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  1. #21
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    Contractors still suffer finance pain

    Electrician Taz Ulu wired the Eastbourne house of Lance James and worked at the developer's failed Brooklyn Rise subdivision but months of unpaid bills left him financially ruined.

    Three years on he and his family have made a fresh start in Sydney and he is slowly clawing his family out of a financial black hole.

    Mr Ulu said yesterday that two years in jail for James did not seem enough for the hardship his family had faced.

    "It's really hard for me to forgive. We had to relocate because of him. For all that pain we went through, I'm a little bit upset about it. "

    But he was pleased James was jailed instead of getting home detention.

    "It will send a message to other people like him."

    From late 2005 Mr Ulu was the sole electrician at the troubled Brooklyn Rise development.

    Mr Ulu said he walked away in August 2007. He was owed $10,000 for Brooklyn Rise and nearly $25,000 for work on Lance and Irene James's hillside Eastbourne home.

    Mounting debts and better employment prospects in Australia forced Mr Ulu to move to Sydney. His wife, Anita, and three children aged 12, 13 and 20 stayed behind at first.

    Mrs Ulu said the family missed relatives and friends in Wellington but had put the saga behind them.

    "We don't feel any anger towards him anymore.

    "What happened, happened. He [James] has to live with what he did."

    Former Castle Doors owner John Minnoch sparked a police callout in 2008 when he removed one of the garage doors he had installed at Brooklyn Rise. He said he was owed about $50,000.

    His actions drew attention to the plight of unpaid contractors.

    Yesterday he said at least 10 contractors had been "badly hurt" by what happened at Brooklyn Rise, including marriage breakups because of financial stress.

    "I've heard some really, really sad stories."
    http://www.stuff.co.nz/dominion-post...r-finance-pain

  2. #22

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    Hi folks....I'm new to this forum. 30 years in property with all its ups and downs.

    This Lance James case : some points here if you are interested in what the newbie has to say :-)

    1) we see that an earlier post makes comment that James was charged with more than 500k in (unpaid) personal taxes.

    2) yet we see later on that he had 168k core tax owing.

    3) we also see media reporting that IRD's Patrick Goggin stated that 'this is a clear case of a businessman who knew exactly what his tax obligations were, but deliberately set out to ignore them'.

    4) now the interesting part here is the comment from Judge Tuohy which states that it is not how much tax was at stake but rather James' intention. And moreover...that it is however acknowledged that there was no fraud in the sense of making up documents or hiding assets.

    I have personally met Lance James only once. I took him to a development that he was in the process of working through and looked at an opportunity to purchase part of it. I declined.

    However,after 30 years of being involved with property I have to say that there is a nasty side to this enterprise. The fortunate few that get through unscathed after decades of toil are few and far between. Throughout though I have met a great deal of well intentioned property folk who have provided an enormous amount of work and therefore wages/livelihoods to so many tradespersons and suppliers. It is a shame that every now and then there erupts some calamity and some poor folk lose their money owed and more. But that is very much a hallmark of the industry and has been for as long as I know. Is that fair ? No. Is it right ? No. Can it be totally avoided ? I doubt it.

    Lance James has done some really odd developments in my opinion. BUT...he has provided a heap of work for a heap of people and even if I don't get with some of his development aspirations I certainly do not believe that when a reasonable person weighs up the facts of what the IRD were on about that it warranted a jail term of two years...or any term of incarceration for that matter.

    God help the property community if that is the sort of vengeance that small minded IRD despots can persuade the Courts of this Country to claim as representing justice.

  3. #23
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  4. #24

    Default Gobsmacked

    Hello, I too am new to this forum, however I couldn't resist responding to the previous post ...

