QUEENSLAND builders are planning to launch a class action against the state’s construction industry watchdog over what they claim is heavy-handed oversight that has destroyed businesses.
Small to medium-sized building firms are aiming to meet next week in Brisbane as the first step in lobbing the legal grenade at the Queensland Building and Construction Commission.
The aggrieved parties will be chasing an unspecified damages bill, certain to run in to the millions of dollars.
They also want to see sweeping industry reforms and the reinstatement of licences revoked “unfairly’’.
The looming Federal Court action, believed to the first in the nation against such a state regulator, has been spearheaded by self-styled “professional advocate’’ Susie Bennell.
Bennell, the Sydney-based former manager of champion boxer Kostya Tszyu, told Business Confidential yesterday she had already convened one meeting that drew about 20 interested parties.
“If the QBCC continues along its lines of just wiping out builders, liquidating their companies for a whole gamut of reasons and not addressing reforms, there will no longer be long-term builders,’’ she said.
Despite the barely contained rage over aggressive policing of the sector, Housing Minister Mick De Brenni intends to double down on his support of the commission.
He wants to give regulators even greater powers to take on dodgy builders in a bid to protect subcontractors and homeowners.
De Brenni’s controversial plan to mandate the use of trust accounts to stop builders shafting their subbies has already drawn the fierce criticism of peak industry groups.
Indeed, Master Builders Queensland, making no secret of their displeasure with De Brenni, have even rented billboard space on the M1 to drive home the point.
City Beat with Anthony Marx - COURIER MAIL
A SYDNEY-based advocacy group is representing a push for a class action against the Queensland Building and Construction Commission over what it claims to be unfair treatment and bullying. The SR Group, headed by professional advocate Susie Bennell, wants builders, tradesmen, subcontractors and construction workers who believe they have been unjustly treated to join the action. The goal is to drive legislative reform, licence reinstatement, and losses and damages for those affected. A meeting is being planned for October 20 to bring together people who feel they have been adversely affected.
A spokesperson said builders were receiving penalties that amounted to licence demerits unfairly and without proper mediation.
"There is no full mediation service between the home owner and the builder," she said. A poster seeking people in the construction industry to join the class action claims the QBCC had been abusing its power as a regulator. "The watchdog is meant to police the dodgy builders in the industry, but instead cripples legitimate businesses whilst the real crooks disappear before they can be caught," the poster claims. A Department of Housing spokesman said a threefold increase in the level of penalties this year in most cases related to defective work. He said the penalty levels were raised in 2014 but have only just come into force. "They're larger than they used to be," the spokesman said.
Bill Hoffman Sunshine Coast Daily
Being a director of a company comes with certain privileges and responsibilities, which must be managed with care. If you don’t stay on top of your responsibilities as a director, you can end up in significant financial and judicial trouble as a result. If at any stage, you are unsure about the position of your company or your obligations as a director, seek professional advice immediately.
Directorship’s come with a duty of care to the company and any shareholders it may have. As a director, there are numerous requirements you are personally responsible for under the Corporations Act 2001. These include, but are not limited to;
+ Duty to exercise your powers and duties in good faith in the best interest of the company;
+ Being fully aware of the company’s financial position;
+ Duty not to improperly use your position to gain an advantage for yourself or someone else, or to cause detriment to the company;
Furthermore, the Corporations Act 2001 also imposes responsibilities on the company, which you as a director are responsible for. The responsibilities of a company include:
+ Having a current registered office;
+ Having a principal place of business;
+ Disclosing personal details of directors;
+ Keeping financial records;
+ Notifying ASIC of key changes;
+ Paying relevant fees to ASIC;
Similarly, directors of companies in financial distress may be in a compromising position – Insolvent trading is a criminal offence and directors who engage in it can be sentenced to jail. Insolvency is defined as being unable to meet and repay all debts as they are due. This means that as a director, you must carefully consider the financial position of the company before incurring any new debts. A failure to keep adequate records or ignorance to the company’s financial position are both presumed to be acts of insolvency by regulators.
Read more about this in our Difficulty Guide
AN alliance of small to medium-sized “mum and dad building companies” have united as the storm over “aggressive” tactics by the state’s construction watchdog is set to intensify.
The builders have accused the powerful Queensland Building and Construction Commission of relentlessly pursuing them over minor disputes and suspending their licenses before fully investigating complaints.
The QBCC is supported by Housing Minister Mick de Brenni, who wants to give the body even greater powers to tackle dodgy builders in a bid to protect subcontractors and homeowners.
“If a mum and dad chooses to build their own home it’s the biggest investment of their life and they deserve the protection of a strong watchdog who will support them if sadly they find they are dealing with a dodgy builder,” Mr de Brenni said.
But the builders, represented by Sydney professional advocate Susie Bennell, say they have been caught in the crossfire, having to spend thousands of dollars on lawyers to defend themselves.
They will hold meetings in Brisbane this week to map out the next step in their campaign.
Their claims, first raised in The Sunday Mail last week, have been validated by the stockmarket-listed builder Tamawood, owner of Dixon Homes.
Its chairman Robert Lynch has told shareholders “a period of aggressive regulatory enforcement” was adding to costs but would likely boost its bottom line by killing off smaller competitors.
Mr Lynch told The Sunday Mail, if the approach continued, some smaller builders would go out of business.
“It creates opportunities for us but probably not the way we’d like to see it happen,” he said.
“We all need to use good products and look after our clients, and obviously there needs to be some regulation.
“But it can also swing the other way where it becomes overzealous to the extent where builders, who haven’t done anything particularly wrong, seem to be getting hauled over the coals and having to become very litigious about how they deal with the QBCC.”
