Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed)

Hammerschlag CJ in Eq: This is an expedited appeal from a judgment of the Commercial, Technology and Construction List judge, Stevenson J (the Primary Judge) determining that the respondent (Sharvain) is entitled to judgment against the appellant (Roberts) for $3,207,999.03 (including interest, $3,278,043.27) by dint of the operation of ss 14(4) and 15(2)(a)(i) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act): Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWSC 606.

Unless otherwise stated or the context indicates differently, references to:

At the outset, a brief synopsis of the objects and operation of the Act might be useful.

Section 3 states the objects of the Act, which is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services. The Act provides an expeditious procedure for the resolution of contested claims.

Section 4 provides, relevantly, that a business day means any day other than a Saturday, Sunday or public holiday, or 27, 28, 29, 30 or 31 December.

Section 11 provides that a progress payment to be made under a construction contract is payable in accordance with the applicable terms of the contract.

Section 13 provides for a claimant to make a payment claim for a progress payment on the person who, under a construction contract, is or may be liable to make the payment.

Section 14 provides that the respondent to a claim may reply by providing a payment schedule, which must indicate the amount of the payment (if any) that the respondent proposes to make.

Section 14(4) provides:

Section 15 provides that, where no payment schedule is served, the claimant may recover the unpaid portion of the claimed amount as a debt due in a court of competent jurisdiction, or make an adjudication application in relation to the claim.

Division 2 of the Act provides a regime for the adjudication of disputes.

Section 31 provides:

Section 34 provides:

Section 13A of the Electronic Transactions Act 2000 (NSW) (ET Act) is also pertinent, it provides:

The parties entered into the Contract on 1 February 2023.

The Contract contains the following provisions relating to the service of documents.

Clause 1.1(4) provides:

Clause 1.1(23) provides:

Clause 23.2(1) provides:

Clause 29.2(2) provides:

Clause 29.2(2) was referred to by the Primary Judge and the parties as the “Deeming Clause”. I will use the same definition.

The facts are not in issue.

At 7:18pm on Friday evening, 28 February 2025, Sharvain emailed a payment claim to Roberts for $3,207,999.03 (the claim) by uploading it on a computer communication and payment system (or EPC) called Payapps, which amongst others, facilitates the submission and assessment of progress claims for construction projects.

Roberts had nominated Mr Thomas Chiu as its representative on Payapps and given his email address. The claim was sent to that address.

Payapps generated an almost immediate response confirming that the claim had been submitted. It is not disputed that by means of the system the claim had then been made and received, nor is it disputed that no person from Roberts actually became aware of the claim before 3 March 2025.

Under s 14(4)(b)(ii), Roberts had 10 business days from service of the claim to provide a payment schedule.

Roberts provided a payment schedule on 17 March 2025 (the payment schedule is in a negative number because Roberts claims it has a cross claim exceeding any claim of Sharvain).

If the 10 day period started to run on 28 February 2025 the payment schedule was out of time and Sharvain is entitled to judgment under s 15.

But if time started to run on 3 March 2025 (the next business day) the payment schedule was in time.

Before the Primary Judge, Roberts argued that the Deeming Clause operated to deem the claim to have been served at 9:00am on 3 March 2025, and the 10 business day period commenced on that day.

Sharvain’s response included that the Deeming Clause is void under s 34 because it modifies or purports to modify the operation of the Act.

The Primary Judge’s succinct dispositive reasoning on the effect of the Deeming Clause and its validity or otherwise was:

Roberts argues that s 31 is concerned with the manner of service not the time of it and that the parties were free to contract with respect to the time at which service is deemed to have occurred. As to email service, Roberts refers to s 13A of the ET Act which makes provision for parties otherwise agreeing which, it argues, adds force to the contention that parties are free to contract with respect to the time at which electronic communications are received.

Roberts argues that the Primary Judge erred in finding that the Deeming Clause is void for all purposes and that if it is void at all, it is void only to the extent that its operation is inconsistent with the Act. Roberts invites the Court to deal with the question because of the importance of it to the building industry.

It seems to me that the application of s 14(4) to the facts of this case is dispositive of it.

The claim was sent by Sharvain and capable of being retrieved by Roberts on 28 February 2025. The document was accordingly given, sent or otherwise provided and therefore served at that time within the plain English meaning of the words of s 31(4). There is no requirement that the recipient party must be aware of the receipt of the emailed payment claim: see Demex Pty Ltd v John Holland (2022) 12 QR 438; [2022] QSC 259 at [70] (Crowley J). That it was sent after business hours does not matter because it has long been established that, fractionem diei non recipit lex, the law does not recognise fractions of a day and treats a day to be twenty-four hours: Prowse v McIntyre (1961) 111 CLR 264 at 270–271 (Dixon CJ), 275–276 (Taylor J), 277–281 (Windeyer J); [1961] HCA 79.

