2 days ago
Aussie home builder collapses after being swamped with more than $12million worth of customer claims over alleged building defects
A Sydney construction firm has gone into voluntary administration following mounting pressure arising from $12.9million in building defect claims.
Family-run J & CG Constructions has been in operation since 1994 and built apartment complexes, offices and commercial spaces until the company was placed into administration in May.
According to documents filed with ASIC, Sean Wengel and Rashnyl Prasad of William Buck have been appointed as joint administrators.
The ASIC filing follows legal action in both the NSW Supreme Court and the NSW Civil and Administrative Tribunal (NCAT).
In total $14.9million is owed to creditors, with the vast majority tied to construction defect claims.
Company director Mark Guerreiro said the business was unable to survive the financial burden, the administrators wrote in their report.
'The director considered that the scale of the claims, along with the legal costs expected to defend them, exceeded the company's financial capacity and rendered the business no longer viable,' the report stated.
The largest claim stems from the Rising Apartments development on Botany Road in Mascot, a 44-unit complex completed in 2017.
Owners at the Mascot building allege defects collectively worth $11.9 million, with an independent 2019 inspection uncovering 'potentially major defects related to the rooftop waterproofing' along with several minor issues.
That matter remains before the NSW Supreme Court.
A second legal action was launched in December by owners of a 15-apartment and two-commercial-lot property on Norton Street in Leichardt, who are seeking $606,820 in compensation for alleged construction faults identified in 2023.
Administrators say more defect claims are under review, and the final total could increase as complex matters are resolved.
J & CG Constructions had stopped taking on new projects in the 2024–2025 financial year, choosing instead to focus on existing contracts and warranty-related claims.
Despite these efforts, the business saw its income plummet, from $15.4 million in FY2023 to just $581,000 in FY2025.
It also faced a string of financial setbacks, including a $550,000 hit from SafeWork fines and legal costs, and an additional $250,000 loss from invoice fraud.
In FY2025 alone, the company recorded a $704,000 loss, following a $1.9 million loss the year prior.
Administrators noted that the company's continued operations had been propped up by Mr Guerreiro personally funding its working capital.
'The company remained able to trade and meet obligations prior to this period only because the director personally funded working capital needs,' the report said.
However, the looming $11.9million claim from the Mascot development 'would place the company into an insolvent position he could no longer support,' the report concluded.
Mr Guerreiro was also listed as a director of related entities J & CG Con, J & CG Group, and J & CG Fitouts.
Administrator are pursuing a deed of company arrangement rather than liquidation which would see Mr Guerreiro put in $100,000 of his own money and creditors would receive 0,68 cents to the dollar.
