Mad as hell and ready to fight
THE level of insolvency in the construction industry is a scandal that fails to attract the headlines deserved of losses that count at $3.4 billion annually.
It's a national issue, costing the economy an estimated $10 billion.
Yet the industry continues to be largely ruled by state-based legislation influenced to varying degrees by the powerful lobby groups that are home to many of those who are part of the problem.
The collapse last October of Walton Construction and Walton Queensland, two companies of which Craig Walton is sole director, left debts totalling $50 million.
Those losses were followed in the previous 18 months by the collapse of Reed Construction Australia and Kell and Rigby.
Combined, the three companies cost mainly small sub-contractors more than $150 million.
What do you think should be done about corporate insolvency?
This poll ended on 08 February 2015.
More criminal sanctions - lock them up if they can't pay up
Longer corporate penalties - go bust and leave the industry for good
Nothing - if the subbies were insolvent they'd be fine with current penalties
Less regulation entirely - it's red tape that causes this in the first place
This is not a scientific poll. The results reflect only the opinions of those who chose to participate.
Sunshine Coast businessman and engineering surveyor Les Williams, whose firm Williams and Kersten formed in 1988 with partner Matt Kersten, is owed $700,000 by Walton for work it did on the $21 million Nambour Coles project.
Williams has had enough.
The Walton collapse, he says, has drawn a line in the sand.
"In short, this is a fight that sub-contractors cannot afford to lose," Williams, who heads the Queensland-based Walton Sub-Contractors Alliance, said this week.
"Otherwise, it will just keep happening."
Williams has been the Sunshine Coast Rugby League president for the past three years, was president at Nambour Crushers Rugby League Club for eight years and also headed the Sunshine Coast Water Polo Association for two years.
Sport has always been part of the life he built for himself after leaving his home town of Longreach to take up a Queensland Rail scholarship at Queensland Institute of Technology where he graduated as an engineering surveyor.
Williams worked all over Queensland with QR but moved to Nambour in the early 1970s to work with former Maroochy Shire mayor Fred Murray's surveying business.
He was then involved in construction for Thiess and other large companies on projects across Australia.
Williams met his wife Gail at waterpolo.
Their son made Queensland representative teams and their daughter represented Australia in waterpolo at schoolgirl level.
"I was never much good," he laughs.
"I was flat out making A grade.''
Dogged determination, though, saw him play for three different teams in one season as his job took him across the country.
Now 64, he's organised, more than ready for a fight, and still angry enough to maintain the energy to complete a full day's work and the four hours on top of that he puts in pursuing justice.
He's brought a rugby league forward's mentality to the battle and he intends to keep driving forward to the point where he is contemplating returning to university to complete a commercial law degree in a bid to improve his industry.
This determination is not just about the money.
The $700,000 his company lost is important.
It killed plans for his partner Matt Kersten to retire this year and absorbed everything they had set aside to protect the business from rogue builders.
But even more important is the need to put a stop to the vicious cycle of
insolvencies that plague the industry and ruin businesses and lives.
This time, rather than carrying their fights individually in the pursuit of what they're owed, the subbies have organised themselves and are speaking with one voice.
It has been a smart move.
It's also personal.
No one likes being lied to and taken for a ride and that is exactly what Williams believes has happened.
"We didn't see it coming," he said.
"They were a bunch of pr*cks to work for but they had paid on the dot.
"It wasn't until we asked at the end of September where the money was owed to the end of August that we realised."
The construction industry's payment system leaves sub-contractors hopelessly exposed.
Subbies incur debt for labour and materials for a full month before their invoices are submitted.
Then they are not paid for another 30 days, during which time they have incurred even further costs in meeting the obligations of their contract.
On the Coles Nambour job, young landscaper Beau Hartshorn's business Earthscape was caught in the worst of the cycle.
Almost all of the work it was contracted to complete fell in August and September, the final two months of the project.
Hartshorn has been caught for more than $500,000 and may lose everything.
"They knew full well we were spending money for which we wouldn't be paid," Williams said.
"That's what really sh*ts you. When they know (and don't tell you).
"There are three things in play here.
"We've been ripped off by crooks that have the money to use the legislation to defeat us.
"Even claims under the Sub-Contractors Charges Act cost $10-15,000 to get into court. If you are owed $20,000, you won't pursue it.
"I hate being beaten by legislation everywhere we turn. They have the money and the lawyers to use the rules.
"In this particular instance, we need a win.
"We want Craig Walton's arse in a sling and we want to get paid.
"If we do it the right way, we will also get the laws changed.
"How long can the Government continue to let this happen?"
The subbies' united stand has already caught the attention of the State Government.
Housing Minister Tim Mander through the new Queensland Construction and Building Commission, which replaces the old Qld Building Services Authority, has committed to fund the public examination of those at the centre of the Walton collapse.
The Australian Securities and Investments Commission also has launched an investigation and is now before the Federal Court of Australia seeking the removal of Walton liquidator Lawler Draper Dillon for failing to declare a conflict of interest.
A decision is yet to be handed down.
A lot of money is at stake.
The subbies' united fight is attracting the attention of major litigation funders who are assessing the risk/reward of swinging in behind them for a slice of what they may be able to retrieve through the courts.
"The only way to bring change is to win this and make developers accountable as well," Williams said.
"If governments don't bring forward legislation that protects 90% of this industry and don't wish to consult, then sub-contractors should consider a High Court challenge to the legislation. As it stands now, it denies justice and is discriminatory.''
- Industry losses up to $34 million
- Craig Walton's companies collapsed, owing $50 million