NAB served with class action over Walton Construction collapse

A major class action has been launched against one of the big four banks as about 1600 subbies seek to claw back $100m they claim to be owed after a 2013 builder collapse.

Subbies burnt by the collapse of a major building firm almost a decade ago have launched a class action against the National Australia Bank seeking about $100m in compensation.

Solicitors for NAB were served with the suit this week in a significant milestone for about 1600 sole traders and small businesses stung when the Walton Construction group collapsed in October, 2013.

Subcontractors across Queensland, NSW and Victoria were left chasing money, including Sunshine Coast subbies who were about $2m out of pocket as a result of the liquidation.

Lawyer for the class action, Robert Anderson Lawyers principal Robert Anderson, said the proceedings had been brought on behalf of Williams and Kersten Pty Ltd, representing about 1600 sole traders or sole trading companies.

Williams and Kersten is directed by long-time Coolum civil contractor Les Williams who founded the Subcontractors Alliance in the wake of the Walton collapse after he took a $700,000 hit on the cusp of retirement.

Beau Hartshorn, right, and Les Williams were impacted heavily by the Walton collapse.

Mr Anderson said the subbies represented in the class action were largely “mum and dad painters, aircon installers” and other tradespeople.

In a statement provided this week the Subcontractors Alliance confirmed the statement of claim filed with the Federal Court of Australia and served on NAB alleged the major bank had acted “unconscionably and as a shadow director of the Walton Group”.

Among the claims the group allege NAB secretly took control of the failed building firm and allowed it to trade insolvent for “at least several months”.

The group also allege NAB illegally recovered millions of dollars “while the bank’s securities were defective”.

Mr Anderson confirmed this week the action had been served on NAB lawyers on Tuesday, January 18.

“It’s been a long time in the making this claim,” he said.

Lawyer for the class action against NAB, Robert Anderson Lawyers principal Robert Anderson.

Among the allegations were that NAB appointed advisers to the Walton Group to liquidate key company assets which left trade creditors and subbies with about $100m of unpaid debts.

The Sunshine Coast Daily reported extensively on the fallout of the Walton Group collapse with several creditors and subbies losing businesses and homes in the aftermath.

The class action claims those losses were a result of the actions taken by NAB.

Mr Anderson said proof of debt claims had been lodged totalling about $86m and they would be seeking interest and consequential damages on top of the alleged debts.

“It’s been a very long haul,” he said.

A mystery US-based backer had come on board to finance the class action but Mr Anderson said he was unable to reveal the identity of the financier at this stage.

Mr Anderson said he expected the class action process to take up to two years.

Les Williams of the Subcontractors Alliance has fought tirelessly for a better deal for subbies in the wake of the Walton collapse in 2013.

Mr Anderson said it was unclear what NAB’s response would be to the action.

Walton Group employees were also caught up in the company collapse but it was unclear whether any were taking part in the class action.

The Walton collapse proved a watershed moment, sparking major campaigns by both the Sunshine Coast Daily and News Corp Australia to better protect subbies with the Back Our Subbies campaign prompting the state government to establish a task force and commission of inquiry.

Security of payment legislation has since passed as well, but there is still more to be done to properly protect small businesses within the industry.

Mr Williams this week said he was pleased the US backing had been secured which had paved the way for the class action.

He told the Sunshine Coast Daily he wanted “justice for people like Beau Hartshorn and his family who lost everything … and others all over Australia who have suffered similarly”.

Mr Hartshorn and his family were forced to sell their home to pay down debts after his landscaping business was left $500,000 out of pocket following the Walton collapse.

Mr Williams also paid tribute to former Sunshine Coast Daily reporter and spearhead of the Back Our Subbies campaign, Bill Hoffman and the Sunshine Coast Daily for highlighting the effects of the Walton collapse on people in the region.

The Federal Court of Australia’s Victoria Registry website has the matter of Williams and Kersten Pty Ltd v National Australia Bank Limited and others listed for a case management hearing on February 7, 2022.

A National Australia Bank spokeswoman said it was “too early to comment on the litigation at this stage”.

NAB was also listed as a major creditor in the collapse of BA Murphy Constructions just before Christmas.

The major bank was owed more than $990,000 across the three BA Murphy group entities which went into liquidation on December 21, 2021.

The Sunshine Coast Daily revealed this week about 550 creditors were claiming debts of almost $11m in the BA Murphy collapse.