A company and its Director have been ordered to pay a total of almost $77,000 in fines, consumer compensation and costs by the Perth Magistrates Court after taking substantial deposits from WA consumers for sheds but then failing to supply them.
Shed Systems Pty Ltd, formerly operating in Malaga and Northbridge, and sole Director David Walter Ah Chee were each fined $12,000 on 16 August 2019 after pleading guilty to six charges under the Australian Consumer Law of accepting payment for goods but failing to supply them within a reasonable time.
The company was ordered to pay prosecution costs of $5,976.65 and the Director was ordered to pay a total of $46,936.69 in compensation to four consumers:
- $21,564.31 to a consumer in Darkan (near Collie)
- $16,200 to a consumer in Maida Vale
- $5,234.10 to a consumer in Warnbro
- $3,938.28 to a consumer in Kronkup (near Albany)
Two additional consumers had already received civil court orders in their favour in relation to their claims.
The six consumers paid the deposits between April 2015 and December 2015 with five not receiving anything and demands for a refund ignored. One consumer was supplied only parts of the shed ordered but not the whole shed.
In handing down the penalty, Magistrate Webb said that, despite Mr Ah Chee experiencing some difficult circumstances, he had walked away from his responsibilities and had no idea of the devastating consequences of his actions. Her Honour stated that the fines for these serious offences were reduced significantly based on Mr Ah Chee’s inability to pay and considering the company was no longer operating.
Commissioner for Consumer Protection David Hillyard said Mr Ah Chee showed a blatant disregard of his obligations to his customers and to authorities attempting to resolve these matters.
“By providing substantial deposits of many thousands of dollars, the consumers had put their faith in Mr Ah Chee to be a man of his word and deliver on his promises. That didn’t occur which came at a great cost to the consumers who were left out of pocket and with no sheds.
“Mr Ah Chee failed to cooperate with our attempts to resolve the complaints and complicated the prosecution process by failing on many occasions to appear in Court.
“Consumers need to be very careful when paying large amounts of money upfront. Only pay a small amount at first and, in this case, make progress payments as materials are delivered and after various stages of work are completed. Also consider paying by credit card as there may be a chargeback option if goods and services are not delivered as agreed.
“The building of sheds, if the total contract value of the work exceeds $7,500, comes under the Home Building Contracts Act which limits deposits that can be charged to 6.5 per cent.”
In July 2016, Shed Systems Pty Ltd and Mr Ah Chee were fined $100,000 by the Joondalup Magistrates Court after being prosecuted by the Building Commissioner for breaching laws related to contracts, registration and exceeding deposit limits in the erection of sheds on two properties in Nilgen and Ravenswood.
Mr Ah Chee, as the sole Director of the deregistered company Shed Co Pty Ltd, was successfully prosecuted in 2008 by the former Builders Registration Board for contractual and registration-related offences and was ordered to pay a fine of $12,000.