    Quote Originally Posted by WORKING BEE
    Lance James has done some really odd developments in my opinion. BUT...he has provided a heap of work for a heap of people and even if I don't get with some of his development aspirations I certainly do not believe that when a reasonable person weighs up the facts of what the IRD were on about that it warranted a jail term of two years...or any term of incarceration for that matter.
    I beg to differ, I too have met James and those closely associated with the Brooklyn Development. The 'heap of people' that were employed by Lance very rarely if ever met with James. He preferred to keep his distance from those working for him. I have spoken to Taz Ulu and while he's happier to be residing in Australia now (best move on his part I say) he strongly feels that the sentence the Judge passed onto James is a joke. No amount of monetry compensation or even sentence can compare to the amount of distress and heartache the families of all employed by James endured. Many of the contractors and sub contractors went without pay for weeks on end. And these were hard working blue collar families - who didn't deserve the cold shoulder they got from James.
    Last edited by revdev; 17-04-2010 at 02:43 AM. Reason: fixed quote

  5. #25
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    Quote Originally Posted by WORKING BEE View Post
    Lance James has done some really odd developments in my opinion. BUT...he has provided a heap of work for a heap of people and even if I don't get with some of his development aspirations I certainly do not believe that when a reasonable person weighs up the facts of what the IRD were on about that it warranted a jail term of two years...or any term of incarceration for that matter.

    God help the property community if that is the sort of vengeance that small minded IRD despots can persuade the Courts of this Country to claim as representing justice.
    they got al capone for tax evasion because it was easier to jail him for that than all his other crimes

    Mr Ulu said he walked away in August 2007. He was owed $10,000 for Brooklyn Rise and nearly $25,000 for work on Lance and Irene James's hillside Eastbourne home.

    sounds like he had more enemies than friends and the courts took account of that and his long trail of wreckage

    did he get many character references at the trial or sentencing?
    have you defeated them?
    your demons

  6. #26
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    Dec 2004
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    Yep looks like Karma working to me.....

  7. #27
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    Apr 2005
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    Developer's fall from the high life


    THE EASTBOURNE MANSION: Lance James's hillside home cost an estimated $4m to build. It is expected to go on the market for $1.8m.


    UNFINISHED BUSINESS: The foreman of the Brooklyn Rise site, Milo Faletolu, is still owed about $40,000.

    He lived the high life in a multimillion-dollar mansion on a hill despite leaving three troubled property developments in his wake. Trying to avoid the taxman has now landed Lance James in jail.

    You have to take a cable car that slowly creeps up a steep Eastbourne hillside to reach the secluded house that Lance James built for himself and his family in Totara St.

    The entranceway is flanked by beautiful stonework. James's teenage daughter has a wing to herself downstairs. There is a wine cellar. The three bathrooms are lined with marble - a lap pool is sunken into the lower deck.

    James's career as a developer, which began in 1993, has been plagued by turmoil and now the 50-year-old faces bankruptcy.

    On Monday, before he was sentenced to two years' jail on tax charges, his lawyer Andrew Davie said James had been selling chattels from his home for a year to survive, and had made a visit to a Winz office.

    His developments, hit by bad luck, litigation with neighbours, financial strain and soured relations with councils, have left a trail of unpaid tradespeople.

    His Brooklyn Rise development collided with the property market downturn and the recession. Soon after he was forced to sell it to Auckland developer Tim Manning, the project's financier Lombard Finance collapsed owing $127 million to investors - $44m of which it had sunk into Brooklyn Rise. The subdivision is in receivership with trade creditors owed more than $1m they are unlikely to recover.

    In court, Inland Revenue labelled James's tax compliance history since 1993 as "poor".

    James gave a wry smile as he was led to the cells in Wellington District Court. He had been found guilty of evading assessment and payment of personal income tax over eight years. Four of his companies withheld and spent PAYE tax deductions, some of which James paid to creditors to keep his companies afloat.

    The charges involved $356,000, of which $168,000 remains unpaid. Judge Chris Tuohy said a sentence of home detention would have "offended the perception of justice".

    It is hard to find anyone among the subcontracting community who feels any sympathy for James, with some claiming they were not paid for work at the Eastbourne house. Taz Ulu, who says financial hardship forced him to move his family to Australia, is still recovering from an unpaid bill of $25,000 for electrical work at the house.

