The battle of the ‘business days’: Understanding the ‘10-day timer’ under SOPA

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When parties enter into a contract relating to the performance of construction work (or the supply of related goods and services), the party that provides these works or services is entitled to payment. The statutory basis for this principle is enshrined in Part 3 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA). As part of this, frameworks exist to ensure disputes over payment are resolved efficiently and quickly. These frameworks include outlining the definition of a ‘business day’[i] and the fact that progress payments under contracts are payable according to the terms stipulated within the contract (provided these terms are not contrary to SOPA).[ii]

Although, what happens when the day a payment claim is served becomes a contentious issue? In Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161, the NSW Court of Appeal considered this question. The court ultimately decided that a payment claim submitted after traditional ‘business hours’ was validly served. [iii]

Key facts

A contract was entered into between Roberts Co (NSW) Pty Ltd (Roberts) and Sharvain Facades Pty Ltd (Administrators Appointed) (Sharvain) to undertake construction works. Of note, clause 29.2(2) of the contract stated that if a ‘Notice’ was sent after 5:00pm on a ‘business day’ it was to be treated as received at 9:00am on the following business day. This was labelled by the Court as a ‘Deeming Clause’.[iv]

During the course of the contract, at 7:18pm on 28 February 2025, Sharvain emailed Roberts, enclosing a payment claim for the sum of $3,207,999.03 through Payapps.[v] Payapps quickly confirmed that the claim was submitted. Roberts subsequently issued the payment schedule on 17 March 2025.

A ‘business day’ is defined within SOPA to mean ‘any day other than a Saturday, Sunday or public holiday, or 27, 28, 29, 30 or 31 December’,[vi].

Therefore, if the 10-business day timer for the issue of a payment schedule started on 28 February 2025, after business hours, the payment schedule was due on 14 March 2025. However, if the timer began on 3 March 2025 (which was the next ‘business day’ Roberts could have received the payment claim), the payment schedule was issued within time on 17 March 2025. [vii]

What did the Court say?

The District Court of New South Wales had held that the Deeming Clause within the contract entered into by the parties operated in a manner that was inconsistent with section 4 of SOPA, and instead clause 29.2(2) attempted to amend the meaning of ‘business day’ by effectively postponing the point at which the 10-business day timer begins counting. Consequently, cause 29.2(2) was held to be void and the payment schedule was issued out of time.[viii]

On appeal, Roberts argued that the Deeming Clause could not be considered void ‘for all purposes’ as if it was to be considered as such, it would only be voided to the extent that it was drafted inconsistently with sections 4 and 14 of SOPA.[ix] Additional arguments were also put forward in relation to how clause 29.2(2) of the contract was exercisable under s 13A of the Electronic Transactions Act 2000 (NSW) which generally allows parties to facilitate contracts based on the exact time and date that electronic correspondence like emails or Payapps notifications are received by a party.[x]

Ultimately, the Court of Appeal upheld that relying upon the Deeming Clause was contrary to section 14(4) of SOPA, which provides a maximum 10-business day period to serve a payment schedule. This timeframe can be reduced to less than 10 business days, but any attempts to increase the amount of time provided to issue a payment schedule is contrary to SOPA. [xi]

What does this mean for you?

Contractors entering into agreements to undertake building or construction works should remain aware of key dates and obligations imposed on all parties both under the contract and SOPA. If you or anyone you know requires advice or assistance in relation to contract administration or rights under SOPA, contact us on (02) 9030 7400, or email us at info@bradburylegal.com.au.

 

[i] Building and Construction Industry Security of Payment Act 1999 (NSW), section 4 (‘SOPA’).

[ii] Ibid.

[iii] Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161 [52].

[iv] Ibid [21].

[v] Ibid [23].

[vi] SOPA, section 4.

[vii] Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161 [28]-[29].

[viii] Ibid [32].

[ix] Ibid [34]

[x] Electronic Transactions Act 2000 (NSW), section 13A.

[xi] Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd (Administrators Appointed) [2025] NSWCA 161 [37].

