Embattled Victorian building company Snowdon Developments allegedly can’t pay superannuation to staff

More than half the staff at an embattled construction company have quit in the past few months as the company allegedly struggles to pay them.

EXCLUSIVE

A Victorian building company believed to be on the brink of collapse hasn’t properly paid staff for months, sources have told news.com.au.

News.com.au can reveal that employees at Snowdon Developments Pty Ltd haven’t received their superannuation since October, leading to more than half of staff quitting in that period of time.

Earlier this week, news.com.au reported that Snowdon Developments has 15 creditors chasing it for debts totalling $2.5 million who are demanding the Supreme Court of Victoria impose a winding up order to force the company to go into liquidation “on the grounds of insolvency”.

More than a dozen customers are also calling for answers after construction works have stalled for months. News.com.au understands there are more than 200 residential homes in the pipeline to be built.

Several other suppliers have stepped forward since then who claim they are owed hundreds of thousands of dollars from the embattled company.

One contractor is owed as much as $480,000 and has been waiting for three years for the payment while another is struggling to feed his family as he waits for payment.

Logan* is “one of the few [employees] left” at Snowdon and says no deposits have been made into his superannuation account over the last nine months. He doesn’t expect to ever recoup that money.

“There’s no direction, no communication [from Snowdon]. We only know [the company is struggling] because of interactions with suppliers and customers,” he told news.com.au.

Snowdon’s slogan is ‘build your dream’ but some say the experience has been more like a nightmare.

A Snowdon build that has been left untouched for months, prompting the fencing to fall over.

Snowdon has shrunk in size from 70 staff to less than 30 people in recent months as superannuation non-payments have driven many out the door.

Logan, who has worked at the company for several years, said staff learnt a few months ago that they were not receiving the money supposed to be going into their superannuation.

Although payslips made it appear super was being deposited, one staff member went into their superannuation fund and realised no money had been put in. They then alerted the others.

“Then we asked [the company and it] confirmed that no super was being paid. And then nothing much has been said about it since,” Logan said.

News.com.au has sighted documents which confirms Logan has not received a super contribution from his employer since October.

In the last nine months, staff have had just one official meeting with Snowdon but their non-existing superannuation payments weren’t addressed.

By law, employers must pay superannuation for all adult employees if they earn more than $450 per month.

Failure to pay superannuation can mean a fine of up to $10,500 or 12 months’ imprisonment, according to Industry Super.

It’s understood several Snowdon employees have registered a complaint to the Australian Taxation Office.

A customer who has forked out $30,000 on this build is worried what will happen to her money if the company goes under.

Snowdon employees have compiled a long list to keep track of the tradesmen who are refusing to work for the company because they are owed money.

“There’s a list, it’s an extensive list,” Logan said. At least 50 suppliers aren’t completing jobs for Snowdon in the hopes of getting paid, he added.

Snowdon staff are regularly harassed by angry creditors or customers wanting their money back.

“We get trucks parked in the car park blocking our cars so we can’t go out because they [the tradies] haven’t been paid,” he explained.

Some staff are not answering phone calls from unknown numbers from fear of frustrated clients or suppliers being on the other end, according to him. 

A tradie parking in employees in protest of not getting paid.

The car park of Snowdon Developments and Pivot Construction Group, where staff have been cornered by angry tradies who are owed money.

Samuel* was one of the many staff members at Snowdon who quit in April over concerns that the company was about to go under.

The former employee, in his mid-30s, says he was among half a dozen site supervisors who quit within days of each other.

“Myself and other supervisors felt sorry for the clients. I felt sick in my stomach lying to them,” he told news.com.au.

By the end of his Snowdon stint, Samuel admitted: “I said to a lot of my clients to get out of the contract because the build isn’t going to happen”.

The worst he ever saw of this was a site in the outer regions of Melbourne that had taken 4.5 years to be built and churned through 11 different site supervisors because they kept quitting.

“All us supervisors all left within a month of each other [in April], we all got out of there,” he added.

“Nobody wants to work for this company because they’re not going to get paid.”

None of his superannuation was paid in 2022 and this wasn’t paid back after he left either, news.com.au can confirm.

A MD Demolition site. Snowdon owes them $103,000.

Michael Hassan’s company MD Demolitions is one of the 15 creditors taking Snowdon to the Supreme Court after waiting over a year for $103,000 owed to be paid back.

Mr Hassan, with three young kids to support as well as 30 staff who work for him, has visited Snowdon’s Keilor Park office six times trying to get his money.

“There was no money coming into the account to feed the family or pay off the workers,” he told news.com.au.

“It’s just sad, I’ve been to the office, I said ‘I’m desperate, I need the money’.

“If I didn’t have financial support behind me, the bank would have taken my property by now.”

For the last three years, the small business owner, in his 30s, claims he has endured late payments from Snowdon but says this was worse.

“It got out of hand so I stopped doing work [for them],” Mr Hassan added.

According to Mr Hassan, originally Snowdon’s debt with MD Demolitions was over $200,000 but they paid part of it off so it now sits at $103,000.

Nick Mihajlovic claims his work for Snowdon as bricklayer hasn’t been paid for years.

Nick Mihajlovic, 67, contracted for Snowdon through his bricklaying business for 22 years and claims he is owed $480,000.

Mr Mihajlovic says he used to have a good relationship with Snowdon but it soured drastically.

He had a verbal agreement with senior members of the building company in 2019 to be paid for the work he had done and the materials he had paid for over a number of months but then the payment never came through.

