Multi-Res Builders Pty Ltd: Contractor angered over Homes Tasmania move to keep security payment

Angered contractors owed thousands by a collapsed construction company have lashed Homes Tasmania’s move to keep a near $300k security deposit on a $7.3m project – money which they say could pay back all involved. Their response >

Multi-Res Builders, Nagle Place, Glenorchy. Picture: Chris Kidd

Angered contractors owed thousands by a collapsed construction company have lashed Homes Tasmania’s move to hold onto a near $300k security deposit on a $7.3m project – money which they say could pay back all involved.

Multi-Res Builders Pty Ltd went into liquidation on May 14 this year, with the company said to owe more than $5m to creditors – which include the sons of director Colin Barratt, and their businesses.

Limcora Pty Ltd, a plumbing company based in New South Wales with an office in Kingston, is owed a total of $81,150 by Multi-Res, according to liquidator’s documents.

The company was contracted to complete plumbing works on the $7.3m Nagle Pl, Glenorchy affordable housing project.

CEO Evan Graham said the security deposit, between $250-300k, was enough to pay the group of four contractors who had been involved in the project.

The locked gate at the development at Nagle Place, Glenorchy. Picture: Chris Kidd

He said it was disappointing to see the Tasmanian government “turn their backs” on contractors now out of pocket.

“I said ‘is that the right thing to do?’,” Mr Graham said.

“I thought, you own the land. It is government land; you’ve got no holding costs, no interest to worry about, and you’re fully funded.

“Our only chance of getting any money is from the government – from Homes Tasmania.”

He said he had written to both Homes Tasmania’s Director of community infrastructure Richard Gilmour and CEO Eleri Morgan-Thomas with questions and concerns over the funds.

Mr Gilmour previously in an email told Limcora Managing Director Alex Nelson that it “may be possible to use the project security to address payment of outstanding invoices”, but they would need “advice” before confirming.

Eleri Morgan-Thomas, CEO of Homes Tasmania. Picture: LinkedIn

Richard Gilmour. Picture: Supplied

But they were later told that based on legal advice, Homes Tasmania could only pay subcontractors directly.

Mr Gilmour in email correspondence to Mr Graham said they would be obliged under law to make the payment directly to the liquidator.

“Any payment made by Homes Tasmania outside of the contract would constitute an ex-gratia payment which is not something Homes Tasmania is legally able to do,” Mr Gilmour wrote.

Ms Morgan-Thomas in response to questions from the Mercury said it was “disappointing that the liquidation had delayed the completion of the development”.

“We are confident that the Nagle Pl development will be completed and are currently negotiating a contract for the site,” Ms Morgan-Thomas said.

It was not said whether the deposit would be used to contract a new builder to compete the project.

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Originally published as Multi-Res Builders Pty Ltd: Contractor angered over Homes Tasmania move to keep security payment