Executive summary

The time periods for taking steps under the security of payment legislation in most States and Territories are punishingly short and, above all, unforgiving. Failure to respond to a payment claim with a payment schedule within the prescribed period of time (10 business days in many Australian jurisdictions) can, for example, result in summary judgment or expensive litigation to reverse that outcome. In the interests of certainty and to avoid situations where payment claims served after hours go unnoticed, many construction contracts contain provisions that deem notices served outside of ordinary working hours to be served the following day. Time is then calculated from after that day.

On 12 June 2025, Stevenson J in Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd (Sharvain v Roberts)¹ held that such a deeming clause was inconsistent with provisions in the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) and was therefore void under the “no contracting out” provisions in section 34 of the Act.

We discuss below some potential criticisms of His Honour’s finding. The decision impacts other jurisdictions with similar SOPA provisions to those considered by the court, including Victoria, Queensland, and Western Australia.² It has been reported that Roberts Co have appealed the decision. Subject to that appeal and until courts in those jurisdictions have given the matter consideration, parties should err on the side of caution and calculate time periods under the legislation and for non-adjudication matters as if these deeming provisions do not apply.

Facts

Roberts Co (NSW) Pty Ltd (Roberts) engaged Sharvain Facades Pty Ltd (Sharvain) under a construction contract (the Contract).

At approximately 7:17pm on Friday, 28 February 2025, Sharvain served a payment claim under the Act for $3.2 million on Roberts through the electronic message system specified under the Contract.

Under the Act, Roberts had 10 business days after the payment claim was issued to serve a payment schedule setting out reasons for disputing the payment claim.³ If a payment schedule is not served within this period the amount claimed becomes due and payable.⁴ Subject to certain limited exceptions, the claimant may then under section 15 of the Act recover the amount in a court of competent jurisdiction, usually by way of summary judgment. It is therefore critical to determine the date on which the payment claim is served for the purposes of calculating by when the 10 business days will expire.

Under clause 29.2(2) of the Contract, a notice received after 5:00pm on a business day, was deemed to have been given to and received by the addressee at 9:00am on the next business day (Deeming Clause).

If the Deeming Clause applied, Roberts had until 18 March 2025 to serve a payment schedule under the Act.⁵

If it did not, Roberts had until 14 March 2025 to serve its payment schedule.⁶

Roberts served its payment schedule on Sharvain on 17 March 2025. Sharvain argued that as the Deeming Clause did not apply, the payment schedule was served late, and it was therefore entitled to judgment against Roberts.

Did the Deeming Clause apply?

Stevenson J found the Deeming Clause to be void as it was inconsistent with provisions of the Act regarding the calculation of time.

Section 34 of the Act provides that:

(2) a provision of any agreement (whether in writing or not) —

(a) under which the operation of this Act is, or is purported to be, excluded, modified or restricted (or that has the effect of excluding, modifying or restricting the operation of this Act), or

(b) that may reasonably be construed as an attempt to deter a person from taking action under this Act,

is void.

Under section 14(4)(b)(ii) of the Act, a party must provide a payment schedule within 10 business days after the payment claim is served (or any shorter period of time agreed by the parties).⁷ Time for service of the payment schedule begins to run on the following business day after the payment claim is served.

Stevenson J held that the purported effect of the Deeming Clause is:

1. time begins to run one day later (because a business day is deemed to conclude at 5:00pm); and
2. to postpone the date on which the payment claim was taken to be served.

The Deeming Clause therefore purported to modify the operation of the Act and was “void for all purposes”. His Honour noted that were this not to be the case, the parties could agree that a document served after 5:00pm should be taken to have been served any number of days later, thus leaving it to the parties to decide with what speed the processes under the Act should operate.

Stevenson J considered whether the service provisions in section 31 of the Act addressed the above inconsistency. Section 31 provides that:

[a]ny document that by or under this Act is authorised or required to be served on a person may be served on the person —

…

(e)  in the case of service by a party to a construction contract on another party to the construction contract—in the manner that may be provided under the construction contract.⁸

His Honour held that section 31 was not applicable as it addressed the means by which service was to be effected but not the time by when this occurred.⁹

When did service occur if the Deeming Clause did not apply?

The court observed that differing views have been expressed as to when, under general law, an email sent to a particular email address is taken to have been received at that email address.¹⁰ Those views include:

1. only when the email and its attachments are opened;¹¹
2. when “the electronic copy was received, in a complete and legible form, at the address for service, within the prescribed time”;¹² and
3. when the email is received.¹³

In addition, under the Electronic Transactions Act 2000 (NSW), an email is received when it becomes “capable of being retrieved”.¹⁴ As Stevenson J found that this occurred on 28 February 2025, that was the date of service. Roberts was out of time.

Discussion

Do deeming provisions really have the effect of excluding, modifying or restricting the operation of this Act?

In our view, not every deeming provision could have this effect. Not every slight deviation from the Act “has the effect of excluding, modifying or restricting the operation of this Act”.¹⁵

Unlike “pay when paid” provisions in the NSW and VIC SOPA legislation and expressly prohibited clauses in other jurisdictions,¹⁶ “no contracting out” provisions like section 34 of the Act are not specific and are, we submit, open to interpretation.

