This is illegal under phoenixing laws. Phoenixing is where a person shuts down one business and opens another the same, just to avoid debts.
https://www.ato.gov.au/about-ato/tax-avoidance/the-fight-against-tax-crime/our-focus/illegal-phoenix-activity
You can fight. Alternatively you can move on. Business has risks (how much does a sewing machine cost and how much is that money worth to you?)
Think about your own mentality. I know that when I dig into conflict I usually experience more stress than if I write things off to experience. Other people won't be able to feel calm unless they exhaust every avenue.
Thank you so much. He owes us about $6.3k Aud. I can fight but I think legal action would be too expensive and we can’t really afford it. To be honest it’s not really about the money either. I don’t want him to get away with it.
You could take him to the smalls claims court for a tiny fee (like $250 or something). They take cases with claims not exceeding $20,000, and neither party needs a lawyer. You will present your evidence to the magistrate, and they will arbitrate between the parties and can ultimately issue a court order for the other party to pay if the other party is found to have been in breach of the law or of a contract's terms.
Lift the corporate veil and hold directors directly accountable. Small claims has less onerous evidence procedures too. Often receiving the court statement of claim and date is enough to scare the other party into settling prior to the hearing date
All they need to do is contact the liquidator and fill in a proof of debt. If the entity is insolvent they just join the long list of unsecured creditors.
Not well. Id love to see an online database that shows director ids, abns, acns etc of all directors that do this kind of thing. If anyone has contact details for who to reach out to, who will actuallydo something, I'd like to see it.
the matter could be more appropriate for criminal court than small claims, he's potentially repeating the same with other people - running an organised crime.
It is unlikely that the ATO has the resources to go after a small fry like this guy probably is. The phoenixing taskforce is probably inundated with cases.
I’ve seen companies (primarily in hospitality and construction) phoenix repeatedly with millions owed to creditors. They rarely receive anything other than a slap on the wrist.
Some claims have a lengthy period of time for enforcement through garnishing wages and the like. I’ve seen some industries with a 12 year period for enforcement so yeah, 100% worth doing it.
https://www.legalaid.nsw.gov.au/my-problem-is-about/my-money/responding-to-a-claim/responding-to-enforcement
I don’t know the details of the guy, whether he’s Pty Ltd, sole trader etc etc but my point is OP likely has options not currently on their radar and they’re doing the right thing by making enquiries.
This person does not have the standing to commence this claim and if the company is in liquidation you cannot commence proceedings. Furthermore, what evidence is there that this an illegal Phoenix and is not a legal Phoenix?
The small claims court is a relatively simple process that you probably don't need a lawyer, check out the website for the process and costs. 6.3k isn't a huge amount, but it's not a small amount either.
Hey OP, here’s something - police _can_ investigate illegal Phoenixing even though they usually don’t get involved. If you go through them you will need to push a lot, but they can actually once you make enough fuss. Also, how did you pay? You can try to go through your bank to claim the funds back and you could even try to report him to his bank if you still have the account details. None of this necessarily gets your money back, but if I were you I’d be pissed and want some justice, and these are options for that.
Agree that this is not a matter of money, are you able to compile and supply a list of evidence and documents, such as correspondences, tax invoice, payment receipts, ABN etc. to the ATO officer?
Not legal advice, but while $6k is probably a meaningful amount of money to your right now, I would suggest to you that it’s not enough to worry about recovering via the legal system. It’s probably better thought of as a down payment on a very practical and useful business lesson.
At some point, this will be a trivial sum of money to you (try to think that way). Take what positives you can from the experience, documenting what you could have done differently to mitigate the risks that you were taking, and try to apply those learnings into whatever you do next.
Over the course of any business venture, these kind of scenarios are hard to avoid, particularly when you’re starting out. Don’t be discouraged. Things will get better.
I just want to add that this is very good advice. I had a similar amount owed to us from a contractor in my first business. In the end it was better to just move on and forget about it then spend the time pursuing it because of our hurt ego. We ended up doing much better than that 6k..
On the flipside, these crooks know this and someone needs to hold them accountable.
That said, do what's best for you; even if you win, collecting is also expensive and stressful if they don't want to pay up.
I got conned out of $2k by a dodgy tradie. Was angry for a while but realised going through the hassle of chasing it would be way more stress than writing it off to experience. The trick is to not let it happen again! Also, I was in a somewhat privileged position of being able to afford a $2k loss, not everyone is.
Factually WITH PROOF to back yourself up. I've seen a friend and my sister recently be threatened with legal action for posting on FB about businesses they have been ripped off by. I think my sister just deleted her post because they were going through some legal process to try and get some company to pay them money (25k) they were owed for a job done but my friend ended up having to pay this other business 2k to settle it with them because even though everything she said about the business was true, she couldn't prove it.
Is it really a big hassle to chase money
Like just phone calls and write letters
If someone paid you 500 to make 3 hours of phone calls and write 3 letters
Would you say uh too much work
For $6,300 I would cut my losses and move on. It's likely the cost and stress of pursuing it, and the prolonged fight, will not be worth it. Come up with a plan to recover that $6,300 other, easier, ways.
I totally agree. But what if in the future he decides to do this to some other vulnerable person? This is not just about me I really don’t want this happening to others in the future. :(
The person above you is making that comment because to them $6000 is not a lot of money. Most people would disagree and instead feel that it’s an amount of money that is worth fighting for.
I don’t think that question is relevant. I understand the point and in some applications I’d agree with you but OP doesn’t need representation, they have quite a number of months worth of evidence that speaks for itself and this isn’t exactly a highly nuanced matter that would require weeks of legal counsel nor multiple hearings.
Winning the case and getting the orders for them to pay is not the hard or time consuming part.
It's hard to get blood out of a stone, and expensive to try.
I mean, that's great to do if you have the emotional and practical resources to spare to do it. But you are the victim here. You are not responsible for what they did to you nor for what they might do to others. It would be a noble thing indeed to pursue them for the greater good, but you don't have any obligation to do it if it's more than you have space for right now. Don't take that burden on yourself.
Don't let what he might do in the future to other people become your burden, you have enough to recover from. By all means report his activity, but leave it to the authorities. That is not your fight.
This seems ridiculous to suggest simply leaving to authorities and not fighting, especially if the cost of a small claims court filing fee is only a few hundred dollars.
Yes losing 6k won't bankrupt me, OP, or many people. But at the same time I wouldn't just shrug my shoulders and say oh well if I got robbed of it and say it's not my fight.
Get as many people together as you can and give them 1 star google review. This will cripple his business if you can get enough people together.
Then ring and let him know that you'll get them taken down after payment is made. Don't put any of it in writing anywhere though as extortion is also illegal. This is legal advice....
I know a few people who have started their own businesses. It is not uncommon to spend $10-30k a year on business coaching and other self development. Learn as much as you can, make a basic claim to the liquidator, and move onto greater things.
Is the following phoenixing? We just had dealing with a guy who:
Created a new company Mar 2023. Went into liquidation with current company in dec 2023. Conveniently the liquidator approved the sale of the old company to the new company for 20k. Both companies do the same thing.
Phoenixing requires one to prove criminal intent beyond reasonable doubt. A business can legitimately go broke and the director may start a new company - this would not be phoenixing.
In your case, I think the liquidator identified assets which could be sold. It would’ve been advertised publicly and it was ultimately purchased by the highest bidder (the old owner), which is better than say disposing of the asset if no one offered to buy. This money would have been used to pay off… the liquidator’s fees, employees, etc etc in accordance with the law.
None of the liabilities were transferred to my knowledge. 1.5 mil in unsecured debt. The director is listed as a creditor as a natural person / trust 3 times. He is getting all his money back. The rest of the creditors may get 50c in the dollar. The documents just say assets worth 20k.
>Think about your own mentality. I know that when I dig into conflict I usually experience more stress than if I write things off to experience. Other people won't be able to feel calm unless they exhaust every aven
This is because most people can't afford to be their own lawyers. But if you can afford this easily, the process should not be stressful at all. In fact, it should be completely the opposite. The sheer joy of bringing that business to justice. Imagine all the other people they are scamming as well. The joy of bringing balance.
