in response in August 2008. The questions for preliminary decision are:


(1) What was the precise date on which Zebicon served (or first served) payment claim 11?


(2) What was the precise date on which Remo provided (or first provided) its payment schedule in response?


2 The case was perceived to have claims to an urgent hearing and was dealt with in vacation. Because of the perceived urgency, I have decided to give judgment forthwith rather than to do as I would prefer to have done: reserve, and reflect upon the evidence with the assistance of a transcript. In what follows, I seek to refer to the essential case put for each party. I do not, however, refer to the detail of the evidence or of the submissions. Nonetheless, the matter is fresh in my mind and I have taken into account, to the extent that I think necessary, relevant evidence and submissions.




3 Zebicon says that it served payment claim 11 by fax on 19 July 2008 (a Saturday). Remo says that it did not receive any payment claim that day or, by fax, thereafter until 22 July 2008. It is common ground that on 22 July 2008 Remo received payment claim 11 (or a copy of it) that Zebicon had posted some time earlier.


4 It is also common ground that:


(1) if payment claim 11 were served on 19 July 2008, the last day for provision of a payment schedule was 1 August 2008;


(2) if payment claim 11 were served on 21 July 2008 (the first business day following 19 July 2008),the last day for provision of a payment schedule was 4 August 2008; and


(3) if payment claim 11 were served on 22 July 2008, the last day for provision of a payment schedule was 5 August 2008.


5 Remo says that it provided a copy of its payment schedule in response to payment claim 11 on 4 August 2008. It says that this document was given personally to Mr Zerilli, a director of Zebicon, at a meeting on that day. Mr Zerilli denies that this happened. Indeed, he denies that there was any meeting with representatives of Remo on that day.


6 It is common ground that Remo faxed a copy of its payment schedule to Zebicon on 8 August 2008. That document comprised what Remo says was a copy of the document provided on 4 August 2008, together with supporting schedules. Zebicon says that this was the first and only time that it received a payment schedule in response to payment claim 11.


7 It is also common ground that:


(1) if payment claim 11 were served by fax on 19 July 2008, or


(2) if no payment schedule were provided until 8 August 2008,


then on any view of the other factual disputes, Remo is liable to Zebicon in the amount claimed by payment claim 11. The amount of that claim is $1,068,700.45. There may be a question as to the allocation of payments made by Remo to Zebicon since the dates in question. I am not concerned with the resolution of this possible question.


19 July 2008


8 The contract provided for a reference date of the 20th of each month, or the next following business day if the 20th were not a business day as defined. See clause 8.3(a), read in conjunction with item 11 of annexure A, and clause 8.3(e).


9 Mr Zerilli said that he caused payment claim 11 to be prepared on 18 July 2008, in anticipation of service on the reference date, and that he faxed it on 19 July 2008. The document that was faxed included two statutory declarations purporting to have been made on 20 July 2008. Mr Zerilli explained this by saying that he thought that the declarations were intended to speak as at the reference date, and that this was what he intended to achieve. Mr Zerilli's first language was not English. Although I am of the view that he well understood the relevant provisions of the contract, I accept his explanation of the dating of the declarations in question.


10 Having said that, Mr Zerilli's evidence did not give any satisfactory explanation of why payment claim 11 was faxed before the reference date. 20 July 2007 was a Sunday. It follows, by application of clause 8(3)(e) of the contract, that the relevant reference date was Monday 21 July 2008.


11 Mr Zerilli produced what he said was a fax transmission report produced by Zebicon's fax machine. The report shows that at 10.27am on 19 July 2008, a six page fax was transmitted to "97474934" (I omit the prefatory "0" which is irrelevant). It is common ground that this was the number of the fax machine at Remo's principal office. Remo had another fax machine, with a different number, at its site office, but nothing of present relevance turns on this.


12 The transmission report noted, under the heading "RESULT", "OK". Mr Zerilli said that in his experience this notation meant that the fax had been sent. He contrasted this with another notation, "NG", which he said indicated that a fax to which it referred had not been sent.


13 Payment claim 11 was some six pages long. It was not put to Mr Zerilli that he (or anyone else) sent a different six page message to Remo by fax on 19 July 2008. I find that Mr Zerilli did send payment claim 11 to Remo on 19 July 2008 by facsimile transmission, as shown by the transmission report.


