Subbies warned on liquidator clawback

BUSINESSES have been warned to use cost- effective steps to protect themselves against clawback of payments by liquidators after a Townsville subcontractor has been hit with a letter of demand for repayment of $ 31,855 received for work on a housing project.

The issue has also drawn criticism of the State’s regulator, Queensland Building and Construction Commission, for approving a licence to a failed builder at the centre of the drama despite being warned that entity had links with another failed builder, N1 Homes.

“The QBCC has essentially issued a licence to an insolvent company and a company they were warned about,” Suncontractors Alliance spokeswoman Kylie McIlroy said.

The liquidator to Jeda Homes, Glenn O’Kearney of GT Advisory and Consulting, issued the letter of demand this month to the subcontractor, claiming it was an insolvent transaction.

In the letter, Mr O’Kearney says he will seek interest of 7.5 per cent per annum on any judgment and his legal costs if he is required to take legal action.

Ms McIlroy said the subcontractor did not want to be identified for fear of repercussions but said the system was failing subcontractors.

She said it should also be recognised that hardworking Townsville builders missed work because Jeda Homes took over some uncompleted projects left unfinished by the collapse of N1 Homes.

QBCC was warned by N1 Homes’ liquidator in early 2016 that Jeda Homes director Julie Anne Milne had been an employee of N1 Homes.

Mr O’Kearney says Jeda Homes appears to have been insolvent from November 2015, when the QBCC issued its licence.

But a QBCC spokesman said there was no legal basis to refuse Jeda Homes’ application and that when they did conduct a financial audit after the warning, the company met requirements.

EC Credit Control North Queensland manager Stephen Collins said it was difficult for the QBCC to check information and that people needed to take responsibility for their own businesses.

People needed to have updated terms and conditions in their contracts and use the Personal Property Securities Register to protect their interests, Mr Collins said.

“At times like this everyone will bitch and complain. The worst part is apathy, looking for someone to blame when things go wrong,” Mr Collins said.

He said PPSR applications cost $ 7 and that in one celebrated case Citibank lost $ 50 million worth of equipment in the collapse of Forge Group in 2014 after failing to use the PPSR.