Where s 14(4)(b)(ii) refers to “10 business days after the payment claim is served” this plainly means served within the terms of the Act within a period specified in the Act unaffected by some inter partes contractual variation such as that contemplated by s 14(4)(b)(i). The overall effect of s 14(4) and one consistent with the policy of the Act of quick resolution, is that the period for providing a payment schedule can be contractually shortened, but not lengthened.

Under s 14(4), the time required by the relevant construction contract for the provision of the payment schedule (if the Deeming Clause is effective) commenced on 3 March 2025 and expired 17 March 2025.

The time of service was 28 February 2025, 10 business days after that date expired on 14 March 2025.

The 10 business day period after service, expired earlier than the time required by the Contract. Under s 14(4) the earlier time prevails.

Hence, the payment schedule was out of time and Sharvain was entitled to judgment.

Thus, even if the Deeming Clause worked, the conclusion of the Primary Judge was correct.

It follows that it is not necessary to deal with whether the Deeming Clause is valid or void, or the extent of any voidness. The resolution of this question should await a case in which it needs to be answered.

It is also not necessary to deal with Sharvain’s Notice of Contention.

The appeal must be dismissed.

The appeal is dismissed with costs.

MCHUGH JA: I have had the advantage of reading in draft the reasons for judgment of the Chief Judge in Equity. Gratefully adopting the terms used by his Honour, I can state in summary form my reasons, which I consider are substantially consistent with his Honour’s, for agreeing that the appeal should be dismissed with costs.

By cl 29.2 of the Contract, the parties “otherwise agreed” within the meaning of s 13A(1) of the ET Act. The consequence is not that s 13A(1) gives statutory force to the parties’ agreement, but rather that s 13A(1) does not apply. The ET Act may thus be put to one side.

The appellant specified Mr Chiu’s email address for service for the purposes of s 31(1)(d) of the Act: J[24]. The section was accordingly engaged. The section 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— … (d) by email to an email address specified by the person …” It was not disputed in this case that, subject to the effect if any of the parties’ Contract (discussed below), in circumstances in which the ET Act does not apply, service “by email to an email address” within the meaning of s 31(1)(d) occurs when the email is capable of being retrieved by the person to whom it is sent: Tcpt, 9 July 2025, p 25(23-35) and 28(32-46). See Demex Pty Ltd v John Holland Pty Ltd (2022) 12 QR 438; [2022] QSC 259 at [70], [91]-[100] per Crowley J and the cases there cited; Claire Rewais and Osama Rewais t/as McVitty Grove v BPB Earthmoving Pty Ltd [2025] NSWCA 103 at [129] (referring to Demex); cf. Parkview Constructions v Total Lifestyle Windows Pty Ltd [2017] NSWSC 194 at [76].

The primary judge found that an email attaching the payment claim was sent to Mr Chiu’s email address and was capable of being retrieved by him on Friday 28 February 2025: J[26], J[42]. That constituted service by email to the specified email address within the meaning of s 31(1)(d). Therefore, for the purposes of the Act, service occurred on 28 February 2025.

By s 14(4)(b)(ii) of the Act, the appellant had a maximum of 10 business days after the payment claim was served on 28 February 2025 in which to provide a payment schedule. As Hammerschlag CJ in Eq points out, s 14(4) contemplates that the parties may by their contract shorten, but not lengthen, that 10 day period. Since the appellant failed to provide a payment schedule within the 10 day period, by force of s 14 it became liable to pay the claimed amount to the respondent.

That was the effect of the statute. The parties’ agreement in cl 29.2 deeming the time of service of the payment claim to be a time later than 28 February 2025 could not change that effect. That is confirmed by s 34(1), which provides that the provisions of the Act “have effect” despite any provision to the contrary in any contract. The effect of ss 14(4) and 31(1)(d) was that any payment schedule had to be served within 10 business days of 28 February 2025. In particular, although s 31(1) is directed to the manner of service, rather than the time at which service is to be effected (see All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 at [37(2)]), nevertheless, the effect of s 31(1)(d) was that, for the purposes of the Act, the payment claim was served on the appellant on 28 February 2025. That is because s 31(1)(d) authorised service of the payment claim by email to Mr Chiu’s email address (which would occur when an email attaching the payment claim was sent to Mr Chiu’s email address and became capable of being retrieved by him); service was in fact effected by that means; and the day on which that occurred was 28 February 2025.

Accordingly, whatever the effect of cl 29.2 for other purposes, that clause could not have the effect that, for purposes of s 14(4), the payment claim was served later than 28 February 2025. It is unnecessary in those circumstances to determine whether any provision of the Contract should be read down or severed pursuant to cl 32.5; whether s 34(2) operates to render void any provision of the Contract; and, if so, whether the provision is void for all purposes or only, as the appellant submitted, to the extent that the provision would otherwise exclude, modify or restrict the operation of the Act. The resolution of such questions should await a case in which they need to be resolved.

GRIFFITHS AJA: I agree with Hammerschlag CJ in Eq.