Money paid to contracting firm a ‘lost cause’

Thursday November 28, 2019 Written by Published in Local
Teau McKenzie and Sam Capper. 19103147 Teau McKenzie and Sam Capper. 19103147

High Court hears CM Contracting is ‘hopelessly insolvent’, to dismay of growing list of creditors. 

A High Court judge has ruled against a building company set up by a beauty queen and her New Zealand boyfriend.

CM Contracting Ltd yesterday admitted it owed $123,112 to Ngatupuna Siliar and Eleanor Opai for failing to complete their house.

Founder Sam Capper has returned to New Zealand, leaving the remaining company directors, his former girlfriend Teau McKenzie and her father Ron, to clean up the mess.

The father and daughter were in the High Court yesterday, but did not say anything.

Lawyer David McNair appeared before Judge Peter Woodhouse yesterday, representing Siliar and Opai. He said CM Contracting has not filed any defence.

Cook Islands News has reported three more customers who say CM Consulting failed to complete work, or did a bad job.

One, Jacki Brown, whose mother Emerar Crummer’s house was abandoned unfinished, said they were owed $162,000. Teau McKenzie had allowed them to access some materials like kitchen flat packs “but crumbs compared to the price we paid,” Brown said yesterday.

Speaking after the hearing, McNair said the chances of getting any money back was not very high and he was still aware of larger creditors and several other people whose homes had been left incomplete by the building company.

However, he hoped he could help his clients recover some of their money as CM Contracting looked at liquidation of what assets they had left, to avoid their debts.

CM Contracting’s lawyer Tim Arnold told the court that to say the defendant fell on hard times was an understatement. Company directors Teau McKenzie and her father Ron approached him for advice and he was asked to act on their behalf, which he accepted.

Arnold told Judge Woodhouse that the company was “hopelessly insolvent” and did not dispute the $123,000 claim. He said the company could not even afford to pay him.

He indicated the company’s customers should not hope for much money back, despite yesterday’s court judgment against the company.

“Obviously for McNair’s clients a judgment is one thing,” he said. “The Cook Islands is an unusual jurisdiction, it does not have an Official Assignee so it’s not a simple procedure of liquidation or making out ground of the liquidation or rather to find and fund a liquidator.”

He said he was advised that the company was a “lost cause”.

Arnold met with McNair on Monday and suggested there were more book debts that could amount to at least an excess of $100,000.

New Zealand official company records show Capper and Teau McKenzie are still listed as fellow directors and co-owners of a New Zealand company, also called CM Contracting Ltd.

As recently as last year, they were listed as living together in a million-dollar home they rented in Birkenhead, Auckland.

There is no record of their New Zealand company being placed in receivership or liquidation.

Jacki Brown, who first blew the whistle on the company, said the money she and her mother paid was sent to New Zealand.

“I know our money was deposited into New Zealand accounts and I believe that Sam Capper was responsible for finance,” she said.

“Our New Zealand lawyer said it was a conflict of jurisdiction, presumably referring to our contract that pertained to Cook Islands and CM Contracting here. We only learned recently that Ron and Teau McKenzie are directors here and Capper is not.”

Seeking legal advice had proven to be extremely expensive, she said, and it was not fair to local people who were owed money and could not afford to go to court.

When Capper disappeared to New Zealand, their building stopped. “Surely before then Teau must have known that things were bad but there was never any communication to advise me but even when Mum and I arrived on the island, she did not say anything or take responsibility for what has happened. That has been hard to digest – the dishonesty to us or misplaced loyalty to Capper.”

Brown is disappointed she did not have a lawyer look at her contract with CM Contracting because although there were scheduled payments, there was no detail on what the money would be spent on.

There was no responsibility in that contract for the contractor to provide any reports. The focus was on payment deadlines to the contractors.

“There needs to be consumer protection and transparency detailed in these contracts to protect people against this situation happening and to make it mandatory that if building is in Cook Islands that the money is paid here to ensure accountability and access to scrutiny here,” said Brown.

In passing judgment at the High Court yesterday, Judge Peter Woodhouse said the claim was admitted and there was no opposition to judgment.

Judgment was passed for the sum of $123,112 and further claims for damages for consensual loss were adjourned for further consideration. Still more claims are to be considered in court tomorrow.

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