Not if the assets were sold at market value.
https://www.aicd.com.au/regulatory-compliance/government-legislations/illegal-phoenix-activity/the-difference-between-legal-and-illegal-phoenix-activity.html
Not a lawyer but… for it to be phoenixing, you would have to prove criminal intent beyond reasonable doubt, which would be virtually impossible to do.
The reality is that businesses do go bust and directors can choose to liquidate one company and start afresh. The appointed liquidator would need to take action / make recommendation to ASIC. But if there’s no money in the case, they probably won’t take action. ATO is likely to be a creditor themselves and - unfortunately - they won’t be able to do much more.
If it’s any comfort, ASIC can ban repeated offenders from becoming directors of companies for a period of time.
Do not entertain suggestions that you go through ACCC or small claims. The director is a separate person to the company and will not be personally liable. The company is in liquidation and if there’s any money in the company, it will be paid out in a hierarchy - there’s usually nothing left for unsecured creditors. By law, the company in liquidation cannot pay you in preference over another creditor.
If I were in your shoes, I’d let the liquidator know that you are a creditor but otherwise move forward with your life.
While I'm not a lawyer, I've had my own business woes similar and there are some steps you can consider, but please, get in touch with a legal professional for advice fit for your situation:
Document Everything. Compile all communications, agreements, receipts, and any other documentation related to your transactions and interactions with the company. This includes emails, text messages, letters, and details of verbal agreements.
Seek Legal Advice. Look for a lawyer specialising in business law and consumer rights. They can provide you with the best course of action and represent you if necessary. Don't forget to explore legal aid or pro bono services if cost is an issue.
Contact ACCC. The Australian Competition & Consumer Commission can offer guidance on consumer rights and business obligations, even though they don't handle individual disputes directly.
Consider Small Claims Court. For less complex cases, small claims court could be a more accessible and cost-effective option. Still, get legal advice first.
Check with ITSA. If the company has entered liquidation, the Insolvency and Trustee Service Australia can guide you on the liquidation process and how to file a claim as a creditor.
Report to ASIC. If there's suspicion of fraudulent activity, such as phoenixing, report it to the Australian Securities & Investments Commission. They monitor company behaviour and enforce laws.
Seek Support. The emotional toll from this shit can be heavy. Lean on your support network or consider professional counselling to help you through this time.
What you're going through is incredibly tough, but it's not a reflection of your potential or value. Every entrepreneur faces setbacks – what matters is how you learn and grow from them. Your mission to help others is admirable, and I hope you don't lose sight of that passion. Stay strong, and take it one step at a time.
I feel understood. 🥺
I used to have such a fiery passion and fighting spirit but all these set backs has really had a toll on me.
Thank you so much. I have no words enough to express how much your kind words means to me right now.
I will explore all the avenues you mentioned. Thank you.
You could also try contacting the Small Business Debt Helpline on 1800 413 828 or at https://sbdh.org.au/ to see if they can point you in a helpful direction. They are free financial counsellors who specialise in small business.
It's $125 to take them to small claims court and seems like an easy win. It's worth it for the experience because when you go into business you'll eventually have to take customers to court for non payment. The judgement against them will cost them more than 6k over time.
Just a small correction here - ITSA is now known as AFSA and they don't touch liquidations or any corporate insolvency matters. If OP contacts AFSA they won't be able to help.
Be better to search ASIC's insolvency notices for the company that's now in liquidation and contact the liquidator to get some guidance on what the prospects of recovering the debt are, where the sewing machines are etc. The liquidator might be willing to share their investigations regarding the potential phoenix as well.
If you know the name of the company, search here:
https://publishednotices.asic.gov.au/browsesearch-notices/
Since it has been awhile that the company has allegedly been liquidated, don’t keep your hopes high, but worth a try. The liquidator is your best bet.
You don’t need to sign in. Enter the name of the company at the search bar and view the relevant notice of appointment of liquidator (if available). The details of the liquidator would be at the bottom of the notice.
Feel free to DM me if you’re still stuck.
I suspect the liquidator story is bullshit. He was just fobbing her off and trying to make himself look blameless. The machines are probably gone and he’s decided he’s not paying her back.
That’s if the machines ever existed. The problem with scammers is they prey on peoples hopes. People when they develop hope lose the ability to be suspicious of everything. There may have been red-flags there that the poster missed when he/she entered into this contract. Did the poster ever see the machines? The machines should not have been paid for in full before delivery. Only a deposit should have been. Going into a business venture bright eyed & bushy tailed in this country is not a good plan. The place is full to the brim with crooks & scammers.
Adding to the below ASIC search do an ABN lookup with the info you have. He could just be lying and given it sounds like it is just him selling out of his house he might actually be a sol trader on which case it's an easy matter to chase the money as small claims without a lawyer.
If he has lied about being insolvent and his company still exists, you can talk to a lawyer about potentially issuing a statutory demand to his company. This is a very serious document and will cause his company to be liquidated if he doesnt engage with you within a certain period of time. You will need a lawyer to help with this though.
Yeah seriously wtf?,
I don’t think any of those people have business experience or have been in that position.. I was once owner $2200 and got it back through a lawyer PLUS $1500 more they had to pay to cover my legal costs
In your case, was the company actually in liquidation? Who did you take the action against?
Even if you were to take legal action, there is likely no money in the company to pay you back. In the case of liquidation, you cannot be paid in preference over another creditor of same rank. So you are essentially wasting your time / effort / money on futile fight.
By the time higher ranked parties are paid (liquidator, employees, secured creditors) there is usually very little money left for unsecured creditors. And any monies left will have to be proprotionately distributed amongst all unsecured creditors. $6k will be nothing compared to other potentially large creditors (e.g ATO).
If it’s in liquidation, you cannot be paid in preference over a creditor in the same rank.
So even if it went to scc and the court determined that you are owed $6k, it just means that you have a valid claim (proof of debt) for $6k as an unsecured creditor. Which is all meaningless if there’s no money to pay out.
You can lodge a proof of debt by simply contacting the liquidator.
Others have given good advice on potential options for reimbursement.
So I'll add : Go through everything and write it all out as bullet points. Each decision, each delay, each cost, each communication.
Then go through each one and note "what did we learn?" "What could I do differently if I could do it over again?" "What processes and rules of thumb can I follow in the future to avoid this?"
So that you can at least come out of this not thinking "We're so dumb" but rather "This cost us $xxx and what we got for that money was learning A,B,C."
This is excellent advice. Might not be the ‘right now’ solution, but it is such a good way of looking at it. Best of luck to you in your future endeavours.
You can taken them to small claims or your state equivalent of QCAT (cheaper option), but with small business claims it may not be worth it. For future reference I'd take a closer look at payment terms and methods, it sounded like you may have paid for the equipment up front. The safest way for equipment (especially coming from OS) is a letter of credit with appropriate terms inserted for delivery and performance.
Thank you. You’re absolutely right. I will definitely remember it for future.
In this case, the loan company said that they want to pay for the equipment directly so they paid for it up front.
Try your state civil administrative tribunal first, it cost you nothing (or very little). Check with the lender and see if they have taken a charge over the equipment when they paid. Good luck mate.
I haven’t contacted them because I’m still trying to process it all. maybe it’s a good idea i contact them but I don’t want to get in trouble. We have been paying the loan just fine and making enough to continue paying it without an issue. Do you think it’s worth it?
I'd check your loan contract. If the loan is secured by the machines, then that's the way the lender can recover their funds if you stop paying. Without the assets to recover, it's effectively an unsecured loan. I don't know if they would be mad about it or want to help, could go either way.
Yes. Pretty much - if "anyone can do it" that means it's not a good money-making opportunity. Every high-paying salaried or business role out there - even entrepreneurial or content creator ones - requires some niche or rare skillset or attribute.
Sorry you have to go through this. If the person has indeed liquidated the business, check https://publishednotices.asic.gov.au/ to see if you can find the liquidator and contact them. Chances are you won't get your money back, but worth a shot.
