Just another non-compliant payment claim

Over a year ago, we reported on a High Court case that provided valuable lessons around contract documentation, valid payment claims and the threshold for summary judgment. The case, CJ Parker Construction Ltd v Ketan [2015] NZHC 2421 revolved around whether CJ Parker had served a valid payment claim on Ketan. The High Court decided that it had not. In particular, the Construction Contracts Act requirements of indicating calculation of the claimed amount had not been satisfied.

The case was appealed by the liquidators of CJ Parker. However, the Court of Appeal was of the same view as the High Court. The clear lesson from this case is that a bare statement for each item claimed will not meet the requirements of the Act. As an example, the Court noted that the following statement simply ‘[did] not make sense’:

Plumbing and drainage for 2 stages as per quote $77,395+GST, currently (Stage 1) 70% work done to charge 20% +GST for major works already done for both stages.

It was clear that CJ Parker’s payment claim (and ‘contract’) fell far short of the norm. However, it is surprising how many non-compliant payment claims we come across. If in doubt, check your payment claim practices against section 20 of the Act to avoid nasty surprises down the track.

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