Fighting for Subbies Rights
28-03-2022 - 3pm
In light of recent liquidation events and with the Oscars on tonight, we are updating The Hall of Shame thanks to a timely reminder from one our readers.
With Privium, Probuild and now Condev going down in recent months, it's time for an update but the size of the disaster doesn't necessarily guarantee any of them the winners gong.
Oh, and let's not forget to give BA Murphy a 20 million dollar mention. This was a case of "the joke is on you boys". It's time for a holiday.
This is a preliminary list as there are a lot more than the few I will add on here but suffice to say, these are the main category winners.
Biggest by a Shitload
Probuild, a much loved pet of ARITA's for what it puts back into their members pockets (liquidators). It's the gift that just keeps giving to Delloite.
A Commercial Construction company, Probuild undercut its way to the top of the pile and had the excellent excuse that Covid bought them undone. In a press conference the head sherang said it had nothing to do with undercutting the opposition, going in with the cheapest quotes to win jobs and not taking into account price increase and labour shortage. It had nothing to do gross mismanagement, it was Covid's fault and who am I to argue.
Way to go guys, it's a credit to you and with a reported 1 billion dollars owed to creditors, it's a whopper. No wonder the parent company cut and run, I would have too....
I admit I cannot count that high, neither can my calculator so I will leave it for others to tally up but I will say, it was owned and operated by a South African mob.
2nd Biggest Disaster
Privium. This company was a residential construction company building homes up and down the East Coast of Australia.
A wonderful church loving organisation who it would seem made some massive donations to their favourite causes and probably came out of it pretty well themselves but their customers came out of it even more heavily indebted to unforgiving banks with holding costs added to all their other woes. Some of them are yet to find new builders and its 4 months later.
Looking at the associated entities, I have never seen such a game of musical chairs played so well by various directors and office holders in the last few months before they walked away.
They were breaking the law by taking deposits but not paying for their customers home owners warranty insurance or the interstate equivalent so many of their hundreds of customers were left with sweet FA.
I trust that FTI reports the fraud to the relevant authorities, not to mention the 22 million dividend in 2020 when the company made a loss. I always thought that you could only pay a dividend out of accumulated profits but I am probably wrong again, it seems you can pay one out of accumulated losses.
That brings us to the most recent stuff up, Gold Coast Commercial builder Condev Constructions.
The first report to creditors by the Liquidator Worrells says all staff will be paid in full and good luck to them. No doubt they love their directors for paying them and sing the Foo Fighters hit "there goes my hero" as the directors walked out the door but spare a though for their subbies.
The directors said they could have continued but how could you continue when you have creditors of 40 million plus and only 2.7 million in the bank to pay staff and Worrells, wake up to yourselves and stop dreaming.
Subbies are out of pocket 31 million plus.
Now a special mention to the Minister for Public Works Mick De Brenni and his mates Master Builders Association for delaying once again Project Trust Accounts, the only real chance of saving subbies millions.
I have to say as a group and a so called peak body, you do not act in the best interests of the industry.
You are not good for the industry and whatever happens to builders and the destruction they cause to subbies and suppliers in the delay period will be on you lot and it would seem that there are plenty more coming to an untimely end very soon.
I have to ask why a government minister acquiesces so often and so willingly to a bunch like the MBA after making unkept promises to the industry.
Without further ado, let's launch into the awards, I would like to announce that this year we have joint winners but lets get on with the countdown.
5. BA Murphy - read above but a relative baby when compared to the giants below. He sold mansion and went on holidays and left subbies to pick up the pieces.
4. Condev - at least the directors faced the media and paid their employees although that is not helping subbies get paid.
3. Probuild - They spread their pain across Australia so it wasn't just concentrated in Queensland like it usually is.
2. Privum - Terrible effort by directors and money went flying everywhere except to creditors.
The winners of this years Hall of Shame are;
1. The Master Builders Association and their mate the Minister for Public Works. You all deserve nothing but scorn for your spineless efforts in delaying project trust accounts yet again. You have done immeasurable damage to the industry.
Please feel free to resign at your earliest convenience.
Charge your glasses folks, naw stuff em.
Below is Helix Legals summary of the PBA changes lobbied by MBA and caved in on by the minister for public works.
