Wagga Paint Shop in Administration
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Wagga Paint Shop in Administration
Mate had his plane recently re painted in Wagga and we headed up there due to a few issues of the paint blistering to be dealt with, were greeted by a gentleman who informed us he was from the council and the business was in administration,we were given a number to call and was informed that the business was in administration and we would not be able to have the work re done, he said there was a creditors meeting with in the next few days but because of the amount owing being over $2,000,000 he wouldnt hold his breath ! Seems another aviation business in doubt!
In doubt?
...not much room for doubt there. 
because of the amount owing being over $2,000,000 he wouldnt hold his breath !
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Wagga Wagga City Council has a proud history of picking losers. This stretches back over fifty years. At times they have had to place a special levy on ratepayers to recoup the losses.
Airport management and council were naive and negligent in this matter. The aerodrome is Dept of Defense property and is leased to the operator, Wagga Wagga City Council. Council sub-lets land to tenants. Over the years, each tenant has paid for their own costs of building.
In this case, the paint shop operator approached council with a story that it could bring forty jobs to Wagga but, because it could not buy the aerodrome site freehold, it could not mortgage the site to finance the construction. Would council like to help? Council should have known all they needed to, at that point.
Instead, they chose to back to only operator that couldn't raise enough dough to start up.
Council then placed the building incorrectly, meaning that RWY 12/30 had to be truncated....effectively ruined and made less safe.
But wait! Accounted for as general capital expenditure, no doubt, will be the acres of tarmac laid down specifically to service this development. This was constructed to support the flow of A320 class aircraft we were told would be processed through the paint shop.
I am advised there are significant problems with the building itself. It seems that project management was poor. The builder has successfully litigated against the paint shop operator over incomplete payment and the operator is unhappy with the building job. Although the operator has been using the building, the required occupation certification has not been achieved.
Airport management and council were naive and negligent in this matter. The aerodrome is Dept of Defense property and is leased to the operator, Wagga Wagga City Council. Council sub-lets land to tenants. Over the years, each tenant has paid for their own costs of building.
In this case, the paint shop operator approached council with a story that it could bring forty jobs to Wagga but, because it could not buy the aerodrome site freehold, it could not mortgage the site to finance the construction. Would council like to help? Council should have known all they needed to, at that point.
Instead, they chose to back to only operator that couldn't raise enough dough to start up.
Council then placed the building incorrectly, meaning that RWY 12/30 had to be truncated....effectively ruined and made less safe.
But wait! Accounted for as general capital expenditure, no doubt, will be the acres of tarmac laid down specifically to service this development. This was constructed to support the flow of A320 class aircraft we were told would be processed through the paint shop.
I am advised there are significant problems with the building itself. It seems that project management was poor. The builder has successfully litigated against the paint shop operator over incomplete payment and the operator is unhappy with the building job. Although the operator has been using the building, the required occupation certification has not been achieved.
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Didn't they do a number of the VB 737's?
I recall a good article on them in an aviation magazine I think... seems they were doing a professional job.
Sad to see such local businesses go under.
I recall a good article on them in an aviation magazine I think... seems they were doing a professional job.
Sad to see such local businesses go under.
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Some of the earlier reports referred to Douglas at Yarrawonga. Fortunately, it seems the Yarrawonga Douglas Aviation is in no way connected with Douglas Aerospace, as it would be a tragedy to see the Yarrawonga company fail because the quality of their work is stunning.
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Alliance Fockers? Ok.
I knew about the VB 73's being painted in Townsville and ChCh but had a suspicion Wagga had his hat in the ring too.
I can hear Benny Hill music in the background too, when I read R755's post
What a cluster
I knew about the VB 73's being painted in Townsville and ChCh but had a suspicion Wagga had his hat in the ring too.
I can hear Benny Hill music in the background too, when I read R755's post
What a cluster
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The story so far:
Litigation Judgement
After reading the evidence as presented to the court, my take on this is poor project administration and management, the main one from the client's position was allowing the builder to split the work between two separate entities. Interesting reading.....
BACKGROUND
Litigation Judgement
After reading the evidence as presented to the court, my take on this is poor project administration and management, the main one from the client's position was allowing the builder to split the work between two separate entities. Interesting reading.....
BACKGROUND
Douglas agreed with Wagga Wagga Council to build two aircraft hangars at Wagga Wagga airport. Douglas contracted with Adrian Robinson t/as Indistri Engineering (“the Firm”) to build the first hangar (“the Stage 1 Contract”), and with Mr Robinson’s company IEA to build the second hangar (“the Stage 2 Contract”). Substantial progress was made in the construction of the first hangar, although Douglas and the Firm are in dispute over the non-completion of the hangar and defects in its construction. The second hangar has not been built; only its footings and basic plumbing have been completed.
