Lawyers preparing for second go at Victorian hotel quarantine bill

Liquidators for Unified Security are preparing to refile the case against the Victorian government, demanding it hand over $10.7m incurred by the company in the state’s hotel quarantine scheme.

Unified Security provided guards to the Victorian and NSW hotel quarantine schemes. Picture John Grainger

Lawyers are preparing to refile a case against the Victorian government for $10.7m owed to failed hotel quarantine provider Unified Security, which claims the state never paid its bill.

Unified Security, which provided guards to the Victorian and NSW hotel quarantine schemes, was placed into liquidation in May this year owing $12.33m.

This came after the company ran up an $8m debt for tax not paid and the company’s owners pulled $20m out as dividends and loans in the months leading up to its collapse.

At the time of its collapse, the company had initiated a case against the Victorian government in a bid to force the state to hand over the $10.7m it says the government owed it for services rendered.

This sum came as part of the $41.7m the company billed the state for providing guards to its 13 quarantine hotels.

Unified Security’s case against the Victorian government lapsed after the company was placed in liquidation, with the state not filing its defence to the Supreme Court proceedings.

At the time of its collapse, MaC Insolvency liquidator Trent McMillen noted he was in discussions with a litigation funder over the case.

However, Mr McMillen told The Australian the case was now progressing without a litigation funder after he had engaged a firm to prepare action to force Victoria to pay the outstanding sums.

“Proceeding as planned, nothing out of the ordinary,” Mr McMillen told The Australian in texts.

“The litigation is just proceeding, no funders.”

Mr McMillen did not respond to further requests for comment.

Unified Security’s first case, filed last year, alleged the Victorian government failed to repay the company for costs incurred by guards who delivered Easter eggs and Mother’s Day gifts to guests of the state’s hotel quarantine scheme.

The company also alleged the Victorian government owed Unified Security $218,730, not including GST, for meal allowances.

The Victorian government blocked paying the bills after the company enlisted subcontractors to guard the hotels without the state government’s approval.

Prior to its appointment as a provider of guards to the Victorian government’s scheme, Unified Security had only 89 permanent staff across Australia.

At its peak the company engaged 1754 security staff across the program.

The looming case against the Victorian government comes after the NSW government paid its outstanding $1.5m bill to the security company despite reporting it to the Fair Work Ombudsman for not paying its staff correctly and the state’s security industry regulator moving to cancel its licence to operate. A Fair Work Ombudsman investigation found Unified Security owed staff at least $900,000 in unpaid wages.

Creditor documents show Unified Security owed $188,985 to Sterling Security Group, a subcontractor used by the company in its Victorian operations.

This was despite the company claiming almost $7.2m JobKeeper to cover the wages of its guards while it was reaping more than $90m for its work in the NSW and Victorian hotel quarantine schemes.

Creditor documents show when Unified Security collapsed in May it had paid almost $20m in loans and dividends to a holding company controlled by David Millward and Luigi Trunzo, who liquidators identified as potential shadow directors.

The NSW Security Licensing Directorate moved to cancel the company’s licence after it was alerted to David Millward’s connection to Unified Security.