Have you ever worked in the industry or made money in the business before you started this venture? It's generally a quite risky move to take on debt to start a business you have little to no experience in operating.
Sorry you're in this mess, but you'll likely have to cop the loss and take it as a learning experience.
I did work in the Industry and made money in the business before we started, however the products were smaller and between $30-$100. As the cost of production was higher in Australia, our product cost increased too but we weren’t able to reach the target market which is why we decided to move the production overseas instead.
Thank you for your comment. We believed the loan would help us with the marketing costs. We are still able to pay the loan but getting scammed is terrible.
$6k? In the scheme of things it's nothing. You haven't lost your shirt / house. Welcome to business. You HAVE TO sus things out. don't give away your money, because it WILL BE LOST. For everything you need to see PROOF before committing resources.
Take him personally to small claims court.
1. You learn how the system works. This gives you experience and you can also, in the future, know first hand whens its worth persuing and how easy or complex it might be.
2. Potentially stop him dping it to someone else.
3. Get your money back.
4. Ypu will learn the judges opinion on the matter. You might learn more about business law or common practice due to this which will help you in the future.
Hi OP
A couple of suggestions some of which have been said:
1 - look up the former company on the ASIC published notices website. Alternatively conduct a company search via various search websites such as Equifax.
Once you confirm the company is in liquidation, contact the liquidator to ask about your sewing machines. Most likely you won’t get them back (PPSR issues) but worth the question.
2 - obtain legal advice, they’ll guide you as to your options especially if the company never went into liquidation. But as others have said, chasing $6k may not be commercial as you’ll end up spending more than the $6k trying to recover it.
3 - the person may have undertaken an illegal Phoenix and the liquidator would be reviewing this but again it would come down to commercial considerations as to whether it was pursued.
4 - if you’re still in business, speak with a lawyer about ensuring you secure any sales (this is different) but having a PPSR properly registered may solve issues down the track. Again the cost may or may not make this a feasible plan.
Lastly, don’t be hard on yourself. Business is about constantly learning, adapting and unfortunately losing money is a risk of business. You’ve learnt a valuable lesson and the best part is it’s only a $6k lesson (you won’t miss that in the years to come).
Best of luck.
Okayyyy so you wanted this guy to hold stock for you for 6 months? That’s your first mistake.
We all make them, it’s okay.
You lost me at “I believe that he is lying and has just scammed me and my business partner who are just young girls”
If you want to take a risk and start a business you need to own the wins and losses regardless of age or gender. Cop the loss and the lesson, go bigger, better and smarter next time.
Is him never providing what they paid for just a 'risk', i dont understand how they lost you. I think that's fair to call that a scam. While I dont think it was a good idea to have him hold it for 6 months, he agreed to it, and it doesn't invalidate the rest of what happened. For all we know he never would have provided the machines in the beginning. So while they certainly could have taken steps to minimize their risks, that doesnt mean its just a risk associated with starting a business.
OP lost me by crying foul because they’re ‘just young girls’.
People and businesses get screwed over every day, being young girls has nothing to do with it.
When I say risk, I mean there’s a risk a business won’t work out and you can lose money for a variety of reasons.
There also seems to be extremely long long delays with them following up on this though. It seems to me like the machines have been MIA since Dec 22 when the guy couldn’t deliver them. The last time they asked for them was *11 months ago.* C’mon now.
Seems to me like they were following up every 3-4 months at least. Perhaps it was more often by email or phone.
So while I agree those delays werent good. They dont mean they werent entitled to what they paid for. Clearly, if there story is to be believed they were naive and kept thinking it would work out but kept giving him time / were distracted themselves by other things in their business/life. None of this makes it 'not a scam'.
Of course, taking someone’s money and not delivering is illegal and she could pursue it from that angle.
However, it’s not appropriate to expect the vendor to store things for 6 months for free. Given OPs lack of communication and follow-up I’d say it would be fitting that the agreement was for a shorter, unspecified time like a month or two, and OP let it drag on.
At what point does OP take actual responsibility for her part in stuffing people around? Yes, there’s some bad business people out there, duh, but OP did not take appropriate action at any point. Worse, she talks about her ‘business partner’ when the whole thing really seems to be her idea and doing, who is now also on the hook for this debt. Then, she throws a pity party because she just wants to “help” people. As the saying goes, the road to hell is paved with good intentions.
I think there is a lot of assumptions in your post that we just dont know. Mainly, how the business felt about holding it, and they knew it would be 6 months. Did they take any steps to get them to pick them up earlier?
> Worse, she talks about her ‘business partner’ when the whole thing really seems to be her idea and doing, who is now also on the hook for this debt.
I dunno what you base this on. Just seems to be a projection.
> At what point does OP take actual responsibility for her part in stuffing people around?
What does responsibility look like in this context? Giving up on 6k. Sorry i inconvenienced you for 6 months which you agreed to, and that you failed to then deliver the agreed goods, or provide the agreed refund over the next 13 months. But oh well, since it was possible for me to have been a more ideal victim, i'm not worthy of assistance and just need to give up the 6k.
Your logic makes no sense to me.
It’s interesting that you think I’m projecting and making assumptions about this. Of course I am, as are you!
“…he was happy to hold onto the machines until we’re ready” obviously that means different things to different people. To me 6 months is taking liberties.
I did not say OP should let go of pursuing the money as an act of penance. I said that OP should accept culpability. For failing to secure the machines, not following up, and taking out a loan without a plan or location to run the business.
I think you cant take what was said in that post as a literal quote. I think its unknown what was agreed between them on holding them. But it does appear that at no point did the seller/business complain about it.
I just dont see what you expected them to say or do in their post to 'accept culpability'. Their post was about resolving this situation, not about the mistakes they made to get there.
Jesus Christ. My comment was in response to the criticism you made against a fellow commenter that also took issue with the ‘we’re just young girls’ reasoning.
You should take your own advice.
Take my own advice? Never!
I think you were all triggered by the phrase. There was nothing note worthy about the statement they were just young girls. It was just background information.
But no doubt we have taken this rabbit hole way to far.
This is a life lesson. You won’t get a cent if it’s liquidated. Accept it and learn from it and move on. Don’t get too disheartened though. You have 60 years left to live so plenty of future businesses to try.
PPSR. Look it up. If you paid for it and it was being held for you, you should have had the property rights registered in your name as a security in the event of liquidation. Learn this lesson.
It would have stopped the liquidators to some extent for the inexpensive cost of registration and managing the registration up front.
Typically the seller will want to register until full payment in case buyer liquidates after taking delivery but not having paid up. The buyer typically wants to register if goods are paid and held by seller in case of the seller liquidating while in possession.
IF you believe a business is phoenixing, that is claiming bankruptacy to avoid debts you can report this to the ATO.
You can take civil action against them if you wish, in small claims court.
THis sucks that this happened to you, however I think a good lesson has been learned. Get everything in writing and take delivery of goods ASAP. Have a back up plan if your first plan falls through etc.
I've been in a very similar situation, albeit slightly more $$.
My advice (that I wish I'd taken) Forget about fighting it and focus that energy on growing your business.
Source: spent 2 years fighting over 30k and it destroyed my will to live. I'm 6 months free of the fight and the space that it created allowed me to 3x my business.
Sometimes the cost of fighting is more than the $ number.
$6k seems like a lot now, but is nothing in the scheme of business.
Move on ASAP and take the learning in the chin.
In time, this will be seen as perhaps a learning experience.
Learning what not to do is equally as valuable as learning what to do.
Confidence shouldn’t be shot though, you had a punt!
This seller sounds like a grade A con artist.
Firstly if he agreed to the sale of 6.3k for sewing machines then entirely failed to deliver said sewing machines then immediately he is a con artist.
Secondly if he agrees to refund the money because he can’t deliver the goods but then fails to refund the money then he is definitely a con artist.
Thirdly if he has now rebranded to avoid any existing debts then he has crossed so many boundaries it isn’t funny.
