Introduction

In the recent case, Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWSC 606, the Supreme Court explored provisions of the Building and Construction Industry Security of Payment Act (SOP Act), and the Electronic Transactions Act to determine when an electronic payment claim is sent and received. Importantly, it was found that provisions of an agreement that modify the SOP Act are void (for all purposes), and that emails are said to be received when they are capable of being retrieved.

Relevant Facts

Sharvain Facades (the plaintiff) sent, via an electronic message system, a payment claim to Roberts Co (the defendant). The contract between the parties included a ‘deeming clause’ which provided that if a notice was sent after 5pm on a business day, the notice ‘will be treated to have been given and received’ by the addressee at 9am on the following business day.

The issue in this case arises from the defendant’s purported late service of the payment schedule, beyond 10 business days after notice was sent on Friday, 28 February. However, the defendant claimed that as the payment claim was sent at 7:17pm, that it was not received until 3 March pursuant to the deeming clause which meant its payment schedule was served within the time prescribed by the SOP Act.

The major issue in contention was whether the payment claim was served on 28 February or, by reason of the deeming provision, 3 March.

Supreme Court’s Reasoning

In All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd, the Court of appeal observed that a clause equivalent to the deeming clause might well have been void due to it modifying the SOP Act.

Here, the Supreme Court held that section 34 of the SOP Act applies to the effect that the deeming clause is made void as it modifies the operation of the SOP Act.

Section 34 states:

“(1) The provisions of this Act have effect despite any provision to the contrary in any contract.

(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.”

The Court found that the deeming clause modifies the SOP Act by changing the meaning of “business day”. The effect of the deeming clause is to postpone the date on which, adopting the definition of “business day” in the SOP Act, the payment claim was taken to be served.

Therefore, Section 13A of the Electronic Transactions Act applies. This provides that the time of receipt of an email is when it becomes “capable of being retrieved”, meaning the notice was sent on 28 February as opposed to 3 March.

NSW Court of Appeal

The defendant argued that section 31 of the SOP Act is concerned with the manner of service, not the time of it. This would mean that parties are free to contract with respect to the time at which service is deemed to have occurred.

The defendant also argued that the Primary Judge erred in finding that the deeming clause was void and that if it were void at all, would only be void to the extent that its operation is inconsistent with the Act.

The Court of Appeal held that it was not necessary to determine whether the deeming clause was void as the overall effect of section 14(4) provides that the period for providing a payment schedule can be contractually shortened but not lengthened.

Under section 14(4), the time required by the construction contract for the provision of the payment schedule commenced on 3 March 2025 and expired on 17 March 2025. As was determined in the primary judgment, 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). This meant that despite the time of service, the payment claim was served on 28 February 2025 and expired on 14 March 2025.

Importantly, under section 14(4) the earlier time prevails. This meant that because the 10-business day period after service expired earlier than the time required by the contract, the primary judge’s decision is upheld regardless of the operation of the deeming clause.

Key Takeaways

• Provisions of any agreement are void if they do, or have the effect to exclude, modify or restrict the operation of the SOP Act. Importantly, such a clause is not void solely for the purposes of the SOP Act but rather void for all purposes.
•  Under the Electronic Transactions Act, the time of receipt of an electronic communication is the time when it becomes capable of being retrieved by the addressee (s 13A).
•  Given the strict time limits in the SOP Act, it is important to understand when notices are taken to be served and, if in doubt, seek advice or adopt the earlier date.