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Fair Go: Looking for answers from Dunedin builder John Sear

John Sear has left a trail of unhappy customers, who are owed tens of thousands of dollars.

There’s more bad news for Otago homeowners owed tens of thousands of dollars after the collapse of a building company once part of the Smith and Sons franchise.

Dunedin businessman John Sear has put his company Heath Larnach Construction Limited into voluntary liquidation.

The former NZ Trade and Enterprise official had held the Dunedin West franchise of Smith and Sons Building and Renovation for four years before the South Island master franchisor terminated the franchise deal in November.

"We have been in contact with the clients and are currently gathering all the information necessary to work toward a resolution," a Smith and Sons South Island director told Fair Go.

Fair Go got involved when customers complained of being ghosted for weeks or months by John Sear after parting with deposits ranging from $6,500 to $32,000.

Their jobs were never begun, promised refunds never materialised and the collapse may leave them out of pocket unless the national franchise steps in.

John Sear was telling Fair Go even after he’d put the company under that he was still working on refunds for customers but has since directed all comment to the Dunedin liquidator, Iain Nellies.

Mr Nellies says he is in the very early stages of gathering information but so far sees only a large bank overdraft and nothing in the way of assets, while any money supposedly owed to the business is likely to be in dispute.

That means it’s not looking good for customers to be repaid from the ruins of that venture.

Mr Sear told Fair Go that in early July he would have started talking to Smith and Sons about exiting the franchise.

However, Mr Sear was still taking large deposits for work to be done under the Smith and Sons banner, by his company Heath Larnach Construction Limited.

Steve Rate paid over $32,000 in mid-July for an extension and renovation to the family home, which they had saved for years to be able to afford.

"We entered the agreement in good faith. It's hard to tell whether he did or not. Did he enter it in good faith? What was the state of the company at that time?" Steve told Fair Go.

Mr Rate says he went with John Sear because he thought the backing of a major nationwide franchise meant something, even though legally all responsibility for the contract stops with Heath Larnach Construction Limited.

"You just don’t expect it to happen especially not when you go with a national franchise. You expect some sort of protection," Mr Rate says.

Smith and Sons South Island has been in touch with Mr Rate. So far it hasn’t delivered him any good news, but Fair Go will keep you posted.

UPDATE

There's some good news - sort of - for Steve.

This is from Smith and Sons South Island, who terminated John Sear's Dunedin West franchise in November.

“We are pleased to inform you that we are working through to a positive resolution with Steve. Unfortunately, we can’t comment further to the details but we are actively engaged with him."

Smith and Sons South Island says it did not receive its franchisor fee in relation to the job and therefore isn’t holding $9000 of the money Steve paid John Sear’s company to renovate his home.

“We are stepping up to the plate in this situation and we do so proudly on behalf of other Smith & Sons Franchisees across NZ who do a great job for our clients every day.”

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If you have any information about the conduct of John Sear in business running Health Larnach Construction Ltd, contact garth.bray@tvnz.co.nz

The liquidator can be reached here.

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