Queens of Hearts in the Dock

QueenOn 15th June, SoCLA is holding a nationwide event to consider the proposal of a new statutory benchmark for unreasonably onerous time-barring provisions in construction contracts.  Discussion in each mainland State in Australia will be followed by a national video hook-up. I will be the convenor for the Adelaide session.

The intention is not so much to move the goalposts here, but to seek to fix the goalposts at a sensible place, since the current reality is that courts, adjudicators and arbitrators use a wide variety of techniques to avoid the inequitable application of Queen of Hearts clauses if they possibly can.

In my book Extra-Contractual Recoveries (still not finished!) I attempt to list the many weapons available in the arsenal of circumvention:

The Arsenal of Circumventions

In these circumstances, it is unsurprising that courts have been prepared to draw from a fairly wide arsenal of arguments in order to relieve a contractor from the harsh consequences of failing to give a required notice, and the following principles have in the past been applied:

  • That the giving of notice is not a condition precedent, such that a failure to give notice does not deprive the contractor the right to the relief in question, but merely renders him liable for the damages (if any) which flow from lateness of the notice[1];
  • That a requirement may not be a condition precedent, even if expressly stated to be so, if that result would be a commercial nonsense[2];
  • That the notice is to be read contra proferentem, or otherwise read down[3];
  • That the requirement for notice may not be relied on unless it has been expressly pleaded[4];
  • That the requirements for notice may be loosely construed, such that even documents such as daywork sheets may satisfy the notice requirements[5];
  • That the notice requirement applies only to the contractual entitlement, and not to any parallel entitlement by way of damages[6];
  • The Doug Jones Principle[7];
  • That the effect of absence of notice may be to set time at large[8];
  • That the owner who has prevented compliance with the clause may not rely on it[9];
  • That the requirement to give notice may have been waived, or negatived by an estoppel;
  • That, where the notice required by the contract is in the nature of an arbitration notice, the time for such notice may be extended by the court[10].

In addition, it has been suggested that further avenues to the same effect might, in some circumstances, be available:

  • That the notice provision is penal[11];
  • That the notice provision might be construed as a forfeiture clause, such that the courts are empowered to grant relief from forfeiture[12];
  • That reliance of the notice provision by the owner is unconscionable;
  • That the notice provision forms part of a contractual mechanism that has broken down;
  • That the contractual provision is insufficiently clear as to the nature of the notice that is required;[13]
  • That the notice provision offends against a statutory control of unfair contract clauses;
  • That, in the context of an East Coast Model adjudication, the notice provision is a mechanism which falls to be ignored for the purpose of ascertaining the statutory entitlement to payment;
  • That the owner has prevented compliance with the provision[14];
  • That the provision is tantamount to an arbitration time limits may be extended pursuant to some statutory power;
  • That the provision is unconstitutional[15].

In theory, such an arsenal would still be available if a statutory benchmark were to be established. But in practice, it seems overwhelmingly likely that courts, arbitrators and adjudicators would look to and apply a statutory benchmark rather than this somewhat irregular pile of weapons.

The indicative draft clause that is presently up for discussion is in the following form:

(1)   A provision in a Construction Contract which purports to make a right to claim or receive payment, or a right to claim or receive an extension of time, conditional upon the provision of any notice shall be of no effect if and insofar as

(a)   Compliance with the requirements of the provision would not be reasonably possible or would be unreasonably onerous, or

(b)   The requirements of the provision are not reasonably justifiable by any legitimate commercial purpose

(2)   For the purpose, “notice” includes any notice, claim for payment, narrative or calculation as to actual or estimated time or money.

(3) The failure of any provision or part of a provision to satisfy the requirement of reasonableness at subsection (1)(a) of this section in relation to a right or claim to money and/or time shall not of itself render that provision ineffective for the purpose of any right or claim to other time and/or money.


It may very well be that discussion will lead to an improvement of that wording. The key question, of course, is not whether a statutory benchmark like this would be free from difficulty, but rather whether it would be preferable to the present free-for-all.

SoCLA’s flyer for the event is thus:


 socla logo

SoCLA Special Event Invitation



The current Federal Government Review of Security of Payment Laws being conducted by John Murray AM is not just about adjudication; it requires him also to consider how to prevent various types of contractual clauses that restrict contractors in the construction industry from obtaining payments for work that has been completed.
John Murray is looking at how to deal with the problem of unreasonably onerous time-barring provisions.  
We all know that parties, courts, arbitrators and adjudicators currently look to a wide variety of legal devices – reading down, waiver, estoppel, breakdown of contractual machinery, parallel rights, etc – to prevent unfair reliance on such clauses.
But should new legislation restrict them, e.g., by prohibiting them or by setting a statutory benchmark, to delineate between clauses that are acceptable and those that are not?  If so, what form should such a statutory benchmark take?
SoCLA is in the process of preparing its submissions. YOU CAN INFLUENCE THESE by having your say at events to be held at the various venues and times shown below at which the views of members will be canvassed. 

The format of the evening will feature a discussion in each venue facilitated by a local convener. Then the latter part of the evening will feature a video-conference to share the views from each venue.

As a member of the Society of Construction Law of Australia, you have the opportunity to influence legislation that may – or may not – influence the way time bars operate in the future.