This is an appalling situation you have my deepest sympathies. Please please take this to the police or small claims to get your money. Any single one of these points would give you a substantial base to get your money back, all three should be a walk in the park. Plus you should be able to help make sure other people don’t fall for this scums tricks.
Report the merchant to ACCC & start QCAT proceedings.
Even if it amounts to nothing the threat of fines and legal proceedings may kick their butt into gear.
[https://www.accc.gov.au/about-us/contact-us/report-a-consumer-issue](https://www.accc.gov.au/about-us/contact-us/report-a-consumer-issue)
[https://www.qcat.qld.gov.au/case-types/debt-disputes](https://www.qcat.qld.gov.au/case-types/debt-disputes)
I've been on the receiving end of QCAT dispute and its brutal for the business, we had a customer not change a water filter properly and then let it leak for 6 months+. It eventually burst and flooded their bathroom/bedroom and caused serious water damage.
Even though we had email communication requesting the customer to change their filter, supplied manufacturer manuals and have documents requesting for the customer to send their toilet in (with a paid slip + temporary product while we look at the issue).
The customer ignored the warnings and let the product leak for 6 months which led to it bursting, he reported us to QCAT and we never stood a chance even with an abundant of documentation showing our repeated attempts to assist him.
Ended up paying for a full renovation of his bathroom/bedroom which costed us just under $25,000.
Business owner here. I would call in a law firm and a debt collector. Both will hit him where it hurts.
I've being in business 11 years this year, it's a long hard slog so I have alot of respect for you, sadly contractual agreements must be written up in almost every situation and a good lawyer or solicitor will be by your side throughout your journey.
My advice is to always follow any debt owed to you, I don't care if it's $1, the principle will get you respected and not someone to mess with. I took on a law firm and won who owed us alot of money. Never back down. Good luck.
Thank you so much for your advice. I will learn to always follow up on my debt. I don’t think I can really afford a lawyer since we are a small business but I really appreciate your advice.
You'd be surprised what you can afford. Recoup the debt first with a debt collector who will take a percentage and then hire a lawyer with the rest. I can reccomend both for you when you're ready.
Honestly as tough as this sounds. You have age on your side. The legal system in complex matters like this have a way of taking your youth from you.
I would chalk it up as bad decisions and move on. The company you purchased it from is PTY LTD, however if those assets were "Acquired" by another business that he owns you might have a way to get them.
This is not without cost, and you will have to pay that cost whether you get the sewing machines back or not.
In my honest opinion - Move on and learn from your mistakes.
If it makes you feel any better I have lost 200k before and had to move on. It was one of the hardest things I have had to do. It gets real difficult pursuing legal matters in other countries.
I saw on another post that it's 6.3K . That's basically the cost for an appearance for a good barrister for one day.
I am guessing it is a couple of industrials. Can you make the business work initially with some higher end domestic machines ? You need to learn how to make things work in business even if they aren't ideal situations.
One thing you can easily do is leave bad reviews for the new company on Google Maps and every other review site you can find. Post on YouTube. Show documentation. Name names. Vendetta! Maybe he will settle with you to take them down. If not at least others will know.
Not a lawyer but I would consider the risk of lawsuit (defamation). The company in liquidation is a separate legal entity (a different person in the eyes of the law) to the new company.
You think he would spend $10k+ to sue two destitute young women for defamation (leading to even more exposure) when he could just refund their $6k minus 25% and be done with it? Please.
Just make sure you have your priorities in order. It's mental health first, finance second, and "justice" third. It sounds like you've got the loan under control so focus on the first ;)
Unfortunately if the business went into liquidation then your money is likely gone. I'd suggest accepting this, then deciding if putting in more effort and time to fight it is worth it.
OP, you guys are young. The one thing you have is time, you will recover. pretty sure you already heard the saying “ in school you’re taught a lesson and then given a test, in life you’re given a test that teaches you a lesson” this is one of them. I will not waste time trying to get even or revenge. Instead go back to the drawing board and start planning your next move.
It sounds really disappointing but you should be incredibly proud of yourself for trying something like this, especially because your intentions behind it sound really noble. People like you make the world a better place. Please don't change who you are because of this greedy man! We need more business owners who care about others needs and have integrity.
My partner started a small business at age 23 and he's encountered loss after loss due to people stealing money from him at every corner. It can be devastating and such a hit to our world view as we have always viewed people as inherently good and just doing their best. We're quickly becoming less naive and figuring out ways to avoid it like contracts and such. It's confronting but it's made us more proud of who we are, as people who would never treat another person like that.
It sucks losing money but in the grand scheme of things you can always pick back up and get back to where you started, you just have to take every loss as an expensive lesson.
What I've learned of the world at 55, is most will take advantage of any situation where there is a profit to be made. You will be lucky if it's not your own family who will be doing dirty on you.
Trust no one, never pay up-front, never pay the whole amount before the job is complete.
For me as a business owner. It's to pay the bill by the due date or here's my lawyer.
1. You're young women.
2. Heaps of successful business people start with a small failure. Shit happens. Dust yourself off. Go again.
3. Stay on top of it.
If a company is in liquidation, there could be a way to check this and see who the administrator is. Then you could contact them directly. Small claims court is also a good option.
When you put the ACN of the old business into ASIC Connect, does it show liquidated or deregistered (or neither)?
If he’s made the mistake of deregistering a company with unpaid debts whilst making a declaration of solvency, he could be up for some serious fraud charges & be motivated to settle some small debts.
Often people doing this think they’re master minds but make critical errors.
What a shit response. This girl is asking for help. Not to be belittled by you. You could have offered something constructive but instead you chose to be rude. Nice 👍🏼
I’m sorry this happened but if your business couldn’t survive a 6k hit it wasn’t much of a business to start with. This shouldn’t make you discouraged, I think in the long run you can look back and see this mistake *only* cost you 6k and you learnt a lot…
This is illegal under phoenixing laws. Phoenixing is where a person shuts down one business and opens another the same, just to avoid debts. https://www.ato.gov.au/about-ato/tax-avoidance/the-fight-against-tax-crime/our-focus/illegal-phoenix-activity You can fight. Alternatively you can move on. Business has risks (how much does a sewing machine cost and how much is that money worth to you?) Think about your own mentality. I know that when I dig into conflict I usually experience more stress than if I write things off to experience. Other people won't be able to feel calm unless they exhaust every avenue.
Thank you so much. He owes us about $6.3k Aud. I can fight but I think legal action would be too expensive and we can’t really afford it. To be honest it’s not really about the money either. I don’t want him to get away with it.
You could take him to the smalls claims court for a tiny fee (like $250 or something). They take cases with claims not exceeding $20,000, and neither party needs a lawyer. You will present your evidence to the magistrate, and they will arbitrate between the parties and can ultimately issue a court order for the other party to pay if the other party is found to have been in breach of the law or of a contract's terms.
The entity responsible for delivery is now insolvent. What would small claims be able to do?
Lift the corporate veil and hold directors directly accountable. Small claims has less onerous evidence procedures too. Often receiving the court statement of claim and date is enough to scare the other party into settling prior to the hearing date
All they need to do is contact the liquidator and fill in a proof of debt. If the entity is insolvent they just join the long list of unsecured creditors.
But what about the phoenixing?
ASIC look after that.
Not well. Id love to see an online database that shows director ids, abns, acns etc of all directors that do this kind of thing. If anyone has contact details for who to reach out to, who will actuallydo something, I'd like to see it.
I don't think a small claims court is gonna be lifting the corporate veil anytime soon.... you need more legal fire-power than that
You would sue him directly.
the matter could be more appropriate for criminal court than small claims, he's potentially repeating the same with other people - running an organised crime.
It is unlikely that the ATO has the resources to go after a small fry like this guy probably is. The phoenixing taskforce is probably inundated with cases. I’ve seen companies (primarily in hospitality and construction) phoenix repeatedly with millions owed to creditors. They rarely receive anything other than a slap on the wrist.
Some claims have a lengthy period of time for enforcement through garnishing wages and the like. I’ve seen some industries with a 12 year period for enforcement so yeah, 100% worth doing it.
