WA court confirms time of actual receipt is what matters for Security of Payment Act time limits

The decision means that it is the actual time of receipt of the payment claim, even if that is out of business hours, that will start the clock ticking on the well-known fast timelines under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOPA).

The court found that a contractual clause which sought to “deem” that communications received on a non-business day would be taken to have been received on the next business day could not overrule the strict timing requirements set out in the SOPA.

The decision, which could be appealed, has far reaching consequences for businesses and contractors when serving and, more importantly, receiving documents. It follows a similar New South Wales (NSW) ruling, Sharvain Facades Pty Ltd (Administrators Appointed) v Roberts Co (NSW) Pty Ltd [2025] NSWSC 606 (Sharvain), in which the court found that contractual clauses deeming communications sent on a business day after a specified time are to be taken as received on the next business day were void for all purposes, and not just for the purposes of the act, under NSW’s equivalent SOPA legislation.

In the WA case, Co-Operative Bulk Handling Ltd (CBH) contracted with Martinus Rail Pty Ltd (Martinus) to construct rail siding and associated infrastructure at Broomehill, WA. The construction contract’s communication clause stated that communications received on a non-business day were to be “taken” to be received at 9am on the next business day.

Martinus emailed its payment claim to CBH on Saturday 31 August 2024 and CBH responded with a payment schedule on 24 September 2024. The court therefore had to decide whether CBH’s payment schedule was within the 15-business day response period provided for under WA’s SOPA and, subsequently, whether the communications clause meant that the payment schedule should be taken as received on the first business day after which it was sent, Monday 2 September 2024.

In court, Martinus argued that the SOPA and the Electronic Transactions Act 2011 (WA) operated to make the date of the communications being received the relevant date for the calculation of time under the SOPA. CBH’s argument was that the language of “unless otherwise agreed” in section 14(1) of the Electronic Transactions Act made the clause in the construction contract the source for determining the schedule.

The court found that those words in the Electronic Transactions Act, when read in isolation, do not give legal force to the agreement between the parties, but instead signal that section 14 isn’t a consideration where the parties have otherwise agreed about the receipt of electronic communications.

The court drew a distinction between “taken to be given” – the language of the SOPA – and “timing of receipt of the electronic communication”, the language in the Electronic Transactions Act.

While this distinction, which appears overly fine, may be appealed, the court stated that the effect of the Electronic Transaction Act was that the payment claim was made on Saturday 31 August 2024 and not the following business day, Monday 2 September 2024.

The court also confirmed that a communication clause along the lines of the one in dispute here is rendered void by section 111 of the SOPA because it is an attempt to contract out of the SOPA.  This component of the decision may be appealable because the language of “unless otherwise agreed” in section 14(1) of the Electronic Transactions Act means that the parties would not be seeking to avoid the SOPA, but instead contracting on the very terms of the SOPA regulations.

Lessons for the construction sector

While it remains to be seen if the decision will be appealed, the decision represents the current state of the law in WA, so while clauses for determining payment claim and schedule time limitations are common in construction contracts, parties relying on these clauses should act cautiously. As WA-based construction contractors are learning under the relatively new SOPA regime, it is critical that payment schedules are lodged on time, or early. Adopting an early payment schedule will assist in avoiding proceedings and issues related to the SOPA legislation.

When drafting notice provisions, consider whether it is necessary to include the typical deeming terms when it comes to the date of receipt of notices. If it is thought that it would be beneficial for such terms to be included, contract drafters should make it clear that those provisions will not apply to notices that trigger SOPA entitlements, namely payment claims and payment schedules. However, given other provisions in the SOPA that can render traditional time bar clauses unenforceable, the precise date on which notices of delay or requests for variations are lodged will likely be of less importance to construction contracts in Western Australia for the foreseeable future.

This means that the usual rules of contract administration remain critical in WA, including:

• ensure project correspondence systems provide ample notice of received communications;
• ensure all project managers are aware of timing requirements under applicable legislation; and
• maintain strong record-keeping practices such that payment schedules can be drafted quickly and accurately.

Co-written by Marcus Bombardiere of Pinsent Masons.