Enforcing a Construction Contracts Act payment claim stalled because the claim form omitted details required by the Act. It was irrelevant that the debtor was a lawyer with professed expertise in construction law who was expected to recognise the legal significance of a payment claim even if all necessary rules had not been complied with.
Construction Act payment claims trigger a ‘pay now, argue later’ regime if they comply with the format demanded by the Act. Do not pay then threats of liquidation follows. The High Court was told the tenant of a property at Coatesville on Auckland’s upper harbour demanded $100,000 from his landlord, Poly Wealth Trustee Ltd, for work done on the property. Poly Wealth is controlled by Auckland lawyer Winston Wang. The tenant had agreed to buy the property for $3.2 million. It had been agreed the value of remedial work to be carried out by the tenant could be deducted from the purchase price. Two years later, the deal fell apart amidst a dispute over the value of work done and the status of a $100,000 deposit paid earlier by the tenant. The tenant claimed Poly Wealth owed $100,000 for construction and repairs to the property. Attempts to wind up Poly Wealth for non-payment failed. The tenant’s Construction Act payment claim did not comply with the Act. In particular, no due date for payment was specified and the required statutory notice of debtor’s rights under the Act was not delivered. It did not matter that the debtor was a construction lawyer presumed to know his rights. The website of Mr Wang’s law firm advertises expertise in construction law. Failure to comply with the Act meant the claimed debt was not due. The tenant was left to go to court to prove how much was owed, and when.
Poly Wealth Trustee Ltd v. van Vlerken – High Court (25.03.20)
20.067