Quittances and Statutory Declarations: Whatever You Don’t Say May Be Used Against You!
Contractors are generally required to produce statutory declarations and quittances as a precondition for receiving progress payments and the release of their holdback.
If you would prefer to avoid receiving a judgment with the following conclusions:
The Court finds on the evidence that the amounts claimed by the general contractor are not subject to any reserves pursuant to the statutory declarations and quittances it issued to the project owner for the periods concerned as a precondition for receiving progress payments and release of the holdback.
The oral evidence the general contractor seeks to adduce regarding such reserves is inadmissible, as it is intended to contradict a written document in the absence of any commencement of proof.
For these reasons, the Court dismisses the action brought by the general contractor against the project owner, with costs.
… then you should pay close attention to the wording of such documents in order to ensure they contain the necessary reserves for preserving your rights and recourses against the project owner.
By way of example, Statutory Declaration form CCDC 9A-2001 provides for the following exceptions to the amounts that must be declared by the contractor:
- holdback monies properly retained;
- payments deferred by agreement;
- amounts withheld because of a legitimate dispute.
In order to avoid any ambiguity, you should specify all material information regarding these exceptions and any other information you would like to include, both in the statutory declaration and in the quittances delivered to the project owner.
You could accordingly refer to an attached schedule specifying, in addition to the basic exceptions mentioned above:
- changes to the work that have not been included because, for example, they are still being negotiated or are being processed pursuant to a cost-plus arrangement;
- claims declared or submitted for certain additional costs and/or time extensions, for example indirect costs associated with a change order whereunder only direct costs have been agreed to and the contractor wishes to reserve its rights with respect to indirect costs. We take this opportunity to recommend, moreover, that you follow the contractual procedure carefully in order to preserve your rights and recourses in this connection, as courts are quite strict in this regard;
- amounts for work performed during the period covered by the declaration and quittance but not able to be timely billed because of delays by subcontractors in requesting payment;
- any exceptions included in the statutory declarations and quittances of your subcontractors and suppliers;
You could also agree, for example during the project launch meeting, on exceptions that will apply systematically to your statutory declarations and quittances, although it is still preferable to expressly specify them on each such document.
You will thus avoid the risk of having the contents of your statutory declarations and quittances being used against you in a court of law.