Moving quickly to secure payment is critical
Our Construction team recently achieved a great outcome for a client which saw them paid in full from a project Principal for work they carried out as a Subcontractor in circumstances where the Head Contractor entered liquidation.
This case demonstrates that if you are prepared to move quickly, and utilise the right legal options, then payment can be achieved in otherwise difficult circumstances.
Our client was part of a contractual chain that looked like this:
Our client came to see us when the Head Contractor had failed to pay 2 months worth of progress payments. We discovered that the Head Contractor had liquidators appointed pursuant to a creditors' voluntary winding up 6 days before the client came to us.
We acted immediately to give our client advice about the Subcontractor’s Charges Act ("the Act") and the circumstances that can allow for a claim to be made on the Principal for payment of outstanding amounts.
In accordance with our advice, our client instructed us to lodge a claim of charge with the Principal and utilise the provisions of the Act to secure funds otherwise owing by the Principal to the Head Contractor for payment of our client’s outstanding progress claims.
Despite the liquidators appointed to the Head Contractor refusing to provide the necessary consent to allow the Principal to pay the outstanding progress claims directly to our client, which lead to the Principal paying the outstanding amount into Court.
Our client followed our advice and commenced the necessary court proceeding.
It was the right decision. We were able to secure a Court order for payment of 100% of the outstanding amount (which was paid directly to our client from the funds held by the Court) and an order for the payment of our client’s legal costs.
The key takeaway from this story is that if you get the right advice, act quickly and are willing to stick out the process you can achieve the just result you deserve.
If you have questions about Subcontractors Charges or other construction related legal matters please contact Kylie Howell, Head of our Construction Team.
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