Date: Thursday 15th June 2017

Time: 5:30 for 5:45 start
Venue: Corrs Chambers Westgarth (Level 42, 111 Eagle St)
Convener: Frazer Moss, Clayton Utz
RSVP: Melissa.Yeo@Ashurst.com 

Time: 5:30 for 5:45 start
Venue: Sparke Helmore (Level 29, 19 Martin Pl)
Convener: Cameron Scholes, Sparke Helmore
RSVP: baileysec@wentworthchambers.com.au

Time: 5:30 for 5:45 start
Venue: Ashurst (Level 26, 181 William St)
Convener: Alastair Oxbrough, Page Seager
RSVP: Jaclyn.Smith@corrs.com.au  

Time: 3:30 for 3:45 start
Venue: Jackson McDonald (Level 17, 225 St Georges Terrace)
Convener: Basil Georgiou, Jackson McDonald
RSVP: louise.coleman@wottonkearney.com.au 

Time: 5:00 for 5:15 start
Venue: Piper Alderman (Level 16, 70 Franklin St)
Convener: Robert Fenwick Elliott, Keating Chambers
RSVP: ARobertson@piperalderman.com.au

Time: 5:30 for 5:45 start
Venue: Meyer Vandenberg (Level 2, 121 Marcus Clarke St)
Convener: Alisa Taylor, Mayer Vandenberg
RSVP: Alisa.Taylor@mvlawyers.com.au

Video-Conference MC: Sean Brady, Brady Heywood


“To contribute to the SoCLA discussion on the John Murray Security of Payment review, activate your Twitter account and use #SCLMurray during the event. Follow along with the SoCLA account at @SCLAust


[1] See page 123 et seq below.

[2] Koch Hightex GmbH v New Millennium Experience Company Limited; see page ~ below.

[3] See the discussion of Tersons v Stevenage at page ~ below.

[4] See Blissgrange v John McGregor (Contractors) 1987 GWD 19-707 at ~.

[5] See the discussion of Henry Boot Construction v D F Mooney at ~

[6] See the discussion of Decor v Cox at page ~ below

[7] See the discussion of Abigroup v Peninsular Balmain at ~

[8] Gaymark Investments Pty Ltd v Walter Construction Group Ltd (1999) NTSC 143; see the discission of this often criticised case at page on page 161 below.

[9] See Koch Hightex GmbH v New Millennium Experience Company Limited (1999) CILL 1595. Note also this passage from Keating at 8-030:

There are, however, conceptual difficulties, it is submitted, where the event causing delay has been caused by the employer’s default, for example a failure on the part of the employer to give possession, or by the default of the employer’s agent, for example a failure by the architect to supply drawings in time. In such a case the employer would, if it were able to recover liquidated damages in relation to that delay, benefit from its act of prevention.

[10] See the discussion of McLaughlin & Harvey plc v P & O Developments Ltd (1992) 55 BLR 101, CILL 677 at ~

[11] See page 113 below.

[12] See page 131 below.

[13] See page 126 below.

[14] Bremer Handelsgesellschaft mbH v. Vanden Avenne Izegem PVBA [1978] 2 Lloyd’s Rep 109 at 113, 130 (HL).

[15] See the discussion of Barkhuizen v Napier at page 133 below.

4 thoughts on “Queens of Hearts in the Dock

  1. Following the Society of Construction Law session on this, Greg Henry of Turtons has suggested the following alternative formulations for a statutory benchmark:
    Prohibited Notice Clauses
    (1) A Prohibited Notice Clause of a Construction Contract has no effect.
    (2) In this section:
    (a) A Prohibited Notice Clause in a Construction Contract is clause that makes a person’s right to make a claim or receive an entitlement conditional upon the person providing more than:
    (i) an Initial Notice within 5 business days of the Relevant Date;
    (ii) an Updated Notice more frequently than every 10 business days; or
    (iii) a Claim within 10 business days of when the person could reasonably be expected to possess sufficient information to make the Claim.
    (b) An ‘Initial Notice’ is a notice that:
    (i) identifies the circumstances giving rise to the claim or entitlement; and
    (ii) contains a bona fide estimate of the likely effect of those circumstances based on the information reasonably available to the person at the time of giving the notice, or a statement made in good faith that it is impracticable to provide such an estimate at that time.
    (c) An ‘Updated Notice’ is an updated or revised notice that contains the same information required by the Initial Notice, given at a later point in time.
    (d) A ‘Claim’ is a notice that identifies the nature and quantum of the entitlement sought and includes sufficient information to enable a reasonable assessment of the claim.
    (e) The ‘Relevant Date’ is the earlier of:
    (i) the date the person becomes aware of the circumstances giving rise to the claim or entitlement; and
    (ii) the date the person starts to perform the construction work or starts to supply the related goods and services that are or will be the subject of the claim or entitlement.

    Deemed to Satisfy Clause
    (1) If a person’s right to make a claim or receive an entitlement under a construction contract is expressed to be conditional upon the giving a notice, the person will be taken to have satisfied that requirement if the person gives:
    (a) an Initial Notice within 5 business days of the Relevant Date;
    (b) if the circumstances described in the Initial Notice are ongoing, an Updated Notice at least every 10 business days until a Claim has been made; and
    (c) a Claim within 10 business days of when the person could reasonably be expected to possess sufficient information to make the Claim.
    [Same definitions as above]

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