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Bungling bureaucrats blamed for collapse of Oadby building firm Hallam Contracts


Bungling bureaucrats have been blamed for the closure of a well-known building firm with the loss of more than 100 jobs.

Specialist accountants looking into what led to the collapse of Hallam Contracts said the Oadby company had a strong order book when it was forced into administration in November.

Accountants Begbies Traynor's report revealed a key document which could have stopped the company from going under had lain unread at a court for up to three weeks.

Meanwhile, the company was ruled by the court to be a bad debtor.

This in turn sparked a spiral of legal proceedings which resulted in the 90-year-old firm closing while owing £4 million to about 300 suppliers and subcontractors.

These creditors are likely to only get back between a quarter and half of what they are owed.

Harborough MP Edward Garnier, whose constituency covers Oadby, yesterday accused county court officials of "maladministration".

In a report into what led to Hallam's collapse, Begbies Traynor said Hallam was unable to defend itself against court proceedings brought by a creditor who was owed about £17,000 because "a backlog of three weeks unopened mail" at the court meant key documents had not been available at the hearing.

The Begbies statement said: "The defence documents which set out that Hallam would contest the jurisdiction of the court in this matter were submitted to the court by the company's legal advisers.

"Although acknowledged as received by the court, these documents were not put before the court because, as it later transpired, the court had a backlog of three weeks unopened mail.

"Consequently, in the absence of court documentation, judgement was awarded against the company."

This set off a chain of events which drove the company into administration and the loss of 117 jobs, Begbies said.

The circumstances which led to Hallam's demise were outlined in documents made public by Companies' House yesterday.

Begbies, which also claimed the £17,000 owed to the creditor was "not technically due for payment", has not named the creditor in question.

It also did not name the location of the county court, although court officials have said it was not Leicester.

Begbies said another supplier submitted a winding-up petition against Hallam, demanding it pay it back more than £500,000 it was owed.

This, along with other financial issues, left Hallam's directors, including managing director John Hallam, with no alternative but to agree to put the company into administration.

Mr Garnier said he would be speaking to officials overseeing the county court system to find out how the backlog of paperwork was allowed.

He said: "Although the demise of the company cannot be blamed on the creditors, who were entitled to recover their debts, it does seem that a whole set of circumstances, and not least maladministration at the county court, has caused a respected local construction company to go under with the loss of 117 jobs."

Alan Savill is managing director of Sanctuary Secure, of Market Harborough, which supplied security guards to Hallam building sites and is owed a five-figure sum. He said he was surprised by the administrators' report.

Hallam had been working on 15 building projects in the East Midlands at the time of its demise, including a new headquarters for Hinckley and Bosworth Borough Council in Hinckley.

HM Courts and Tribunal Service, the Government agency which oversees county courts, said there was no central register of county court proceedings.

A spokeswoman said that a request for a comment by the Mercury yesterday afternoon did not give them long enough to look into the matter properly and respond.

Bungling bureaucrats blamed for collapse of Oadby building firm Hallam Contracts

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