Clear case of justice denied

Failure to act will ultimately shame all who turned their backs on this vital industry sector

Beau and Kerry Hartshorn of Eumundi lost their home and business when Walton Construction failed to pay them for landscaping work their business did on the Nambour Coles job. Picture: John McCutcheon

A NEWS Ltd campaign to Back Our Subbies has revealed stories of similar heartache across Queensland caused by subcontractors left unpaid by failed building companies.

The series uncovered a disturbing pattern of lengthy pre-liquidation insolvency allowed to go unchecked in what is a regulated industry controlled by the State Government's Queensland Building and Construction Commission.

How many of these building companies were able to satisfy the minimum financial requirements of their licences during a time when they were later found by liquidators to be trading insolvent, deserves greater focus than has been afforded to date.

Questions have also been raised about the behaviour of National Australia Bank in its relationship with failing building companies.

The Palaszczuk Government has announced $200,000 in funding through the QBCC for a public examination by liquidator PwC into the October 2018, collapse of JM Kelly Builders Pty, which has left debts of $21 million, including $11 million to unsecured trade creditors. There are 400 of them, many whose businesses and personal finances have been badly damaged.

The Government has failed to address questions about its role in the transfer of contracts it held with JM Kelly Project Builders to associated company JM Kelly Builders after it too had gone into liquidation.

The Premier's contention that her Government should refrain from doing so while the public examination runs its course is at best disingenuous.

There was no obligation on the liquidator's behalf at the public examination to even consider the Government transfer of 21 contracts from one JM Kelly company to another.

There is also the matter of formal police complaints that have been lodged in relation to the conduct of failed builders and the role played by the NAB and others.

Not one of the complainants was given the courtesy of a formal interview with police before their complaints were shunted off to the dark stagnant pool which is the corporate regulator, the Australian Security and Investments Commission.

How that could be possible remained unexplained despite more than 7000 small businesses being left unpaid well in excess of $500 million since 2013. If those numbers had involved thieves holding up banks, no-one would have any doubt the situation would be declared and an appropriately equipped and skilled task force would be put into play to deal with it.

Oddly, there appears a lack of any serious will on the part of a Government that would have itself be seen as champions of payment security in the construction sector, to actually use the laws and enforcement agencies at its disposal to deal with any wrong doing.

Why? That's the question the Premier won't answer as her Government hides behind a process that falls well short of the formal criminal investigation victims demand.

Last December, Judge Derrington in the Federal Court of Brisbane found Walton Construction's 2013 planned exit from the industry to have been a complex set of arrangements to benefit NAB, Craig Walton and business advisor Mawson without a thought for those who would be hurt. It was a judgment that vindicated the allegations made over the past six years by trade creditors left unpaid $90 million who have demanded to no avail that federal and state police and ASIC rigorously apply the law.

No one in government, either federally or in Queensland, should be any doubt that complaints about illegal behaviour in the construction sector will simply fade away.

Labor federally would need to show more resolve than the Palaszczuk Government has to date to secure the support of the 367,000 construction industry small businesses that employ one million fellow Australians and generate $200 billion in revenue annually.

They deserve to operate in an environment where white collar crime is not a cost of doing business. They deserve the support of governments to whom they pay licencing fees and taxes and who are always first in line for payment.

Construction sector subcontractors have to date looked to government to provide the protection to which they should be entitled.

They have asked simply for the law to be applied, for those who have provided false financials to justify their QBCC-granted licences to be prosecuted, and for allegations of fraud to be fully investigated.

Let down by their government, left unprotected by the law, subcontractors won't simply walk away. There is a long way to go yet in this saga, the course of which will shame those who failed to act.

Originally published as Clear case of justice denied