JML Developments: Alleged mismanagement behind collapsed building firm owing millions
It was in April 2018 the director of now-collapsed JML Developments bragged of his Hawaii holiday — complete with a Ford Mustang GT driving experience. But a year on, he’s been accused of mismanagement with $2 million owed to creditors.
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In late April last year building company director Jamie Lees escaped Adelaide’s cooling climate for a tropical Hawaiian getaway with wife Laetitia.
Among the idyllic photographs posted to his Facebook account were views from the balcony of their Honolulu hotel to which he wrote “not a bad view to wake up to”.
The couple hired a Ford Mustang GT and Jamie told his Facebook friends and family of having an “absolute cracker” of a day driving the “beast”.
“For those who are wondering yes, I did reach over 200ks/h (sic) and yes I did get a boner,” he bragged.
But this week the 31-year-old unemployed Daw Park businessman was using Facebook to sell a cubby house for $400.
“Would suit someone who is handy with tools and likes to be creative for the kids,” he wrote on Tuesday.
“I spent more than $1500 constructing just over a year ago. An inspection is a must to assess the excellent structural integrity.”
A week earlier Lees and his father Mark, 53, had placed their building companies JML Developments and JML Home Constructions — trading as GJ Gardner Homes Onkaparinga — into voluntary administration.
Statements of company affairs compiled and signed by Jamie Lees, and filed by liquidator Daniel Lopresti with ASIC, reveal the company owes an estimated $2 million.
The collapse came seven years after JML Developments started trading and two-and-a-half years since they established the GJ Gardner franchise, which operated from the Old Reynella Shopping Centre on Old South Rd.
JML Home Constructions owed $937,299 and JML Developments — largely a renovation and home extension business — owed $1.136 million.
Those creditors such as the plumbers, electricians, painters, roofers, carpenters and cleaners who attend a meeting at liquidator Clifton Hall’s office next month expect to hear a familiar story that they won’t see a cent.
The Lees have declined to discuss the circumstances behind the closure.
But Gary Cooke, who for 13 months was GJ Gardner’s site supervisor until his resignation in January, said in his opinion “poor management” was to blame for the company’s collapse.
“They were doing their own estimating and they were miles out with their pricing,” the 50-year-old said.
“One prime example was on one job they forget to even put structural steel in the quote, that was an extra $20,000.
“Jamie did all the estimating … on (almost) every job there were estimating errors.”
In December Mr Cooke recalled Jamie had pressed him to go ahead with a job at Clovelly Park despite Mr Cooke’s concerns that he did not have all the required plans and documentation.
Mr Cooke said Mark called him two days before they were due to pour the slab telling him that the clients had not settled on the sale of the block.
“We had done the pad preparation, levelled out the site and dug the footings and had done the under floor plumbing and we had all the steel and were ready to do the reinforcing,” he said, adding that the sale settled a month later.
“Jamie hadn’t checked the certificate of title.
“I’ve been in the building industry all my life … the building trade always goes up and down, it’s part of the cycle, but this had nothing to do with the cycle of the industry, it all comes down to poor management and too many overheads.”
He said in his opinion there was “no doubt” that the Lees were trading while insolvent, incurring more debts without the capacity to pay them, which carries potential criminal penalties.
“I love doing my job but I stopped enjoying my work about November last year … I had jobs I couldn’t get anyone to do anything because all the accounts had been maxed out and we couldn’t get any money,” he said.
Mr Cooke sent a resignation email at 2.36am on January 24 to Mark Lees citing “poor operational standards and disrespect for trades and clients”.
“I am always put in a position where I have no choice but to lie to clients, trades and suppliers,” he said in the email, a copy of which he provided The Advertiser.
He estimated problems began to surface with the company in the middle of last year when payments to trades slowed down and contractors began walking off the job.
He said Mark had put his own “hard-earned spare cash” into the business without any bank overdraft.
“That was always going to be tough,” he said, adding Mark had invested close to $400,000 in the business.
Jamie would not publicly apologise for leaving trades out of pocket and said in response to The Advertiser’s queries about the concerns raised by Mr Cooke that Mr Cooke was a “large reason” for the company being placed into liquidation.
“The worst mistake I ever made was employing Gary and there are many people throughout the industry that will second that,” he said in a Facebook message to the paper.
“He was responsible for a number of costly mistakes in construction and would never take responsibility for the mistakes.
“If you would like a better understanding of how my operation was run, please ask eight of my other employees who I’m 100 per cent certain would only give credit to the way the business was run.
“Of course I don’t think that would make a good story for you would it??”
He said Mr Cooke had been sacked from three previous employers but did not say who they were.
Mr Cooke denied that allegation, and said he had resigned from supervisor roles with his three most recent employers, who The Advertiser has chosen not to name.
Two of the businesses confirmed to the paper that Mr Cooke resigned while a third declined to comment citing privacy.
After learning that Mr Cooke had spoken to The Advertiser, Jamie sent Mr Cooke’s wife a Facebook message — sighted by the paper — saying her husband’s comments to the paper were “quite possibly the worst and stupidest thing” he had done.
“You may have to move interstate soon,” he wrote.
Mr Cooke said he considered the message as a threat and had reported it to the police.
Former JML Developments supervisor Scott Woods, who was employed last May to look after the division largely undertaking renovations and extensions, said initially business was “hammering along”.
But he said that about four months into his job he could not get trades to site and many were complaining of not getting paid.
“The business probably derailed before I started,” the 45-year-old, who resigned on January 25, said.
“I personally feel sorry for Mark because he put a lot of money into the company and lost it.
“It was just bad use of funds, JML Developments was funding GJ Gardner, I think they tried to get too big too quickly.
“From my few conversations with Mark I got the feeling he didn’t want the GJ stuff, he didn’t say I didn’t want to do it, he sort of said this has cost me a fortune.”
GJ Gardner’s SA franchisor is owed $132,000 but had not responded to requests for comment.
Mr Woods and Mr Cooke said they had not been paid any superannuation.
Mark Lees could not be reached for contact but the paper reported he had written to a contractor on March 13 that he had “lost everything”.
“The sad part about it all is if we would have had the support from some contractors and suppliers, with future work we had, we would have got through it,” he wrote.
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