    Wellington Garage Doors owner Kevin Philpott removed more than $3000 worth of garage doors he installed at the property, after nine months of fruitlessly chasing James for payment in 2001.

    Everyone who talked to The Dominion Post about working at the house knows others who were unpaid.

    City Timber owner Chris Trudgen says he supplied $5000 in native timber hand rails to a building contractor at the Brooklyn Rise development. "They didn't get paid so it all turned to custard. We've never supplied him directly, with his reputation in the industry."

    An unpaid subcontractor contacted by The Dominion Post says the Eastbourne mansion cost an estimated $4m to build. Next week it is expected to go on the market for $1.8m. It is expected that all the proceeds will go towards paying back the mortgage to NZF Money Ltd. Trade creditors will get nothing.
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    James told the court of trips with his wife, Irene, and daughter to Millbrook resort, at $400 a night, to ski in Queenstown. Other times they stayed at B&Bs, he said. He claimed his lifestyle was not lavish.

    Annie Fuamoli says her former partner Milo Faletolu, James's site foreman at Brooklyn Rise, went months without getting paid and was having to front up to angry sub- contractors.

    She says she had a death threat from a subcontractor, and her partner's blind loyalty to James contributed to their breakup in 2006.

    Ms Fuamoli says James and his wife were regulars at the Melbourne Cup, owned horses and took trips overseas, including to Bali.

    "Milo was turning up to the work site at two o'clock in the morning. I would say to him: 'We're eating bread for tea and your boss is off jet- setting somewhere'."

    James continued to build his dream house despite the struggles at Brooklyn, she says.

    "It's flash, I remember that much. It kind of rubbed me up the wrong way because we were struggling at the time."

    The subcontractor says the house in Eastbourne was among the top 90 per cent he has seen in terms of luxury, after decades in the building industry. "If I walked into the house and didn't know him from a bar of soap, I'd say 'This guy must have zillions'. If he had got home detention, that would have been a joke because it was a beautiful home."

    James's friends are fiercely loyal, including Wayne Gillies, who was the marketing mind behind Brooklyn Rise. He is owed $8000 and says sending his friend of 30 years to jail has scuppered his and other people's chances of getting paid.

    "We all actually need Lance to get his developments up and running. I've seen the knocks he's had to take. I've never known anyone to work as hard as that guy's doing to try to survive. He has had his run- ins but he's out there taking risks."

    Mr Gillies spoke to James on the eve of sentencing and says he was confident of avoiding a jail term.

    "He mentioned it to me as being a possibility [but] he didn't expect to go to jail. He was absolutely genuine in his desire to repay that money."

    Mr Gillies says James was tied up in lengthy legal battles which cost him profits from his Oriental Pde developments, but Brooklyn Rise gave him a chance to do something significant. "It was a vision that needs to be applauded. There were other people that looked at that hillside and couldn't make it work."

    James said in court that after the sale of Brooklyn Rise his construction companies had a $2.8m agreement to finish the roading and landscaping for the first 100 houses.

    There was also $500,000 in unpaid work his companies had completed. Three days after settlement, James says the agreement was cancelled and his workers ordered off the site.

    One of his companies won a mediated settlement of $242,000 for the breach of contract but by the time the decision was issued Mr Manning's company was in receivership and there were no funds left.

    * * *

    James told the court he would have liked to have finished the work at Brooklyn.

    His company was prosecuted by Wellington City Council and fined $3000 for earthworks without consent at Brooklyn Rise in 2004. Greater Wellington regional council prosecuted him for discharging sediment from the site into Owhiro Stream in 2005. He was ordered to pay $3500 in costs and a $2000 fine.

    A senior city council building manager says lawyers were asked if there was any way building consents could be refused "but there were no loopholes". "We have had problems with Lance James on a number of jobs over a number of years. I can't recall a development of his that we didn't have problems with.

    "We could never nail him. There were numerous stopwork notices but he always fixed the problem just in time or promised you that he wouldn't offend again but he always did."