14 Nonetheless, Remo says that it did not receive the document. There was evidence, which I accept, that Remo's fax machine was "playing up" at the time. Employees of Remo had received complaints, both before and after 19 July 2008, that they had not responded to faxes that had apparently been sent to Remo. I think that the evidence of malfunction was somewhat exaggerated. I say this because, if Remo's fax machine were as faulty as some witnesses suggested, it is inconceivable that Remo would have delayed replacing it until October 2008, as happened. Nonetheless, I accept that at the time in question the machine did malfunction from time to time. Specifically, I find that from time to time Remo's fax machine did not print out faxes that had been sent to it.


15 Remo called no evidence as to the nature of the malfunction. There was some evidence that the machine had a memory, so that inward transmissions could be stored (if, for example, the paper supplies had run out and transmissions could not be printed out). There was no evidence as to whether the faults:


(1) affected the ability of the machine to receive transmissions into its memory;


(2) affected the ability of the machine to print out stored transmissions from memory; or


(3) for that matter, affected the machine in some other way.


16 The question of receipt is relevant because of section 31 of the Building and Construction Industry Security of Payment Act 1999 (the Act). So far as it is relevant, s 31 reads as follows:


31 Service of notices


(1) Any notice that by or under this Act is authorised or


required to be served on a person may be served on the person:



(b) by lodging it during normal office hours at the person’s ordinary place of business, or


(c) by sending it by post or facsimile addressed to the person’s ordinary place of business, or



(2) Service of a notice that is sent to a person’s ordinary place of business, as referred to in subsection (1) (c), is taken to have been effected when the notice is received at that place.


17 In considering what inferences may be drawn from Zebicon's transmission report, ss 71 and 147 of the Evidence Act 1995 require attention. So far as those sections are relevant, they read as follows:


71 Exception: telecommunications


The hearsay rule does not apply to a representation contained in a document recording a message that has been transmitted by electronic mail or by a fax, telegram, lettergram or telex so far as the representation is a representation as to:


(a) the identity of the person from whom or on whose behalf the message was sent, or


(b) the date on which or the time at which the message was sent, or


(c) the message’s destination or the identity of the person to whom the message was addressed.


147 Documents produced by processes, machines and other devices in the course of business

(1) This section applies to a document:


(a) that is produced wholly or partly by a device or process, and


(b) that is tendered by a party who asserts that, in producing the document, the device or process has produced a particular outcome.


(2) If:


(a) the document is, or was at the time it was produced, part of the records of, or kept for the purposes of, a business (whether or not the business is still in existence), and


(b) the device or process is or was at that time used for the purposes of the business,


it is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that, in producing the document on the occasion in question, the device or process produced that outcome.


18 The word "fax" is defined in the dictionary to the Evidence Act as follows:


fax , in relation to a document, means a copy of the document that has been reproduced by facsimile telegraphy.


19 That definition, like all others in the Evidence Act , applies "except insofar as the context or subject matter otherwise indicates or requires" (section 3(3)).


20 Mr MG Rudge of Senior Counsel, for Zebicon, submitted that the transmission report showed that the document to which it referred - on my finding, payment claim 11 - had been transmitted successfully to Remo's fax machine. Thus, Mr Rudge submitted, there was an available inference that Remo had received the document. He submitted that this inference was not rebutted by the evidence of malfunction.


21 Mr FP Hicks of Counsel, for Remo, submitted that the evidence did not permit a finding that Remo had received the document. He relied on the evidence of malfunction and on evidence (which I accept) that employees of Remo had not seen, and had searched for but had not found, any printout of the fax.


22 Mr Hicks submitted in the alternative that even if the document had been "received", the operative date of receipt was 21 July 2008 - the first business day following both the date of transmission and 20 July 2008.


23 I find that payment claim 11 was sent "by facsimile" to Remo's ordinary place of business on 19 July 2008. That is an available - indeed, I think, the only rational - inference from Mr Zerilli's evidence and the transmission report. As I have said, it is fortified by the absence of any other suggested candidate for the role of the six page document shown to have been sent on that day.


24 Was it received? It is not necessary that the document should have come to the attention of anyone at Remo's ordinary place of business. See Hodgson JA in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 at [62] , [63]. Although what his Honour there said was obiter, it commanded the support of Handley JA and Hunt AJA. I do not regard myself as at liberty to take a different view. (On this, see Austin J in Firedam Civil Engineering v KJP Construction [2007] NSWSC 1162 at [65] .) Nor do I see it as a relevant point of distinction that Hodgson JA was talking of receipt in the context of s 17(3)(c) of the Act, rather than that of s 31(1)(c).