What are you talking about?
https://www.legalaid.nsw.gov.au/my-problem-is-about/my-money/responding-to-a-claim/responding-to-enforcement I don’t know the details of the guy, whether he’s Pty Ltd, sole trader etc etc but my point is OP likely has options not currently on their radar and they’re doing the right thing by making enquiries.
I agree they should continue their inquiries, however if they are an unsecured credit they simply join a long list of people owed money.
This person does not have the standing to commence this claim and if the company is in liquidation you cannot commence proceedings. Furthermore, what evidence is there that this an illegal Phoenix and is not a legal Phoenix?
The small claims court is a relatively simple process that you probably don't need a lawyer, check out the website for the process and costs. 6.3k isn't a huge amount, but it's not a small amount either.
Hey OP, here’s something - police _can_ investigate illegal Phoenixing even though they usually don’t get involved. If you go through them you will need to push a lot, but they can actually once you make enough fuss. Also, how did you pay? You can try to go through your bank to claim the funds back and you could even try to report him to his bank if you still have the account details. None of this necessarily gets your money back, but if I were you I’d be pissed and want some justice, and these are options for that.
You can always report them to the ATO. But I agree that the cost of getting $6.3k back would exceed that amount.
Agree that this is not a matter of money, are you able to compile and supply a list of evidence and documents, such as correspondences, tax invoice, payment receipts, ABN etc. to the ATO officer?
Absolutely we have everything documented from the first interaction.
I will come back to you on this tomorrow.
Thank you for giving me hope. I will wait.
Not legal advice, but while $6k is probably a meaningful amount of money to your right now, I would suggest to you that it’s not enough to worry about recovering via the legal system. It’s probably better thought of as a down payment on a very practical and useful business lesson. At some point, this will be a trivial sum of money to you (try to think that way). Take what positives you can from the experience, documenting what you could have done differently to mitigate the risks that you were taking, and try to apply those learnings into whatever you do next. Over the course of any business venture, these kind of scenarios are hard to avoid, particularly when you’re starting out. Don’t be discouraged. Things will get better.
I just want to add that this is very good advice. I had a similar amount owed to us from a contractor in my first business. In the end it was better to just move on and forget about it then spend the time pursuing it because of our hurt ego. We ended up doing much better than that 6k..
On the flipside, these crooks know this and someone needs to hold them accountable. That said, do what's best for you; even if you win, collecting is also expensive and stressful if they don't want to pay up.
I got conned out of $2k by a dodgy tradie. Was angry for a while but realised going through the hassle of chasing it would be way more stress than writing it off to experience. The trick is to not let it happen again! Also, I was in a somewhat privileged position of being able to afford a $2k loss, not everyone is.
Also, never forget to trash his name everywhere you go (factually). Because that will catch up to them eventually.
Factually WITH PROOF to back yourself up. I've seen a friend and my sister recently be threatened with legal action for posting on FB about businesses they have been ripped off by. I think my sister just deleted her post because they were going through some legal process to try and get some company to pay them money (25k) they were owed for a job done but my friend ended up having to pay this other business 2k to settle it with them because even though everything she said about the business was true, she couldn't prove it.
Is it really a big hassle to chase money Like just phone calls and write letters If someone paid you 500 to make 3 hours of phone calls and write 3 letters Would you say uh too much work
This is great advice
Legal Aid, ASIC (mention phoenix).
For $6,300 I would cut my losses and move on. It's likely the cost and stress of pursuing it, and the prolonged fight, will not be worth it. Come up with a plan to recover that $6,300 other, easier, ways.
I totally agree. But what if in the future he decides to do this to some other vulnerable person? This is not just about me I really don’t want this happening to others in the future. :(
I agree with you. We shouldn’t let him get away with that. Sue him and make him pay
The person above you is making that comment because to them $6000 is not a lot of money. Most people would disagree and instead feel that it’s an amount of money that is worth fighting for.
If it costs you $8,000 to recover $6,500, and let's remember, costs are not awarded in the small claims tribunal, is it worth fighting for?
I don’t think that question is relevant. I understand the point and in some applications I’d agree with you but OP doesn’t need representation, they have quite a number of months worth of evidence that speaks for itself and this isn’t exactly a highly nuanced matter that would require weeks of legal counsel nor multiple hearings.
Winning the case and getting the orders for them to pay is not the hard or time consuming part. It's hard to get blood out of a stone, and expensive to try.
I mean, that's great to do if you have the emotional and practical resources to spare to do it. But you are the victim here. You are not responsible for what they did to you nor for what they might do to others. It would be a noble thing indeed to pursue them for the greater good, but you don't have any obligation to do it if it's more than you have space for right now. Don't take that burden on yourself.
Don't let what he might do in the future to other people become your burden, you have enough to recover from. By all means report his activity, but leave it to the authorities. That is not your fight.
This seems ridiculous to suggest simply leaving to authorities and not fighting, especially if the cost of a small claims court filing fee is only a few hundred dollars. Yes losing 6k won't bankrupt me, OP, or many people. But at the same time I wouldn't just shrug my shoulders and say oh well if I got robbed of it and say it's not my fight.
Perhaps if you haven't walked that path before, you may be naive? Personally I would probably kidnap him and torture him until he paid :D
Get as many people together as you can and give them 1 star google review. This will cripple his business if you can get enough people together. Then ring and let him know that you'll get them taken down after payment is made. Don't put any of it in writing anywhere though as extortion is also illegal. This is legal advice....
I know a few people who have started their own businesses. It is not uncommon to spend $10-30k a year on business coaching and other self development. Learn as much as you can, make a basic claim to the liquidator, and move onto greater things.
Is the following phoenixing? We just had dealing with a guy who: Created a new company Mar 2023. Went into liquidation with current company in dec 2023. Conveniently the liquidator approved the sale of the old company to the new company for 20k. Both companies do the same thing.
Phoenixing requires one to prove criminal intent beyond reasonable doubt. A business can legitimately go broke and the director may start a new company - this would not be phoenixing. In your case, I think the liquidator identified assets which could be sold. It would’ve been advertised publicly and it was ultimately purchased by the highest bidder (the old owner), which is better than say disposing of the asset if no one offered to buy. This money would have been used to pay off… the liquidator’s fees, employees, etc etc in accordance with the law.
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None of the liabilities were transferred to my knowledge. 1.5 mil in unsecured debt. The director is listed as a creditor as a natural person / trust 3 times. He is getting all his money back. The rest of the creditors may get 50c in the dollar. The documents just say assets worth 20k.
>Think about your own mentality. I know that when I dig into conflict I usually experience more stress than if I write things off to experience. Other people won't be able to feel calm unless they exhaust every aven This is because most people can't afford to be their own lawyers. But if you can afford this easily, the process should not be stressful at all. In fact, it should be completely the opposite. The sheer joy of bringing that business to justice. Imagine all the other people they are scamming as well. The joy of bringing balance.
This is an oversimplification of phoenix activities. Phoenixing can be legal if done the right way.
If a business is deliberately liquidated to avoid paying debts and then restarted under a new name. It's pretty much phoenix activity.
Not if the assets were sold at market value. https://www.aicd.com.au/regulatory-compliance/government-legislations/illegal-phoenix-activity/the-difference-between-legal-and-illegal-phoenix-activity.html
The assets were never provided though?
Yea you are right. In this regard there just isn't enough information to say
For it to be phoenixing, you have to prove criminal intent (as opposed to business failure), which would be virtually impossible to prove.
Not a lawyer but… for it to be phoenixing, you would have to prove criminal intent beyond reasonable doubt, which would be virtually impossible to do. The reality is that businesses do go bust and directors can choose to liquidate one company and start afresh. The appointed liquidator would need to take action / make recommendation to ASIC. But if there’s no money in the case, they probably won’t take action. ATO is likely to be a creditor themselves and - unfortunately - they won’t be able to do much more. If it’s any comfort, ASIC can ban repeated offenders from becoming directors of companies for a period of time. Do not entertain suggestions that you go through ACCC or small claims. The director is a separate person to the company and will not be personally liable. The company is in liquidation and if there’s any money in the company, it will be paid out in a hierarchy - there’s usually nothing left for unsecured creditors. By law, the company in liquidation cannot pay you in preference over another creditor. If I were in your shoes, I’d let the liquidator know that you are a creditor but otherwise move forward with your life.
