Ebert's subbie fund $1m shy

Some subcontractors left out of pocket with the collapse of Ebert Construction could be denied a total of $170,000 because of a ‘‘data entry error’’.

And whether they get any money back hinges on an impending High Court decision.

High Court judge Peter Churchman’s reserved decision will decide which of 152 subcontractors can be repaid from a $3.6 million fund held in trust for them.

But some of the subcontractors could miss out because there was a ‘‘data entry error’’ when Ebert processed their contracts – instead filing them as ones signed before a law change.

Under changes to the Construction Contracts Act, which came into effect last April, construction contractors are required to keep retention payments in a trust for subcontractors.

These are a portion of a subcontractor’s payment held back for a time to guarantee faulty workmanship is fixed.

Held in trust, the payments are considered the legal property of the subcontractor and in the event the company collapses, they are not able to be distributed to secured creditors.

Ebert owes its unsecured creditors about $34m, plus another $9.3m in retention money but, in reality, there’s only a $3.69m fund to dip into, which is about $1m short of the $4.5m subcontractors should have had set aside under the law.

Twenty-one subcontractors that signed contracts with the company after the law change did not have their retentions put into the fund, causing the nearly $1m short change.

This was either because of a ‘‘data entry error’’ or because Ebert stopped setting aside retentions in the two months before its collapse – in some cases, it was not even calculated

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