A tradie who went through the “grim” experience of losing close to $35,000 when a Melbourne building company collapsed owing a staggering $5.5 million, was “absolutely gobsmacked” to uncover the firm has used its old Instagram account to launch a new business.
The company, known as Archiblox, used its former Instagram account, which currently boasts 145,000 followers, to launch the new business called Arkular.
Rhys Ewart has been running his cabinet and joinery business called Dreamcraft Interiors for seven years.
He began working with the firm at the start of 2018 but said things started to go really bad around August 2019.
“You had this gut feeling something wasn’t going right and they went through four or five site supervisors, they couldn’t get materials and couldn’t get modules delivered to site as they owed money to the crane and transport to site. It was farcical,” he claimed in an interview with news.com.au.
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Eventually, Mr Ewart knew he had to get out, despite being owed tens of thousands of dollars.
“The ship was sinking and I knew the ship was sinking and I couldn’t get off it and they owed me about $70,000 and I had to keep getting jobs there on the promise I would get my money,” he said.
“In the end I said no more after they sent me purchase orders for three more houses … I pulled the pin.”
The 41-year-old said he was forced to bring in a debt collector to try and recover they money he was owed.
“They were paying me $1500 a month roughly,” he said. “It was coming through and it was being drip fed basically.”
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The collapse of the company
Archiblox went into voluntary liquidation in February 2020 and the liquidator’s report, filed with the Australian Securities and Investments Commission, showed 17 projects in various stages of completion were impacted and the company did not have any cash in the bank.
The report revealed the company had been trading with a “significant deficiency” since 30 June 2018 and had accumulated trading losses of approximately $2.8 million from July 2017 to February 2020.
Despite being owed money, Mr Ewart said it was still “mind-blowing” when the company collapsed with the liquidator’s report noting he was owed close to $35,000 out of the $5.5 million debt.
“There is absolutely nothing you can do. Along with me, there were a few other trades that just had to wear the debt. Labour I can wear as it was all my own work but when it’s physical product and materials it costs a bomb,” he said.
“Out of that money there was about $20,000 worth of stone benchtops that I got from other subcontractors under me and I wore that debt.”
The dad-of-two added losing that amount of money was a “massive” amount for a tradie like him running a small business.
“It’s a massive thing to have to keep working to clear it and there’s nothing you can do,” he added.
“It was grim for a little while but you claw your way out of it. When you’re owed money for months and months, you take jobs elsewhere to get cashflow out there.”
The Melbourne-based tradie was “gobsmacked” when he saw that a new business had been started by Archiblox’s former owner, called Arkular.
“I knew something like this was going to happen. If the business was to end why wouldn’t you shut the Instagram account down? But when you have 146,000 followers you’ve got a big fan base, if that’s what you want to call it. It was just started again and word filtered through,” he said.
“I can’t see how they can go bust owing $5.5 million and start another business again in the same line of work. You have got to be held accountable somewhere.”
An Instagram post on August 28 announced that “Arkular is the new home for Archiblox” to its 146,000 followers at the time.
Despite Arkular only launching in August this year, a number of projects from the Archiblox website are featured on its website and posts date back to 28 September 2018.
Bill McCorkell is an architect, who was a director at Archiblox when it collapsed, but he declined to answer news.com.au’s questions for this story.
He previously spoke about the company’s demise when news.com.au revealed a couple who claimed their lives were destroyed by the collapse and were left out of pocket by $600,000, were horrified to see the new business launched on Instagram.
Mr McCorkell previously said the vast majority of that debt was owed to his family and himself and he “worked with all external creditors to implement payment plans where possible”.
However, Mr Ewart said he was never approached about a payment plan and the money was never returned — with his accountant writing off the debt.
Mr McCorkell also said the new company Arkular had been established to only focus on the design, sales and marketing of sustainable homes, “which is my passion and area of expertise”.
“Arkular does not engage in construction, which is outsourced to a range of reputable, specialist construction firms,” he added.
He said his family had retained ownership of the intellectual property from Archiblox and there was a reason the old Instagram handle was used.
“The original handle had a large number of followers, whom we still believe would be interested in our design work, so it made sense to continue using it,” he said.
“The designs we did at Archiblox were all of our own work – I am the chief architect at Arkular, as I was at Archiblox — and we are proud to showcase them through Arkular.”
Issues in the building industry
Mr Ewart added a disturbing issue in the construction industry in general is “every builder uses” subcontractors to “bankroll their projects” but he has learned his lesson.
He has become more “weary” – employing a range of checks and balances before working with a firm.
In most cases his invoices have to be paid within two weeks, he added, rather than the work “snowballing” and waiting on payment.
“Once a certain stage is reached with my work, if not paid I don’t go back on site, that’s just the way I have to do it to limit my liability,” he said.
There have been a spate of company collapses in the crisis-hit building industry this year, with residential builder Tozer Construction Group the latest joining dozens of other companies in entering liquidation.