Case Note: Black Label Developments Pty Ltd v McMenemy [2025] NSWCA 114

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In the recent decision of Black Label Developments Pty Ltd v McMenemy [2025] NSWCA 114, the Court of Appeal considered whether to stay the enforcement of a judgment obtained under security of payment legislation.

Facts

McMenemy (the Owner) engaged Black Label Developments Pty Ltd (the Builder) to carry out renovations at the Owner’s property.  The Owner informed the Builder that his family needed to move back into the home on a certain date.

On the moving in date, the Builder allegedly refused access to the home unless a Deed of Variation was executed by the Owner. This deed substantially increased the contract price. This deed was signed by the Owner.

The Builder then issued a payment claim pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) for the additional money that was owed under the deed.

Consequently, the Owner served a payment schedule noting issues of duress, undue influence and unconscionability.

The matter proceeded to adjudication and the adjudicator made a determination of just over $260,000 to be paid to the Builder.

The Builder then filed the adjudication certificate in the District Court.

Following this, the Owner commenced proceedings against the Builder for duress and undue influence. He also sought a stay of execution of the judgment.

The primary judge granted the stay and the Builder appealed this decision.

The Legal Issue: Whether the Stay of Judgment Should be Granted

The main issue on appeal was whether the stay of judgment should be granted despite previous case law principles such as those provided in A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144.

The Court dismissed the appeal for the following reasons:

  1. The principle from A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144 in that the power to stay must be exercised in accordance with the policy of the Security of Payment Act becomes less certain when a homeowner is involved due to the demands of justice that arise.
  2. The Court may, on a case-by-case basis, determine whether it is in the interest of justice for a stay to be granted.
  3. There is a significant difference between commercial construction contracts and the risk profile of these contracts. and agreements where a homeowner is involved. This difference  should be considered by the Court in deciding whether a stay should be granted. The Court stated at [103]:

For consumers of residential building services, the prospect that the contractor might take their money pursuant to an unfavourable adjudication of an excessive payment claim and then be unable to meet a s 32 judgment is not a mere commercial risk to be factored into the structure and conduct of a commercial relationship with another business. The fact that the subject-matter of the contract is their home may also complicate matters. Execution of a s 25 judgment may have catastrophic consequences. For example, where the principal is unable to meet a s 25 judgment debt, it might well be relevant to the dictates of justice and to the force to be given to the statutory policy of immediate cashflow that the Sheriff is threatening to sell the principal’s home.

To Consider

This case demonstrates that while it is rare for the Courts to stay the execution of a judgment under Security of Payment legislation, there is a level of allowance provided by the Courts in circumstances where a homeowner may be at a risk of injustice, particularly where the homeowner is raising issues of duress, undue influence and unconscionability.

Not all Calderbank offers are created equal – 7 Rules for Drafting Enforceable Calderbank Offers

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In construction disputes – where legal costs escalate quickly and project delays can be costly – Calderbank offers are a powerful strategic tool for early resolution and litigation cost management. However, not all Calderbank offers are created equal. To be effective, particularly when seeking to recover costs, a Calderbank offer must be drafted with precision, clarity and intent. A poorly constructed offer may be given little or no weight in costs proceedings.

Before diving into the drafting rules, let’s revisit the fundamentals.

What is a Calderbank Offer?

A Calderbank offer is a written offer to settle a legal dispute, made “without prejudice save as to costs.” It originates from the English case Calderbank v Calderbank [1975][i] and allows parties to negotiate privately without prejudicing their legal position – except when arguing about legal costs after judgment.

In practical terms, if the offer is unreasonably rejected and the opposing party fails to achieve a better result at hearing, the offering party can seek indemnity costs from the date the offer was made.

With that in mind, here are 7 key rules to ensure your Calderbank offer carries legal weight and maximises its intended cost consequences.

Rule 1: Clearly mark the offer “Without Prejudice Save as to Costs”

This label ensures the offer remains privileged during the substantive proceedings but can be disclosed when the issue of costs is determined. To avoid ambiguity, include the phrase prominently – both in the heading and opening paragraph. If this wording is missing or incorrect, the offer may be inadmissible in cost proceedings, undermining its strategic value.