Writing extra judicially, McDougall J makes a distinction between contractual terms that are “so excessive as to thwart the operation of the Act” and those that were ‘not so excessive in their impact [and which would] need to be examined individually for their validity’.¹⁷

A distinction should be made between provisions which in substance exclude, modify or restrict the operation of the Act and provisions which benefit both parties and still allow the Act to substantially operate.

The court’s concern that the deeming clauses could allow parties to extend the date for service by any number of days later, thus leaving it to the parties to decide with what speed the processes under the Act should operate, may be warranted where the extended period is substantial. However, as with most deeming clauses, the date of service was only extended to the following day.

There is, we submit, clear utility to a deeming clause. They are common devices aimed at avoiding uncertainty as to the timing of notices. As occurred in this case, the consequences of error are severe. In addition, these clauses ensure that payment claims served at 11:59pm are not missed when a recipient opens up their email inbox the following morning.

Stevenson J’s conclusion that section 31(e) of the Act (service of notices) only deals with the manner and not the timing of notices, while in line with the NSW Court of Appeal’s decision in All Seasons Air, is probably not how many users of the adjudication process would construe that section.

The words “in the manner that may be provided under the construction contract” may be broad enough to encompass the timing of notices. The specific reference to the timing of receipt for documents sent by post in section 31(1)(e) does not expressly exclude deeming provisions for emails.

Are deeming provision void for all purposes?

In McDougall J’s article on the Prohibition on Contracting Out, relied upon indirectly by Stevenson J, he says that:

“It seems to me to be strongly arguable that if a provision is avoided by operation of s 34, it is void for all purposes. In other words, notwithstanding the interim nature of adjudications and other proceedings under the Act, and notwithstanding the express preservation of rights (in relation to a final hearing) effected by s 32, it may well be that a provision avoided by the operation of s 34 could not be relied upon in any such final hearing.”¹⁸

In support of this position, he argues that if the section did not so operate, there could be radical inconsistencies between the interim rights established under the Act and rights established on a final hearing. This, he says, could lead to “difficult and perhaps absurd consequences“.¹⁹

It is respectfully submitted that far more difficult and absurd consequences could arise if inconsistent terms are void outside the adjudication process.

Other than where the SOPA legislation expressly prohibits certain provisions (eg ‘pay when paid’ clauses²⁰) parties should be free to draft terms that suit their requirements, and these should be upheld in a non-adjudication setting. Unlike express prohibitions, it can be unclear whether or not a contractual provision does or purports to exclude, modify or restrict the operation of the Act. Roberts appears to have fallen victim to this uncertainly.

Conclusion

Whatever the merits of this decision, until such time as this issue is the subject of further judicial consideration, parties should err on the side of caution and calculate time periods for service of notices by email whether under the SOPA legislation or otherwise as if deeming provisions do not apply.

This article was written by Brian Rom, Partner and Oliver Clark, Law Clerk.

¹ [2025] NSWSC 606.

² Building and Construction Industry (Security of Payment) Act 2009 (ACT) s42; Building Industry Fairness (Security of Payment) Act 2017 (Qld) ss102, 200; Building and Construction Industry Security of Payment Act 2009 (SA) ss33-34; Building and Construction Industry Security of Payment Act 2009 (Tas) ss11, 40; Building and Construction Industry Security of Payment Act 2002 (Vic) ss48, 50; Building and Construction Industry (Security of Payment) Act 2021 (WA) ss111, 113; Building and Construction Industry (Security of Payment) Regulations 2022 (WA) reg 23.

³ s14(4)(b)(ii) of the Act.

⁴ s15 of the Act.

⁵ The Deemed Date of service was 3 March 2025, and the 10 business days ran from the next business day (4 March 2025) and expired on 18 March 2025.

⁶ The 10 Business Days under the Act ran from 3 March 2025 and expired on 14 March 2025.

⁷ s14(4)(b)(ii) of the Act.

⁸ Ibid s31(1)(e) (emphasis added).

⁹ At [33-34] relying on All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289.

¹⁰ Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWSC 606, at [37]-[39].

¹¹ Austar Finance v Campbell [2007] NSWSC 1493 at [48] (Austin J).

¹² SGR Pastoral Pty Ltd v Christensen [2019] QSC 229 at [37] (Bowskill J).

¹³ Demex Pty Ltd v John Holland Pty Ltd (2022) 12 QR 438; [2022] QSC 259 at [67] and [100] (Crowley J).

¹⁴ s13A(1)(a) of the Electronic Transactions Act 2000 (NSW).

¹⁵ s34(2) of the Act.

¹⁶ For example, s12-15 of the Construction Contracts (Security of Payments) Act 2004 (NT) and s16 of the Building and Construction Industry (Security of Payment Act) 2021 (WA).

¹⁷ Robert McDougall, ‘Prohibition on Contracting Out of the Building and Construction Industry Security of Payment Act 1999 (NSW)’ (2006) 22 BCL 246, 253 (‘Prohibition on Contracting Out’).

¹⁸ Ibid, 255.

¹⁹ Ibid, 255.

²⁰ For example, s12-15 of the Construction Contracts (Security of Payments) Act 2004 (NT) and s16 of the Building and Construction Industry (Security of Payment Act) 2021 (WA).