Four contractors or service providers have claimed they have not been paid for tens of thousands of dollars worth of work and invoices linked to the Raffles ApartmentsNapier project.
Herbert Construction Ltd, whose sole director is Malcolm Herbert, is behind a four-storey development for 30 new apartments on Raffles St.
Labour-hire company Workforce Solutions last week made an application in the High Court at Napier to place Herbert Construction Ltd into liquidation, over what it claimed to Hawke’s Bay Today was $28,000 worth of unpaid labour (about 500 hours of labour) at the development in April.
Another contractor, who did not want to be named, claimed his crew had only been paid for two weeks’ worth of work despite working for six, and he stopped work earlier this month until he was paid by Herbert and his company.
He claimed there were “no other disputes” with any other contractors and the project was still on track to be completed by February 2025.
He said, regarding the contractor owed four weeks’ pay, that “payment is made monthly” and he “is due payment from lender next week”.
Westshore Holiday Park co-owner Martin Dilger claimed they were owed $4340 by Herbert Construction Ltd, for accommodation provided to a handful of workers during January and February, who were working on the development.
Dilger said they dealt with a contractor at first who organised the accommodation, but the arrangement was for Herbert to pay.
The Raffles Apartments Napier project is in a prime spot with a short walk to the centre of Napier. Photo / Gary Hamilton-Irvine
He claimed the initial invoices were paid, and Herbert was initially contactable by phone and email, however, that soon stopped.
“They were here for about a month,” he said of the workers.
“We kept them here for as long as we could and then had to ask them to leave because [Herbert] wouldn’t respond to phone calls or emails or anything.”
Dilger said the workers told him they were getting paid, which he said was good.
The owner of an asbestos removal company, who did not want to be named, claimed to Hawke’s Bay Today he was still owed $4209 for asbestos removal at the development in 2021.
“[Herbert] made payment for the first [job] and then we had to go back and do a bit more that was found, and he didn’t make payment at all with that second invoice.”
The man claimed Herbert wrote in an email that the second invoice was in dispute, even though, in his opinion, there was nothing to dispute.
He said he initially became involved in the project after being contacted by Napier City Council about asbestos removal at the site to meet requirements.
However, he claimed Herbert was responsible for the project and payment and paid the first invoice.
“If we didn’t do that work he wouldn’t have been able to carry on with his project.”
Herbert Construction Ltd had not been set up to lead the development in 2021, but Herbert was a trustee of Thorn Place Trust and the director of MAH Enterprises, which were involved in the project.
The apartments remain up for sale and are being marketed through real estate company Bayleys.
The liquidation application for Herbert Construction Ltd is set to be heard in court on September 5.
MCNZ Group, parent company of Workforce Solutions, general manager Ellie Stone said they had unsuccessfully tried to recover $28,000 worth of invoices from Herbert Construction Ltd through a collection agency, and now had to begin court proceedings.
She had paid all her workers involved in the apartment project.
That company owed creditors over $900,000 and most of that money was never repaid, according to a final liquidators report.
There are laws against setting up similar companies, known as phoenix companies, once a company has gone into liquidation.
However, the Ministry of Business, Innovation and Employment (MBIE) confirmed those rules were not breached by Herbert when he set up Herbert Construction Ltd in 2022, because the rules only apply for five years after a liquidation.
“Herbert Construction Ltd was incorporated nine years after the commencement of the liquidation of the failed Herbert Construction Company Ltd, meaning that the time limitation around the formation of a new company was not triggered and no breach had occurred,” MBIE’sVanessa Cook said.
“The Government is currently progressing a package of reforms to help make sure the rules governing companies are clear, workable and fit for purpose.
“These reforms are the first step in a phased approach to make improvements to New Zealand’s company law.”
Last year, Herbert and another of his companies, MAH Enterprises, were fined $96,000 after an investigation found 42 breaches of employment law involving migrant workers, including not paying annual leave entitlements.
In 2021, Herbert was one of three co-defendants (along with his brother and another person), referred to in court papers as the Herbert Group, ordered by the High Court to pay $580,000 over a breached agreement relating to which hotel could operate at 36 Munroe St in Napier. Herbert had converted that building into a hotel.
Gary Hamilton-Irvine is a Hawke’s Bay-based reporter who covers a range of news topics including business, councils, breaking news and cyclone recovery. He formerly worked at News Corp Australia.