A QBCC spokesman said staff must act with fairness and impartiality, and anyone who believes they have been unfairly treated should contact the Queensland Ombudsman.
ALLEGATIONS of heavy-handedness and “aggressive tactics” have been levelled at the state’s construction watchdog by an alliance of builders who say its methods are destroying jobs.
The builders have joined forces to blow the whistle on the relentless pursuit of their businesses by the powerful Queensland Building and Construction Commission which has pushed them to the brink of closure and in some cases, the collapse of their companies.
While the Palaszczuk Government has strengthened rules to protect subbies from being out of pocket by the collapse of building companies, the builders say the QBCC’s “overzealous” compliance actions are to blame for some building companies going bust.
Consumer complaints related to minor defects are being used to unleash a barrage of compliance activity which is used as a lever to pressure them into fixing building defects or agreeing to hefty settlements. This is despite disputing they were to blame for the faulty work, according to the builders.
“They just railroad us. They can pull your licence off you whenever they want and you can’t be paid – even for the work you’ve done,” builder Scott Russell said.
His father, Cedric, had a separate run- in with the QBCC following a dispute with a customer over defects he said were caused by the homeowner failing to install drainage, which was not part of his contract. He spent five years fighting the QBCC.
“The whole thing over that period cost me half a million dollars plus,” he said.
Since July, the QBCC has been issuing directions to rectify defective work, which becomes a black mark on builders’ records. Housing Industry Association assistant director Kelvin Cuskelly said builders were being hit with directions over minor non-structural defects, sometimes before being asked for an explanation. Many mum and dad builders were opting to roll over and fix defects, even when not at fault or responsible for the work, just to avoid a legal dispute.
He said that could continue only for a limited time before they ran out of funds.
“They are fixing it just so (they) don’t get a direction. “Builders with no marks on their file guard their records viciously and we don’t believe the QBCC is giving that clean record enough credit,” he said.
Master Builders’ Paul Bidwell said there was anxiety about the tough new approach because the issue of defective work was often not black and white.
Merlo Law principal John Merlo, who has represented clients in the construction sector for 25 years, accused the QBCC of standing by while small, mum and dad operators were crippled by “institutional violence”. He said builders were not the bad guys but the system was lopsided.
The group of builders at loggerheads with the QBCC is being represented by Sydney professional advocate Susie Bennell, an ex-manager of champion boxer Kostya Tszyu, who has carved a reputation representing victims of financial fraud. Ms Bennell is pushing for an overhaul of the QBCC and is seeking compensation for builders she said had been unfairly targeted and crippled.
“Their companies are in liquidation,” she said. “Their livelihood was denied them.”
Housing Minister Mick de Brenni has defended the QBCC and is pushing to give it new powers to ensure builders faced jail or hefty fines for financial malfeasance.
QBCC ‘harassment’ hammers battling builders
KIMBERLY Williams and her four-year-old daughter were both sick in hospital when the QBCC began raking through the finances of her building company last year.
Kimberly Williams said she had felt harassed by constant phone calls from the QBCC. Her daughter had been diagnosed with pneumonia and Kimberly, 38, was fighting a virus. Despite providing medical certificates, she said the QBCC refused to allow extra time for the family building company to respond to requests for information.
She said she had felt harassed by constant phone calls.
“It’s disgraceful what they did to us,” she said. “We were in tears asking if my daughter was going to survive and then I have the QBCC hounding me and refusing to give me an extension of time.”
The company’s run-in with the QBCC followed a dispute with a customer over construction of a home. It led to the cancellation of the company’s building licence. Mrs Williams claims the customer owed tens of thousands of dollars at the time., The dispute is now in the Queensland Civil and Administrative Tribunal. She is one of six builders claiming to have been unfairly targeted.
Another is Scott Russell, who says he was owed tens of thousands of dollars by a customer when the QBCC stepped in and pressured him to pay for the project to be completed. He said he was threatened with his builder’s licence being cancelled if he did not agree. Mr Russell said the ordeal cost him his business and more than $100,000 in legal fees. He lost his house and now lives with a relative. “They just kept wearing me down,” he said. “Subbies and customers get QBCC, but there’s no protection for builders.”
Mr Russell’s father, also a builder, is taking aim at the QBCC after he was pursued for a homeowner complaint about defects linked to drainage problems, despite his contract stipulating he was not responsible for drainage works. It cost him thousands of dollars in legal fees.
Another of the builders, who asked not to be named, said customers could hold up payment over a minor defect.
“The flow-on effects are devastating,” he said.
The Sun Herald & Courier Mail Queensland
A DODGY investment destroyed this couple’s marriage.
Now, with funding from the federal government, Peter Dimitrov is taking the financiers to the High Court — with his ex-wife’s support.
Mr Dimitrov is battling Bendigo and Adelaide Bank, which is chasing him for about $550,000, half of which is interest.
Today a Senate inquiry was established to examine cases of wrongdoing in the banking and financial services sector and to allow victims of financial misconduct scandals and rip offs to have their voices heard. The Senate voted 40-25 in favour of the establishment of the inquiry with only Government Senators voting to oppose it. The inquiry will also look closely at existing legislative and regulatory frameworks to ensure they have Australian consumers best interests at their core.
Mum-and-dad investors entrusted Steve Navra and his companies with $400 million, which he and the liquidator say is all gone. Forever. But the investors, led by professional advocate Susie Bennell, believe $150 million remains and they are going to find it. Ms Bennell and more than 100 investors from across the country are now waging war against banks, lawyers, insurers and Mr Navra.
Consumer advocates say a Supreme Court case involving a financial planner underscores the need for a fund of last resort for people who have lost money through poor financial advice.