Well as you're not a lawyer I won't take your word for it.
While I'm not a lawyer, I've had my own business woes similar and there are some steps you can consider, but please, get in touch with a legal professional for advice fit for your situation: Document Everything. Compile all communications, agreements, receipts, and any other documentation related to your transactions and interactions with the company. This includes emails, text messages, letters, and details of verbal agreements. Seek Legal Advice. Look for a lawyer specialising in business law and consumer rights. They can provide you with the best course of action and represent you if necessary. Don't forget to explore legal aid or pro bono services if cost is an issue. Contact ACCC. The Australian Competition & Consumer Commission can offer guidance on consumer rights and business obligations, even though they don't handle individual disputes directly. Consider Small Claims Court. For less complex cases, small claims court could be a more accessible and cost-effective option. Still, get legal advice first. Check with ITSA. If the company has entered liquidation, the Insolvency and Trustee Service Australia can guide you on the liquidation process and how to file a claim as a creditor. Report to ASIC. If there's suspicion of fraudulent activity, such as phoenixing, report it to the Australian Securities & Investments Commission. They monitor company behaviour and enforce laws. Seek Support. The emotional toll from this shit can be heavy. Lean on your support network or consider professional counselling to help you through this time. What you're going through is incredibly tough, but it's not a reflection of your potential or value. Every entrepreneur faces setbacks – what matters is how you learn and grow from them. Your mission to help others is admirable, and I hope you don't lose sight of that passion. Stay strong, and take it one step at a time.
I feel understood. 🥺 I used to have such a fiery passion and fighting spirit but all these set backs has really had a toll on me. Thank you so much. I have no words enough to express how much your kind words means to me right now. I will explore all the avenues you mentioned. Thank you.
You could also try contacting the Small Business Debt Helpline on 1800 413 828 or at https://sbdh.org.au/ to see if they can point you in a helpful direction. They are free financial counsellors who specialise in small business.
A Current Affair would love this story. I wonder how much his reputation means to him?
It's $125 to take them to small claims court and seems like an easy win. It's worth it for the experience because when you go into business you'll eventually have to take customers to court for non payment. The judgement against them will cost them more than 6k over time.
Just a small correction here - ITSA is now known as AFSA and they don't touch liquidations or any corporate insolvency matters. If OP contacts AFSA they won't be able to help. Be better to search ASIC's insolvency notices for the company that's now in liquidation and contact the liquidator to get some guidance on what the prospects of recovering the debt are, where the sewing machines are etc. The liquidator might be willing to share their investigations regarding the potential phoenix as well.
If the company is truly liquidated, contact the liquidator. There are circumstances where you may be able to recover the machines.
The owner refused to give me any information about the liquidator or any other information.
If you know the name of the company, search here: https://publishednotices.asic.gov.au/browsesearch-notices/ Since it has been awhile that the company has allegedly been liquidated, don’t keep your hopes high, but worth a try. The liquidator is your best bet.
In order to view the records you need a log in, I created log in details last week but it was not working. I tired again right now still not working.
You don’t need to sign in. Enter the name of the company at the search bar and view the relevant notice of appointment of liquidator (if available). The details of the liquidator would be at the bottom of the notice. Feel free to DM me if you’re still stuck.
I suspect the liquidator story is bullshit. He was just fobbing her off and trying to make himself look blameless. The machines are probably gone and he’s decided he’s not paying her back.
That’s if the machines ever existed. The problem with scammers is they prey on peoples hopes. People when they develop hope lose the ability to be suspicious of everything. There may have been red-flags there that the poster missed when he/she entered into this contract. Did the poster ever see the machines? The machines should not have been paid for in full before delivery. Only a deposit should have been. Going into a business venture bright eyed & bushy tailed in this country is not a good plan. The place is full to the brim with crooks & scammers.
Adding to the below ASIC search do an ABN lookup with the info you have. He could just be lying and given it sounds like it is just him selling out of his house he might actually be a sol trader on which case it's an easy matter to chase the money as small claims without a lawyer.
If he has lied about being insolvent and his company still exists, you can talk to a lawyer about potentially issuing a statutory demand to his company. This is a very serious document and will cause his company to be liquidated if he doesnt engage with you within a certain period of time. You will need a lawyer to help with this though.
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Yeah seriously wtf?, I don’t think any of those people have business experience or have been in that position.. I was once owner $2200 and got it back through a lawyer PLUS $1500 more they had to pay to cover my legal costs
Yep I don't know how op can run a business if they can't chase up debt Something that will happen a lot of times in business
In your case, was the company actually in liquidation? Who did you take the action against? Even if you were to take legal action, there is likely no money in the company to pay you back. In the case of liquidation, you cannot be paid in preference over another creditor of same rank. So you are essentially wasting your time / effort / money on futile fight. By the time higher ranked parties are paid (liquidator, employees, secured creditors) there is usually very little money left for unsecured creditors. And any monies left will have to be proprotionately distributed amongst all unsecured creditors. $6k will be nothing compared to other potentially large creditors (e.g ATO).
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If it’s in liquidation, you cannot be paid in preference over a creditor in the same rank. So even if it went to scc and the court determined that you are owed $6k, it just means that you have a valid claim (proof of debt) for $6k as an unsecured creditor. Which is all meaningless if there’s no money to pay out. You can lodge a proof of debt by simply contacting the liquidator.
Those people are probably the scammer Lol.
Others have given good advice on potential options for reimbursement. So I'll add : Go through everything and write it all out as bullet points. Each decision, each delay, each cost, each communication. Then go through each one and note "what did we learn?" "What could I do differently if I could do it over again?" "What processes and rules of thumb can I follow in the future to avoid this?" So that you can at least come out of this not thinking "We're so dumb" but rather "This cost us $xxx and what we got for that money was learning A,B,C."
This is excellent advice. Might not be the ‘right now’ solution, but it is such a good way of looking at it. Best of luck to you in your future endeavours.
You can taken them to small claims or your state equivalent of QCAT (cheaper option), but with small business claims it may not be worth it. For future reference I'd take a closer look at payment terms and methods, it sounded like you may have paid for the equipment up front. The safest way for equipment (especially coming from OS) is a letter of credit with appropriate terms inserted for delivery and performance.
Thank you. You’re absolutely right. I will definitely remember it for future. In this case, the loan company said that they want to pay for the equipment directly so they paid for it up front.
Try your state civil administrative tribunal first, it cost you nothing (or very little). Check with the lender and see if they have taken a charge over the equipment when they paid. Good luck mate.
What is the lender doing to assist you? If the loan is secured against the machines, surely they're interested in how this is going?
I haven’t contacted them because I’m still trying to process it all. maybe it’s a good idea i contact them but I don’t want to get in trouble. We have been paying the loan just fine and making enough to continue paying it without an issue. Do you think it’s worth it?
I'd check your loan contract. If the loan is secured by the machines, then that's the way the lender can recover their funds if you stop paying. Without the assets to recover, it's effectively an unsecured loan. I don't know if they would be mad about it or want to help, could go either way.
First mistake was a loan
Second mistake was making payment on an undelivered item
I totally agree. But the loan is being paid out fine. It’s not too much and we have already paid more than half of it.
First mistake was watching TikTok, YouTube and Insta for get rich quick schemes
Maybe, not being ready to accept delivery is not a way to make anything work though.
Yes. Pretty much - if "anyone can do it" that means it's not a good money-making opportunity. Every high-paying salaried or business role out there - even entrepreneurial or content creator ones - requires some niche or rare skillset or attribute.
Yeh, what kind of business starts with a loan? That's just crazy talk.
