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NT Builder Went into Liquidation - Letter of Demand from Accountant Firm?

Discussion in 'Commercial Law Forum' started by TropicalDarwin, 16 March 2016.

  1. TropicalDarwin

    16 March 2016
    Likes Received:
    In Dec 14, our builder went into liquidation and liquidators were appointed. This meant they had a breach of contract and we could contract a new builder to complete our building, which we did. We had paid to the previous builder all progress claims that were due.

    In June 2015, our building was finally completed. We thought all was behind us.

    Today, 15 months after, they sent us a letter to inform us of the liquidation. They have now sent a new letter of demand, claiming approx $102k. Basically, they have said that the building contract was $340k less than what we had paid. $118k less than what they say it would have cost to complete the building. Therefore, we owe them $102K for work completed and not paid for. They have given us 21 days to pay.

    The build-to-complete was approx $230K way above the $120K mark. They went under partway through the enclosed stage. The new builders also had to correct quite a few defects.

    I do not believe that they can make this claim, am I right?

    Do I need to answer the letter as if comes from an accountant firm, not lawyers?

  2. Sophea

    Sophea Guest

    Hi Tropicaldarwin,

    The accountant is likely the liquidator or acting for the liquidator for the builder and they are most likely going through the builder's accounts trying to call in all debts of the owing to the builder to get as many funds in as possible to pay off their creditors. They can be quite aggressive in this process. The letter of demand is the first step toward making a legal claim for the money - so next step is likely retaining lawyers to bring a legal action for the money, unless you can convince them that they are not entitled to it and its not worth pursuing.

    Whether or not you are in the clear depends very much on the wording of your contract with the builder and whether in fact (1) the builder going into liquidation did constitute a breach of the agreement, (2) that breach gave you grounds to terminate the agreement and (3) what you paid them at that time was what was owing under the contract at that time.

    My opinion would be to get a lawyer to look over it for you, advice you in relation to your rights and write a robust response to the letter of demand shutting the liquidator down before they institute proceedings.

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