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RTÉ One, Tuesday, 8.30pm
The Consumer Show

The Consumer Show

Topics

Building Woes

Kay O'Leary, an 84-year old pensioner from Walkinstown, paid ¤23,000 to get a 6ft x 6ft extension built onto the back of her home in 2007. The builders were a local firm, Cranlowe Ltd. Almost immediately after they completed the extension a litany of problems arose, including dampness, improper insulation and electrical defects. Kay tried to get the problems fixed, but eventually felt she had no option but to go to court. The company did not defend the action - Kay won her case and was awarded ¤18,000 damages by the court. However, when Kay went to collect her money, she found that Cranlowe Ltd had effectively ceased trading and its main asset, a van, had been transferred to a new company - Cowzer & Sons Ltd - with the same registered address.

To get the money she is owed, Kay O'Leary would once again have to pursue Cranlowe Ltd through the courts to have the company liquidated. Unfortunately Kay cannot afford to pursue Cranlowe Ltd in court again.

The good news for Kay is that builder Peter Finn has generously offered the services of his builders for a day's work so that they can try and fix as many of Kay's problems with her extension as possible.

In our current economic climate, thousands of creditors are being left high and dry by business failures. Many companies also show signs of so-called phoenix traits - this is where a new company arises from the ashes of the old company in effect depriving creditors of what they are due. The Revenue Commissioners now have almost 700 of these phoenix companies in its sights. Donal Bolger of BLG Chartered Accountants has done analytical work for Stubbs Gazette on business failures, and says that 1 in 20 companies they've analysed show classic phoenix traits.

It is the responsibility of the office of the Director of Corporate Enforcement to police compliance with company law. Last year there were 1,950 reports and complaints to the Corporate Enforcement office. 19 people were convicted in 4 criminal cases, although only one person went to prison. 18 directors were disqualified and a further 121 directors were restricted, which means they cannot be on the board of certain companies.

Our system of company law is there to protect entrepreneurs, but who is going to protect Irish consumers, when companies go to the wall?

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