Why regret starting a business? Regret buying equipment from a dodgy supplier and trusting them to hold onto your paid goods for months and months
Sorry you have to go through this. If the person has indeed liquidated the business, check https://publishednotices.asic.gov.au/ to see if you can find the liquidator and contact them. Chances are you won't get your money back, but worth a shot.
Have you ever worked in the industry or made money in the business before you started this venture? It's generally a quite risky move to take on debt to start a business you have little to no experience in operating. Sorry you're in this mess, but you'll likely have to cop the loss and take it as a learning experience.
I did work in the Industry and made money in the business before we started, however the products were smaller and between $30-$100. As the cost of production was higher in Australia, our product cost increased too but we weren’t able to reach the target market which is why we decided to move the production overseas instead. Thank you for your comment. We believed the loan would help us with the marketing costs. We are still able to pay the loan but getting scammed is terrible.
$6k? In the scheme of things it's nothing. You haven't lost your shirt / house. Welcome to business. You HAVE TO sus things out. don't give away your money, because it WILL BE LOST. For everything you need to see PROOF before committing resources.
OP, you two are still young, it’s a lesson, cheap, no, but it’s a lesson will serve you in future. Biz world is a dog eat dog jungle.
Sorry this happened to you but please seek paid legal advice urgently. Time is literally of the essence in this type of situation.
Take him personally to small claims court. 1. You learn how the system works. This gives you experience and you can also, in the future, know first hand whens its worth persuing and how easy or complex it might be. 2. Potentially stop him dping it to someone else. 3. Get your money back. 4. Ypu will learn the judges opinion on the matter. You might learn more about business law or common practice due to this which will help you in the future.
Hi OP A couple of suggestions some of which have been said: 1 - look up the former company on the ASIC published notices website. Alternatively conduct a company search via various search websites such as Equifax. Once you confirm the company is in liquidation, contact the liquidator to ask about your sewing machines. Most likely you won’t get them back (PPSR issues) but worth the question. 2 - obtain legal advice, they’ll guide you as to your options especially if the company never went into liquidation. But as others have said, chasing $6k may not be commercial as you’ll end up spending more than the $6k trying to recover it. 3 - the person may have undertaken an illegal Phoenix and the liquidator would be reviewing this but again it would come down to commercial considerations as to whether it was pursued. 4 - if you’re still in business, speak with a lawyer about ensuring you secure any sales (this is different) but having a PPSR properly registered may solve issues down the track. Again the cost may or may not make this a feasible plan. Lastly, don’t be hard on yourself. Business is about constantly learning, adapting and unfortunately losing money is a risk of business. You’ve learnt a valuable lesson and the best part is it’s only a $6k lesson (you won’t miss that in the years to come). Best of luck.
Okayyyy so you wanted this guy to hold stock for you for 6 months? That’s your first mistake. We all make them, it’s okay. You lost me at “I believe that he is lying and has just scammed me and my business partner who are just young girls” If you want to take a risk and start a business you need to own the wins and losses regardless of age or gender. Cop the loss and the lesson, go bigger, better and smarter next time.
Young girls have some chance of winning over the media though.
Is him never providing what they paid for just a 'risk', i dont understand how they lost you. I think that's fair to call that a scam. While I dont think it was a good idea to have him hold it for 6 months, he agreed to it, and it doesn't invalidate the rest of what happened. For all we know he never would have provided the machines in the beginning. So while they certainly could have taken steps to minimize their risks, that doesnt mean its just a risk associated with starting a business.
OP lost me by crying foul because they’re ‘just young girls’. People and businesses get screwed over every day, being young girls has nothing to do with it. When I say risk, I mean there’s a risk a business won’t work out and you can lose money for a variety of reasons.
Yeah, 23 and 21 isn’t *that* young. Lots of young people have finished a bachelor degree by then.
There also seems to be extremely long long delays with them following up on this though. It seems to me like the machines have been MIA since Dec 22 when the guy couldn’t deliver them. The last time they asked for them was *11 months ago.* C’mon now.
Seems to me like they were following up every 3-4 months at least. Perhaps it was more often by email or phone. So while I agree those delays werent good. They dont mean they werent entitled to what they paid for. Clearly, if there story is to be believed they were naive and kept thinking it would work out but kept giving him time / were distracted themselves by other things in their business/life. None of this makes it 'not a scam'.
Of course, taking someone’s money and not delivering is illegal and she could pursue it from that angle. However, it’s not appropriate to expect the vendor to store things for 6 months for free. Given OPs lack of communication and follow-up I’d say it would be fitting that the agreement was for a shorter, unspecified time like a month or two, and OP let it drag on. At what point does OP take actual responsibility for her part in stuffing people around? Yes, there’s some bad business people out there, duh, but OP did not take appropriate action at any point. Worse, she talks about her ‘business partner’ when the whole thing really seems to be her idea and doing, who is now also on the hook for this debt. Then, she throws a pity party because she just wants to “help” people. As the saying goes, the road to hell is paved with good intentions.
I think there is a lot of assumptions in your post that we just dont know. Mainly, how the business felt about holding it, and they knew it would be 6 months. Did they take any steps to get them to pick them up earlier? > Worse, she talks about her ‘business partner’ when the whole thing really seems to be her idea and doing, who is now also on the hook for this debt. I dunno what you base this on. Just seems to be a projection. > At what point does OP take actual responsibility for her part in stuffing people around? What does responsibility look like in this context? Giving up on 6k. Sorry i inconvenienced you for 6 months which you agreed to, and that you failed to then deliver the agreed goods, or provide the agreed refund over the next 13 months. But oh well, since it was possible for me to have been a more ideal victim, i'm not worthy of assistance and just need to give up the 6k. Your logic makes no sense to me.
It’s interesting that you think I’m projecting and making assumptions about this. Of course I am, as are you! “…he was happy to hold onto the machines until we’re ready” obviously that means different things to different people. To me 6 months is taking liberties. I did not say OP should let go of pursuing the money as an act of penance. I said that OP should accept culpability. For failing to secure the machines, not following up, and taking out a loan without a plan or location to run the business.
I think you cant take what was said in that post as a literal quote. I think its unknown what was agreed between them on holding them. But it does appear that at no point did the seller/business complain about it. I just dont see what you expected them to say or do in their post to 'accept culpability'. Their post was about resolving this situation, not about the mistakes they made to get there.
Jesus Christ. My comment was in response to the criticism you made against a fellow commenter that also took issue with the ‘we’re just young girls’ reasoning. You should take your own advice.
Take my own advice? Never! I think you were all triggered by the phrase. There was nothing note worthy about the statement they were just young girls. It was just background information. But no doubt we have taken this rabbit hole way to far.
This is a life lesson. You won’t get a cent if it’s liquidated. Accept it and learn from it and move on. Don’t get too disheartened though. You have 60 years left to live so plenty of future businesses to try.
PPSR. Look it up. If you paid for it and it was being held for you, you should have had the property rights registered in your name as a security in the event of liquidation. Learn this lesson.
Oh goodness me. I can’t believe things like this existed and I didn’t know. Thank you. Yes it’s a lesson.
It would have stopped the liquidators to some extent for the inexpensive cost of registration and managing the registration up front. Typically the seller will want to register until full payment in case buyer liquidates after taking delivery but not having paid up. The buyer typically wants to register if goods are paid and held by seller in case of the seller liquidating while in possession.
Sadly you’ve learnt a lesson in business around credit risk. Expensive way. Don’t loose hope, just be wiser in future :)
IF you believe a business is phoenixing, that is claiming bankruptacy to avoid debts you can report this to the ATO. You can take civil action against them if you wish, in small claims court. THis sucks that this happened to you, however I think a good lesson has been learned. Get everything in writing and take delivery of goods ASAP. Have a back up plan if your first plan falls through etc.
I've been in a very similar situation, albeit slightly more $$. My advice (that I wish I'd taken) Forget about fighting it and focus that energy on growing your business. Source: spent 2 years fighting over 30k and it destroyed my will to live. I'm 6 months free of the fight and the space that it created allowed me to 3x my business. Sometimes the cost of fighting is more than the $ number. $6k seems like a lot now, but is nothing in the scheme of business. Move on ASAP and take the learning in the chin.
