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Families Suffer As Building Company Goes Bust
Robin Martin, Taranaki Whanganui reporter
A Taranaki building company has gone into liquidation owing creditors hundreds of thousands of dollars and leaving families with unfinished projects.
JT Construction trading as Level Build New Plymouth went into voluntary liquidation last week.
According to liquidators Insolvency Matters the company, whose sole director and shareholder was Jarom Tipene, owed unsecured creditors $400,000 and Inland Revenue $250,000.
Cass Gray and her husband Darren contracted Level Build to do a $400,000 fixed-price extension and renovation of their Vogeltown property in New Plymouth.
She said they first got wind something was up when a friend they had organised to do the kitchen cabinetry had not been paid and began asking more questions.
The couple thought they had bought $15,000 worth of appliances from Harvey Norman Commercial through Level Build and paid $4500 for variation on the contract in May.
"So, we called the Harvey Norman contact we had met with, and they [Level Build] never placed the order. So they've taken that $15,000 and spent it on I don't know what as well as the kitchen joinery. So there's probably close to $30,000 there.
"We haven't done the full sort of forensic analysis yet, but we reckon there we're $50,000 plus out of pocket."
Cass Gray said the couple could not live in the home.
"There's no kitchen. There's no flooring. So, we're still living with my parents with a 14-month-old baby with no real avenue to be living in a close to finished home."
She said the couple were gutted to be left high and dry by builders who they thought they had developed a good relationship with.
Mark Pollard and Jess Lawn had a contract with Level Build for the construction of new home in Ōākura about 12 kilometres southwest of New Plymouth.
They reckoned they had lost about $140,000 in total.
Pollard said they paid a $120,000 establishment fee for design work, consent fees and materials.
"Then the work was going forward on the concrete slab etcetera and that was another $43,000 and we paid that [to Level Build] on October 25 or just before it and then got the letter saying they going into liquidation just after that, within the next week."
Pollard, who put the value of work done already at about $25,000, sad they had been told the roof would be on their new home by Christmas.
"We've been burned. We've had no procurement of materials and they've pretty much walked away with that last $43,000 straight out of our hands and they obviously didn't have a chance of paying that back."
He was angry.
"I'm pissed off that this can even happen in New Zealand. You know, we've had people look through it and they say there is nothing we can do. You've got to wait, but I don't know how you can get away with it getting so out of hand.
"Like I've worked for companies that have gone into liquidation but they've done it honourably. I mean they don't do it like this."
Pollard said he had been unable to get a hold of Jarom Tipene whose contacts had all gone dead.
It was not only families who had been affected.
Hamish Scott is from Re-Lume Electrical and his company was down $30,000.
"We thought we were friends, we literally hung out with him quite a bit because we'd see him all the time. So, it's pretty hard when you leave your friends like that and we're down a fair bit in the pocket too," Scott said.
"You know we've done our job, we've done everything to the T and then we've got slammed."
Scott knew of about eight projects Level Build was involved with and felt for the property owners.
"Business is business, it is what it is, but taking people's money a week or two weeks before going into liquidation, you must be able to see the shit is hitting the fan really.
"That's what hit us. Clients are people, you know, and they work hard and it's been a couple of tough years, so why would you think it's okay to invoice people and make them pay."
Level Build's website and social platforms were closed and Jarom Tipene phone contact was also dead.
Liquidator Brent Hunt of Insolvency Matters did not return RNZ's call, but had published a first liquidator's report.
It said JT Construction faced increasingly difficult trading conditions due to the current economic climate, which included rising material and labour costs and tighter market competition, significantly impacting margins.
"Operational challenges, such as financial impacts from undervalued pricing, further strained the business and despite efforts to streamline operations, the financial pressures became unsustainable."
The report said the director terminated staff and closed down operations as much as possible to minimise further losses.
"The director sought professional advice and decided to place the company into voluntary liquidation to address outstanding obligations."
Staff were paid outstanding wages and holiday pay, the report noted.
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