Subbies' hopes founder on Hartner's Reef

By ANNE GIBSON

Disgruntled subcontactors who built The Reef apartment block in Mt Maunganui for Hartner Construction claim they are owed more than $700,000 and have withdrawn their backing for the luxury development.

Only about three apartments remain unsold in the $12 million development, which owners moved into before Christmas.

But some of the bills still have not been paid.

In protest, the tradespeople have withdrawn their warranties and guarantees, though organiser Steve Cook acknowledged this would not affect the safety or saleability.

Frustrated by the outstanding bills, 27 suppliers and subbies are objecting to not being paid. Of these 27, 17 companies gave warranties and guarantees for work and materials on the job, stating their work and materials were of a certifiable standard and met specifications on the building's plans.

But last month, they told the Hartner Trustee Ltd-owned developer, The Reef Ltd, the apartments' body corporate, real estate firm Eves Realty and the Hartner Group that these were withdrawn.

However, the general manager of The Reef, Martin Milford-Cotton, said the subcontractors and suppliers' claims were against Hartner Construction, to which they were contracted when working on The Reef.

Mr Milford-Cotton said the upset subbies should be dealing directly with the receiver of Hartner Construction - PricewaterhouseCoopers - over any outstanding amounts, rather than The Reef.

However, he has taken legal advice about the threat to withdraw guarantees and warranties and believed the action was against the law.

Steve Cook, of Ceramic Protection and Restoration, is owed money for tiling work on The Reef. But after distributing information on the subbies' claims, Mr Cook received a letter from Auckland law firm Jones Young, acting for The Reef, this month.

The letter advised him to retract documents he had circulated threatening that the unpaid subbies and suppliers would withdraw their warranties and guarantees unless they were paid.

Mr Cook should refer any complaints and concerns about payment to the receiver of Hartner Construction, Jones Young advised.

Unless he stopped circulating written material about the situation, the law firm said The Reef would "seek punitive damages due to the gross misrepresentations made by you, knowing that they were untrue, together with compensatory damages for any losses or liabilities."

The subbies and suppliers are claiming $729,377 for work they did on the building and materials they delivered or installed on the site.

Tauranga's Bay Building Certifiers inspected and passed the building for the Tauranga District Council. Bay Building Certifiers issued a code of compliance certificate in December, stating the building was up to scratch.

Tauranga District Council's manager of building services, Terry Wynyard, said the council was not involved in the dispute but he was not concerned.

"The withdrawal of guarantees and warranties does not make a scrap of difference to the fact that the building meets all legal requirements," Mr Wynyard said.

Steve Cook said he had contacted PricewaterhouseCoopers about the outstanding bills, but was not satisfied with the response.

He said he was told in late February by PricewaterhouseCoopers that they might be paid some money. But Mr Cook has yet to see any money.

Building Subcontractors Federation executive officer Mr Peter Degerholm questioned the fact that The Reef and Hartner Construction had common directors - Wayne Hartner and his wife Gaile Hartner, who are also directors of Hartner Construction.

"The relationship between the companies should be examined," Mr Degerholm said.

"Those are areas a statutory manager might have greater powers to investigate and recover any money from the directors, which could then be made available for subcontractors."