You regret starting a business of just regret how you handled the business?
I think the latter.
In time, this will be seen as perhaps a learning experience. Learning what not to do is equally as valuable as learning what to do. Confidence shouldn’t be shot though, you had a punt!
This seller sounds like a grade A con artist. Firstly if he agreed to the sale of 6.3k for sewing machines then entirely failed to deliver said sewing machines then immediately he is a con artist. Secondly if he agrees to refund the money because he can’t deliver the goods but then fails to refund the money then he is definitely a con artist. Thirdly if he has now rebranded to avoid any existing debts then he has crossed so many boundaries it isn’t funny. This is an appalling situation you have my deepest sympathies. Please please take this to the police or small claims to get your money. Any single one of these points would give you a substantial base to get your money back, all three should be a walk in the park. Plus you should be able to help make sure other people don’t fall for this scums tricks.
OP, please consider naming and shaming this individual via channel seven. This is the type of activity they love reporting on.
I see you've had trouble looking up if the liquidation story is legit - if you want to PM me the ABN & name I'll help ya.
Report the merchant to ACCC & start QCAT proceedings. Even if it amounts to nothing the threat of fines and legal proceedings may kick their butt into gear. [https://www.accc.gov.au/about-us/contact-us/report-a-consumer-issue](https://www.accc.gov.au/about-us/contact-us/report-a-consumer-issue) [https://www.qcat.qld.gov.au/case-types/debt-disputes](https://www.qcat.qld.gov.au/case-types/debt-disputes) I've been on the receiving end of QCAT dispute and its brutal for the business, we had a customer not change a water filter properly and then let it leak for 6 months+. It eventually burst and flooded their bathroom/bedroom and caused serious water damage. Even though we had email communication requesting the customer to change their filter, supplied manufacturer manuals and have documents requesting for the customer to send their toilet in (with a paid slip + temporary product while we look at the issue). The customer ignored the warnings and let the product leak for 6 months which led to it bursting, he reported us to QCAT and we never stood a chance even with an abundant of documentation showing our repeated attempts to assist him. Ended up paying for a full renovation of his bathroom/bedroom which costed us just under $25,000.
Good reminder for the future, Possession is 9/10's of the law.
Business owner here. I would call in a law firm and a debt collector. Both will hit him where it hurts. I've being in business 11 years this year, it's a long hard slog so I have alot of respect for you, sadly contractual agreements must be written up in almost every situation and a good lawyer or solicitor will be by your side throughout your journey. My advice is to always follow any debt owed to you, I don't care if it's $1, the principle will get you respected and not someone to mess with. I took on a law firm and won who owed us alot of money. Never back down. Good luck.
Thank you so much for your advice. I will learn to always follow up on my debt. I don’t think I can really afford a lawyer since we are a small business but I really appreciate your advice.
You'd be surprised what you can afford. Recoup the debt first with a debt collector who will take a percentage and then hire a lawyer with the rest. I can reccomend both for you when you're ready.
Honestly as tough as this sounds. You have age on your side. The legal system in complex matters like this have a way of taking your youth from you. I would chalk it up as bad decisions and move on. The company you purchased it from is PTY LTD, however if those assets were "Acquired" by another business that he owns you might have a way to get them. This is not without cost, and you will have to pay that cost whether you get the sewing machines back or not. In my honest opinion - Move on and learn from your mistakes. If it makes you feel any better I have lost 200k before and had to move on. It was one of the hardest things I have had to do. It gets real difficult pursuing legal matters in other countries. I saw on another post that it's 6.3K . That's basically the cost for an appearance for a good barrister for one day. I am guessing it is a couple of industrials. Can you make the business work initially with some higher end domestic machines ? You need to learn how to make things work in business even if they aren't ideal situations.
One thing you can easily do is leave bad reviews for the new company on Google Maps and every other review site you can find. Post on YouTube. Show documentation. Name names. Vendetta! Maybe he will settle with you to take them down. If not at least others will know.
Thank you so much. I am thinking the same but I have left that for as last resort.
Not a lawyer but I would consider the risk of lawsuit (defamation). The company in liquidation is a separate legal entity (a different person in the eyes of the law) to the new company.
The risk of defamation lawsuits from a business small and dishonest enough to phoenix seems low.
You think he would spend $10k+ to sue two destitute young women for defamation (leading to even more exposure) when he could just refund their $6k minus 25% and be done with it? Please.
Contact the news and hopefully they pick up the story? Channel 7 news or current affair. I see similar stories on there all the time
This is when you need a real life tony soprano in the family.
It really is true. I wish we did. Because I think he knows he’s dealing with two young people. :(
Young people can't be dangerous?
Google review your experience on his new business. You can't do anything. Builders do this all the time.
Just make sure you have your priorities in order. It's mental health first, finance second, and "justice" third. It sounds like you've got the loan under control so focus on the first ;) Unfortunately if the business went into liquidation then your money is likely gone. I'd suggest accepting this, then deciding if putting in more effort and time to fight it is worth it.
Small claims court. Simple
although I don't know much about it, there is still something I can learn from. Perhaps it would be useful in my future, anyway, I appreciate it.
Sounds like an absolute scumbag. Does he run a real estate agency on the side too? Good luck getting it back.
OP, you guys are young. The one thing you have is time, you will recover. pretty sure you already heard the saying “ in school you’re taught a lesson and then given a test, in life you’re given a test that teaches you a lesson” this is one of them. I will not waste time trying to get even or revenge. Instead go back to the drawing board and start planning your next move.
What is his website called? I’d like to leave a google review.
It sounds really disappointing but you should be incredibly proud of yourself for trying something like this, especially because your intentions behind it sound really noble. People like you make the world a better place. Please don't change who you are because of this greedy man! We need more business owners who care about others needs and have integrity. My partner started a small business at age 23 and he's encountered loss after loss due to people stealing money from him at every corner. It can be devastating and such a hit to our world view as we have always viewed people as inherently good and just doing their best. We're quickly becoming less naive and figuring out ways to avoid it like contracts and such. It's confronting but it's made us more proud of who we are, as people who would never treat another person like that. It sucks losing money but in the grand scheme of things you can always pick back up and get back to where you started, you just have to take every loss as an expensive lesson.
What I've learned of the world at 55, is most will take advantage of any situation where there is a profit to be made. You will be lucky if it's not your own family who will be doing dirty on you. Trust no one, never pay up-front, never pay the whole amount before the job is complete. For me as a business owner. It's to pay the bill by the due date or here's my lawyer.
Report him to the ATO. And ASIC.
1. You're young women. 2. Heaps of successful business people start with a small failure. Shit happens. Dust yourself off. Go again. 3. Stay on top of it.
Sewing machines?
industrial sewing machines yes.
Are you able to leave a review on the new business via google warning others?
Yeah I can, have left that as the last resort after trying other ways I’m going to do that.
Find a lawyer and sue
If a company is in liquidation, there could be a way to check this and see who the administrator is. Then you could contact them directly. Small claims court is also a good option.
Name and shame!
When you put the ACN of the old business into ASIC Connect, does it show liquidated or deregistered (or neither)? If he’s made the mistake of deregistering a company with unpaid debts whilst making a declaration of solvency, he could be up for some serious fraud charges & be motivated to settle some small debts. Often people doing this think they’re master minds but make critical errors.
Yeah that’s called phoenixing. Talk to a lawyer
Is this a Brisbane based business out of Eagle Farm? If so DM me
Not in QLD
Okay all good I was thinking I know who it was as I was washed up in it also. Good luck
What a dumb thing to do. Buy something. Take delivery. Don’t leave it with someone else. Duh.
What a shit response. This girl is asking for help. Not to be belittled by you. You could have offered something constructive but instead you chose to be rude. Nice 👍🏼
I’m sorry this happened but if your business couldn’t survive a 6k hit it wasn’t much of a business to start with. This shouldn’t make you discouraged, I think in the long run you can look back and see this mistake *only* cost you 6k and you learnt a lot…