Case Review: Lesson for Builders re Security of Payment Act NSW – How Late night emails, lost millions

Background | Security of Payment Act NSW

The facts were straightforward: At 7:18pm on Friday, 28 February 2025 the respondent, Sharvain Facades (Sharvain), lodged a payment claim for $3,207,999.03 through the “Payapps” construction software. The appellant, Roberts Co (Roberts), did not review the claim until Monday, 3 March 2025. It served a payment schedule on Monday 17 March 2025.

The key question was when was service of the payment effected – on the evening of Friday the 28th of February (when the payment claim was lodged by Sharvain), or on Monday the 3rd of March (when the payment claim was actually reviewed by Roberts).

Issue | When was the payment claim served?

A payment schedule is required to be served within 10 business days from service of the relevant payment claim under the Act. As a result:

• if the payment claim was served on 3 March 2025, the payment schedule was served prior to the expiry of the statutory deadline.
• if the payment claim was served on 28 February 2025, the payment schedule was served after the expiry of the statutory deadline.

Decision | Statutory Deadlines Matter

The Court of Appeal held that service is effective once a document is capable of being retrieved by the recipient and that, in the circumstances, it is irrelevant whether the email has been read or even noticed. As the claim was lodged on the Friday evening, the statutory deadlines ran from that date.

The result? The payment schedule served by Roberts on 17 March 2025 was issued after the statutory deadline had already expired, with the result that it was indebted to Sharvain for the full $3.2 million claimed.

 The ‘Deeming Clause’ Argument Rejected 

Roberts sought to rely on a contractual provision commonly found in construction contracts, which provided that notices received after 5:00 pm would be deemed to be served at 9:00 am the following business day. Roberts argued that, in accordance with this clause, the payment claim was deemed to be served on Monday, 3 March 2025 (with the result that the payment schedule was served prior to the expiry of the statutory deadline).

The Court of Appeal rejected this argument on the basis that:

1. Section 14(4) of the Act requires a payment schedule within the time prescribed by contract or within 10 business days, whichever expires earlier.
2. Because the statutory deadline (14 March 2025) fell earlier than the contractual one (17 March 2025), Roberts’ payment schedule was three days late.

The Court confirmed that while the period for providing a payment schedule can be contractually shortened, it cannot be lengthened.

Takeaway | Comply with the Act

The outcome in this case was severe:  Roberts was indebted to Sharvain for the full $3.2 million claimed. The decision is a powerful reminder that compliance with procedural rules under the Act is not merely a formality, but is often determinative of a party’s rights.

For principals and head contractors, the lesson is clear: review internal systems for receiving and actioning payment claims, including those lodged outside ordinary business hours. The statutory clock begins the moment a claim can be accessed and missing it – even by a single day – can prove costly.

How we Help | Security of Payment Specialists

Specialist Building and Construction Lawyers can play a crucial key role in helping businesses avoid the kind of losses seen in this case.

By advising on contract drafting and administration, we ensure that internal systems for receiving, reviewing and responding to payment claims are watertight and compliant with the Act.

Our lawyers also provide clear guidance on procedural obligations, helping principals, contractors and subcontractors understand exactly when statutory deadlines begin and how best to manage them.