On 10 January 2014, Douglas sent Mr Robinson a letter requiring completion of all works by the end of January 2014, foreshadowing the invocation of clause 18 (penalties for unjustified delays) and clause 19 (dispute resolution) of the contract, and asserting “Your performance under this contract has resulted in considerable delays, which has been depremental [sic] to our business”.
On 21 January 2014, IEA sent Douglas a payment claim under (NSW) Building and Construction Industry Security of Payment Act 1999 (“BACISOPA”) in respect of the Stage 2 contract, claiming a total of $224,445.87, comprising the balance of invoice 247 (said to be $83,160 of the invoice total of $277,200 after giving credit for a part payment of $194,040), invoice 258 ($101,200) and invoice 285 ($40,085.87). Douglas responded in a letter dated 24 January raising a number of complaints about the works – including about the position of the footings, the integrity of the structure, damage to the bracing, and incorrect assembly of the frame, some at least of which appear to relate to the Stage 1 works – and requested a meeting to discuss the issues, but served no payment schedule.
On 13 February 2014, IEA gave notice in accordance with BACISOPA, s 17(2), of its intention to apply for an adjudication in respect of the Stage 2 payment claim. The Firm also made a payment claim in respect of the Stage 1 contract, claiming a balance of $956,123.32 said to be due in respect of invoices 235, 236, 238, 240, 242, 243, 244, 245, 248 and 253 (which together totalled $2,725,994.35), after giving credit for payments, which were specified, totalling $1,769,87.03. No payment schedule having been provided in respect of the stage 1 payment claim, the Firm on 10 March 2014 gave notice under s 17(2) of intention to proceed to adjudication in respect of that claim. In fact, there has not yet been any adjudication application in respect of the stage 1 claim, but it is relevant for present purposes because it gives credit for certain payments and thus appropriates them to the Stage 1 contract.
IEA made and served an adjudication application in respect of the Stage 2 payment claim on 5 March 2014. On 13 March, Douglas repeated its complaints about the position of the footings, the integrity of the structure, damage to the bracing, and incorrect assembly of the frame, and requested a meeting, but not having served a payment schedule, it was not entitled and did not endeavour to lodge any adjudication response. On 14 March, Douglas sent a letter to the lawyers acting for the Firm and IEA, requesting mediation and referring to the “Dispute Resolution” clause of the contract; it is unclear whether this was intended to relate to the Stage 1 contract, the Stage 2 contract or both, but it referred to the letter sent to Mr Robinson on 10 January.
On 14 March 2014, the adjudicator determined the stage 2 claim in the amount claimed, plus interest at the rate prescribed by (NSW) Civil Procedure Act 2005, s 101, and 100% of the adjudication fees. Subsequently, an adjudication certificate was issued and filed in the District Court at Albury, whereupon it took effect as a judgment against Douglas for $229,320.23. On 27 June 2014, IEA served the creditor’s statutory demand, the subject of the present application, for the judgment debt on Douglas (having withdrawn two earlier statutory demands on account of issues raised by Douglas).
Douglas instituted the present proceedings, within time, on 18 July 2014. In addition, Douglas applied to quash the adjudicator’s determination. That application was heard by McDougall J on 20 October 2014 [ Douglas Aerospace v Indistri Engineering Albury [2014] NSWSC 1445]. One of the issues before his Honour pertained to the identity of the parties to the stage 2 contract: Douglas contended that the Firm and not IEA was the contracting party. McDougall J rejected this contention, concluding that the contracting parties to the Stage 2 Contract were Douglas and IEA. Douglas also contended that it was denied natural justice because it was not provided with notice of the adjudication process; however, McDougall J found that Douglas had notice of the payment claim, of IEA’s intention to apply for adjudication, and of the adjudication application.
Douglas also made an application in the District Court to set aside the judgment. That application was dismissed on 3 February 2015.
On 2 February 2015 – the eve of the hearing before me – Douglas filed a statement of claim in the District Court, asserting claims against both IEA and the Firm. In respect of the stage 2 contract, the pleading alleged (1) that Douglas had paid $390,152 in respect of invoices for stage 2 that totalled $335,325; (2) that in breach of the stage 2 contract IEA had not obtained a construction certificate for the stage 2 works, whereby all the stage 2 works were carried out “illegally”; (3) that in breach of the stage 2 contract, the stage 2 works were not completed by the completion date or at all, and were not carried out in a proper and workmanlike manner and were defective and incomplete, as particularised; and claimed $205,000, being the cost of rectification, plus restitution of overpayments, and damages. As will become apparent, that statement of claim has, since the hearing before me, been amended by Douglas.
