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Fair Go: Christchurch quake victims lose life savings and their home when project manager fails to deliver

Iain and Yvonne Wilkinson spent over $870,000 on a rebuild of their home, so you can imagine how disappointed they were when it went under the hammer for just $465,000. The loss of money isn't the only reason they're unhappy. They'd raised their family in the property, happily living there for 42 years, and the plan was to stay living there.

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Iain and Yvonne Wilkinson first met Andrew Shepherdson when they were working on their earthquake claim, they told Fair Go. Source: Fair Go

But after problems with the company who managed the project, they've had to sell up and move to a tiny unit nearby.

The reason the rebuild of their Redcliffs home in Christchurch was necessary was because of earthquake damage.

They decided to take the opportunity to create their dream home with plenty of room for the grandkids to stay, and they had the money to do it thanks to an insurance payout. It was when they were working on their claim that they were first introduced to Andrew Shepherdson.

Shepherdson had been working as an expert witness on behalf of insurance companies but had then switched to work for homeowners. So after a recommendation from a friend, they employed him to work on theirs. They were more than happy with Shepherdson's help and said the payout they received was more than expected, meaning their rebuild could go ahead. It was at this point that Shepherdson suggested that he take on the project management of their rebulid through his company Build Ecology Limited, of which he was sole director.

The Wilkinsons readily accepted, as Shepherdson had earned their trust. He also had good credentials, such as holding a degree in building surveying and being a member of the Chartered Institute of Building in the UK.

The rebuild got underway and the friendship grew between the two families, with shared baking and family meals together. At first all went well, with the foundations and retaining wall completed. Then came the delivery of SIPS panels for the floor and walls. These are panels that are pre-made with insulation already incorporated in order to speed up the build.

The Wilkinsons later became aware that an on-site inspection of the panels had shown they'd been stored incorrectly. NZ SIPS, the company that supplied them, had sent an email to Shepherdson in August 2019 explaining they'd found the panels to be wet and compromised and that they needed replacing at Build Ecology's expense. But instead of explaining the situation to the Wilkinsons at the time, Shepherdson kept the information to himself and continued to use the panels for the build.

The project began to suffer delays. All the while, Shepherdson continued to charge the Wilkinsons for things like materials and labour, until they'd paid a total of $876,000. Given they had high levels of trust in Shepherdson, the Wilkinsons rarely questioned what the invoices were for. But alarm bells started to ring for their daughter Sonja.

They'd now paid well over the fixed price contract for the rebuild of $589,000. Then came further alarming news. Another elderly couple who'd employed Build Ecology Ltd had gone to the police with a complaint of fraud. Sonja and her parents eventually decided to start checking where their money had gone.

They got in touch with the suppliers that Shepherdson had claimed to pay deposits to. Their worst fears were realised when several companies emailed them back to say that they hadn't received any payment at all. The Wilkinsons also discovered there'd been three failed council inspections, but as with the information about the SIPS panels, this hadn't been passed on by Shepherdson. He'd given the appearance it was business as usual.

At this point, the Wilkinsons made their own complaint to the police. They also employed a lawyer who arranged for both parties to go to mediation. But a week before the mediation was to take place, Build Ecology Ltd went into liquidation. Not long after, Shepherdson left New Zealand with his family to live in the UK. Sonja Wilkinson says he never apologised to her parents or gave them an explanation for what went wrong.

The Wilkinsons were devastated. Yvonne suffered a mini-stroke, and both she and Iain lost all faith in dealing with other people. The further they looked into the problem, the worse it seemed. On discovering the truth from NZ SIPS about the problem with the SIPS panels, they realised the framework of their rebuild, which consisted of damaged panels, would have to be pulled down to start again. The trouble was, all their money had gone, so they had to face up to letting go of their dream in order to put the property up for sale.

It's at that point that they came to Fair Go for help. They'd been able to account for $350,000 of the money spent but not for the remaining $500,000. Even after contacting various companies, they couldn't track this money to any specific goods or services. They asked Shepherdson's accountant and his lawyer to provide this information but the details never came.

Fair Go spoke to the liquidator who, even after a year, said they were still working to understand what had happened. We also spoke to the police, who said that fraud cases were complicated and they hadn't yet decided whether or not to take the case on.

Neither the liquidator or the police had established the whereabouts of Shepherdson in the UK. However, Fair Go managed to track him down and established that he'd set up a new business in the UK called GNP Structural Surveys.

With the help of our Europe correspondent Daniel Faitaua, we made contact by phone. On being questioned about the money the Wilkinsons had paid to Build Ecology Limited, Shepherdson said, "I haven’t done anything and it’s all with the liquidator and everything has been done honestly ... and I wasn’t paid by other people in my business folding."

Faitaua asked why he hadn't finished the Wilkinson's house. His only reply was "the house couldn't be finished".

It was extremely distressing to the Wilkinsons to hear this. They felt there were other questions that needed answering. So Fair Go emailed Shepherdson to try to understand more about what happened, but he failed to reply. We then got Faitaua to pay a visit to Shepherdson's company-listed address. But Shepherdson involved his lawyer at this stage, asking the reporter to leave.

However, it did draw out some answers as Shepherdson also instructed his lawyer to send an email. The email stated that Shepherdson denied all wrong-doing, and that all payments were according to the Wilkinsons contract and were documented in the company accounts. It also gave Shepherdson's version of why the delays occurred.

But after reviewing documentation relating to the build, and the emails between Shepherdson and the Wilkinson, his claims don't stack up.

Sonja and her parents were grateful that at least Shepherdson had been made to think about his actions. They also felt that Fair Go's involvement had sped things up with police as, after months of little information, they called a meeting.

Sadly, it was bad news. The police said there were no grounds for a criminal case, as they'd finally got hold of financial information which showed no large sums of money had been transferred abroad or used for personal spending. It was also clear that Shepherdson had lost a considerable sum of his own money. They say it's a case of bad management and qualifies as an example of civil wrongdoing.

It's more devastating news, but the Wilkinsons decided to channel their energy into how to help others avoid disasters like this.

They say they might have been more aware, and able to act more quickly, if they'd known the rebuilding was repeatedly failing council inspections. They had no idea because the reports only went to Shepherdson. They believe it could make a difference if they were also sent to homeowners by default.

Fair Go took this proposal to Christchurch City Council. It received a warm reception from Building Consenting head Robert Wright, who promised to make the change. So Fair Go's happy to report that since March 2020 the council has reconfigured its system to ensure homeowners receive inspection results without fail.

It's not the happy ending the Wilkinsons hoped for, but they feel good that the change has been made.