“I knew the people, we used to go out together for dinners, that’s why we never had a written agreement,” he told news.com.au.

The company stood by the fact there was no written communication. When Mr Mihajlovic tried to pursue them legally, solicitors told him he didn’t have much of a case because there was no proof of their agreement.

“I’m financially ruined,” he said. “I’m 67 years of age and I’ve got to keep working.

“I came back to brick laying, I’ve got to make money, all my debts to pay.”

Josh Curmi and his wife are customers with Snowdon. They’ve missed out on a $15,000 government grant because of the delays.

Saurabh Mittal, another Snowdon customer, is “crying day and night” as his building site languishes, untouched.

John* is another Snowdon supplier who claims he has been affected by late payments since 2019.

“We’ve been trading with them off and on for many years, I think they had a problem before Covid,” he told news.com.au.

“They’ve never paid us on time.”

The contractor says he has been waiting since November for a $30,000 payment.

That amount of money has left him stuck because it’s almost not worth taking Snowdon to court.

“It would cost us $20,000 to get $20,000 back,” he said.

Now he plans to join the winding up proceedings along with the other 15 creditors.

“We’ve known they’ve been in trouble or tight for quite a number of years,” he added. “I hadn’t heard of anyone taking them further until now.”

Even though it should take 30 days for his money to arrive, John explained Snowdon usually took between 45 to 60 days to cough up the cash. But now it's been eight months, since March, that his latest payment was due. 

“We’ve stopped everything, no deliveries, no paperwork, no nothing," he said.

“We pulled the pin because the signs show us it could be in trouble, jobs sitting unfinished, when you start hearing that, it’s time to stop.

“Once they start going past that 60 day mark [for payments] it’s a red flag.”

Another customer who has waited over a year just for a slab.

Casabene Plumbing hired lawyers in April after Snowdon had not paid $38,000 owed to them.

The plumbers began winding up proceedings against Snowdon and although the construction company swiftly paid the debt, by then 14 other creditors had joined the case.

Court documents show East West Roofing applied to appear in the hearing because they are owed $936,192, Home & Industrial Soil Test Pty Ltd wants $685,255 to be paid while Tamar Cabinets is demanding $174,348.

The Office of State Revenue is also owed $262,444.54 

Other creditors include Just Metal Roofing, Dahlsens Building Centres, Waco Kwikform Limited, Top Cat Installations, Mitek Australia, Bingo Waste Services, Aria First Homes and On Trax Earth Moving with their money owed ranging from $24,00 to $91,000.

Two individuals are also owed $11,511.83 who joined the case.

When added up, out of those creditors, Snowdon owes more than $2.5 million.

However, it’s understood some of the money Snowdon owes creditors has already been paid off, including to the State Revenue Office and Casabene Plumbing.

The building firm claims other expenses can be paid after July 4 once they have sold a property.

Their next hearing is on July 13.

Snowdon did not respond to news.com.au’s repeated requests for comment.

All another customer has to show for their so-called dream home.

Pivot Construction Group also under threat

It has also emerged that Snowdon is closely aligned with another company, Pivot Construction Group, who news.com.au understands is a developer.

They are owned and run by the same people, with a sign for Pivot Construction Group on the door of Snowdon’s office, and with the same location registered to ASIC.

A third company also used to be part of Snowdon but has since separated.

The owners of Snowdon Developments sold part of their business in mid-2021 which rebranded to Oreana Homes.

“The Oreana Group is completely separate and independent from Snowdon Developments or Pivot Construction with separate governance structures, leadership teams, staff and offices,” a spokesperson said to news.com.au.

“As Snowdon Developments and Pivot Construction were builders for Oreana clients, and there were occasions when communications were insufficient from these two organisations and clients would seek updates from Oreana …

“The Oreana Group would like to reassure clients and stakeholders that Oreana Homes is a financially strong and secure business.”

One Pivot customer who preferred to stay anonymous said he was immensely confused and didn’t know who to contact when he was emailed about delays to his build. Snowdon, Pivot and Oreana were all copied into the email.

Pivot Construction did not respond to news.com.au’s request for comment.

Dharminder Singh is a customer for Snowdon worried about his half-finished home.

Black parts on the frame after it was left in the rain for months with no roof.

Homeowners who signed with Pivot Construction Group and Snowdon Developments are concerned what will happen to them if both the builder and developer go under.

One of those customers is Dharminder Singh, who signed with both companies in 2020.

Mr Singh, 40, has paid $28,000 to the two companies in progress payments for his $267,000 build in the Melbourne suburb of Cranbourne East.

Only the slab and frame have been completed but unfortunately, there’s no roof on the building.

According to the dad-of-two, with no roof, the constant rain since January has caused parts of the frame to turn black.

The delays have been so long that two sliding doors have also been stolen off the site.

“I have been paying electricity bills and water supply bills for that property since it began,” Mr Singh told news.com.au.

“I am paying rent and mortgage in this crucial time.

“Our children had many dreams of their own room but these builders ruined our all dreams. Now our children stop asking about the new house.”

Another half-finished Snowdon home.

It comes as Australia’s building industry is in crisis, with many companies collapsing this year amid rising costs for construction materials and the supply chain crisis.

Two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, already went into liquidation earlier this year, while smaller operators like Hotondo Homes Hobart, Perth firms Home Innovation Builders, New Sensation Homes and Next have also collapsed.

At the end of last month, two firms from Queensland went bust just days apart, Pivotal Homes and Solido Builders.

*Names withheld 

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