On 10 January 2014, Douglas sent Mr Robinson a letter requiring completion of all works by the end of January 2014, foreshadowing the invocation of clause 18 (penalties for unjustified delays) and clause 19 (dispute resolution) of the contract, and asserting “Your performance under this contract has resulted in considerable delays, which has been depremental [sic] to our business”.
On 21 January 2014, IEA sent Douglas a payment claim under (NSW) Building and Construction Industry Security of Payment Act 1999 (“BACISOPA”) in respect of the Stage 2 contract, claiming a total of $224,445.87, comprising the balance of invoice 247 (said to be $83,160 of the invoice total of $277,200 after giving credit for a part payment of $194,040), invoice 258 ($101,200) and invoice 285 ($40,085.87). Douglas responded in a letter dated 24 January raising a number of complaints about the works – including about the position of the footings, the integrity of the structure, damage to the bracing, and incorrect assembly of the frame, some at least of which appear to relate to the Stage 1 works – and requested a meeting to discuss the issues, but served no payment schedule.
On 13 February 2014, IEA gave notice in accordance with BACISOPA, s 17(2), of its intention to apply for an adjudication in respect of the Stage 2 payment claim. The Firm also made a payment claim in respect of the Stage 1 contract, claiming a balance of $956,123.32 said to be due in respect of invoices 235, 236, 238, 240, 242, 243, 244, 245, 248 and 253 (which together totalled $2,725,994.35), after giving credit for payments, which were specified, totalling $1,769,87.03. No payment schedule having been provided in respect of the stage 1 payment claim, the Firm on 10 March 2014 gave notice under s 17(2) of intention to proceed to adjudication in respect of that claim. In fact, there has not yet been any adjudication application in respect of the stage 1 claim, but it is relevant for present purposes because it gives credit for certain payments and thus appropriates them to the Stage 1 contract.
IEA made and served an adjudication application in respect of the Stage 2 payment claim on 5 March 2014. On 13 March, Douglas repeated its complaints about the position of the footings, the integrity of the structure, damage to the bracing, and incorrect assembly of the frame, and requested a meeting, but not having served a payment schedule, it was not entitled and did not endeavour to lodge any adjudication response. On 14 March, Douglas sent a letter to the lawyers acting for the Firm and IEA, requesting mediation and referring to the “Dispute Resolution” clause of the contract; it is unclear whether this was intended to relate to the Stage 1 contract, the Stage 2 contract or both, but it referred to the letter sent to Mr Robinson on 10 January.
On 14 March 2014, the adjudicator determined the stage 2 claim in the amount claimed, plus interest at the rate prescribed by (NSW) Civil Procedure Act 2005, s 101, and 100% of the adjudication fees. Subsequently, an adjudication certificate was issued and filed in the District Court at Albury, whereupon it took effect as a judgment against Douglas for $229,320.23. On 27 June 2014, IEA served the creditor’s statutory demand, the subject of the present application, for the judgment debt on Douglas (having withdrawn two earlier statutory demands on account of issues raised by Douglas).
Douglas instituted the present proceedings, within time, on 18 July 2014. In addition, Douglas applied to quash the adjudicator’s determination. That application was heard by McDougall J on 20 October 2014 [ Douglas Aerospace v Indistri Engineering Albury [2014] NSWSC 1445]. One of the issues before his Honour pertained to the identity of the parties to the stage 2 contract: Douglas contended that the Firm and not IEA was the contracting party. McDougall J rejected this contention, concluding that the contracting parties to the Stage 2 Contract were Douglas and IEA. Douglas also contended that it was denied natural justice because it was not provided with notice of the adjudication process; however, McDougall J found that Douglas had notice of the payment claim, of IEA’s intention to apply for adjudication, and of the adjudication application.
Douglas also made an application in the District Court to set aside the judgment. That application was dismissed on 3 February 2015.
On 2 February 2015 – the eve of the hearing before me – Douglas filed a statement of claim in the District Court, asserting claims against both IEA and the Firm. In respect of the stage 2 contract, the pleading alleged (1) that Douglas had paid $390,152 in respect of invoices for stage 2 that totalled $335,325; (2) that in breach of the stage 2 contract IEA had not obtained a construction certificate for the stage 2 works, whereby all the stage 2 works were carried out “illegally”; (3) that in breach of the stage 2 contract, the stage 2 works were not completed by the completion date or at all, and were not carried out in a proper and workmanlike manner and were defective and incomplete, as particularised; and claimed $205,000, being the cost of rectification, plus restitution of overpayments, and damages. As will become apparent, that statement of claim has, since the hearing before me, been amended by Douglas.
