Stockland Kawana Waters Pty Ltd fined $150k

A major developer on the Sunshine Coast has copped a six-figure fine in court after a $3.9m payment bungle to subcontractors.

Maroochydore Court House. Picture: Patrick Woods.

A major developer on the Sunshine Coast has copped a six-figure fine in court after a $3.9m payment bungle to subcontractors.

Legal representatives for Stockland Kawana Waters Pty Ltd appeared in the Maroochydore Magistrates Court on Friday, April 11, and pleaded guilty to twelve counts of failing to deposit into a project trust account.

Legal counsel for the Queensland Building and Construction Commission told the court the company had paid $3.9m into the wrong bank account of the construction company, PBS, on twelve separation occasions.

Rather than paying funds into a PBS trust fund, Stockland Kawana Waters paid the money into another PBS fund, which then had to be transferred over by PBS.

According to QBCC counsel the practice of paying funds directly into a trust fund exists to ensure subcontractors are protected in instances where larger companies collapse.

“It is about the protection of sub-contractors, these are people at the lower end of the food chain in these large construction contracts, it is about setting aside money to protect those people,” QBCC counsel said.

The court was told Stockland was informed of the error twice but the issue was never resolved, which meant when PBS entered liquidation about $500k was never transferred into the correct trust fund.

Legal counsel for Stockland Kawana Waters, Angus Scott, told the court it was a third party responsible for making the payments and they had been asked to make the change, however the request was not followed up by Stockland.

Mr Scott also told the court the outstanding funds from the final payment had been paid to subcontractors.

Magistrate Raelene Ellis told the court it was clear Stockland’s conduct was inadvertent and issued a fine of $150,000.

No conviction was recorded.

A Stockland spokeswoman told this publication the company’s payment system had been “strengthened” following the incident.

“Stockland is committed to upholding The Building Industry Fairness (Security of Payment) Act 2017,” the spokeswoman said.

“We have accepted the Magistrate’s decision and complied with all requirements to resolve the matter. Our payments processes have been audited and strengthened to support our ongoing compliance.”