A dispute over a marine researcher's building project has left her high and dry, writes Catherine Masters
Marine biologist Ingrid Visser says she is close to bankruptcy and faces losing her home and orca research centre on the Tutukaka coast, despite emerging the winner in a long-running dispute with her building contractor.
In December, a Whangarei District Court-endorsed expert ruled Visser had overpaid Paramount Sheds Ltd - which had been trading as a Steel Sheds 'R Us franchise - by $44,301 and that a further $17,080 worth of remedial work was required for defects in a large lock-up shell for a house and equipment garage the company had put up on land owned by Visser's father.
The ruling also said the contractor should pay all of the experts' costs but instead, in April, the company's name was changed to PMTCO then placed into liquidation.
"Now I'm stuck with a building that I can't afford to get repaired, that I can't afford to get finished, that I can't get insured," says Visser. "I can't sell it because it's on my dad's land. I couldn't sell it anyway because it doesn't have a Code of Compliance."
She says if she goes bankrupt the bank will probably dismantle the building and take it away - but she fears also losing the boat she uses to track New Zealand's orca population, her truck and research equipment.
She says she has been naive but is a whale researcher, not an accountant and now her life's work, the Orca Research Trust, which she set up to protect orca through conservation, education and scientific research, could be in jeopardy.
She says she signed a contract in 2007 with Paramount Sheds Ltd, owned by Whangarei businessman Donald Kerr, for a fixed price of nearly $200,000 for a big shed, which she would also use as her home, and a garage. The deal was unusual in that she would obtain sponsorship for some of the materials, such as concrete and cladding, to keep her costs down.
"I had an extremely tight budget but very good support from the general public, including companies. And so, because I don't get paid for what I do as a researcher and I have to work overseas to get money to survive, for food and a haircut and all that sort of thing, I needed to find a way to make this happen."
But the relationship between Visser and the company descended into dispute. The company claimed there had been a verbal agreement to change to a cost-plus contract and that she had made multiple and substantial variations to the building specifications.
Visser denies she ever agreed to switch to a cost-plus arrangement - "who on earth would?" - and that the sponsorship arrangement had been agreed to.
She is angry that Donald Kerr, who was the sole director of Paramount Sheds and is a director and/or shareholder in other companies, including some bearing the name Paramount, could legally wind up one company and avoid the liabilities involved, although this is a common commercial practice in the building industry.
Kerr told the Weekend Herald he was recovering from a major operation and referred us to his lawyer, Wayne Peters, who pointed out his client had been the one who had taken the action against Visser in the first place, believing she owed an outstanding $54,000.
Surprised this newspaper was writing a story, he said there was nothing unique about the situation. He said the case turned on a difference of opinion around the type of contract it was and the decision of the expert had indicated a belief his client may not have been clear enough with Visser that it was a cost-plus arrangement.
In the decision, the expert, Tony Dean, found in Visser's favour that the contract was a fixed-price lump sum contract and wrote that though he accepted the contractor's staff were under the impression she had agreed to change to a cost-plus method of billing, he found it "curious" an experienced contractor would proceed to adopt such a radical change without confirming the change in writing.
Speaking to the Weekend Herald, Peters questioned why Visser carried on paying above the fixed price if she thought the contract was fixed-price and said if she had a genuine complaint she would have instigated a complaint well before Paramount Sheds took its initiative.
If the decision had gone the other way, Visser would have owed his client money and, though not successful, it didn't mean his client had not stuck to his side of the bargain, "that just means he was unsuccessful with his claim".
Peters said Paramount Sheds had become technically insolvent as a result of the decision and therefore did not have the resources to pay Visser.
"It's not the design to deny anyone their rightful entitlement, it's a fact of life. To put it mildly, I don't think there's much of a story to be honest."
When Kerr's other companies were mentioned, Peters said, "Are you suggesting to me that if I have 10 companies and I have one that trades unsatisfactorily in one forum that I'm giving some guarantee from my other nine companies? Is that what you're suggesting? Because if you are, I'm going to suggest to you that you're defying commercial reality."
An Auckland lawyer who specialises in construction disputes, Paul Grimshaw, says situations involving limited liability companies come across his desk every week.
"It does go to show we need to think carefully about the whole concept of limited liability companies and, in particular, we probably need to think about things like builders and developers posting bonds with the bank, that sort of thing, to guarantee their performance.
"And, perhaps, also for builders before they enter into building contracts like this, to establish that they have insurance in place, so that if they do go out of business there's someone there to pick up the tab."
Visser says in retrospect she should have stopped paying after the fixed price was reached and, in fact, did stop paying at about $16,000 over but had felt threatened by being told the debt collectors would be called in, so had continued to pay.
She says she had not wanted to have bad credit to her name and wanted to protect her sponsors.
"The last thing I wanted was all of these people who had been helping me, including the members of the public who call me about an orca sighting, thinking 'oh my God, this girl doesn't pay her bills'."
Her original mortgage had been for $160,000 but, with the over-payment and interest, was now creeping towards $260,000 - far more than she could afford.
She says she stopped the over-payments when her father, Fritz Visser, found out and asked what on earth she was doing.
Mr Visser, 75, told Weekend Herald on the phone from Vanuatu where he lives for part of the year, that people saw his daughter on the television in the water with orca and deduced she must have a lot of money, but that was not the case.
He says she had been very naive and that while great with orca, commercially she was hopeless.
"She is a scientist and the rest of the world - other than her orca - are an alien place to her."
The whole thing had been distressing, but he knew it was not an isolated incident.
"This is normal in the building world. This is why they're setting up these limited liability companies, to isolate the various activities from their other businesses, so they send one bankrupt, next week they'll be building another house for somebody else, under another name."
The Herald contacted the expert who ruled in the case, Tony Dean, who said though he ruled in Visser's favour and felt for her, this was life and also legal.
It had been her choice to enter into a contract with a limited liability company rather than an individual, and it would have been prudent of her to consider whether she needed to get a personal guarantee from the director.
Dean, who has been involved in leaky home disputes involving limited liability companies said this situation wasn't the same because those disputes came about by a different set of circumstances.
"I can't see any immediate law change that would benefit Ingrid's situation. I think it's a case of there are laws already there, there are systems already there. It's just unfortunate that she moved outside the normal house building systems."
People needed to be more savvy about what they were entering into, he said.
"One of the things leaky homes has taught us, is don't buy a house without checking it over. The Kiwi way was 'I'll get a my builder mate to have a look around and see if it's all right'. It's not good enough.
"I think it's the same for building a house.
"If you go to a firm, you should take some steps to find out what's going to happen if things go bad."
The warning from Visser's situation was that even if you win in a dispute, "you can win the battle but lose the war".
Visser, meanwhile, says she is borrowing money from family to help keep up with the mortgage payments but is up against a brick wall.
"I'm hoping for a miracle."