VIC Builder Terminated - Who's Liable to Pay Our Invoices?

[DEM]

We started working on a residential property after our quote being accepted by a "builder". There was no written contract and the arrangement was to invoice progressively. The first invoice was paid by the property owner - not the builder, via bank transfer.

Soon after our second invoice was issued, the builder was terminated and we learned that he did not have all his legal documents ie permit, licence in check. He said we would be paid and then told us it was the owner that was going to pay us. He disappeared, the owner said they were taking him to court and would keep us "in the loop" however we didn't hear from them again either.

After several attempts to contact both parties we employed the services of a debt collection agency who advised us to re issue the invoices in the owners name as she had "acknowledged the debt" by paying the initial invoice. After their first attempt to reach her they received a response from her denying any involvement in hiring us etc. This then prompted the debt collection company to turn around and tell me that they had wrongly advised us and that we had no right to reissue the invoices in the owners name!

We are so frustrated. We have over $10,000 worth of materials and labour owing to us from the job and don't know where to go from here... debt collectors? Do we have a leg to stand on?

 

[Sarah J]

Hi DEM,

Has the work been completed or partially completed in the property? Were you working as a contractor to the builder?

Even if you did not expressly contract with the owners of the property, the fact that you expended materials and services and were in fact doing work for the owners, you should be able to claim compensation/damages from the owners. You may have an action in contract (implied or oral contract) or part performance (where there was an oral agreement that you relied upon and partly performed according to, which the other party is denying, and you have suffered losses as a result) or unjust enrichment.

As to which cause of cause, this will depend on a number of factors, including what arrangement you had with the builder and what arrangement the builder had with the owners, what arrangement you had with the owners, any recorded correspondences, first payment details etc.


I would suggest speaking with a lawyer for advice on the merits of your case. Try and collate all this information in a folder and have it ready for your first interview. Record all future correspondences with the builder and the owners in writing, for past conversations that were not in writing, email/write to them and confirm what was said. Any written agreements would be extremely helpful.

 

[DEM]

Thanks for you fast response Sarah!

The house is now being occupied to the best of my knowledge - so completed. Other contractors were hired to finish the work that we started. We were hired as contractors by the builder. We only communicated with the builder (almost exclusively by phone) and didn't communicate with the owners until the builder had been terminated. We didn't carry out any further work at this point. Unfortunately the builder has gone missing we have no way of reaching him and the owners don't return our phone calls.

Are there lawyers that specialise in this type of thing?

Thanks again

 

[Sarah J]

Hi DEM,

What does your independent contracting agreement between yourself and the builder say about who is employing you? Do you have any agreements with the owners of the building? Further, are you able to obtain copy of the contracting agreement between the owners and the builder?

It would be helpful to know about what either of this says in relation to sub-contractors.

There is no way you can find the builder? Can you find the builder's contact details from the owners?