Uncovered firm pulls the plug

By ANNE GIBSON


An Auckland building waterproofing company has folded because its insurers will not cover it.

Architectural Waterproofing went under last month on the eve of a $1.2 million leaky building claim in which it is one of the parties named by a group of Ponsonby residents. But the liquidation is controversial.

At a Weathertight Homes Resolution Service adjudication on the Ponsonby properties this week, Auckland City Council solicitor Dr Rodney Harrison, QC, sought an adjournment because of the firm's liquidation. He said it had come only two weeks before the hearing, and this was an abuse of the winding-up provisions of the Companies Act.

He sought the adjournment so he could take the matter to the High Court, seeking to reverse the liquidation or to get a ruling that legal claims against Architectural Waterproofing should be able to continue.

The initial report from liquidator Graeme McDonald, of McDonald Vague, showed that although Architectural Waterproofing was solvent, its problems were tied up with the leaky building crisis.

"The directors of the company have advised the reason for the failure of the company is the withdrawal by the company's insurance provider from their insurance cover, thereby leaving the company exposed to actual and contingent liabilities," McDonald wrote.

A statement of affairs showed a $259,962 surplus for preferential creditors and a $78,737 surplus for preferential and unsecured creditors.

The company had $134,639 cash in a Bank of New Zealand account and its assets included vehicles, office furniture, computers and printers.

Creditors are being asked to file claims by October 22, but McDonald said he hoped to sell the business as a going concern.

Architectural Waterproofing is involved in the claim by owners of Ponsonby Gardens, a 10-townhouse development in Auckland.

The case, which also involves the council, developer Tim Manning and his Taradale Properties and the Building Industry Authority, went to the Government's weathertight service for an adjudication hearing on Monday which was adjourned until tomorrow.