Grocon: Court documents allege construction company dodging debt collecting solicitors

Explosive court documents allege that struggling building empire Grocon has been dodging debt collectors as subcontractors chase money owed.

Struggling building company Grocon, which has fallen into administration owing up to $60 million, has been dodging debt collecting solicitors, according to court documents.

The company, which transformed Australia’s skyline with the Rialto and Eureka Towers in Melbourne and restored the GPO Building at 1 Martin Place in Sydney, is now being chased by subcontractors for unpaid invoices.

Grocon, once a giant of Australia’s construction industry, put 39 of its companies into administration in November, claiming a $270 million court dispute over a project at Sydney’s Barangaroo was to blame for their woes.

However, according to allegations contained in new court documents, the problems for the company at other sites had been bubbling away since at least March.

CEO of construction empire Grocon, Daniel Grollo. Picture: Stuart McEvoy

Maxim Electrical Services, a subcontractor on its Aesop office development in Melbourne, has lodged a County Court claim for $662,105.82 in unpaid invoices since March.

But when Maxim’s suburban solicitors tried to serve the court documents on Grocon at their listed city office, the legal claim was redirected to an “unknown address” in Melbourne’s northern suburbs.

Richard Hapgood, of Hapgood Legal in Rosanna in Melbourne’s north east, was acting for Maxim.

He detailed at length his efforts to deliver the court documents to Grocon, now run by third generation family member Daniel Grollo.

“After mailing the Served Documents a delivery report from Australia Post dated 9 December 2020 was obtained showing that the Served Documents were redirected to an unknown Greenvale destination,” Mr Hapgood said in a court affidavit.

The diligent solicitor then personally went to the listed Coates Lane address in the QV building for Grocon and was told they had not been there for 18 months.

He then went to the company’s registered address at 577 Little Bourke Street, but was not allowed in.

“At approximately 4:37pm on 9 December 2020 I attended at the address of the Registered Office and found that Grocon still occupied the premises,... but I had no ability to enter the premises and the security guard or attendant was not authorised to allow me in, escort me to the floor or call anyone to let me in,” Mr Hapgood said in the court documents.

He called the reception on the publicly listed phone number and said he was waiting outside but no-one came to see him and he left after 30 minutes.

Grocon’s development at the Northumberland in Collingwood. Picture: NCA NewsWire / Daniel Pockett

Mr Hapgood then tried several email addresses for Grocon employees, including Mr Grollo, which he said had not bounced back.

However he did receive a message from someone linked to Grocon, questioning whether they should have received the documents.

Paul Murray, director of Maxim Electrical Services, claimed in an affidavit that he was owed money for work on the Aesop building.

He claimed that Maxim had not been paid for work since March, with the final bill totalling more than $600,000 and demanded more than $30,000 in interest.

“The Contract is silent with respect to interest for late payment,” he said in the affidavit.

“I am informed by my solicitor that the penalty interest rate applicable to the period of late payment set out herein is 10.5% per annum.”

Grocon was yet to file a defence with the County Court.

Grocon’s snub of the proceedings saw judicial registrar Sharon Burchell on Thursday vacate a hearing scheduled for Friday, declaring she would deal with the case in chambers.

“The court notes that the defendant has been served the documents, has failed to file a notice of appearance or take any part in this proceeding — and proposes to determine the proceeding on the papers to minimise costs,” she said.

She will hand down her ­determination at a later date.

Impact Investment Group, which had argued it had a fixed price contract with Grocon for the Aesop building, terminated its contract with the company.

They will engage another builder to finish the $120 million job.

[e-mail]