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Watching the roof watchers

By Kerces 22 May 2006 7

“Watch this roof” 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. “The paint starts peeling off and they’ve been given a 10 year, 15 year or lifetime warranty,” he said. “They go [back to Watch This Roof] and say they’ve got a warranty but the company’s disappeared.” 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 Builders’ Association, explained that all coatings and paints used in roof restorations come with a manufacturer’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. “This is an area where every consumer’s got to be very, very careful,” he said. “The [manufacturer’s] warranty is only as good as the company giving the service.” 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 Penn’s habit of winding up the companies he traded under, thereby voiding the warranties, is proof his services would not “stand the test of time”.

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 creditors’ voluntary liquidation – meaning the company declared itself insolvent – 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 Penn’s business ideas just do not work out, however the Office of Fair Trading thinks otherwise.

“I 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,” Commissioner Tony Brown said. The Watch This Roof advertisement in the 2006 Yellow Pages still says its services are “fully guaranteed”. Likewise, the television advertisement (available here) promises “once it’s on it never comes off, totally guaranteed”. Mr Brown said, “The fact that he had alternative company structures already in place, thereby enabling the Watch This Roof brand to trade continuously, indicates that Penn’s modus operandi has been to offer long and unconditional warranties that he never intended to honour.” Mr Durham agreed with this assessment. “It’s fairly clear that he deliberately misled people and that’s led to his demise,” 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 “Under Reconstruction”, 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 company’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 “up on the coast somewhere”.

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 Penn’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 Roof’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 Penn’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]

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Watching the roof watchers
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Ags 9:20 am 28 Jul 09

“dodgy brothers”

Granny 2:16 am 28 Jul 09

I really wish they would give bodies like the ACT Office of Fair Trading some real teeth. What’s the point in having them there if they can’t do anything about anything?

I sincerely hope that their recommendations in regard to necessary legislative changes are actively sought by the legislature; because this consultation should certainly happen on a regular basis, so they can be equipped with the proper tools and resources needed to effectively carry out their job.

At the moment, if all they can do is limply wave a wet fish around in the air, they’re just going to be the laughing stock of these ‘legal’ conmen and crooks.

Do we just want to be seen to have fair trading; or do we want to actually ensure fair trading occurs, and that the rights of consumers are protected?

kakosi 12:18 am 28 Jul 09

I had react roofing and react guttering (two separate businesses btw) do my roof. The guttering service was ok, but the roofing guys were seriously sloppy.

They also put the pressure on to pay the same day they “complete” the job (before you notice all the little things they didn’t do properly).

In my case they cracked tiles walking on the roof which leaked the next time it rained, finishes were sloppy and the cost was over the top.

They were always friendly and did some urgent repairs on damage they caused – but the majority of the “little” things they left unfinished are still unfinished. After a few months of trying, I just stopped calling. Every time I see the ad on television I have the urge to throw something.

JP 12:33 am 22 Mar 07

React roofing has recently restored our roof, using Nutech’s Flexishield. Like many homes in Southern Canberra, we were hit by the 2006 NYE hail storm resulting in internal flooding.

The cause of the flooding was the 6 inches of hail that lay of the roof once the storm passed. After the hail had melted, I personally inspected our roof and found not one square millimeter of Flexishield peeled or cracked, though numerous tiles had been destroyed.

As for the character and integrity of REACT staff, I have no doubt. They have been curteous, prompt, helpful, open and available at all times. Maybe the unfortunate customers of WRT should have done their homework on WRT, their Director and their Products (and suppliers). As for the ex employee’s of WRT now working as Directors of ReACT, they played no such role at WRT.

RandomGit 10:33 am 23 May 06

I’m glad to see you could get that much together. An eye opener indeed.

che 9:26 am 23 May 06

very nice write up Kerces, cheers

jube 9:23 am 23 May 06

Just watch other very similar companies as well – Bill Durham was Watch This Roof’s sales manager for a very long time, and his salespeople and tradespeople are mostly ex-Watch This Roof as well.

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