Limitations Act 2010 (Part 2)

Freddy's lesson retaining business records continues

Pebbles arrives at Freddy’s house to find poor Freddy quite flustered.  Freddy is in his office knee deep in paperwork.  The call, a couple of weeks ago, from the farmer complaining that the hay he says Freddy had cut for him, has been playing on Freddy’s mind.  Christmas is just round the corner, and he hasn’t even thought about Christmas presents yet.

Freddy tells Pebbles that he hasn’t been able to find any paperwork about the contract he did for the Farmer.

“Dad, you really need to be more careful about retaining your business records for at least 15 years.  The Limitation Act requires this,” Pebbles stresses.

“I know, I know, Pebbles, it’s on my list of New Year’s resolutions,” replies Freddy.

In amongst the mess in Freddy’s office, Pebbles finds a note book.  It is coffee stained, and dog eared in parts.  On opening it up, she sees a lot of scribble referring to Freddy’s jobs from 2010.  There are some references to some of the contracting work Freddy did that year, but nothing that relates to the Farmer complaining about his hay.  She shows it to Freddy.

“What use will that be Pebbles?  That’s just my diary of odd jobs,” Freddy says.

“Well it’s not perfect but it might jog your memory about whether you did the work for the farmer at all.  I’m beginning to wonder whether you did do the job in the first place.”

“How am I going to prove that Pebbles?” Asks Freddy.

“Well, read back through this notebook, and keep it in a safe place.  When you find out more detail about the farmer’s claims, like the date the Farmer says you cut the hay, you might be able to show from your notebook that you did not do the work, and therefore not responsible for it.  You see, although you really do need to get better at keeping good business records, the farmer that says you cut and stored his hay must give you sufficient details (including the dates about when his claim arose), for you to respond to his claim.  Also, if the farmer decides to file a claim against you in the Disputes Tribunal, or District Court, he must be able to support his claims with evidence that you did the work,” explains Pebbles.

“Ok so what do I do next, Pebbles?” Asks Freddy.

“Well, you could write to the Farmer stating that you have been through your records and you have no record or recollection of doing the work he claims you did, and therefore deny his claims.  You should require him to provide further details about the job, including the dates the work was claimed to have been done, the price of the job, and when payment was made and how.  All this information will help you pin point whether you actually did the work.”  Explains Pebbles.

“What happens if I did do the work, Pebbles?” Asks Freddy.

“Don’t panic.  We’ll cross that bridge if we need to.  If you did do the work, it might be that there are other defences available.  For example the hay may have gone mouldy for some reason out of your control.  In the meantime enjoy your Christmas trip to Waiheke island,” Pebbles reassures.

“Shh, Pebbles, Mrs Freddy is just down the hallway, and the Waiheke holiday is a surprise.”


The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.

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