{"id":18174,"date":"2024-10-31T09:20:31","date_gmt":"2024-10-31T13:20:31","guid":{"rendered":"https:\/\/www.millerthomson.com\/?post_type=insights&#038;p=225693"},"modified":"2025-01-02T13:46:14","modified_gmt":"2025-01-02T18:46:14","slug":"contractors-are-your-invoices-for-construction-services-or-materials-supplied-to-an-improvement-proper-arcamm-v-avision","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/construction-and-infrastructure-law\/contractors-are-your-invoices-for-construction-services-or-materials-supplied-to-an-improvement-proper-arcamm-v-avision\/","title":{"rendered":"Hey contractors: Are your invoices for construction services and\/or materials supplied to an improvement \u201cproper\u201d?  Lessons learned from <i>Arcamm v. Avision<\/i>"},"content":{"rendered":"<p>Contractors<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a> supplying construction services and\/or materials to an improvement must render \u201cproper invoices\u201d<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a> in order to rely on and take advantage of Part I.1 of Ontario\u2019s <em>Construction Act<\/em> (the \u201cAct\u201d)<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a> (hereinafter referred to as, the \u201cPrompt Payment\u201d regime).<\/p>\n<p>A \u201cproper invoice\u201d is a written bill or other request for payment for services or materials in respect of an improvement under a contract<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a> which meets the requirements listed in subsection 6.1 of the Act, and, subject to subsection 6.3 (2) of the Act,<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a> meets any other requirements that the contract specifies.<\/p>\n<p>The <em>Arcamm<\/em><a href=\"#_ftn6\" name=\"_ftnref6\">[6]<\/a>case is a reminder that contractors need to be cognizant of the new requirements applicable for their invoices given the \u201cstrict definition\u201d<a href=\"#_ftn7\" name=\"_ftnref7\">[7]<\/a> of proper invoices under section 6.1 of the Act in order to capitalize on the Prompt Payment regime.<\/p>\n<p>By way of example, and as highlighted in the <em>Arcamm<\/em> case, a contractor\u2019s reliance on, and ability to take advantage of the Prompt Payment regime under the Act, will be impacted by:<\/p>\n<ul>\n<li>the contractor\u2019s failure to clearly set out the period during which the services and materials subject of the invoice were supplied. In particular, the contractor\u2019s invoice(s) cannot simply refer to the end date of the supply of the services and materials;<a href=\"#_ftn8\" name=\"_ftnref8\">[8]<\/a><\/li>\n<li>the contractor\u2019s failure to identify in its\/her\/his invoice(s) the authority under which the services or materials were supplied.<a href=\"#_ftn9\" name=\"_ftnref9\">[9]<\/a> That is, the proper invoice regime under the Act requires that a contractor\u2019s invoice(s) reference the governing contract or other authority that the services or materials were being supplied under; and<\/li>\n<li>the contractor\u2019s failure to specify in an invoice(s) rendered the name, title, telephone number and mailing address of the person to whom payment is to be sent.<a href=\"#_ftn10\" name=\"_ftnref10\">[10]<\/a><\/li>\n<\/ul>\n<h2><strong>Takeaway: Contractors should have their invoices for construction services and materials reviewed for compliance with the Act <\/strong><\/h2>\n<p>Adapting to change can be challenging and daunting, but (based on the <em>Arcamm<\/em> decision) maintaining outdated invoicing practices will lead to complications with contractors receiving payment under the Prompt Payment provisions in respect of invoices for construction services and materials supplied to an improvement.<\/p>\n<p>Although many successful contractors have likely maintained consistent invoicing practices for years regarding their construction services and materials supplied to improvements, the reality is that the Act now mandates specific elements for proper (monthly<a href=\"#_ftn11\" name=\"_ftnref11\">[11]<\/a>) invoicing. Compliance with these specific elements is necessary to benefit from the Prompt Payment regime, which legally requires payment by an owner to a contractor unless a notice of non-payment is given within the prescribed timeline.<\/p>\n<hr \/>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> Under the Act, a \u201ccontractor\u201d means a person contracting with or employed directly by the owner or an agent of the owner to supply services or materials to an improvement and includes a joint venture entered into for the purposes of an improvement or improvements.<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> It is an owner\u2019s receipt of a proper invoice from a contractor that triggers the application of the prompt payment rules under the Act (as that term is defined in this publication).<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> Construction Act, R.S.O. 1990, c. C.30.<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> Under the Act, a \u201ccontract\u201d means the contract between the owner and the contractor, and includes any amendment to that contract.<\/p>\n<p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a> A provision in a contract that makes the giving of a proper invoice conditional on the prior certification of a payment certifier or on the owner\u2019s prior approval is of no force or effect.<\/p>\n<p><a href=\"#_ftnref6\" name=\"_ftn6\">[6]<\/a> <span style=\"text-decoration: underline;\"><em><a href=\"https:\/\/www.canlii.org\/en\/on\/onsc\/doc\/2023\/2023onsc1151\/2023onsc1151.html?resultId=cac53cb87dd141208cf10758e58d833c&amp;searchId=2024-10-21T12:02:16:412\/4486f386824c4e6cba62d0bb2292c4c0\" target=\"_blank\" rel=\"noopener\">Arcamm v. Avison et al.<\/a><\/em><\/span>, 2023 ONSC 1151<\/p>\n<p><a href=\"#_ftnref7\" name=\"_ftn7\">[7]<\/a> <em>Ibid<\/em> at para 94.<\/p>\n<p><a href=\"#_ftnref8\" name=\"_ftn8\">[8]<\/a> <em>Supra note 2,<\/em> at para 96.<\/p>\n<p><a href=\"#_ftnref9\" name=\"_ftn9\">[9]<\/a> <em>Ibid<\/em> at para 96.<\/p>\n<p><a href=\"#_ftnref10\" name=\"_ftn10\">[10]<\/a> <em>Ibid<\/em> at para 96.<\/p>\n<p><a href=\"#_ftnref11\" name=\"_ftn11\">[11]<\/a> Unless the contract provides otherwise (section 6.3(1) of the Act).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Contractors[1] supplying construction services and\/or materials to an improvement must render \u201cproper invoices\u201d[2] in order to rely on and take advantage of Part I.1 of Ontario\u2019s Construction Act (the \u201cAct\u201d)[3] (hereinafter referred to as, the \u201cPrompt Payment\u201d regime). A \u201cproper invoice\u201d is a written bill or other request for payment for services or materials in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14341,"parent":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[539],"insight-format":[416],"class_list":["post-18174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-construction-and-infrastructure-law"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hey contractors: Are your invoices for construction services and\/or materials supplied to an improvement \u201cproper\u201d? Lessons learned from Arcamm v. 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