A Victorian building company facing legal action over alleged apartment defects has been awarded a $22,000 federal government grant to improve its business.
Meanwhile, legal fees continue to mount for the apartment owners locked in an ongoing legal fight with the builder, Shangri-La Construction.
In July, Melbourne woman Tamara Railton-Stewart told ABC's 7.30 that expert reports and legal fees alone had cost the 10 apartment owners in her building complex about $500,000.
The company denies the allegations against it and is defending its workmanship in the Victorian Civil and Administrative Tribunal (VCAT).
In a separate case heard by VCAT in early August, Shangri-La director Obaid Naqebullah was fined $25,000 over historical misconduct at a different building site in 2012.
That case related to the use of combustible expanded polystyrene (EPS) external cladding, which had not been approved on the building permit documents.
Mr Naqebullah was found to have "neglected his duties as a building practitioner, and the results of that neglect created a serious risk to members of the public".
On August 25, Shangri-La Construction was granted approval for a $22,000 federal government grant through the Department of Industry, Science and Resources Entrepreneurs Programme.
Ms Railton-Stewart said she was shocked to find out about this, while her legal fees in the ongoing dispute continued to mount.
"To find out that our federal government … gives away $22,000 of taxpayers' money to a company [whose director] has been disciplined and successfully prosecuted by the VBA (Victorian Building Authority), and who also have current cases against them at VCAT, is disgusting," she said.
"Where is the justice in our legal system when SLC [Shangri-La Construction] can [have] a legal case against them for years, but simply apply for a $22,000 grant from our government and have it approved within a couple of months?"
Shangri-La 'greatly concerned by allegations of defects'
In a statement, Mr Naqebullah told ABC's 7.30: "Shangri-La remains greatly concerned by allegations of defects at [Ms Railton-Stewart's] property."
"The satisfaction of our customers is always foremost on our mind," he said.
"We have previously left no doubt that we take immense pride in the quality of the projects we deliver, and that we take any allegations of defects very seriously.
"However, as we have also previously advised [ABC's] 7.30, we cannot comment on any defects at the property at this time because the allegations of defects are the subject of a current proceeding at VCAT.
"In that proceeding, not only the extent of any defects but also the allocation of responsibility for any such defect between multiple parties [including the subcontractors who were responsible for much of the physical work and the building surveyors who issued the relevant occupancy permit] is in issue."
In the matter heard by VCAT in August, it ruled against the Victorian Building Authority's recommendation that Mr Naqebullah should have his registration suspended for three months due to his prior record.
The tribunal accepted that Mr Naqebullah had no previous disciplinary history and had run a successful construction company over a period of 14 years.
Despite this, the VBA has since confirmed to ABC's 7.30 that it was currently investigating Mr Naqebullah for work on a number of sites, but said it could not provide further details.
In a statement, Mr Naqebullah told ABC's 7.30 Shangri-La Construction was "still trading and striving to deliver homes to our valued customers in a difficult economic environment".
He said he could not disclose how many staff the company currently employed or what its annual turnover was.
"To do so would be inappropriate towards our employees, partners, and other stakeholders, all of whom also have a right to have their confidential information protected," Mr Naqebullah said.
"Shangri-La Construction complies with all its financial and regulatory obligations as a duly incorporated company under the Corporations Act."
Government says it was not aware of proceedings against Shangri-La
A spokesperson from the Department of Industry, Science and Resources told ABC's 7.30 the department was not aware of the proceedings against Shangri-La and the penalty imposed on its director before the recent $22,000 grant was awarded.
"The grant was awarded to support business improvement activities recommended through a business advisory service received under the Entrepreneurs program," the spokesperson said in a statement.
"Payments are made on completion of those activities.
"As of 12 October, no payments have been made to Shangri-La Construction."
Cladding Safety Victoria, which works with owners' corporations to fund rectification on buildings found to be high risk due to combustible cladding, has committed $24.5 million to rectifying buildings where the original builder was Shangri-La Construction.
Of the 338 buildings approved for funding thus far, 13 were built by Shangri-La Construction.
Ms Railton-Stewart said the ongoing cost of legal proceedings meant she was facing bankruptcy.
"Because of a decision I made back in 2014 to simply buy my first home, my family's life will be forever financially destroyed," she said.
Australian Apartment Advocacy (AAA) director Samantha Reece said Ms Railton-Stewart's situation highlighted flaws in the system.
"The system has been geared to turning a blind eye to the plight of apartment owners with defects," she said.
"When AAA was made aware of the $20,000 innovation grant provided to Shangri-La we were concerned that there was a lack of transparency between state and federal jurisdictions."
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