Legal action pursued over Lake Macquarie's Weemala estate

The couple never realised their dream. Instead they have found themselves out of pocket for upwards to $100,000 because, they've been told, the block they purchased was not fit for purpose.

"This whole thing has just been horrible ... it's just blown up in our face," Mrs Firns-Seifert said.

"It might not seem like a lot to these people but to save that amount of money .. it was a big deal for us and we are still out of pocket and trying to recover from that."

They bought land at Weemala by the Lake at Boolaroo from developers, Green Capital Group, in February 2018.

"We initially bought lot 509 ... for $360,000," she said." My now husband and I had managed to save a deposit on part-time retail workers' wages, which I was proud of being only 22 at the time."

The estate, the former the Pasminco lead smelter site, has a long and troubled history. Pasminco went into administration in September 2001. The site's subsequent remediation was a protracted and controversial affair.

The couple say they were told theirs was one of the "best lots in the estate". There were delays, and then more delays, and then when their builder finally got started, they stopped work soon afterwards and refused to continue.

"It didn't register until May 2020," Mrs Firns-Seifert said.

"It was in August of 2020 that our builder stopped all work and refused to continue due to instability concerns with the soil. It has been found that the soil has not been compacted properly, which compromises the structural integrity of any future dwellings.

"After months of testing and trying to come up with geotechnical solutions, our builder walked away from the project in November 2020 and told us to seek legal advice."

Their legal advice was that the block which they purchased was not fit for purpose. Initially, the couple say, they were told by Green Capital director Darren Van Aardt at a meeting in December 2020 they were "faultless victims" and that Green Capital was keen to provide them with a resolution. Green Capital denies there are any significant geotechnical issues with the site.

"After many years of waiting and living with our parents as a newly wedded couple, we were desperate to move forward and have our own home," she said.

They got in touch with another property group who agreed to hold a lot for them at Trinity Point, until an agreement was reached with Green Capital. No agreement was reached.

In January, three of the eight affected landowners were given an offer of $450,000, which the couple say was lower than a recent land valuation of $455,000 and did not take into account their costs or losses, but they sold anyway, for the sake of starting over again at Trinity Point estate at Morisset Park.

In April the couple sold their lot, with full geotechnical disclosure, Mrs Firns-Seifert said, while their lawyer continued to try to find a resolution with Green Capital.

"We are finally free of the land at Weemala at the Lake but we are still waiting to be compensated for the additional costs/losses. This has put us in a tight position financially, especially considering the over-inflated market we have now had to buy into."

The couple are now hoping to have a home built and ready to move into by about July next year, by which time they will have been renting for 12-18 months.

A spokesman for the builder, McDonald Jones Homes, said their company conducts individual geotechnical investigations on every block of land it proposes to build on.

"We then design houses to suit those sites," he said. "There were a small number of blocks in one stage of the development that we believed the land was unsuitable for residential construction.

"We engaged several independent engineering firms to help us conduct further investigations and to help our customers resolve the matter with the developer. These matters have not been resolved yet. We are working to ensure our customers get the best outcome.

"Great houses are built on great foundations, we stand by our product and will continue to do so."

In response to questions from the Newcastle Herald, Mr Van Aardt said Green Capital was made aware that there were some buyers who were experiencing problems with a builder and that Green Capital offered to "try to assist the buyers".

"We tried to contact the buyers directly but were directed to their lawyer where we were finally able to set up a meeting with them and their lawyers.

"It should be noted that Green Capital is not a builder or civil construction company but as the ongoing developer we effectively tried to mediate an amicable outcome for the owners, it has always been our intention to help if we could.

"Even though neither Green Capital or the civil contractor agreed or accepted that any of the works were defective, there were offers made by the civil contractor to buy the buyers lots at above market values at the time as they had builders who were quite willing to build on the lots."

But this was rejected by the buyers as their expectations were a lot higher, Mr Van Aardt said. "I understand that some of the buyers have subsequently on-sold their lots at significantly higher prices but you will have to confirm this with them."

While Green capital was "sympathetic" to any issues that the buyers might have with their builder, the land had been constructed by a competent licensed civil contractor who has had the works certified by a geotechnical company which in turn is also compliant with and has been accepted by the certifying authority being council, he said.

"The civil contractor remains adamant that their works were done correctly and has provided us with comprehensive site reports supporting that the works were done properly."

The development of the former Pasminco lead smelter site at Boolaroo, formerly marketed as Bunderra at the Lake, is part of a messy and long-running saga involving legal action and controversy.

Green Capital director, Darren Van Aardt, is also no stranger to controversy. In 2008, he was banned by the Australian Securities and Investment Commission from managing a company for four years - a ban which ended in 2011.

He was one of four directors of the collapsed Bay and Morgan group of building companies which collapsed in early 2006 owing more than $35 million, including $22.8 million to an estimated 500 unsecured creditors and investors.

It had been building residential and commercial properties in the Hunter and on the Central Coast. At the time, ASIC executive director of enforcement Jan Redfern said the four men were "responsible for the failure and financial deficiencies of the companies and engaged in multiple forms of misconduct".

She said the directors made or agreed to make "uncommercial and irrecoverable loans to related entities" totalling more than $7.5 million.

They also allowed the companies to breach statutory requirements in tax and workers' compensation and Gregg Morgan and Mr Van Aardt failed to prevent one company, Bay Building Investments, from incurring more than $570,000 in debts while insolvent.

The Newcastle Herald is not suggesting that Mr Van Aardt or Green Capital has engaged in any similar conduct with respect to the Weemala development.

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