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Traders who left thousands of dollars out of their pockets for the collapse of a construction company are angry that its owner is still in business under a different name.
Christchurch builder Jonny Collett put his company, JE Collett Builders Ltd, into liquidation this month due to about $ 200,000. Known creditors include Inland Revenue and some 30 companies, many of which are subcontractors and suppliers.
Collett now runs Collett Construction Ltd, which he formed in May, around the same time he stopped paying his other company’s bills.
The Companies Act says that a director cannot manage what is known as a phoenix company, one that operates in the same business using the same or a similar name as the one that failed, before or within five years of liquidation.
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Power company owner Dayle Condliffe is owed $ 15,000 after completing work in January at one of Collett’s sites in Christchurch.
“I gave him a little room to breathe because everyone was struggling with the lockdown,” Condliffe said.
For three months, Condliffe received no response to his emails, phone calls and text messages seeking payment, he said.
“When all communication stopped, that’s when I realized it. He was not paying bills and had already created another company. “
Condliffe then served JE Collett Builders Ltd with a legal claim, a court document demanding payment, and several days later Collett put the company into liquidation.
The outstanding sum represents the half-week salary for Condliffe staff.
“It just doesn’t seem right to him that this could happen, that he has already started a company in Phoenix and continues to work as a builder.”
The builders had “all the power” because they had the contract, Condliffe said.
“They don’t know how to run a business and they basically use subbies like a bank. All these family businesses are being rigged. “
You have now filed a complaint with the Business Office.
Liquidator Brenton Hunt’s first report for JECollett Builders lists the reason for the insolvency as an incorrectly priced contract “resulting in considerable loss and pressure on working capital.”
It lists a deficit of $ 190,000 for creditors, an overdrawn checking account, and a computer as the only known asset.
LIZ MCDONALD / Stuff
The first report from the liquidator of JECollett Builders Ltd lists some 30 creditors.
“The motor vehicles used by the company were leased to a related party, therefore they were not owned by the company,” says Hunt’s report.
“… the liquidator estimates that there will be no funds available to unsecured creditors.”
Collett Construction is the namesake of a previous company, which Collett closed in December.
One subcontractor, who did not want to be named, said JE Collett Builders owed him a “substantial amount” and had yet to pay his staff and suppliers.
“He [Collett] not once did he sit down and say, ‘this is the situation.’ He just ignored everyone and we would never get a call.
“He always said that he was a family man, but he has taken me, my children and my wife.”
The subcontractor said it was “a flawed system” when people could put their business into liquidation and start over.
In an email to Condliffe, liquidator Hunt said the company’s assets had been “sold prior to liquidation when the new company was established.”
“I am waiting for details on what valuation was made for the sale, etc.
“I can not stop [a] director forming a new company, but obviously I can investigate any related party transactions, which I am doing. “
Collett’s new website lists the 2017 and 2018 House of the Year awards and testimonials from satisfied customers, including the wife of former Christchurch Mayor Sir Bob Parker, Lady Jo Nicholls-Parker.
The site claims that Collett Construction has been “a proud member of Master Builders since 2013.”
Master Builders Registered General Manager Bronwyn Millar said former Collett Construction was a 2017 member and retired in March 2019, while JECollett Builders was kicked out of the organization when it went into liquidation this month.
“We have very clear rules regarding members when there is a sale. They can’t create a new company to become a Master Builder, ”Millar said.
Libby Wilson / Stuff
The law prevents directors of liquidated companies from continuing under a similar or equal name. (File photo)
May Moncur, an Auckland labor law advocate, believed that too many companies were using liquidation as a way to avoid their liabilities.
“They keep the business going by creating another company and continue as normal. In New Zealand, liquidating a business is very easy and inexpensive.
“There is a loophole.”
Collett has not responded to messages from Stuff looking for feedback.
