[co-author: Shanya Singh]
The NSW Court of Appeal in Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161 has confirmed that, under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), a payment claim served after business hours is still considered to be served on the same day. No contractual term can provide otherwise, such as by deeming after-hours service to take place on the next business day.
The dispute
The contract contained a clause deeming notices given after 5pm on a business day as received at 9am on the next business day (the Deeming Clause). The respondent (Sharvain) served a payment claim on the appellant (Roberts) at 7.18pm on Friday, 28 February 2025. The key issue was whether the payment claim was served under the Act on the Friday or the following Monday.
The implications of the answer to that timing question were significant. This is because, under section 14(4)(b) of the Act, Roberts was required to provide its payment schedule within the earlier of the time required under the relevant contract or 10 business days of service of the payment claim. A failure to meet that timeframe would make the total amount claimed a debt due and payable and enable Sharvain to seek judgment under section 15 of the Act.
Roberts provided its payment schedule on Monday, 17 March 2025: more than 10 business days after Friday, 28 February 2025, but within 10 business days of Monday, 3 March 2025.
The courts’ reasonings
At first instance, in Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWSC 606, Stevenson J held that the Deeming Clause was void for all purposes under section 34(2) of the Act. This was because it purported to modify the operation of the Act; while the Act permitted a document to be served at any time during a business day, the Deeming Clause purported to change this by deeming that a business day ended at 5pm. Therefore, his Honour concluded that the payment claim was served on 28 February 2025. It followed that Roberts’ payment schedule was not issued on time and Sharvain was able to seek judgment for the entire claimed amount.
On appeal, and on an expedited basis, the NSW Court of Appeal reached the same result, but for a different reason.
Hammerschlag CJ in Eq (with whose reasoning Griffiths AJA agreed and McHugh JA’s judgment was substantially consistent) held that the timeframe for issuing a payment schedule (set out in section 14(4)(b)(ii) of the Act) is to be calculated within the terms of the Act and within a period specified in the Act, independent of any contractual provision as to the calculation of time. Under the Act, a document is considered to be served when it is sent by the sender and capable of being retrieved by the recipient. Therefore, for the purposes of section 14(4)(b)(ii) of the Act, Sharvain’s payment claim was served on 28 February 2025.
Based on that reasoning, it was not necessary for the Chief Judge to deal with whether the Deeming Clause was valid or void, or the extent of any voidness. This was because, under section 14(4)(b), the deadline for providing a payment schedule is the earlier of the time required under the relevant contract (17 March 2025, if the Deeming Clause is effective) or 10 business days after service of the payment claim (14 March 2025, as explained above). Whether or not the Deeming Clause is effective, Roberts’ payment schedule was due on 14 March 2025, and not provided by then.
What does this mean for you?
Failure to meet the prescribed (and often tight) timeframes under the Act can result in significant consequences. Here, a failure to meet the timeframe for serving a payment schedule meant that the total amount claimed in the payment claim became a debt due and payable.
For any party making and receiving payment claims under the Act, it is critical to understand the service and timing requirements under the Act and take action to ensure they are met.
In this connection, the NSW Court of Appeal has now provided guidance that, within the meaning of the Act, a day is a full, 24-hour day, irrespective of how a day or a business day might be calculated under the relevant contract. In Hammerschlag CJ in Eq’s words, "the law does not recognise fractions of a day and treats a day to be twenty-four hours".
Given the reasoning of the NSW Court of Appeal, it remains an open question as to whether a contractual provision which has the effect (actual or purported) of excluding, modifying or restricting the operation of the Act is void for the purposes of the Act or for all purposes. This awaits a case in which the question needs to be answered. This will be one to watch.
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