Rule 2: Use precise, clear and unambiguous language

When it comes to Calderbank offers, ambiguity is the enemy of enforceability. As stated in Grabavac v Hart,[ii] the offer must “leave the offeree in no reasonable doubt as to the nature and extent of what is being offered.” The offer must:

  • Specify the exact amount offered or set out alternative settlement terms – such as completion of specific works or the granting of releases.
  • Identify the claims being resolved – whether it’s a global settlement or limited to a specific issue, such as claims for delay damages or variations.
  • Set out any conditions attached to the offer – such as execution of a deed of release, the timeframe for payment, or confidentiality provisions.

This clarity is particularly important in construction disputes, where overlapping claims are common.

Rule 3: Ensure the offer is reasonable and genuine

To be effective, a Calderbank offer must be a genuine attempt to settle, not just a tactical move. Offers that are clearly unrealistic or derisory may be disregarded by a court or tribunal. By contrast, offers supported by expert reports, quantum assessments or commercial analysis are more likely to carry weight and influence cost outcomes.

Rule 4: Include an express statement on costs consequences

Strengthen your position by making the cost implications explicit. For example, include a clause such as the following:

“This offer is made pursuant to Calderbank v Calderbank [1975] 1 All ER 333. In the event that this offer is not accepted and you fail to obtain a more favourable outcome, we will seek indemnity costs.”

This puts the recipient on clear notice and reinforces the seriousness of the offer.

Rule 5: Set a clear and reasonable deadline and acceptance process

The offer should clearly specify:

  • A reasonable timeframe for acceptance – generally at least 14 days unless the circumstances justify otherwise. The appropriate duration will depend on factors such as the complexity of the project, the nature of the offer and industry standards. For instance, in Meldov Pty Ltd v Bank of Queensland (No.2) [2015],[iii] a 12-day acceptance period was found to be sufficient.
  • The method by which acceptance should be communicated — such as by email, signed acceptance or written confirmation. This ensures that both parties are clear on how and when acceptance is valid.

Clearly setting out these details helps avoid disputes regarding the timing or manner of acceptance, particularly important in time-sensitive construction projects.

Rule 6: Explain why the offer should be accepted

While not mandatory, explaining the rationale behind your offer can help demonstrate its reasonableness. Courts have recognised that where one party clearly sets out why the other will fail, and that offer is unreasonably rejected, it may support an application for indemnity costs. As Lindgren J stated in NMFM Properties Pty Ltd v Citibank Ltd (No 2) [2001],[iv] where His Honour observed:

“…No doubt where a party puts with sufficient particularity to the opposing party the reasons why the latter must fail, yet the latter does not recognise the inevitable, this will be a factor pointing to an award of indemnity costs.”[v]

Importantly, where an application for indemnity costs is made, the burden lies with the applicant to establish that the rejection of the Calderbank offer was unreasonable.[vi]

Rule 7: Retain evidence of service and communication

Always serve the offer in a traceable manner – via email with read receipt, courier or registered post. You should retain copies of:

  • The offer letter and any attachments.
  • Proof of service.
  • Any correspondence or acknowledgements.

These records are critical if there is later a dispute about whether the offer was made, received or properly considered.

Key Takeaway

A Calderbank offer is far more than a procedural step—it’s a tactical instrument for shaping both the outcome and the cost consequences of litigation. In construction disputes, where issues are complex and stakes are high, the value of a well-drafted Calderbank offer lies in its clarity, reasonableness and procedural integrity. Draft it with precision to not only encourage early settlement, but also to protect your client’s position when costs are ultimately determined

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[i] 1 All ER 333.

[ii] [1997] 1 VR 154 per Winneke P at 155.

[iii] NSWSC 2015.

[iv] FCA 480; (2001) 109 FCR 77.

[v] Ibid., per Lindgren J at 87.

[vi] MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 240 per Lindgren J; Sural Spa v Downer EDI Rail Pty Ltd [2007] NSWSC 1292 at 8 per Einstein J.