Problem: Carpenter having money held by contractor
I am a self-employed carpenter and have recently carried out work on some flats for a new client who is a carpentry sub-contractor, who in turn has the carpentry contract with a main contractor.
I am having some trouble with the carpentry sub-contractor, as it is refusing to pay me what I am owed on the work I have just done, blaming it on another job I have also been working on. When my client said he was not going to pay me, I wrote an invoice and sent it to the main contractor, complete with a covering letter explaining that my client was refusing to pay me because of a job that was not related to the work I had done at the flats.
This did not go down well with my client and he has now ripped all the work out I have done on the other job, saying it was rubbish and did not give me the chance to go look at what is said to be wrong with my work or give me the chance to fix whatever was wrong. Do you have any advice?
Response: Legal advice for having money held by a contractor
As you have no doubt discovered, informing your client’s client of your dispute was not a good idea, not only because of the fall-out but because there is no contractual obligation on the main contractor to make payment to you, as your contract is with the carpentry sub-contractor. That said, making contact with the main contractor does not give a right for your client to rip out your work without giving you an opportunity to inspect and carry out the remedial works.
If your work was defective in any way, then your client must give you an opportunity to make good. The reason for this is that your client must show that it mitigated the cost of the remedial works should it make a claim [or counter-claim] against you for carrying out the remedial work, and that includes offering you to return and make good as opposed to getting a third party to make good, the cost of which would be greater. Further, the onus is on your client to show that there was indeed a defect in your work and that defect warranted your work to be ripped out and started all over again.
Your matter, however, has a further, yet interesting dimension to it. It would appear that your client is withholding monies on your contract for the flats on the basis of defects on another contract. This is known as a cross-contract set-off. Such a set-off is possible, but only in limited circumstances where the cross-claim is so closely connected with a claiming party’s demands that it would be manifestly unjust to allow that party to enforce payment without taking into account the cross-claim. In other words, your client must show that its claim against you under the other contract should be taken into account on your claim for the monies owed against the contract for the flats – from what you have said, I doubt that your client would succeed (that is not to say that your client could not bring a separate action).
I recommend that you write back to your client and state that it failed to notify you of the defect and failed to provide you with the opportunity to make good [on the other contract], and in any event, you require payment of your invoice for the work you did on the flats which is a separate agreement within [say] 7 days, failure of which you will escalate the matter and issue a formal Letter of Claim under the CPR Pre-Action Protocol.
© Michael Gerard 2018
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.