25 Thus, I conclude, for the purposes of s 31(1)(c) of the Act, Remo would have received payment claim 11 on 19 July 2008 if that document had been received into the memory of Remo's fax machine on that date. I do not think that it is necessary, in terms of receipt, for the document to have been printed out. If it were, a respondent could avoid facsimile service of a document by keeping its fax machine perpetually empty of paper.


26 In my view, it can be inferred from the "OK" result indicated by Zebicon's transmission report that communication was established between Zebicon's fax machine and Remo's fax machine on 19 July 2008 and that the message - the data into which Zebicon's machine had transformed payment claim 11 - was delivered to Remo's machine. If communication had not been established, or the message had not been delivered, the result would not have been "OK".


27 In this context, I bear in mind that Remo could have called evidence as to the nature of the fault, and as to whether it was possible that a sender could receive an "OK" report for a message that in fact had not been received into the recipient machine's memory. It did not do so, although at an interlocutory hearing Mr Hicks referred to the fact that Remo was considering obtaining and calling expert opinion. I bear in mind also the observation of Lord Mansfield CJ in Blatch v Archer [1774] EngR 2 ; (1774) 1 Cowp 63 at 65 [1774] EngR 2 ; ; 98 ER 969 at 970 that "all evidence is to be weighed according to the power of one side to have produced, and the power of the other to have contradicted". (Subsequent citations of his Lordship's words do nothing to diminish their authority: see, by way of example only, Dixon CJ in Hampton Court Limited v Crookes [1957] HCA 28 ; (1957) 97 CLR 367 at 371 and Gleeson CJ in Swain v Waverley Municipal Council (29005) [2005] HCA 4 ; 220 CLR 517 at 525 [17] .)


28 I conclude that Remo did receive payment claim 11 on 19 July 2008, because I think the evidence of Mr Zerilli, coupled with the transmission report, leads to an unrebutted inference that the document was transmitted to and received into the memory of Remo's fax machine on that day.


29 I turn to Mr Hicks' alternative submission. Section 31(1)(c) does not require that service in the ways that it authorises be effected during normal office hours. In this, it stands in contrast to s 31(1)(b).


30 Mr Hicks relied on what Hodgson JA said in Falgat [63]. As I have said, his Honour was there speaking of s 17(3)(c). His Honour said that the requirement for receipt in that paragraph would be satisfied "in general" if the document arrived at the recipient's registered office or ordinary place of business "and is there during normal business hours".


31 Bearing in mind the distinction in the wording of paras (b) and (c) of section 31(1), I do not think that it follows from what Hodgson JA said in Falgat that receipt, for the purposes of para (c), necessarily requires receipt during normal business hours. In Taylor Project Group Pty Ltd v Brick Dept Pty Ltd [2005] NSWSC 439 , Einstein J held at [21] that the distinction in language between paras (b) and (c) made it clear that the "normal office hours" restriction in the former did not apply to the latter. I agree.


32 Mr Hicks submitted also that the payment claim should be taken to have been served, or treated as served, only on 21 July 2008, because that was the reference date.


33 I accept that, under s 8(1) of the Act, an entitlement to a progress payment accrues "on and from each reference date ...". I accept also that it is at least arguable from s 13(4)(a) that a payment claim must be served in accordance with the relevant provisions of the applicable construction contract. However, s 13 itself applies not only to someone who is entitled to a progress payment, but also to someone who claims to be so entitled. Thus, premature service may have afforded a good answer to payment claim 11. But that point was not taken by any (or any valid) payment schedule. It cannot be relied upon now by way of defence. See s 15(4)(b)(ii) of the Act, and note the observations of Palmer J in Brookhollow Pty Ltd v R and R Consultants Pty Ltd [2006] NSWSC 1 at [48] , [51].


34 The payment claim was served when it was sent and received. That matter of fact, or history, cannot be varied to make the date of service the date on which it should have been served (or the first date on which, according to the contract, it could have been served).

4 August 2008


35 The conclusion to which I have come makes it unnecessary to consider the events of 4 August 2008. However, in case others disagree with what I have said, I will deal briefly with those events.


