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Construction contracts often include detailed provisions setting out prescribed regimes for the provision of claims. Such regimes provide for the form and detail to be included in a notice and importantly for the purposes of this article, timeframes within which the claim must be submitted. It is also common for construction contracts to include a term which provides that if the claim is not submitted within the specified timeframe. the claiming party (invariably the contractor), loses it entitlement to bring the claim.
These provisions are known as 'time bars'.
Principals require these time bars so they have certainty surrounding a contractor's entitlements thereby allowing them to manage any associated risks to the project accordingly and have timely visibility of any time and cost claims of the contractor. which will impact the delivery of the project.
Time bars apply to different types of claims in construction contracts such as a claim for an extension of time, for variations or for additional cost. Time bars differ from other contractual obligations where breach can expose the non-compliant party to a claim for damages suffered by the innocent party as a result of the non-compliance with the onus on the innocent party to establish its suffered loss.
A time bar disentitles the claiming party to bring its claim even though it might have carried out the work (without defect) or legitimately been delayed and but for the time bar would have been entitled to cost or time relief.
The Courts have upheld clearly drafted time bar clauses so that compliance is a pre-condition to any entitlement to the claim. Non-compliance can result in a party losing a substantial entitlement.
Cautionary Time Bar Tale — WestConnex M5 motorway tunnel in Sydney
On 1 December 2025 Southern Cross Electrical Engineering Ltd (ASX: SXE) announced that its contracting subsidiary, Heyday Pty Ltd, had been unsuccessful in its arbitration proceedings for additional costs incurred in performing works on the WestConnex M5 motorway tunnel in Sydney.
Heyday's contract with CPB Dragados Samsung Joint Venture (CDSJV) contained strict terms regarding the notice and timing for bringing claims against CDSJV – time bars.
The Arbitrator found that Heyday had failed to comply with the notice requirements provided for in the contract and held that Heyday's claims totalling $22m for delay and disruption costs and unpaid variations were time barred and accordingly dismissed.
Further, Heyday was ordered by the Arbitrator to repay to CDSJV $15m it received under an earlier security of payment claim.
Compliance with the procedural requirements of a contract may seem harsh, however, they are a regular feature of construction contracts. Non-compliance is harsh: it can result in a party losing a substantial entitlement.
For further information please contact:
Mark Glynn, Partner
Phone: + 61 2 9777 8342
Email: mcg@swaab.com.au
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