"Today it was announced that “Queensland’s building industry is being given more time to prepare for the further expansion of the trust account framework which provides additional security of payment to smaller industry players.”
What this means at the end of the day is more time.
More time to prepare.
More time to wise up.
More time to get help.
Phases 3 and 4 of the Trust Account Framework have been delayed.
Phase 3, for contracts valued at $3M or more will now apply from 1 April 2023, not 1 July 2022.
Phase 4 applicable to contracts valued at $1M or more will now apply from 1 October 2023, not 1 January 2023 as previously".
Yeah, top 14 because those who should be protecting the industry are working their arses off to destroy subbies.
Below is from 2017
We have put this list together to highlight the lack of Police involvement in building industry fraud.
This is no reflection on the Federal or Queensland Police who for the most part, do a wonderful job. It is more a reflection on the investigative ability of the Liquidators, ASIC, the QBCC and other regulators in the industry who do not refer corrupt building company directors to the Police when there is clear evidence of fraud.
Their efforts do not pass the pub test.
In any Western democracy it is a basic expectation that if someone breaks into your house, hijacks your car or steals money that belongs to you, the Police will be called to investigate and bring the perpetrators to justice.
It is a rare event when a building company director is charged and convicted of fraud, especially when it involves subbies money. You see it now and again when a builder rorts home owners and that might only be because it involves the QBCC paying out on their Home Warranty Insurance. They are known to act when their bottom line is at risk.
I can't think of anyone charged even though in the last 14 months there has been over 30 major building company liquidations where hundreds of millions of creditors money has gone missing. If we went back as far as Walton in 2013 and Trac Constructions who were trading insolvent for 11 months before they put themselves into liquidation, it is much worse so for the sake of this exercise, we will go back to 2013 after all, we need to start somewhere and draw a line in the sand.
We are getting close to a result with the impending public examination of the directors and other participants in the liquidations of Cullen Group and Queensland One Homes.
All figures below are approximate because no one will ever know the collateral damage they cause. Many of these companies had illegal phoenix companies going to slip straight into and all were designed to defeat creditors.
Its a pretty simple process, build up a huge debt, cancel you license so the QBCC can’t help subbies and liquidate the company after transferring the assets for no commercial value into the phoenix. It is then business as usual. Sometimes they will cancel their licence and leave the company in limbo so that home owners cannot collect on their insurance. That kicks in when they liquidate so it is then up to someone to pay to tip them into liquidation.
I have been told by our lawyer to delete the commentary I had next to each builder so I will take his advice but suffice to say, I have substantial evidence that this is a fair assessment of just how bad they were.
On the other hand, there is a school of thought that they are all as bad as each other but as in all walks of life, there is good and bad and circumstances can have an effect on a builder surviving.
An example is a developer liquidating to avoid paying a debt to a builder. That liquidation tips the builder into liquidation, at times through no fault of his own. Yes, developers do it to builders too!
Some of the individual stories we have been told by subbies would curl the hairs in your nose and make you vomit a little in your mouth.
Liquidation Hall of Shame - Let the Countdown Begin
10 CMF Constructions - (20 million)
9 Carmichael Builders – (15 million)
8 CKP Constructions – (3.5 million)
7 The Ashtay Group PL t/a CMS – (3.2 million)
6 Trac Construction – Update, 27 million and "not a kid washed" based on that, they have been promoted.
5 Collhart Investments – (20 million)
4 Bluestone Constructions - (7 million)
3 Walton Constructions – (30 million QLD) For sheer weight of numbers not just in Queensland
2 Cullen Group – (30 million)
And coming in at number one, the winners is ................
1 Queensland One Homes – (7 million).
Congratulations to Q1 Homes, you win the SU gong for the period 2013 to 2017, give them a huge round of applause folks, fantastic effort.
In compiling this list, I can only speak from my experience.
As always, there will be people who disagree with the final tally but the judges have spoken and please, by all means, submit your own list in the comments section below and keep it clean. We have a bevy of Lawyers, Liquidators, the QBCC, MBQ, HIA and a nun who visit this site daily and we don't want to offend any of them.
Easy money boys, raise your glasses, Cheers!!!
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