Angry tradies to seek legal action
CREDITORS owed more than $1.6 million by failed construction company Perle are seeking legal action in the hope of filing a class action to recover their money.
At a meeting late yesterday, out-of-pocket Coffs Harbour sub-contractors voted unanimously to have the financially troubled Sydney company wound up in liquidation. Their vote will go to a meeting of statewide creditors tomorrow.
Local trade companies affected by the company’s collapse also expressed an interest in pursuing Housing NSW, and possibly the government’s primary project contractors Bovis Lend Lease through the courts.
Legal advice has also been sought through Slater and Gordon Coffs Harbour to see if the sub-contractors have the grounds for a class action involving other creditors in the Illawarra and Sydney.
“I believe there is enough information there to join the players in this debacle in a legal case,” Member for Coffs Harbour Andrew Fraser said.
Yesterday’s late-breaking development came after Housing Minister Frank Terenzini confirmed the collapse of Perle Industries had been referred to police for investigation ‘to see if there had been any breaches of the law’.
Statewide Perle has left debts of around $10 million after commencing government stimulus package projects, three of which involved Housing NSW unit developments in Coffs Harbour.
At the meeting, Mr Fraser received copies of the contract agreements that Perle signed with Housing NSW and that the department signed with construction giant Bovis Lend Lease.
The paperwork was made available, after Mr Fraser’s recent meeting with the minister in the presence of local creditor Ernie Burnett, whose plumbing company is owed almost $300,000.
Mr Fraser was, however, denied access to sensitive financial audits, which two independent companies conducted into Perle on behalf of the State Government department.
“The reason I believe I was denied access is because these reports don’t come up to scratch,” Mr Fraser said.
“I believe there could be grounds for a class action against the Department of Housing, possible grounds against Bovis Lend Lease and also the companies that undertook the financial assessment, I may be wrong, but we won’t know until we get that legal advice.”
A report handed down by the administrator Rogers Reidy stated that if creditors across NSW vote to liquidate the company, that could see returns of five cents in the dollar.
Another option on the table is for creditors to offer Perle a deed of contract and allow the company to complete its building projects.
This the administrators believe would offer returns of 27 cents in the dollar, but after blockading the incomplete Harbour Drive worksite, the sub-contractors have held firm.
Minister Terenzini said it had been agreed by some creditors that if the State Government moved in and covered the debts of the company it would set a dangerous precedent for the construction industry.
“We reject outright the administrators ‘opinion’ that, in the spirit of the economic stimulus package, clients such as Housing NSW should pay in full the outstanding debt to creditors,” Mr Terenzini said.
“Our decision not to pay out the subbies has nothing to do with stimulus – it’s based on long-standing and responsible Housing NSW policy.”