Getting Scalier: David A. Collard's creditors, lawsuits, now a thing of Scale

When Deputy Prime Minister Richard Marles described David A. Collard as a “force of nature…innately entrepreneurial…values driven”, he at least got part of it right. As Collard's mounting retinue of creditors would see it, he is certainly a force of nature.

Same goes for Peter Dutton. The Opposition Leader labelled the former PwC partner "a superman" with “the ability to see around corners and over the horizon.” Surely, he is a superman of not paying his bills. 

Collard is the chief executive of Scale Facilitation and Scale's landlord is taking legal action against the company over unpaid rent on its 88th floor office at the World Trade Center in New York, Open Politics can reveal. 

A petition lodged with the New York State Civil Supreme Court on 28 June by Hyperscience, a sublandlord of the 88^th floor, alleges Scale Facilitation Partners LLC is in rental arrears of US$455,518 (A$696,924) and has refused to vacate the premises.

Scale only took possession of the floor in February this year, adding to their existing lease of the entire 82^nd floor, and on 9 May Hyperscience issued their subtenant with a default notice for “defaulting on their monetary obligations”.

Scale didn’t respond to the notice and nor to the subsequent Notice of Cancellation and requirement to move out of the premises, forcing Hyperscience to commence legal action the following month.

The $455,518 in alleged arrears comprises non-payment of rent in May and June 2023, at the monthly rate of $200,561, a cleaning charge of $8,778, and various water, electricity, and security charges.

Not the only legal action

These revelations come the same day The Australian revealed Scale’s CEO David Collard is being pursued in the courts by his landlord for not paying the rent on his luxury Central Park condominium at 157 West 57^th Street.

According to a summons and complaint filed with the New York Supreme Court on 7 July by plaintiffs Yiqian and Sichao Liu, Collard’s company 3C USA LLC (Sanitex Global) has not paid the US$75,000 (A$114,607) monthly rent since 1 May and owes at least US$150,000 to the Lius up until 30 June.

The complaint states Collard is personally liable for Sanitex’s rental arrears as he provided a written guarantee that the company would meet its rental obligations, which would now be around A$343,086 unless he has vacated the flat.

Broke?

Surely the end is nigh for Collard and Scale Facilitation.

In addition to rental arrears, Scale and subsidiary companies can’t pay staff and creditors in Australia and the United States (leading to people leaving in droves), has missed the final payment to purchase collapsed lithium battery startup Britishvolt, and has been raided by the AFP over an alleged $150 million tax fraud.

It’s difficult to see a way back.

ITV News Tyne Tees evening news 4 August 2023 on Scale's default on Britishvolt purchase. Open Politics was interviewed for the segment.

Questions for Deputy Prime Minister and Opposition Leader

Deputy Prime Minister Richard Marles probably regrets feting Collard at the opening of Scale’s New York office in December 2022 and noting excitedly that Scale says "everything about the power of the human spirit and what people can do." Yeah, nah.

Peter Dutton too, who was flown to the shindig at company expense. If Collard could see around corners and over the horizon, as Dutton claimed, how come he didn't see the AFP coming?

While Marles and Dutton were not to know about Scales’ subsequent tax and financial problems, they showed poor judgement in their effusive praise of Collard, someone with very thin experience in innovation and commercialisation and no track record of manufacturing and lithium battery technology.

To be fair to Marles, Scale’s Australian offices are based in Geelong, in his electorate, and Collard has been promising to build a gigafactory there, so we can understand why he might’ve felt the need to promote the Geelong boy made good.

But why didn’t Marles and Dutton ask themselves how a company with no obvious revenue stream, apart from a facemask contract, was able to lease office space at the World Trade Center?

They should’ve run a mile.

As it is, they’ve both gone to ground, with Marles refusing our FOI for his communications with Collard on the basis that it would “substantially and unreasonably interfere with the performance of the Minister’s functions.”

Excerpt from FOI refusal, 1 August 2023

Dutton didn’t comment, but we suspect he wouldn’t describe Collard as superman if he had his time over again.