By Andrew Steele - 30 Jun 2015
If you're a building contractor who issues simplified
invoices, you may need to think again. A recent high court case
emphasised the need for contractors to get invoices right the first
time if they intend to rely on summary procedures to maximise their
cash flow.
In Can Build Limited v Laura Kirkpatrick Family
Trust the contractor included a total sum for materials and an
hourly rate for labour. The Court held that this was not the detail
necessary to comply with the Construction Contracts Act. The Court
expected:
- Details around how much work had been completed and what it
related to.
- Labour costs broken down for subcontractors such as for
plumbers or carpenters.
- Itemised materials costs.
The invoices submitted did not provide enough detail for the
property owner to provide any meaningful response to the payment
claim.
The result for this contractor was that they face a more
protracted legal claim. More detail would have enabled them to get
a quick judgment on the unpaid invoices.
The Associate Judge also noted that contractors cannot try to
amend invalid payment claims by issuing them again.
Easy enforcement provisions are available for building
contractors, but only if the invoices are right.
We often see examples of payment claims falling short because
home owners aren't given the proper forms with the invoices.
Another common mistake is in not putting in enough detail around
how the claimed amount has been calculated.
To check if your payment claims would stand up contact our Construction
Law team.