36 Mr Zerilli denied that any meeting took place on that day. I do not accept that aspect of his evidence. Three employees of Remo - Messrs Loru, Passas and Emmi - gave evidence that there was such a meeting: Mr Emmi's evidence was supported by a contemporaneous note in a "work book" maintained by him. It was not put to Mr Emmi that his note was fabricated. I find that there was a meeting on 4 August 2008.


37 It does not follow that I must accept also that Mr Zerilli was given a copy of the payment schedule on that date. Mr Emmi's note says nothing about this. However, Mr Loru says that he did give Mr Zerilli the payment schedule (minus its supporting documentation). Messrs Passas and Emmi offer some corroboration of this, although in truth they were at most bystanders and their corroboration is of slight weight. As to Mr Passas: it is plain that he has little actual memory of the events in question. As to Mr Emmi: he was not concerned in the events relating to the payment schedule (or, for that matter, the payment claim).


38 It is clear that Mr Zerilli's memory of the meeting is defective. In the circumstances, his denial of receipt cannot be given great weight. Nonetheless, I think, his denial of receipt encompasses both receipt at the meeting and receipt at any time other than by fax on 8 August 2008. Given Mr that in my view Mr Zerilli sought to tell the truth to the best of his ability, and that he impressed me as a witness of credit (subject to the obvious defect to which I have referred) I cannot disregard his evidence entirely.


39 It is clear from the evidence of Mr Loru in particular, and also of Mr Passas, that the meeting was concerned with payment claim 11 as well as a variation (which was the subject of Mr Emmi's note). Indeed, Mr Passas said, and I accept, that he annotated a copy of payment claim 11 in the course of the meeting.


40 Thus, one might think that it is logical that if the payment schedule was then in existence, a copy of it would have been given to Mr Zerilli to enable him to understand and consider Remo's position.


41 Mr Rudge pointed to discrepancies between the form of the document that was said to have been given to Mr Zerilli on 4 August 2008 and the form of the document that was faxed on 8 August 2008. The former was unsigned, undated, bore no footer and had no supporting schedules: all in contrast to the latter. (Mr Rudge did not submit that those deficiencies, individually or together, meant that the document could not be a payment schedule for the purposes of s 14 of the Act.)


42 The document faxed on 8 August 2008 had a footer:




43 It was signed by Messrs Loru and Passas. One of them dated it "04/07/08". There is no explanation as to why a document apparently sent on 8 August 2008 was dated the 4th of the previous month. It may be that the reference to July was mistaken. However, it may be that the addition of the date "04" was an attempt to give some corroboration to the proposition that a copy of the document had been provided on that date. Nonetheless, since that was not pursued in cross-examination, I do no more than mention the possibility.


44 If the document said to have been provided on 4 August 2008 had been then printed out from Remo's system, one would expect to find that it had a footer showing the date and time of printing (as was the case with the document faxed four days later). The absence of that footer, and of any explanation as to why it is not there, does not assist in resolving this question in Remo's favour.


45 The question is whether, on the evidence that I have briefly outlined, I can and should conclude that a copy of the document was handed to Mr Zerilli on 4 August 2008. On balance, having considered both the affidavit and oral evidence and the forms of the documents themselves, I feel no sense of actual persuasion, on the balance of probabilities, that this occurred. The discrepancies to which I have referred, coupled with Mr Loru's failure when faxing the document to refer to the earlier provision of a version of it, leaves me unsatisfied that the event occurred. In this context, I note that Mr Loru agreed that it was his "invariable practice" when faxing a document to use a cover sheet. He did not do so on this occasion, and could not explain why he did not. Had he followed his "invariable practice", it is likely that he would have referred on the cover sheet to what he said was Mr Zerilli's request for a further copy.


46 As I have said, in all the circumstances I do not feel the requisite sense of actual persuasion.


47 Thus, were it necessary to express a conclusion on the events of 4 August 2008, I would conclude that I am not satisfied that Mr Zerilli was given a copy of the payment schedule at the meeting on that day.




48 It follows that Zebicon is entitled to judgment and to its costs of the proceedings. I direct the parties to bring in short minutes of order in the course of today, including therein an agreed calculation of interest and giving credit for any payments that may have been made.

49 The exhibits are to be dealt with in accordance with the rules.





5 January 2009