â€œWatch this roofâ€ demanded the once familiar blue and white signs planted in front laws all over Canberra. The marketing campaign for the roof restoration business was supported with catchy television ads with the singing cartoon dog.
In April the ACT Commissioner for Fair Trading issued a warning that Watch This Roof was in fact worth watching. Commissioner Tony Brown said the Office of Fair Trading was investigating complaints about Darren Penn, the man behind Watch This Roof, not honouring warranties.
John Bundock, a spokesman for the Commissioner, said the complaints were from people who had had their roofs restored and wanted to have further work done under warranty. â€œThe paint starts peeling off and theyâ€™ve been given a 10 year, 15 year or lifetime warranty,â€ he said. â€œThey go [back to Watch This Roof] and say theyâ€™ve got a warranty but the companyâ€™s disappeared.â€ Since the warning was issued, the number of formal complaints has tripled and the Office of Fair Trading has received hundreds of phone calls.
Roof restorations most commonly involve cleaning roof tiles with high pressure water and respraying them with a sealant and weatherproof paint. It can also involve replacing broken tiles and ridges and capping tiles. Bill Durham, from ReACT Roofing which is a member of the Master Buildersâ€™ Association, explained that all coatings and paints used in roof restorations come with a manufacturerâ€™s guarantee but this can be void if the product is not applied correctly. The most common problem is not properly cleaning the surface before applying the new paint. â€œThis is an area where every consumerâ€™s got to be very, very careful,â€ he said. â€œThe [manufacturerâ€™s] warranty is only as good as the company giving the service.â€ He said ReACT Roofing gives guarantees to customers on top of those given by the manufacturers. Mr Penn also gave these extra guarantees, but the trouble is that warranties, no matter how long they are for, only last as long as the lifetime of the company giving them. If the company ceases to exist, for whatever reason, any warranties given by that company become invalid. It turns out that Watch This Roof was only a trading name, and the companies behind it have been frequently changing since 1993. Commissioner Tony Brown said that Mr Pennâ€™s habit of winding up the companies he traded under, thereby voiding the warranties, is proof his services would not â€œstand the test of timeâ€.
Darren Penn has been the director of 12 companies over the past 13 years. Nine of these have been deregistered and one is currently in the process of being wound up. Two of the deregistered companies were placed in liquidation some years after Mr Penn ceased his directorship, but the others have been variously voluntarily deregistered, placed under creditorsâ€™ voluntary liquidation â€“ meaning the company declared itself insolvent â€“ or deregistered by the Australian Securities and Investments Commission (ASIC) because they were no longer trading. A quick glance through this track record might suggest Mr Pennâ€™s business ideas just do not work out, however the Office of Fair Trading thinks otherwise.
â€œI believe [Mr Penn] was fully aware that winding up companies would relieve him of any responsibility to honour the warranties he had promoted so strongly when seeking new customers,â€ Commissioner Tony Brown said. The Watch This Roof advertisement in the 2006 Yellow Pages still says its services are â€œfully guaranteedâ€. Likewise, the television advertisement (available here) promises â€œonce itâ€™s on it never comes off, totally guaranteedâ€. Mr Brown said, â€œThe fact that he had alternative company structures already in place, thereby enabling the Watch This Roof brand to trade continuously, indicates that Pennâ€™s modus operandi has been to offer long and unconditional warranties that he never intended to honour.â€ Mr Durham agreed with this assessment. â€œItâ€™s fairly clear that he deliberately misled people and thatâ€™s led to his demise,â€ he said. Mr Penn was asked for comment on these allegations via his liquidator but no reply was received.
Mr Penn seems to have been erasing himself from Canberra over the past year or so. A drive past the Watch This Roof office in Hume showed half of it is now occupied by another unrelated business, General Lighting Services, and the other half is for lease. The real estate agent handling the lease said the place had been vacant for a while and thought it could have been as long as 12 months. The receptionist at General Lighting Services said they had moved into the premises in December last year. She said there have been many people coming to the office looking for Mr Penn and Watch This Roof, but she did not know where he had moved to. Looking up the Watch This Roof website brings up a blank page with the message â€œUnder Reconstructionâ€, though this has been the case for less than a month, and the person who answered the phone number listed for Watch This Roof said they had no way to either get in touch with Mr Penn or take a message for him.
So where has Darren Penn gone? The business address listed on his NSW building license, which was renewed in March, is in Hoskinstown in Palerang Shire, NSW. This is the same address listed on an ASIC extract, obtained in April, for Mr Penn as the director of National Roofing Services Pty Ltd, his most recent company. This week that companyâ€™s registered office and place of business details changed to Newcastle. Mr Durham said he had heard rumours that Mr Penn was setting up business again on either the NSW north coast or the Gold Coast in Queensland, and the real estate agent handling the Hume office lease said he had heard Mr Penn had been found â€œup on the coast somewhereâ€.
It seems there is little that can be done to stop Mr Penn setting up business outside the ACT and continuing with the same pattern of avoiding his warranty obligations. Closing down companies is not an illegal practice, although there are disincentives in place for serial insolvency. These include a court ordered disqualification from being a director for up to 10 years because of involvement in two or more failed corporations within a seven year period, if the court is satisfied that the way in which the corporations were managed contributed to their failure. ASIC has the power to disqualify a person from being a director for up to five years because of involvement in two or more insolvent corporations within a seven year period. The ACT Office of Fair Trading and another undisclosed party have made complaints to ASIC about Mr Pennâ€™s practices. ASIC was not willing to comment on these complaints or any action in progress.
Another control on the practices of tradespeople is the issuing of licenses. In the ACT no license is required to carry out roof restorations, although it is needed in other states. Mr Penn holds a NSW license for carpentry and roof repair and maintenance, which was issued in 1995. A spokesman from the NSW Office of Fair Trading stated that if someone holds a license this means they are a qualified tradesman. However, he said as long as the yearly fee is paid the license can continue to be renewed.
The ACT Commissioner for Fair Trading can and has issued public warnings in Canberra media about Mr Penn and Watch This Roof, but these were not broadcast much further than the ACT and its surrounding region. As well, the ACT Office of Fair Trading is encouraging Watch This Roofâ€™s past customers to fill in a questionnaire to assist with their investigations into the growing number complaints. If they find there have been any breaches of consumer law in this case they may prosecute Mr Penn.
The ACT Office of Fair Trading has informed its counterparts in other states of the investigation into Mr Pennâ€™s activities, in part by sending them the press release given to Canberra media in early April. However the Housing and Builders section of the NSW Office of Fair Trading said they had nothing in their database about Mr Penn and so could not tell anyone inquiring anything about him. If Mr Penn does start planting his blue and white signs in the lawns of NSW residents, will they know to watch him carefully?
[First published on NowUC]