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

What the court decided

Roberts engaged Sharvain under a construction contract dated 1 February 2023 for the design, construction and façade works on the paediatric services building at Westmead Hospital [2]. The appeal concerned the Building and Construction Industry Security of Payment Act 1999 (NSW) [1].

Under section 14(4), a respondent served with a payment claim becomes liable to pay the claimed amount if it does not provide a payment schedule within the time required by the contract or within 10 business days after service, whichever expires earlier [9]. Subject to clause 29.2(4), clause 29.2(2) of the contract provided that a notice whose time of receipt under the clause fell after 5pm on a business day, or on a day that was not a business day, would be treated as given and received at 9am on the following business day [20]. The primary judge and the parties called it the "Deeming Clause" [21].

At 7:18pm on Friday 28 February 2025, Sharvain emailed a payment claim for $3,207,999.03 to Roberts by uploading it to the Payapps system [23]. The claim went to the email address of the representative Roberts had nominated on Payapps [24]. It was not disputed that no one at Roberts became aware of the claim before 3 March 2025 [25]. Roberts provided a payment schedule on 17 March 2025 [27]. That schedule was late if time ran from 28 February 2025, but in time if it ran from 3 March 2025 [28], [29].

Before the primary judge, Roberts argued that the Deeming Clause deemed the claim to have been served at 9am on 3 March 2025 [30]. Sharvain's answer included that the clause was void under section 34 because it modified, or purported to modify, the operation of the Act [31]. The primary judge, Stevenson J, held that the clause purported to modify the operation of the Act and was void for all purposes [1], [32]. His Honour gave Sharvain judgment for $3,207,999.03 ($3,278,043.27 with interest) under sections 14(4) and 15(2)(a)(i) [1]. On appeal, Roberts argued that section 31 deals with the manner of service rather than its timing, leaving the parties free to agree when service is taken to occur [33].

The Court of Appeal dismissed the appeal with costs [46]. Hammerschlag CJ in Eq gave the leading reasons, with which Griffiths AJA agreed [54]. McHugh JA agreed in separate reasons, which he regarded as substantially consistent with those of the Chief Judge in Equity [47].

Hammerschlag CJ in Eq held that the application of section 14(4) to the facts decided the appeal [35]. The claim was served on 28 February 2025, when Sharvain sent it and Roberts could retrieve it [36]. Service did not require the recipient to be aware that the claim had arrived [36]. Nor did it matter that the email was sent after business hours, because the law does not recognise fractions of a day [36]. The words "10 business days after the payment claim is served" in section 14(4)(b)(ii) refer to service under the Act, unaffected by a contractual variation of the kind section 14(4)(b)(i) contemplates [37]. Consistently with the Act's policy of quick resolution, a contract can shorten the period for a payment schedule but cannot lengthen it [37].

Assuming the Deeming Clause was effective, his Honour reasoned that the contractual time began on 3 March 2025 and expired on 17 March 2025 [38]. The statutory period ran from service on 28 February 2025 and expired on 14 March 2025 [39]. Because the statutory period expired first, it prevailed and the payment schedule was out of time [40], [41]. Even if the Deeming Clause worked, the primary judge's conclusion was therefore correct [42].

The Electronic Transactions Act 2000 (NSW) provides in section 13A(1)(a) that, unless the originator and the addressee otherwise agree, an electronic communication is received when the addressee can retrieve it at an electronic address the addressee has designated [14]. McHugh JA reasoned that by clause 29.2 the parties had "otherwise agreed" within section 13A(1), with the consequence not that section 13A(1) gave their agreement statutory force but that section 13A(1) did not apply [48].

McHugh JA noted that Roberts had specified its representative's email address for service, so section 31(1)(d) of the security of payment Act was engaged [49]. It was not disputed that, subject to any effect of the contract, where the Electronic Transactions Act does not apply, service by email under section 31(1)(d) occurs when the email can be retrieved by the person to whom it is sent [49]. Service therefore occurred, for the purposes of the Act, on 28 February 2025 [50]. Although section 31(1) is directed to the manner rather than the time of service, the effect of section 31(1)(d) was that the claim was served on that day for the purposes of the Act [52]. His Honour said that section 34(1), under which the Act has effect despite any contrary contractual provision, confirmed that clause 29.2 could not change the statute's effect [52]. Whatever its effect for other purposes, clause 29.2 could not have the effect that the claim was served later than 28 February 2025 for the purposes of section 14(4) [53].

Neither set of reasons decided whether the Deeming Clause was valid or void, or the extent of any voidness [43], [53]. Both sets of reasons said those questions should await a case in which they need to be answered [43], [53]. The Chief Judge in Equity also found it unnecessary to deal with Sharvain's notice of contention [44].

Why it matters

Under the New South Wales Act, a respondent should count the 10 business days for a payment schedule after the day on which a payment claim emailed to the address the respondent has specified for service is sent and can be retrieved, even if it arrives on a Friday evening and no one reads it until the following week. On this reasoning, a contract clause deeming after-hours notices to be received on the next business day cannot give the respondent more than those 10 business days to provide a payment schedule.

The Court of Appeal left open whether such a clause is void under section 34(2), so the primary judge's view on that question was neither adopted nor rejected. The decision concerns the New South Wales Act, and readers should check the Act that governs their own contract before relying on it.

Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.