Former Midwater Main Beach builder Tomkins alleges illicit kickback scheme on project

The since-terminated head contractor of a troubled $100m apartment tower development at Main Beach has made serious allegations about a former senior employee who it claims artificially inflated contracts.

Midwater Main Beach, which has been plagued by difficulties since late August 2024. Picture: Glenn Hampson

The former head contractor for construction of a troubled $100m apartment development at Main Beach alleges it discovered an illegal kickback scheme on the project involving one of its senior staff members and a subcontractor.

Tomkins Commercial and Industrial Builders Pty Ltd, which was appointed to build the 40-storey, 119-unit tower on Main Beach Pde in 2021 before the contract was sensationally terminated last September, aired the allegations during a payment dispute with Molendinar subcontractor Starline Interiors Pty Ltd.

The dispute, details of which are contained within an April 15 adjudication decision under the Queensland Building Industry Fairness (Security of Payment) Act 2017, related to $1,908,040.70 Starline claimed it was owed by Tomkins.

Tomkins had asserted it was only liable to pay $101,926.37, with adjudicator Paul J. Hick ultimately ruling Tomkins owed Starline $1,490,381.26.

According to Mr Hicks’ decision, Tomkins argued there was no sense in adjudicating the payment dispute because it was “tainted by fraud” and as such any adjudication would be liable to be set aside.

Midwater Main Beach was originally slated for completion in November 2024, but now it is not known when the project might be completed. Picture: Glenn Hampson

Despite the allegations, it’s understood no criminal complaint has been made. No charges have been laid.

Tomkins alleged it discovered a “former senior employee” had defrauded the company by “using some... subcontractors, including [Starline], to carry out or pay for work carried out on three properties owned by” the former employee and/or his spouse.

In return for the work on the private properties, the former senior employee caused Tomkins to “inflate subcontract sums, that caused the cost of the private work to be hidden within the costs of work to be carried out under subcontracts,” Tomkins alleged.

According to Mr Hicks, Tomkins considered it had two crucial pieces of evidence to support its allegation.

First, there was allegedly an “unorthodox process of procurement of the subcontract that was controlled by [the former senior employee] and saw a substantial increase in the price originally quoted by [Starline] for the work to be carried out under the subcontract and the subcontract sum”.

Tomkins Commercial and Industrial Builders Pty Ltd claimed it discovered a rat in its ranks. Picture: Tomkins

According to a statutory declaration by a Tomkins employee, Starline’s quoted sum was “significantly higher” than the $8.5m that was initially indicated verbally.

Second, Tomkins claims there were “a number of invoices in relation to the private works which appear to concern [Starline], together with other information concerning certain events and activities by [the former senior employee] and/or his spouse,” details of which were expanded upon in a series of reports that were not made publicly available.

According to Mr Hicks, Starline denied the allegations, submitting the subcontract sum was not artificially inflated, it did not engage in an illicit kickback scheme, and the Tomkins allegations were “not supported by any probative evidence or sufficient evidence to meet the heavy burden of proof required”.

Mr Hicks ruled that, although he accepted Tomkins had “genuine suspicions of some inappropriate dealings”, on the balance of probabilities no fraudulent conduct had been made out on the evidence, and so the argument the payment claim was tainted must fail.

Tomkins and Starline were both contacted for comment.

In a statement, a Tomkins spokeswoman said the former senior employee no longer worked at the company.

“As Tomkins’ investigations into the matter are ongoing it would be inappropriate to comment further,” she said.

Midwater was originally due for completion in late November, but it is now not known when the project may be ready for residents to move in.

Separate to its dispute with Starline, Tomkins is currently involved in a series of payment disputes with site owner York Property Holdings Pty Ltd, part of the Heran Group.

Originally published as Former Midwater Main Beach builder Tomkins alleges illicit kickback scheme on project