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‘The whole thing is so wrong’: Knox and Manly Corso caught in builder’s collapse

The company’s sole director, Stuart Abbott, is a prominent member of the Baptist church community and serves on the board of BaptistCare.

Stuart Abbott, a board member of BaptistCare. His company Clifford Constructions has gone bust leaving a string of angry creditors in its wake.

Stuart Abbott, a board member of BaptistCare. His company Clifford Constructions has gone bust leaving a string of angry creditors in its wake.

Clifford Construction’s sole shareholder is Abbott Corporation Pty Ltd, a company owned and controlled by Mr Abbott’s wife, Rachael Abbott.

It has been estimated the company owes around half a million in unpaid taxes, $1 million in entitlements to its 40 employees, and over $11 million to unsecured creditors, who have been told recently they may come away with nothing.

One of those creditors, John Geeves of Round the Bend Plumbing, called on the corporate watchdog to investigate the collapse, which he said had come at the worst possible time amid the Covid-19 pandemic.

“I think the whole thing is so wrong … [it’s] left so many subcontractors in such a bad hole,” Mr Geeves said.

According to minutes of a meeting called by administrators in May, furious creditors questioned if they could try to pursue Mr Abbott’s personal assets to recoup their losses, including his “nice boat and sportscar” and the $3.5 million French-inspired mansion in Wahroonga owned by Ms Abbott.

The Abbott's French-inspired mansion in Wahroonga, worth $3.5 million.

The Abbott’s French-inspired mansion in Wahroonga, worth $3.5 million.

Administrator Stewart Free told the creditors it depended on whether bankruptcy action was taken against Mr Abbott, and if it was successful “anything was up for grabs’.

Mr Free and Bradd Morelli of Jirsch Sutherland were appointed administrators in April and recommended the stricken firm be placed into liquidation.

The company was forced to abandon a string of projects, including the redevelopment of St Matthews Church and a row of retail stores in a neighbouring building on the Manly Corso.

Workers are chasing outstanding payments of $1.3 million for work already performed.

In a letter to creditors, Mr Abbott blamed unprofitable contracts incorrectly priced by an employee, and the “unprecedented” economic downturn caused by Covid-19.

However administrators allege the company was in trouble well before the pandemic because of its strategic management and because “financial resources were used to service related entities”, in addition to the unprofitable contracts.

They said their investigations indicated Clifford Constructions may have been trading insolvent since at least June 2018 and if the claim was proven it could be worth $10 million.

The administrators raised “major concerns” at meetings about money loaned by Clifford Constructions to a string of companies linked to Mr Abbott, including $1.1 million to steel fabrication company MechaSteel and $1 million to the Abbott Family Trust.

Mr Abbott said the Abbott Family Trust had no cash to repay the loan and MechaSteel could offer only $100,000 because it was in a “precarious position” due to Covid-19.

Creditors rejected the offer. Mr Free told them he would ask ASIC for funding to investigate further, after the watchdog declined to investigate Mr Abbott for a potential breach of his director’s duties.

Mr Abbott did not respond to Sun-Herald’s requests for comment.

It comes as tradies have been at loggerheads with Knox Grammar School over its MacNeil indoor sports centre, constructed earlier this year by Clifford Constructions.

The owners of Bright Balustrading refused to issue the school with the certification necessary to allow the children to use the centre because it had not been paid.

To their astonishment, a third party with no involvement in the project, Magic Glass, then issued the certification instead.

The MacNeil Indoor Sports Centre at Knox Grammar.

The MacNeil Indoor Sports Centre at Knox Grammar.

“Bright Balustrading found it strange and questionable that another contractor can provide the certification when they neither engineered the design, supplied the glass nor installed the glass,” the company’s principal, Faizan Ahmed, said.

He argued the matter was particularly sensitive given Knox Grammar School’s image as an elite private school.

“Parents would not wish for their children to be occupying and using buildings that are not legitimately certified,” Mr Ahmed said.

However the private certifier involved, Mariusz Para, pointed out there was no legal requirement for the certification to be issued by the contractor who performed the work.

“Our office was provided with certification from an appropriately qualified and reputable sub-contracting firm, Magic Glass, who possess all the pertinent qualifications and a long standing in the industry,” Mr Para said.

“Magic Glass confirmed that the glazing achieved compliance with the relevant Australian standards.”

A spokesperson for Knox Grammar said it regretted the position Bright Balustrading was in but it was not contractually bound to pay for the same work twice.

“Knox will, however, support Bright Balustrading in any action that it may take to recover the funds that Knox has already paid to Clifford Constructions,” the spokesperson said.

Magic Glass did not respond to a request for comment.

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