Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161

Andrew Hales  |  Rachel Cheung |  Isabella Waters

Key takeouts

• In NSW, parties can contractually shorten the period for providing a payment schedule to less than 10 business days but cannot lengthen the period.
• Contracting parties and their advisers should be wary of deeming clauses which may conflict with statutory rights under the Construction Industry Security of Payment Act 1999 (NSW).

Facts

Roberts Co (NSW) Pty Ltd (head contractor) appealed a NSW Supreme Court decision that gave judgment to Sharvain Façades Pty Ltd (subcontractor) for the full quantum of a payment claim that Sharvain had served claiming over $3.2 million. The Supreme Court held that the subcontractor was entitled to judgment because the head contractor had failed to serve a payment schedule within 10 business days of receipt of the payment claim.

On Friday 28 February 2025 at 7.18 pm, the subcontractor served a payment claim on the head contractor by uploading the claim to Payapps, a computer communication and payment system which facilities the submission and assessment of progress claims for construction projects. Payapps automatically generated an email to the subcontractor’s nominated representative.

On 17 March 2025, the head contractor provided a payment schedule to Sharvain.

The contract contained a deeming clause which said that any notice served after 5.00 pm on a business day or on a non-business day would be treated as having been given and received at 9.00 am on the following business day.

Decision

The Court of Appeal dismissed the appeal having unanimously agreed with the primary judge’s conclusion that the payment schedule had been served out of time.

The Court held that the payment claim was served on 28 February 2025 and 10 business days after that date expired was 14 March 2025. Accordingly, the payment schedule was out of time and the subcontractor was entitled to judgment. Hammerschlag CJ in the Equity Division noted:

• there is no requirement that the recipient must be aware of the receipt of the emailed payment claim; and
• that the payment claim was sent after business hours does not matter because it has long been established that the law does not recognise fractions of a day and treats a day to be 24 hours.

Deeming clauses

In the first instance decision, the primary judge held the deeming clause to be void for all purposes as it purported to modify the operation of the NSW Security of Payment legislation by changing the meaning of ‘business day’ to conclude at 5pm.

The Court of Appeal expressly declined to consider the validity or voidness of the deeming clause, or the extent of any voidness, as it was not necessary to deal with that issue in this case.