Sinenhlanhla Masilela | Published 1 hour ago
The joint liquidators of collapsed property development group Novabuild have launched a sweeping legal action in the Western Cape High Court, seeking to hold former directors David Peter Bunce and Jason Anthony Bailey personally liable for more than R76.6 million in debts allegedly incurred through years of reckless and fraudulent trading.
According to particulars of claim filed in the Western Cape Division of the High Cour, the liquidators allege that Bunce and Bailey knowingly conducted Novabuild's affairs in a manner that prejudiced creditors and benefitted associated entities and family trusts.
Novabuild, founded in 1994, operated as a property development, financing and holding company and managed a number of residential and commercial development entities. The company ceased operations around 2022, was placed under provisional liquidation in August 2024 and entered final liquidation in October 2024.
The plaintiffs, acting as liquidators of Novabuild, allege that the company had been insolvent since at least 2016 but continued trading despite its deteriorating financial position.
Allegations of false financial reporting
The claim alleges that audited financial statements ceased after the 2016 financial year and that subsequent records were incomplete, unsigned and unaudited.
Among the most serious allegations are claims that parallel accounting systems were maintained. The liquidators allege that Pastel software reflected the company's actual financial position, while CaseWare-generated statements allegedly presented a more favourable picture to banks and lenders.
Court papers further allege that Novabuild's financial position was misrepresented to financiers including Standard Bank, Nedbank, Chrysalis Capital and the South African Revenue Service.
Claims of reckless trading
The liquidators contend that Novabuild continued to obtain funding and extend loans to insolvent subsidiaries and related entities while knowing that repayment was unlikely.
The claim states that loans were advanced to entities such as Copper Moon Trading 215, Pearldale Property Developers and Novabuild 1, despite those companies allegedly being commercially insolvent.
The directors are accused of failing to impair these loans and continuing to record them as assets, thereby creating what the liquidators describe as an "illusion" of solvency.
Allegations of personal benefits
The court papers also contain allegations that company funds were used to pay personal expenses for family members.
The liquidators allege that between 2014 and 2023, approximately R3.67 million was paid to or on behalf of Christine Maria Bunce, wife of David Bunce, despite her not being employed by the company. These payments allegedly included salary, vehicle expenses, petrol and domestic staff costs.
In a separate allegation, Novabuild 1 is said to have paid approximately R4.78 million to or for the benefit of Candice Nicole Bailey, wife of Jason Bailey, while relying on loans from Novabuild itself.
The liquidators further allege that company funds were used to service personal bond obligations and finance expenses connected to private properties.
Property discounts and related transactions
The action also focuses on transactions involving developments including The Sentinel and The Chesterfield.
According to the particulars of claim, certain residential units were sold to related parties at prices below market value, allegedly depriving Novabuild and its subsidiaries of millions of rand in revenue. In the case of The Sentinel development, the liquidators estimate losses exceeding R5.1 million arising from discounted sales.
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