Unconscionable and misleading conduct by insolvent building contractor Modco Residential Pty Ltd has resulted in a $10,000 fine for its former director at the State Administrative Tribunal.
Unconscionable and misleading conduct by insolvent building contractor Modco Residential Pty Ltd (BC103549, expired) has resulted in a $10,000 fine for its former director at the State Administrative Tribunal (SAT).
The SAT also issued a reprimand against Modco, which entered administration in July 2023.
According to agreed facts following mediation, Damien Thomas Clancy was Modco's sole director in 2022 when the company sought unjustified payments for two homes in Maida Vale and Hammond Park.
In relation to the Maida Vale property, Modco engaged in unconscionable conduct by demanding a lock-up stage progress payment when the project had not reached that stage. It also sought a $57,053 contract price increase without demonstrating a valid justification. On both occasions, the company told the owner no further work would be scheduled until the payments were made.
Modco engaged in misleading conduct by demanding a roof cover progress payment for the Hammond Park home when it had not completed this work in accordance with approved plans. The company also engaged in unconscionable conduct by seeking an unjustified contract price increase of $50,075 from the Hammond Park owners.
Modco claimed the price increases at both properties due to building permits not being issued within the required timeframes, when the company had not actually applied for the permits.
Unconscionable and misleading conduct are disciplinary matters under the Building Services (Registration) Act 2011.
Building and Energy accepted Mr Clancy's mitigation submissions, which included unprecedented challenges affecting the building sector, remorse for the clients' stress and inconvenience, cooperation with proceedings and the alleged influence and actions of the company's co-owner.
Building Commissioner Peter Stewart said the conduct overseen by Mr Clancy was unacceptable.
"Demanding a progress payment without providing the corresponding service or materials is illegal under home building contract laws," Mr Stewart said.
"Likewise, a builder must provide evidence of legitimate reasons for a contract price increase. The threats to cease work until payments were made no doubt exacerbated the stress experienced by the property owners.
"This outcome should also remind company directors that they can be held responsible for their company's actions even after insolvency."
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