PART 1
There are builders out there who have no moral compass, in fact from my experience there are many of them are like that and don’t expect any help at all from the local authority, in Queensland, its the QBCC.
They are usually toothless tigers and come in only after these large builders are beyond help and almost always, too late to save our money. Being a government organisation the care factor is zero anyway so it is up to us subcontractors to look after ourselves.
We subscribe to a credit reporting organisation but even then, it is usually too late by the time you are notified that there has been a default registered against the builder or developer.
An example of this is with CreditorWatch. We were studiously monitoring a company we were about to sign a quarter of a million-dollar contract with on the 8th August 2016.
There was nothing adverse reported against Cullen Group, I purchased their credit score which was at acceptable levels of 8.5 so we signed the contract.
On the 17th October 2016, a few months after signing the Builder contract, a Creditor Watch email alert came to my inbox.
I was shocked to find that on the 7th March 2016, Cullen Group had a default judgement for $73,610.99 recorded against them but it didn’t appear on Creditor Watch until 7 months after the judgement was awarded. Obviously, that is no help to anyone doing their homework in regard to this company.
I contacted CreditorWatch by email and they told me the following:
Approximately 3 months ago it was brought to the attention of CreditorWatch that the QLD Magistrates courts were not sending through judgements for commercial entities where they did not have the ABN or ACN listed.
We worked with them to ensure that this additional information was to be sent through, giving us the opportunity to match the entity to their ABN or ACN and so list the judgement.
The judgement in question appears to be one of those not advised to us originally due to this issue.
DECK STACKED AGAINST SUBCONTRACTORS
In the building industry, the deck is heavily stacked against Subcontractors to the point where, even if you do your homework, the information is not available until it’s too late. The Queensland Magistrates Court has failed us miserably, the QBCC has failed us miserably. Government in general has failed the subcontractor miserably.
In this case, immediately after signing the contract, we started manufacturing the balustrade product, we ordered $16,000 worth of aluminium, we ordered $22,000 worth of glass from our overseas supplier. We then proceeded to install the posts in preparation for Cullen Group to be able to remove their scaffold.
By the time the alarm bells rang, we had done approximately $70,000 of preliminary planning and work towards this job.
What caused the alarm bells to ring was NOT the SEVEN MONTH LATE CreditorWatch alert (that came later).
It was the fact that our first claim of $21,000 for work done in August was due on the 6TH October (35 business days) but Cullen Group could not tell us when we would be paid and that was only after we contacted them. They didn't contact us.
The Managing Director was overseas so I called the Operations Manager who was very condescending. He made excuses about other jobs finishing and said he would help us out if we needed the money.
I saw red! Help us out?
Since signing the contract in early August, we had:
- Worked on the job for 3 months
- We imported the product
- We paid for the imported material before dispatch
- We ordered 20k of aluminium locally
- We paid our suppliers for the material
- We manufactured balustrade
- We paid our staff
- We paid our tax
- We paid our super
- We paid our outgoings
- We installed product
- We paid the installation subcontractors
- We did all that but we had not seen ONE CENT from Cullen Group and when we asked, we were told that he thought his loyal subcontractors would not mind late payment while they sorted out their financial mess.
Worse still, this arrogant bastard though he was helping us out by organising our payment later than the contractual terms.
Us wanting to be paid was an inconvenience to them, the hide of a subcontractor wanting to be paid at all, let alone on time.
Our first claim of $21,000 was paid 8 business days late and only after numerous calls, emails and texts in which the Operations Manager made promises he did not keep.
Default Judgement
I called the recipient of the default judgement who had nothing at all good to say about Cullen. He manufactures the same type of products that we do.
Following that I got a call from a company in Adelaide who has 4 contracts with Cullen Group here in Qld (she also called the recipient of the default judgement like I did, he gave her my number ).
They are owed approximately $100,000 for 4 jobs. They have some minor defects on one job so the builder held payment on all 4 jobs. At least that is the excuse.
Cullen Group defaulted on a payment yesterday and the Adelaide company is commencing legal proceedings today.
She said they were owed 4 times what we were (80 to 100k) and hasn’t been paid for any of them.
They were 130 days overdue. She said they have disputed one of the jobs with some very minor cosmetic defects which are easily fixed but are holding payment on all the jobs.
She said in 2014 Cullen Group were paying 30 days from EOM, last year it was 38 days, now it is 130 days.
If you value what you have worked all your life for and often including your marriage and family, when subcontractors in the building industry talk, you should listen because with builders and developers, subcontractors are at the coal face and know what’s going on.