Subcontractor’s desperate bid to claw back $330k from JM Kelly

A Brisbane stonemason is in a desperate fight to reclaim $330,000 from collapsed builder JM Kelly after failing to convince the Queensland building regulator he was owed the money despite presenting proof of debt and a written offer of a payment plan.

A BRISBANE stonemason whose family business has operated in the city since the late 1800s says he is “aghast” at the inaction of authorities to clean up the construction industry.

Peter Wrafter’s company was owed hundreds of thousands of dollars by the now failed JM Kelly Group when it went broke in 2016.

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Mr Wrafter had proof of debt, the written offer of a payment plan and a schedule that committed to the settlement of invoices totalling $329,660 – but it wasn’t enough to convince the Queensland building regulator that JM Kelly Group owed the money to Mr Wrafter’s iconic business, T. Wrafter & Sons.

Instead, after discussions with JM Kelly lawyers, the Queensland Building and Construction Commission, withdrew its notice to suspend the builder a month before the JM Kelly Group collapsed.

The money was owed for work T. Wrafter & Sons did on stage three of the Brisbane City Council Anzac Square restoration project for JM Kelly Project Builders, before the central Queensland company went broke in June 2016.

Mr Wrafter said when Project Builders went into liquidation he had hounded it for the money.

“The JM Kelly project supervisor came down to Nudgee and said they had made up their minds to pay us,” Mr Wrafter said.

“He proposed a payment schedule and put it in writing.”

WHY MORE BUILDERS WILL GO BROKE

Before those conversations Mr Wrafter had other concerns.

“The part that really gets me is when Project Builders went down I went to see a bloke from Brisbane City Council regarding the Anzac Square job and he said they had received statutory declarations from Kellys saying they had paid everyone,” he said.

“I said ‘well, I haven’t been paid’ and he was adamant I would be.

“If they don’t hold power they are a waste of time.

“Mick de Brenni (Housing and Public Works Minister) has this new scheme to protect subbies. They have one now. Why don’t they just administer it.

“It’s an understatement to say there is an enforcement void.

“I’m aghast at the inaction. How did they (JM Kelly) hold a licence? How were they able to go on building?”

Correspondence from JM Kelly to Mr Wrafter, in part, read: ‘With respect to your current debt relating to the Anzac Square project, Our Director has advised that JM Kelly Builders Pty Ltd will meet all of the obligations of JM Kelly (Project Builders) Pty Ltd for that project including the money owed to T. Wrafter & Sons Pty Ltd irrespective of the fact that it has recently been placed into voluntary liquidation’.

There were 13 payments of $23,000 each to be made on dates from September 28, 2016, and November 29, 2017 with a final December 29, 2017, payment of $22,418.60.

“The first two payments were late and I was told ‘they’ve stuffed up in the office again’,” Mr Wrafter said.

“I rang and rang but that was the last I heard of them. I gave up wasting my time.”

Mr Wrafter complained to the QBCC on September 3, 2018, about the non-payment of the debt.

Peter Wrafter, Director of T. Wrafter and Sons Stonemasons, says he is owed hundreds of thousands of dollars by the now failed JM Kelly Group. Picture: AAP Image/Richard Walker

“He didn’t hear from the regulator until November 19, advising him to contact the liquidator.”

Mr Wrafter wrote back immediately wanting to know what the QBCC had done since his complaint had been lodged.

In an email reply sent the same day a QBCC senior investigator said “the building regulator had written to JM Kelly Builders, receiving a response on September 11 that no contractual obligation existed to pay for the work Wrafters had done.”

When questioned why the promise made to Mr Wrafter had not been honoured, there had been no response from the builder.

On September 19 the regulator had issued a Notice of Reasons for Proposed Cancellation or Suspension to the company for non-payment of a debt.

The QBCC said in an email to Mr Wrafter that subsequent discussions with JM Kelly’s lawyers had demonstrated the debt was subject of a genuine dispute.

Mr Wrafter was left to wonder how.

JM Kelly Builders went into administration in October and then liquidation in November.

A QBCC spokesperson said it acted on Mr Wrafter’s complaint but that JM Kelly Builders Pty Ltd lawyers had established the debt was not a responsibility of that entity.

The QBCC received six monies-owed complaints totalling $200,000 about JM Kelly (Project Builders) Pty Ltd between March 2015 and July 2016, recovering almost $180,000 of that money.

The QBCC also said it received 42 monies-owed complaints about JM Kelly Builders Pty Ltd between July, 2015 and October 2018 with the Wrafter complaint made in August 2018.

Originally published as Subcontractor’s desperate bid to claw back $330k from JM Kelly