The inside story of how building company Cullen Group collapsed
THE first cracks leading to the collapse of Wayne Cullen’s building company which now threatens to wipe out Gold Coast subbies began appearing 12 months ago on his Brisbane sites.
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THE first cracks leading to the collapse of Wayne Cullen’s building company which threatens to wipe out some Gold Coast subbies began appearing on Brisbane sites 12 months ago.
As liquidators begin the voluntary winding up of Cullen Group Australia, subbies working on a $100 million Boheme development just south of the Robina Town Centre want to know what went wrong.
Some of the 300 subbies estimate they are owed up to $130,000, others predict millions of dollars will be lost, comparing the financial crash to the Titan’s Centre of Excellence dispute which left construction players bankrupt.
The first intervention occurred when the Queensland Building and Construction Commission suspended Cullen’s licence just days before Christmas, as protection to subcontractors across southeast Queensland from entering future contracts.
But the suspension and subsequent appointment of a liquidator means the Robina subcontractors doubt they will see their money.
A Bulletin investigation reveals the Cullen Group launched legal action for money owed by developers throughout 2016. At the same time, Wayne Cullen was expanding the company while trying to overcome a family tragedy.
“This hasn’t happened overnight,” An industry insider close to the company said.
“The only reason they haven’t been held to task is developers (on other sites) haven’t wanted anyone to say anything.
“In so many ways this started happening late in 2015. The sad truth is I did feel for Wayne at the loss of his son. That was so sad to lose a child.
“The thing is, the guys he had in place to look after this business — they weren’t up to the job.”
Justin Cullen, 24, had just finished a degree in urban construction at QUT. In July 2015 he had saved enough money for a two-week surfing trip in the Maldives.
Described by family members as “the glue that kept us together”, Justin late at night misjudged a jump from the top of his boat, hit his head and was lost in the water.
Six months later the family was still reeling. Justin brother, Cameron, shared his grief in an open letter to surf champion Mick Fanning who had lost his brother, inspired by his courage.
“Three days after the funeral I played a game (for Burleigh Bears) against Tweed Heads,” Cameron wrote.
“On the field I could not stop thinking about the last day we spent together, the last phone call we shared, the picture of his body in the coffin at the viewing.
“I cried on the field in the sheds at halftime, at fulltime I was a mess. I can remember having all my family and friends on the hill supporting me but I just felt numb. I was and still am struggling to cope with the fact that he is really gone.”
By early 2016, life was not the same on Cullen sites. Experienced subbies likened taking a contract to “playing lottery” and described supervisors as “rude, pig headed and aggressive”.
Emails were sent among suppliers and subcontractors working on various residential sites to the south and west of Brisbane with some walking off from Cullen Group jobs by Easter.
“What the …. is happening with Cullen (Group)? We’re not being paid,” a subbie wrote.
By April as tensions became worse on the sites, the Cullen family had a rare chance to celebrate as Cameron received a shock call-up for the Gold Coast Titans.
Broncos coach Wayne Bennett correctly predicted the 22-year-old would handle the step-up.
“What would I know about Cullen? Well, I coached his dad. I won a grand final with him in 1985. His dad was a wonderful player,” Bennett told sports reporters.
Wayne Cullen, at halfback, had stood out in a Souths team that included Mal Meninga, Gary Belcher and Peter Jackson against a champion Wynnum side led by Wally Lewis.
Fast forward 30 years and he was determined to step up again, developing a project in the bayside suburb Wynnum.
He had started the company in 2008 with respected Tweed builder Bill Engwirda as the technical licence holder and nominee. In their first year their only job was valued $513,000.
Documents show the Cullen Group in 2012-13 completed work worth $5.2 million. In the past two years, the company was finishing more than a 100 jobs a year worth $25 million annually.
“They tried to grow too quickly,” an experienced site worker said. “They didn’t have the cash and at the same time Wayne was doing his own developing.”
Business documents reveal the company in February sought $200,000 in payments for design work for apartments after a $16 million Brisbane project went to another company. They failed to prove their case.
Cullen was having more legal success after seeking $339,745 for work on a $6.3 million Cannon Hill project. Payment of $105,828 was due on October 25 but the adjudication application was not served on the respondent until November 7.
A Coast subbie said the Cullen Group reassured contractors at Robina they would be paid.
“They were telling me, other subbies and suppliers that payment will be delivered by the end of November. They were asking us to hang in there and keep working,” the subbie said.
“There was an adjudication they were supposed to win. We would be paid for November and December. That didn’t happen.”
The payment system became messy as the builder worked out priorities.
“If you’re someone required to supply, or worker required to work, they pay them up. If you’re anyone who worked on the project they don’t need anymore, they didn’t pay you,” the subbie said.
“If you’re someone silly enough to work and not get paid, they’d allow you to do it.”
A chippie is estimated to be owed $70,000, a steel provider about $120,000 and plumber at risk of losing his business after being out of pocket $116,000.
Another Coast-based subcontractor tracked a similar change in fortunes.
“We have done two jobs with them in Brisbane in 2015,” the subcontractor said. “You couldn’t wish for a better payer, religiously on time on the first of the month.
“Then we started another job and that caused us a lot of emotional and financial hell. We started to see some issues in April and May last year.”
The subcontractor estimated their family company was owed $32,000 but agreed to begin work on Boheme at Robina. They are now $73,000 out of pocket.
“Do you know why we are in this situation? Everyone is scared (about talking up). We were told if we go to the QBCC we would be lucky to get 20 cents in the dollar.”
The Cullen Group and family have declined to return calls to subbies and the Bulletin.
The State Government has ordered an investigation in why the hundreds of subbies were not warned about Cullen’s collapse.
Housing and Public Works Minister Mick de Brenni told the Gold Coast Bulletin yesterday he had tasked the QBC board with what went wrong and called for reform of the payment system in construction and of the building regulator.
Subcontractors Alliance leader Les Williams, who knows the Coast subbies, is furious with the QBCC.
“Records indicate that Cullen Australia would have provided audited financials to the QBCC by 13 February 2016 to indicate assets allowing them to construct to the value of $60 million,” Mr Williams said.
“Ten months later Cullen has their licence suspended and an external administrator appointed only six weeks before his financials are due again in February 2017.
“There were payment problems experienced by subcontractors and supplies throughout 2016. There is evidence of quite a number of adjudication applications involving Cullen that should also have been a concern also for the QBCC.”
The “dogs were barking” about Cullen about one month before the QBCC suspended their licence.
“Surely they would have thought about the damage to existing subbies by their actions. There is something very wrong here,” Mr Williams said.
Originally published as The inside story of how building company Cullen Group collapsed
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