Pōkeno, where the house-builder was active before it stopped trading.
Pōkeno, where the house-builder was active before it stopped trading.
A creditor of south Auckland building business Compass Homes (Franklin) wants to be paid money he claims he is owed after the business stopped trading.
Responding to a Herald article yesterday where company owner and director Garry Shuttleworth said his business was no longer trading, the subcontractor complainedhe was owed more than $80,000 for work completed by November.
He was encouraged to continue to finish work for Compass, he said.
“We kept being told we had to finish them so the owners could move in and we could be paid. Where is the money?” he asked.
Shuttleworth said today in response to the creditor’s complaint: “Given the serious accusation made against me, I am having my lawyer check my response.” He then said he had no comment to make.
Yesterday he said the company had not sold a home for a year although it had built around 200 new homes at Pōkeno alone when all was going well.
The subcontractor said losses to the Franklin business were not the first from a Compass company. He had lost nearly $30,000 when another Compass business failed last year. That was Compass in the western Bay of Plenty which was liquidated. One family complained of losing more than half their $55,000 deposit when that business failed.
Terwen Investment, trading as Compass Homes (Western BOP) went into liquidation last April. Grant Reynolds of Reynolds & Associates was appointed by the shareholder. The company is owned by Terence and Wendy Sharplin of Tauranga and Terwen Holdings.
Reynolds’ six-monthly report said the director Terence Sharplin blamed the pandemic, the GIB crisis and delays in PlaceMakers delivering frames and trusses. Rising interest rates meant customers had cancelled or delayed building contracts and cost rises impacted fixed-price building contracts.
Creditors were listed as being owed $364,000 by that business and include Aotea Security (NZ), Bay Glass & Glazing, Entire Electrical Bay of Plenty, Carpet Court Retailing, Prestige Loos, Enviro NZ, PlaceMakers, Central Contracting, Off the Wall Construction, SDP Construction and Wallboard Systems.
The Herald also reported two years ago on Krish Koria who was building a home in Wānaka when a local Compass business there failed.
Krish Koria no longer believes that using a national building brand is a more secure way of ensuring a trouble-free build. Photo / Sylvie Whinray
Companies Office records show two other Compass businesses currently in liquidation: Bearing Property trading as Compass Homes Waikato and Huntingdonshire Holdings trading as Compass Homes Central Otago.
Bearing creditors are owed $122,000.
NZ Insolvency and Trustee Services said in December it was uneconomic to pursue the Huntingdonshire director’s $30,000 overdrawn shareholder current account. IRD was listed as being owed $140,000. Creditors included Allied Concrete, Fletcher Distribution, Applico on Onehunga, Mico New Zealand in Christchurch and Stanley Building Supplies of Penrose.
Yesterday, Shuttleworth said Compass Homes (Franklin) had hit the “perfect storm”. Two staff members who were in sales had resigned, the price of land had risen astronomically, building material costs were escalating, interest rates were still high, inflation remained elevated and people were having trouble getting access to finance, he said.
Sections which were just under $200,000 a few years ago were now going for $550,000 and above in Pōkeno alone, he said.
“At the moment, I’ve ceased trading [that company] and what I will do, I don’t know. I’ll have meetings in the next few weeks to determine that. The company is unable to pay its bills,” he said.
How much is owed remains unknown.
The company is not in liquidation, receivership or administration but Shuttleworth said he had yet to decide what to do next.
Another person who had dealt with the company said many Compass customers of the Franklin franchise had lost money because work had not been completed. Some people were afraid to speak out about it, he said.
“There are numerous examples where remedial works have been outstanding for two-plus years when in fact they should be remedied by law within the first year of a new build being finished. It’s a sad state of affairs,” he said.
Shuttleworth, in his early 70s, was a former chief executive of the Certified Builders Association but resigned from that position in 2005.
His wasn’t the only business which was suffering and he was hearing from many others in the sector about issues continuing with residential building businesses,
The company was incorporated in 2012 and is owned by Capital Investments which is owned by Shuttleworths and his interests.
He emphasised Compass Homes (Canterbury), of which he is the sole director, was continuing to trade. Interests associated with him also own 80 per cent of that company, according to Companies Office records. It was incorporated in 2011 so has been running longer. Shuttleworth stressed there were no issues with that business and it was continuing, in a strong position.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
