Fears building giant St Hilliers amassed huge debts before collapse
Collapsed building giant St Hilliers is at least $6m ‘in the hole’ on one of its major Queensland projects with subbies tipping any rescue package was doomed to fail.
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The failure of building giant St Hilliers is shaping up to be a major test of Queensland’s controversial construction payment laws with at least one project more than “$6m in the hole.”
Industry sources say the huge amount owed on only one project underscored the overall dire finances of the company, which has 19 other unfinished projects around the country.
St Hilliers’s Queensland projects include the Bernborough retirement village in the inner northern suburb of Ascot, the $40 million expansion to the Townsville health facility and the $37m Aveo retirement village at Carindale.
Queensland Building and Construction Commission (QBCC) records show St Hilliers had set up project trust accounts for both the Ascot and Townsville projects to pay subcontractors in the event the company became insolvent. But subbies on the Carindale project are not covered because work started before the scheme was expanded to include the private sector in 2022. The Carindale project is believed be $6m in the red.
A QBCC spokesperson yesterday declined for considentiality reasons to say how much had been set aside in the trust accounts to pay subbies. “Queensland’s project trust account framework was established to improve security of payment for subcontractors in the building and construction industry,” the spokesperson said.
Master Builders Queensland has warned the expansion of project trust accounts to the private sector would result in “chaos” and the loss of investment.
St Hilliers’ administrators Glenn Livingstone and Allan Walker, of WLP Restructuring, are now in urgent talks to get at least some of the company’s projects restarted.
Subbies United spokesman John Goddard however said hopes the company could be rescued were doomed to fail. “I have not seen an administration not go into liquidation, they always do,” said Mr Goddard. It is understood that some $13m in retentions were held by St Hilliers’ clients, funds subbies are unlikely to ever see.
Retentions in construction contracts refer to the percentage of payment that is held until the completion of the project. The funds are to ensure that contractual obligations, including the fixing of defects, are met.
“They will never release that as they will say it doesn’t even cover their holding costs,” said Mr Goddard. “Subbies live in hope that a miracle will happen and they will be running again soon but it’s a forlorn hope. One subbie has said that if ever a company needed to be gone from the industry, its this one.” It is the second time Hilliers has entered voluntary administration over the past 13 years.
The company had made a loss of $12m over the past two years and in 2021 was embroiled in an investigation by the Australian Building and Construction Commission that found it had falsely inflated subcontractor quotes on Department of Defence projects. The company expressed remorse and repaid amounts totalling in excess of $1.3m.
The company was founded in 1989 by Tim Casey, who served as vice president of the NSW Property Council from 2009 until 2011. Comment has been sought from Mr Casey.
Latest figures show that for the first two weeks of 2024, 48 construction-related companies collapsed, with 25 of them based in NSW.
That represents almost a quarter of the total 193 company failures across all industries in the two weeks to January 14, according to ASIC data published last week.
For the financial year to January 14, 1869 construction-related companies collapsed, up 37 per cent from 1367 for the same period a year earlier.
Construction failures represented 27 per cent of the total 6884 company failures across all industries in the period from July 1, 2023 to Jan 14, 2024.
Originally published as Fears building giant St Hilliers amassed huge debts before collapse
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