“Price escalations made a number of projects uneconomic quite quickly,” the report states.
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Get daily South Island headlines straight to your inbox.“There have been a number of issues with projects over the last few years which have had a large impact on working capital.”
Legal action is also under way by a former customer over costs related to an incomplete build.
According to the report, Shape Construction owes $530,000 to preferential creditors, including $500,000 to Inland Revenue and $30,000 in staff wages and holiday pay. Unsecured creditors are owed another $500,000.
The company has just $25,000 in assets available for distribution, leaving a shortfall of just over $1m.
Creditors include Auckland Council, Central Otago District Council, ACC, Inland Revenue, Spark NZ, Contact Energy, Vulcan Steel and Flooring Xtra.
However, Hunt told the Herald that customer debts were not included in the first liquidator’s report.
He said the next six-monthly report would be different.
‘This is our forever home’
The ordeal is a bitter pill for Ethan*, his partner and his young family. They’ve spent around $700,000 with Shape Construction and still don’t have the home they paid for.
The couple, who have two small children, are now living in a cramped, damp 30sq m temporary home on the site where their 300sq m “forever home” should be.
“Sometimes water drips through the ceilings on to our bed. We find black mould lurking in corners. The damp and stress has caused illness,” they told the Herald.
Ethan said they signed a contract with Shape Construction to build a large family home on their Mt Pleasant section.
“Instead, we’re living in an insulated panel house because we couldn’t afford rent.
“We’ve been here for nearly two and a half years. I can’t see us getting any [money] back.”
He said they faced numerous issues, including construction delays and container units that were rusted and structurally unsuitable.
“They were just bad,” Ethan said. “The engineers won’t sign them off. We asked [Shape Construction] to fix them and never heard from them again.”
The couple spent an additional $40,000 removing the faulty containers from their property.
Another customer, who wanted to go by JD, told the Herald “it’s been well over three years of active contracted LBP [Licensed Building Practitioners] work that has never got out of the design stage”.
JD said he engaged Shape Construction because Toby’s building methodology was clever and was suited to his very steep property.
“I’ve paid him $228,000, I’ve got about half that in value… we don’t have a stake in the ground yet at all. It’s all been through the design process.”
JD said he had the steel portal shells of the four modules, which are roofed, and a set of plans that are approved by the council.
“I’ve paid [Toby] advanced stage payments for deliverables that have not been delivered.
“I’m obviously pissed.
“I’m 73 years old, I’m meant to be retired, I’m still working… and I’ve had to suffer through this builder.”
Shape Construction is the latest in a string of modular builders to collapse.
In 2023, Auckland-based FirstBuild Homes went into liquidation, affecting 11 clients.
Just a week earlier, Christchurch’s Kiwi Modular Homes went into liquidation with an unpaid tax bill of $298,000.
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.
