Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWCA 161
A recent decision of the New South Wales Court of Appeal has delivered an important ruling for the construction industry, reinforcing that statutory timeframes under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) cannot be extended by contract.
Background
In this dispute, Sharvain Facades served a progress payment claim on Roberts Co for $3.2 million on 28 February 2025 via an agreed electronic platform. Under the SOP Act, Roberts Co was required to serve a payment schedule either:
- Within the period specified in the contract; or
- Within ten business days after the payment claim was served, whichever was earlier.
Roberts Co issued a payment schedule on 17 March 2025, but only after relying on a contractual “deeming clause”. That clause stated that any notice sent after 5 pm on a business day would be treated as received at 9 am the next business day.
Roberts Co argued this meant the payment claim wasn’t “served” until 3 March 2025, thereby making its payment schedule timely.
The Legal Issue
The Court was asked to decide whether the contract’s deeming clause could alter the statutory service date for the purposes of the SOP Act’s strict timeline for responding with a payment schedule.
Court’s Ruling
The Court of Appeal rejected Roberts Co’s argument, holding:
- Statutory timeframes under the SOP Act prevail over contractual provisions that seek to lengthen the period for serving a payment schedule.
- A party cannot rely on a contract to “deem” service of a payment claim at a later date if this extends the statutory period within which a response must be given.
- The Act permits contractual shortening of timeframes but not extension, consistent with its policy of speedy dispute resolution.
- Because the payment claim was submitted after business hours on 28 February 2025, the Court treated that day as the effective date of service.
As a result, the payment schedule issued on 17 March 2025 was out of time, and Sharvain was accordingly entitled to judgment for the full claimed amount.
Practical Takeaways
This case reinforces several critical lessons for industry participants:
- Strict adherence to statutory time limits is essential. Even sending a payment claim outside normal business hours does not delay when time begins to run.
- Contractual deeming clauses designed to manipulate service dates may be ineffective, to the extent they operate to lengthen statutory response periods.
- Parties should implement reliable systems to monitor the receipt of claims and commence response obligations promptly, particularly if electronic platforms are used.
Why It Matters
The outcome is a timely reminder that courts will uphold the primacy of statutory protections under security of payment laws. Contract administrators must therefore carefully consider how procedural clauses interact with statutory schemes, particularly in high-value and fast-moving construction disputes.