Builder sued for alleged defects awarded $22,000 in federal fines | Media Pyro

A Victorian building company facing legal action over alleged building defects has received a $22,000 government grant to improve its business.

Meanwhile, legal costs continue to mount for homeowners caught in a legal battle with the builder, Shangri-La Construction.

In July, Melbourne woman Tamara Railton-Stewart told the ABC’s 7.30 that expert reports and legal fees alone had cost the 10 homeowners in her apartment complex about $500,000.

The company denies the allegations against it and is defending its actions in the Victorian Criminal and Administrative Tribunal (VCAT).

In a separate case heard by VCAT in early August, Shangri-La manager Obaid Naqebullah was fined $25,000 for previous misconduct at a different property in 2012.

That case involved the use of expanded polystyrene (EPS) insulation on the exterior, which was not approved in accordance with the building permit documents.

Mr Naqebullah was found to have “neglected his duties as a construction worker, and the consequences of that neglect created serious problems for members of the public”.

On August 25, Shangri-La Construction was approved for a $22,000 federal grant through the Department of Industry, Science and Entrepreneurial Resources Program.

Ms Railton-Stewart said she was shocked to learn of this, as legal fees continue to rise in the ongoing dispute.

“To realize that our government is giving $22,000 of taxpayer money to a company [whose director] they have been punished and prosecuted by the VBA (Victorian Building Authority), and they have cases against them in VCAT, which is disgusting,” he said.

Shangri-La ‘deeply concerned about allegations of wrongdoing’

In a statement, Mr Naqebullah told ABC’s 7.30: “Shangri-La is deeply concerned about allegations of wrongdoing in [Ms Railton-Stewart’s] property.”

“The satisfaction of our customers is always at the top of our minds,” he said.

“In the past we have taken great pride in the quality of the programs we offer, and we take any allegations of wrongdoing seriously.

“However, just like we said before [ABC’s] 7.30, we cannot comment on the material defects at this stage because the alleged defects are the subject of the current proceedings at VCAT.

“In that process, it is not the scope of the mistakes but the distribution of responsibility for a mistake among several parties. [including the subcontractors who were responsible for much of the physical work and the building surveyors who issued the relevant occupancy permit] it’s in the matter.”

In a case heard by VCAT in August, the Housing Authority of Victoria rejected Naqebullah’s decision to suspend his registration for three months because of his past record.

The tribunal accepted that Mr Naqebullah had no criminal history and had run a successful construction company for 14 years.

Despite this, the VBA has confirmed to the ABC’s 7.30 that it is currently investigating Mr Naqebullah for work on a number of occasions, but said it could not provide any further information.

In a statement, Mr Naqebullah told ABC’s 7.30 Shangri-La Construction “is still trading and trying to deliver homes to our valued customers in a difficult economic environment”.

He said he could not testify how many employees the company currently employs or what its annual turnover is.

“Doing so would be unfair to our employees, partners, and other stakeholders, all of whom have the right to protect their privacy,” Mr Naqebullah said.

“Shangri-La Construction is complying with all its financial and legal obligations as a duly incorporated company under the Corporations Act.”

The Government says it does not know what to do with Shangri-La

A spokesperson from the Department of Industry, Science and Resources told ABC’s 7.30 that the department was not aware of what had happened to Shangri-La and the penalty imposed on its manager before the $22,000 was awarded. of the past.

“The grant was awarded to support business improvement activities recommended through the business advisory service provided under the Entrepreneurship program,” the spokesperson said in a statement.

“Costs will be paid for the completion of such works.

“On October 12, no payment was made to Shangri-La Construction.”

Cladding Safety Victoria, which works with owners’ corporations to pay for repairs to buildings found to be at high risk from fire cladding, has spent $24.5 million to repair buildings that are Shangri-La Construction is the primary developer.

Of the 338 houses approved for financing so far, 13 were built by Shangri-La Construction.

Ms Railton-Stewart said the ongoing costs of legal proceedings meant she was bankrupt.

“My decision in 2014 to just buy my first home cost my family forever,” he said.

Australian Apartment Advocacy (AAA) executive director Samantha Reece said Ms Railton-Stewart’s situation exposed the flaws in the system.

“The system is set up to turn a blind eye to the plight of owners of subsidized houses,” he said.

“When AAA was notified of the $20,000 awarded to Shangri-La we were concerned about the lack of understanding between federal and state authorities.”

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