Business Hasn’t Paid Your Contractor Invoice? The Recovery Path

You delivered the work, sent the invoice, and the business that hired you has gone quiet. Maybe they paid the first invoice and ghosted on the second. Maybe they pushed back on scope and refused to pay. Independent contractor disputes don’t go through Fair Work — you’re not an employee — but the legal path is well worn. A properly-drafted Letter of Demand gives them a chance to pay before you file.

The legal context — contract law plus the Independent Contractors Act

Your invoice is enforceable as a debt under the contract you formed when the engagement was agreed (whether written, verbal, or by conduct). The Independent Contractors Act 2006 gives the Federal Circuit and Family Court jurisdiction to review and vary unfair contract terms in genuine independent-contractor arrangements. The Australian Consumer Law (Competition and Consumer Act 2010) protects against misleading or deceptive conduct in business-to-business dealings. Where a debt claim goes depends on the state or territory: the Local Court in New South Wales, VCAT in Victoria, QCAT in Queensland (up to $25,000), the Magistrates Court in Western Australia, South Australia and Tasmania, ACAT in the Australian Capital Territory and NTCAT in the Northern Territory.

Common business defences and why they fail

• “The work wasn’t what we wanted.” If they accepted the work, used it, or didn’t raise issues within a reasonable time, this defence is weak.
• “We’re waiting on our client to pay us.” Not a defence unless your contract genuinely makes payment contingent on their receipt — most don’t.
• “Cash flow is tight.” Insolvency is a separate issue. The debt remains owed.
• “We never received the invoice.” Easily disproved with email records and read receipts.

The Letter of Demand approach

The Letter of Demand identifies the contract, the work delivered, the invoice number and amount, the due date that has passed, any interest provisions, and a 14-day deadline. It flags the next step — small-claims proceedings or, where the debtor is a Pty Ltd and the debt is undisputed and over $4,000, a Statutory Demand under the Corporations Act 2001 leading to a winding-up application. The mention of these alternatives is what shifts the cost-benefit for the debtor.

What Claim Done delivers (flat fee)

Walk through the wizard with the contract details, the invoice, the dates, and the amount. Claim Done generates a polished Letter of Demand as a PDF, ready to send. If your debtor is a Pty Ltd and the amount is over $4,000, the Statutory Demand service ($97) is the more powerful next step.

What to expect — and the tribunal escalation

If the 14-day deadline passes without payment, the right path depends on the debtor and the amount. Claims against sole traders and small partnerships generally go to the small-claims forum for the state or territory (the Local Court in New South Wales, VCAT in Victoria, QCAT in Queensland, the Magistrates Court in Western Australia, South Australia and Tasmania, ACAT or NTCAT in the territories). Pty Ltd debtors above the statutory demand threshold can be served with a Statutory Demand, which compresses the timeline dramatically. Either way, the Letter of Demand is the foundation document.