ACT News

Queanbeyan contractors lose $400,000 at new Dan Murphy's

Queanbeyan construction businesses are chasing over $400,000 in unpaid debts at the town's controversial new Dan Murphy's site after a management contractor was evicted from the build this month for not paying his bills.

It's enough to send at least one local contractor Fairfax Media spoke with to the brink of closure, while others bigger operators are owed amounts up to $80,000.

The new Dan Murphy's site at the corner of Crawford and Morisset streets in Queanbeyan.
The new Dan Murphy's site at the corner of Crawford and Morisset streets in Queanbeyan. Photo: Queanbeyan Age

A total of 15 local construction contractors and suppliers are chasing unpaid invoices ranging from $2000 up for works dating back to November last year after Award Contracting was recently dumped from the work site by principal contractor, Sydney-based Flexem Constructions.

Flexem's project manager, Mark Jabbour, said his firm removed Award Contracting principal Matthew Fraser from the site on Friday, February 6 after realising he hadn't been passing on the money paid to him to pay his local subcontractors.

"As soon as we found out that people weren't getting paid, considering that we've paid whatever invoices we had from him, and there was no reason why he wasn't paying his people – and the fact that he wasn't meeting targets – alarm bells started to ring," Mr Jabbour said.

Meanwhile, the affected local business owners said they're furious with both Flexem and Dan Murphy's parent company, Woolworths, for continuing to pay Award Contracting without checking the company was paying its subcontractors.

One smaller local operator said the lost funds could put them out of business entirely, after losing several thousand dollars at the Dan Murphy's site.

"We're only a small company, and I also had another, eight or nine grand not turn up from another job. So at the end of the month when I'm supposed to have $20,000, where is it?

"Then you've got all your insurances you've got to pay. It's too much. You can't carry it," he said.

The affected businesses, who have withheld their names and company titles for the time being so as not to prejudice their payment claims, have formed a lose collective and have lobbied Queanbeyan Council and local state MP John Barilaro to help them reach out to Flexem and Woolworths.

Their spokesperson, who manages a construction hire firm owed $12,000 from the Dan Murphy's site, said Flexem and Woolworths hadn't done its due diligence in monitoring Award Contracting.

"We feel that whole process of Woolworths appointing Flexem, and their due diligence in appointing another contractor has erred – they've erred in their responsibility," he said.

"The life cycle of the job was supposed to be 12 weeks, and inside of a month, he hasn't been paying bills. So [Award] had no cash flow to start with, and then [Flexem] make progressive payments to Award, and Award's still not paying its bills.

"We personally believe that Woolworths have a responsibility to resolve this. We don't know how much Woolworths have paid Flexem, but if they haven't paid them their progress payments, they should stop that until we've been paid," he said.

Another local crane operator, owed $70,000 from the work completed on the site in early February, said it was unusual for a contractor like Award to be paid in advance for works that had still to be completed.

"What the principal contractor is telling us, they're saying that they paid him [Award] in full in December for the work I hadn't even completed yet. I don't know why they would do that.

"I've never heard of that before, and I've been in business for 20 years."

He said his business would seek to reclaim the money through the courts, however he was not optimistic about seeing the full amount returned.

"We don't really have any options. I have palmed it off to my solicitors, but now we start racking up solicitors bills, which never ends well.

"Once the [debtor] company's wound up, you never see it. Even if it be five cents5¢ in the dollar [reclaimed], you would have well outspent it in chasing it in legal fees."

Meanwhile, Mr Jabbour said Flexem Constructions would now take over full management of the site after removing Award Constructions, and was willing to re-hire the local businesses and pay them up front for any new work beginning this week. But he stopped short of offering to pay for their prior work conducted under Award Contracting.

"They were contracted by Award Contracting – they weren't contracted by us. We've offered to keep them on and pay them direct. And regarding the money they're owed by Awards, it's a legal matter at the moment. It's a legal matter between everybody, between us and Award, and Award and their contractors.

"It is an unfortunate situation for everyone involved. We're chasing them [Award] as well; we're on that same bandwagon," Mr Jabbour said.

The Queanbeyan Age contacted Woolworths to see if it had been in contact with the local contractors about the pay dispute; however a spokesperson for the company said it was a matter solely for Flexem.

"Woolworths' contracted builder on the new Dan Murphy's in Queanbeyan is Flexem. They have told us that they have fulfilled all obligations with respect to workers on the site," the spokesperson said.

The Queanbeyan Age also made several attempts to contact Matthew Fraser and Award Constructions, however our calls were not returned.

The Queanbeyan Age