How much can your builder charge you?

DICK V LEE & ANOR (HC, DUN, CIV 2004-412-310 [31 May 2006])

Sometimes, builders neglect to give you an invoice immediately after contract work was finished or simply charge you much more than expected. What can be done if this happens?

This case illustrates the problems that can arise when paperwork associated with building projects is neglected. Between 1997 and 2003 the plaintiff carried out several building projects for the defendants pursuant to oral agreements. In the case of the projects relevant to this proceeding invoices were not rendered on a timely basis. But at that time the plaintiff and first defendants enjoyed a good relationship and the defendants made progress payments to the plaintiff totalling $248,500. It was anticipated that some final balancing would be required.

Early in 2004 the plaintiff became concerned that the first defendants, who had emigrated from Korea, were overseas and their Dunedin house was on the market. He set about calculating the amount the defendants still owed, arrived at a figure of $326,822.37, issued proceedings, and obtained a court order against the defendants’ assets in their absence. Although these orders were subsequently set aside, the relationship between the parties was destroyed and their attempts to resolve the matter failed.

The Court held that the responsibility for issuing timely invoices must rest entirely with the plaintiff. If he had rendered invoices on a timely basis issues concerning the reasonableness of the charge could have been raised and resolved at the time.

The plaintiff’s claim of $326,822.37 was held unreasonable. The Court also rejected the defendants’ claim that the plaintiff always carried out work after making maximum estimates of building work in advance and that they did not owe anything to the plaintiff. The Court ordered reasonable estimate of building work done to be paid to the defendant and awarded the plaintiff in the sum of $85,023.64 plus court costs. This is a little more than a quarter of the original claim by the plaintiff.

Please note that the above information is intended to provide general information only. The contents contained in this article do not constitute legal advice and should not be relied on as such. For legal advice please contact our professional team at Forest Harrison.