Court probe into JM Kelly builder collapse to be held

The Queensland Government has announced a public court examination will be held into the collapse of JM Kelly Builders Pty Ltd, which left hundreds without jobs and subcontractors owed $52 million.

A PUBLIC court examination will be held into the collapse of Rockhampton-based JM Kelly Builders Pty Ltd with witnesses to include company director John Murphy in a bid to obtain information to support potential civil and criminal claims.

Building industry regulator, the QBCC, has announced the $200,000 funding comes after talks with the liquidator PwC and follows what it says have been months of talks. It also comes in the wake of The Courier-Mail's coverage of the spate of high-profile builder collapses across the state since 2013.

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Liquidator Derrick Vickers of PwC Australia said the examination process may uncover information relevant to ongoing Queensland Police Service investigations following earlier referrals by the liquidator.

"We will be exercising our powers as liquidators to the fullest extent, with an objective to maximise recoveries for the benefits of creditors," Mr Vickers said.

"Conducting a public examination will allow the liquidators to advance our ongoing investigation in relation to the collapse of the company, and to obtain information to pursue civil claims and support criminal claims that may exist," he said.

John Murphy was appointed director of JM Kelly Builders on June 27, 2016. Picture: Allan Reinikka / The Morning Bulletin

"As part of the examinations, we will be seeking the approval of the Court to issue summons to individuals to produce materials and answer questions under oath before a magistrate or a Federal Court judge."

The liquidator's report filed with ASIC refers to:
•       Minimum Financial Requirements Reports provided to the QBCC by auditors
•       Insolvent trading
•       Potential shadow or de facto directors of the company
•       Breaches of director duties
•       Voidable transactions, including director-related transactions
•       Significant transactions involving related entities of the JM Kelly Group and their associates
•       Statutory Declarations signed by authorised officers of the company,

Some or all of these issues are likely to be raised during the examination.

QBCC Commissioner Brett Bassett said the Commission had been working with PwC Australia since the liquidation to ensure those affected by the company's collapse were given every chance to get the money they were owed.

"Last year we funded a public examination into the Cullen Group and Queensland One Homes and this is another example of how seriously the QBCC takes its role in providing security of payment for subcontractors," Mr Bassett said.

"In Queensland, the QBCC uses our powers to protect subbies, as well as home and business owners, wherever we can, but in circumstances where a company has gone into liquidation, we will work with partners who can make use of the State and Federal Courts to carry out that action.

The Aldi construction site on Gladstone Road, Rockhampton, following the collapse of J M Kelly. Picture: Chris Ison

"When companies of this size collapse it has a flow-on effect to honest, hard-working tradespeople, which we cannot abide.
"Our statutory mission is to protect our licensees and ensure they get paid and we will use all the tools at our disposal to rid the industry of dangerous and dodgy operators."
The public examination is expected to be completed within six months

Efforts are being made to contact John Murphy.