A building company has liquidated after being pursued over multi-million-dollar defects in a Dandenong apartment building once described as a “danger to life”.
Developer and builder 4S Constructions Pty Ltd was ordered by VCAT to pay more than $2.8 million in damages over the 31-unit, four-storey complex at 2-4 Hutton Street.
However, prior to the order, 4S went into liquidation in August – with just $12,500 in the bank, according to the liquidator’s report to creditors.
In September last year, Emad Farag resigned as 4S’s founding director.
The building’s owners corporation (OC), under an administrator, had sought to recover from 4S the cost of a $2.2 million loan – plus interest – to fix a litany of defects at the circa-2011 building.
Building notices from City of Greater Dandenong date back to 2015 , including one describing the building as a “danger to … life, safety or health” due to its combustible cladding and the lack of an active fire monitoring system.
The OC installed a fire monitoring system and rectified other non-cladding defects such as insufficient fire resistance in walls and doors, a lack of fire detectors, non-compliant fire escapes as well as leaking balconies.
On top of that, Cladding Safety Victoria spent $1.3 million to replace the cladding, which the State Government recently settled with Farag and 4S.
In a separate hearing, a related company E & M Farag Pty Ltd lost a bid to quash an OC special levy to recover the repair costs.
Apartment owners were billed nearly $71,000 per lot, meaning E & M Farag, which owns 12 lots, would face a combined levy of more than $850,000.
In November, the Victorian Supreme Court refused leave for E & M Farag and nine other lot owners to appeal against the levy.
Supreme Court judge Michelle Quigley noted that the rectification of “significant” defects had been “languishing” prior to the appointment of OC administrator Matthew Twistleton.
“(The) Farag lot owner was using its lot holdings to prevent action to deal with the defects and flammable cladding”, according to an allegation previously aired at VCAT and noted by Justice Quigley.
“It is … clear on the evidence that the financial circumstances, the impact of sourcing a loan and the special levy were all in the best interests of the OC and the individual lot owners,” Justice Quigley stated.
In 2021, Farag’s building registration was cancelled and disqualified for breaches including “non-compliant use of combustible wall cladding” in a 4S-built apartment building in Frankston South.
He was also previously fined and reprimanded by the Victorian Building Authority over breaches at project sites in Dandenong and Noble Park.
Last year, Farag and the company E & M Farag were convicted at Dandenong Magistrates’ Court for failing to comply with building orders and to provide timely reports on Essential Safety Measures for the City Edge hotel apartment building in Thomas Street, Dandenong.
Star Journal sought comment from Farag, Twistleton and 4S’s liquidator Dye & Co.
