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Tradesmen out of pocket for work on hotel

Last updated 05:00 22/08/2013

TRACEY CHATTERTON

Steven Hill sees red whenever he drives past Napier's newest hotel.

Inside the multimillion-dollar Viceroy Hotel is $20,000 worth of materials he installed but was never paid for. A year after walking out on the job, the electrician is still paying off his debt with wholesalers.

Wellington company Central City Inn was put into liquidation in December because it owed tradesmen more than $160,000.

Mr Hill is owed $30,000 for materials and labour - money he doubts he will ever see.

The company, whose sole director was former Wellington woman Maureen Young, was refurbishing the rundown Tennyson Motor Inn (now the Viceroy Hotel) when it was put into liquidation. Another company, of which she is sole director, Tennyson Properties 2009, owns the building on the corner of Clive Square and Tennyson St.

The business that runs the luxury hotel, which opened in February, leases the building and is unrelated to Mrs Young's companies. Contractors were told Central City Inn had run out of money in July last year, nine months after the refurbishment started. After weeks of working with no pay, Mr Hill walked off the job.

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Brian Beckett and his two Lifestyle Building carpenters also pulled the pin after working for five weeks with no pay. He is still $14,000 short.

When Central City Inn was put into liquidation, creditors were asked to invoice Tennyson Properties 2009.

Transactions between the two companies were investigated by liquidator John Fisk, of PricewaterhouseCoopers. It appeared that Tennyson had benefited from the transactions, Mr Fisk said.

Recovering costs had been further complicated because Mrs Young had moved to Australia.

Through her lawyers, Mrs Young said she had made herself available and had met all her obligations to assist the liquidators.

She disputed the amount claimed by at least one of the creditors.

Before the liquidation, one sum was questioned and was the subject of settlement discussions relating to the works carried out by that creditor for Central City Inn.

Mrs Young had made a settlement offer to the liquidators on her behalf and on behalf of Tennyson, Mr Fisk said. It was for well under half the $160,000 owed to tradesmen.

Any money recovered would go towards liquidation costs before unsecured creditors could be paid.

He said they were deciding whether to accept the settlement, which would still leave tradesmen short. The other option was to take legal action. However, creditors were reluctant to put more money towards recovering the debt.

After the collapse of one of New Zealand's largest construction firms, Mainzeal, a construction dispute expert called for an overhaul of the law to prevent subcontractors being caught in the middle.

Lawyer Paul Grimshaw said there were too many situations in which developers could start a company, complete the development and then fold the company.

Contact Tracey Chatterton
Hawke's Bay reporter
Email: tracey.chatterton@dompost.co.nz
Twitter: @trackchatt

- The Dominion Post

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