The NSW Court of Appeal in Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161 has clarified a clause in a contract which says service of a document after a certain time of day (usually 4pm or 5pm) is deemed to occur on the next business day is ineffective under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA).
The facts
Sharvain Facades made its payment claim at 7.18pm on Friday 28 February 2025 through Payapps. Roberts Co issued its payment schedule on Monday, 17 March 2025, within 10 business days after Monday 3 March 2025. The subcontract stated that if a notice/document was sent after 5pm it was to be treated as being received at 9am on the following business day (a deeming clause common to many construction contracts). Roberts Co relied on that deeming clause to set the time by which a payment schedule was to be given.
Court view
The Court of Appeal was clear the time period for service of payment schedules under section 14(4) of SOPA cannot be extended by a contract clause:
14 Payment schedules
…
(4) If—
(a) a claimant serves a payment claim on a respondent, and
(b) the respondent does not provide a payment schedule to the claimant—
(i) within the time required by the relevant construction contract, or
(ii) within 10 business days after the payment claim is served,
whichever time expires earlier,
the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.
So long as the notice/document was served by a method for the service of documents allowed and was capable of being retrieved (the case with Payapps) a deeming clause will not apply and the 10 business days started on Friday 28 February 2025 at 7.18pm, meaning Roberts Co’s payment schedule was due on Friday 14 March 2025 (not Monday 17 March 2025).
Take-away
No longer is there any doubt (in NSW at least) that the time for payment schedules starts from when the payment claim is received and/or capable of being retrieved. Respondents have 10 business days to provide a schedule, or lesser time if the contract prescribes a short timeframe, but a contract cannot extend the time for a payment schedule:
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