    James also had fraught dealings with neighbours. He infuriated his Eastbourne neighbours when he hired a helicopter company to clear trees from his property. Bob Fitness says the workers made a 40-metre- round clearing in scrub on a 30-hectare block owned by a syndicate of four families, behind James's property, and dumped tree tops and branches there.

    "I just happened to come home and see the helicopter up the top of my house. We probably would have let him do it if he'd asked but he just went ahead and did what he wanted to do. He had no intention of clearing them away." Another member of the syndicate filed a restraining order to stop him repeating the act.

    In 2008, James offered to come into The Dominion Post offices to be interviewed by a reporter, but pulled out at the last minute - one of several opportunities the paper gave him to talk about his troubles at Brooklyn Rise.

    At one of his early court appearance in September 2008, James successfully opposed being photographed in the dock, citing the impact it would have on his wife who had cancer. Outside court he ran from a waiting photographer. A month later The Dominion Post was granted permission to photograph him and he unsuccessfully tried to block the photograph by holding papers to his face.

    By the time sentencing rolled around on Monday, his resistance was over. He wanted to put on a good face, literally, and joked as he checked the image on the photographer's digital camera to make sure he was smiling in the picture.

    But he was an elusive man to contact. Little could be gleaned about his background. One person describes him as charming and funny, but hard to get close to.

    An elderly couple who contacted The Dominion Post say they became friends with James's parents, who had just moved from England, in the late 1950s.

    James's mother worked as a postie and the family had a fish shop in Lower Hutt, they say. James was born in 1959.

    The developer spoke at the couple's 60th wedding anniversary celebration four years ago.

    "As far as we're concerned he's still a good friend of ours. I don't care what he's done. He's a good, wonderful person - a really good guy."

    James's father ventured into property development and the family had serviced apartments on The Terrace in Wellington. James did a cadetship with the Land Valuation Department, but never practised as a valuer.

    IRD Assurance Group Manager Martin Scott says what made James' offending so serious was that he knowingly avoided paying personal and company tax for many years, despite being contacted repeatedly by IRD investigators.

    "There is a great difference between someone who is deliberately not paying, not filing . . . than someone who's got a temporary problem.

    "Here you're seeing us dealing with the very few people at the top end who don't comply. He was aware of his obligations and he chose to ignore them." Mr Scott says the jail term represents James paying his debt to society but when he is released from prison the $168,000 debt remains.

    The department will be able to attach orders to take instalments from James' future earnings, he says.

    The IRD has also secured a $1m High Court civil judgment against James.

    Mr Davie, is appealing against James' jail sentence and is expected to apply for bail.

    TROUBLED WATERS

    Brooklyn Rise:

    * James becomes involved in the Brooklyn Rise subdivision in Brooklyn, Wellington, in 2002.

    * His companies are convicted and fined for breaching council earthworks and sediment-control consents in 2004 and 2006 respectively.

    * During 2006 and 2007 James builds his Eastbourne mansion.

    * He is forced to sell Brooklyn Rise to Auckland developer Tim Manning in 2007.

    * Three days after settlement James's contractors are told to leave. James's relationship with the subdivision is essentially over.

    * About 30 homes have been completed. The receiver John Fisk says negotiations are continuing for sale of the remaining development sites and six partly completed homes.

    166 Oriental Pde:

    * In 1994 James knocks on the door of Stuart and Adair North and suggests they vacate their property while he knocks down the houses next door.

    * During the next five years the Norths wage a costly and losing legal battle over the way the highrise development is conducted.

    * 1996: James's financiers withdraw their support and he sells the development to Longford Holdings. Longford takes on the litigation. James stays on as project manager.

    * The legal costs sucks the profits from the development for James and from his earlier seven-property development in Thane Rd, Roseneath.

    * Mid-2009: It is revealed residents of 166 took Wellington City Council, James and Longford director Wayne Wright to the Weathertight Homes Tribunal after spending $4m to fix the leaky building. James and Mr Wright say they are not liable for the damages. The owners have asked the tribunal for an adjudication in the case.

