South Australian family takes NDIS provider Horizon SolSolutions to court over claim of unpaid sum of $4.5 million

NDIS provider, Horizon SolSolutions, which is currently suspended over a fraud investigation is now facing another legal battle in South Australia.

An NDIS provider under a fraud investigation is being chased in court for more than $4.5 million in unpaid “referral” payments to a company who built disability support homes.

Cocoon SDA Care’s parent company Horizon SolSolutions has been taken to court by a South Australian family who claim they have been short-changed.

Dentist Muhammad Rizwan Khattak, his wife Hira Khan and brother Muhammad Numan Khattak have filed a complaint in South Australia’s District Court.

Horizon SolSolutions has also filed a counter claim, with its corporate strategist and former bankrupt Zaffar Khan saying he was defending the Khattak family’s demands.

Muhammad Rizwan Khattak, his wife and brother have filed a complaint in South Australia’s District Court. Picture: Supplied

Zaffar Khan says he was defending the Khattak family’s demands.

They are in dispute over “referral”, or commission, payments for NDIS clients in properties that the Khattak family built in South Australia to be used by Mr Khan’s Cocoon SDA Care company.

Court documents state that Mr Khan had agreed in 2021 to pay the Khattak family’s company Rehmana Investments up to $150,000 a year for a property worth $950,000 in Encounter Bay, near Victor Harbour.

Mr Khan’s company also agreed, the Khattak family alleged, to pay referral fees, or take up to 10 per cent of the profit from another 11 properties in South Australia.

Some of the payments were linked directly to each NDIS participant, with the Khattak family company to receive up to $6667 per person who was moved into the supported homes.

“The payments would continue for the life of each referral,” the documents alleged.

The Khattak family had been receiving referral commission from Cocoon SDA Care since 2018 before the new agreement was signed in 2021.

“The respondents (Horizon SolSolutions) failed to act in a manner consistent with its duty of good faith and duty of co-operation with respect to generating profit with respect to the referrals and/or the calculation of profit attributable to the referrals,” the Khattak claim alleged.

14 Barnabas Crescent Christies Downs, SA, is one of the NDIS homes listed in court documents in a legal dispute between Rehmana Investments and Horizon SolSolutions, parent company of Cocoon SDA.

16a Ramsay Way Para Hills, SA, is another of the listed properties.

The documents alleged that “the respondent (Horizon SolSolutions) has failed to pay any amount at all” in relation to the Encounter Bay home.

Mr Khan’s company admitted in its defence filings that it had agreed to a $50,000 payment every four months, or $150,000 a year for the Encounter Bay home.

But it denied the Khattak family were owed any money because the “commission agreement” had been terminated.

The defence further denied that the Khattak family had suffered any loss.

8A Hope Street Encounter Bay, SA, is wrapped up in the legal dispute.

Along with 1 Rose Street Ottoway, SA.

Mr Khan’s spokesman said in response to questions that Cocoon SDA Care is defending the allegations.

“All parties were in agreement that any bonus or incentive payments would be ‘best case’, aspirational outcomes and all parties were aware that these were entrepreneurial ventures, where the future financial performance of these new businesses was not known.

“As this matter is before the Court, Cocoon SDA Care will not be making further public comment at this stage.

“Cocoon SDA Care is a legitimate business that has provided real services to real participants under the National Disability Insurance Scheme (NDIS).”

The court case, which was first filed in December 2022, is among a string of legal battles facing Horizon SolSolutions.

The company remains under investigation by the Fraud Fusion Taskforce over claims it had breached the rules surrounding NDIS payments.

It has received a temporary ban from providing some NDIS services, which left up to 438 vulnerable clients in limbo as they scrambled for new providers.

Mr Khattak was contacted for comment.

Originally published as South Australian family takes NDIS provider Horizon SolSolutions to court over claim of unpaid sum of $4.5 million