    318 Oriental Pde:

    * After starting the development at 166 James starts building at 318 Oriental Pde with a business partner.

    * About four metres of the front yard belonging to former NZ Post chief executive Elmar Toime slips away after excavation at the development site in October 1998.

    * James is the project manager.

    * He says the litigation cost him his share of the profits from the development. In court he described 166 and 318 as a "financial disaster" for him.

    FOREMAN STAYS LOYAL DESPITE HUGE LOSSES AND HARDSHIP

    The most important things builder Milo Faletolu learned from his late father was to work hard and be loyal. He worked 70-hour weeks as Lance James's site foreman at Brooklyn Rise and was left penniless, owed tens of thousands of dollars.

    Two years on and living in a small house in Wainuiomata, he is torn because of his financial situation but remains loyal. "I got the chance to be a project manager of a subdivision and I wouldn't have got that anywhere else. He's an honourable man and he keeps to his word. That's why I hung on so long."

    Mr Faletolu, 42, started working for James as a labourer in the mid 1990s. He worked at several of his developments then in 2002 stepped out from the pack to be site foreman at Brooklyn Rise.

    Three days after Brooklyn Rise was sold to Auckland developer Tim Manning in 2008, James's construction companies were ordered off the site. Mr Faletolu walked away owed five years' of annual leave - about $40,000 - and with dreams of finishing the project in tatters. "We just got a fax saying they wanted to shut the site down and we were told to leave. It was soul-destroying. It's like bringing your kid up and not being there to see it grow."

    Mr Faletolu is listed as sole director of Gale Property Holding Company Ltd, the latest owner of James's Eastbourne house. He says James told him it was going on the market so he agreed to do some work on it and be listed as the director.

    "I thought that was an avenue for me to get my money back off Lance. I'm not a guy like those other guys that knock on Lance's door asking for money. I thought it [the money] might come around.

    "He's trying his best to get through the recession. I feel for the subcontractors because I dealt with most of them. We're all on the same side of the fence. We all haven't been paid."
    http://www.stuff.co.nz/dominion-post...-the-high-life

  8. #28

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    Quote Originally Posted by eri View Post
    they got al capone for tax evasion because it was easier to jail him for that than all his other crimes
    Probably...but then Al Capone wasn't building houses, he was selling liquor to tens of thousands of folk who wanted it and were prepared to buck the (stupid) prohibition laws that the then US Government thought were appropriate. So Capone was an enemy of the state not just because of that breach of law but because he found himself up against plenty of other would be Capone clones who wanted the underground liquor selling business.

    Murder is not an appropriate analogy to stuffing up financially.
    Last edited by essence; 18-04-2010 at 04:58 PM. Reason: Formatting correction

  9. #29

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    Quote Originally Posted by LondonKiwi View Post
    Yep looks like Karma working to me.....
    You know...you are probably correct. But what irks me is the way that people are so ready to pounce and ridicule, call out, push aside and lambast those that screw up.

    Some escape under the radar and others just get hammered...in the press, over beers in the restaurants and corporate social gatherings...and even on internet sites.

    I humbly suggest to you that there are those 'suits' sitting in their multi-million dollar homes that have brought massive destruction to other peoples lives that would make James' look like a herring amongst an ocean of sharks. And they won't be off to jail anytime soon...

  10. #30
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    no doubt you are right

    but it appears this guy ran out of money

    and ran out of friends

    while he built himself a $4million house

    that he couldn't pay for

    if he had rented a house somewhere and instead spent that $4million paying taxes, subcontractor wages and helping owners of his leaky developments he might have had a better chance of staying out of jail

    but he didn't

    so he became the poster boy for the "pay your taxes or go to jail" campaign

    someone's got to be the face of the campaign

    he's helped society in that way anyway
    Last edited by eri; 19-04-2010 at 01:54 AM.
    have you defeated them?
    your demons


 

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