Paul Keightley from Wide Bay Floor Sanding - out of pocket $21,000 after the Maryborough City Hall main contactor went bust. Photo: Alistair Brightman
Paul Keightley from Wide Bay Floor Sanding - out of pocket $21,000 after the Maryborough City Hall main contactor went bust. Photo: Alistair Brightman

Subbies left in the lurch as City Hall contractor goes bust

FRASER Coast subcontractors have been left in the lurch after the main contractor for the Maryborough City Hall renovations went bust.

GSG Contracting, which won the tender for the $550,000 renovation works, went into voluntary liquidation before local subbies had been paid for their work on the heritage building.

<<READ MORE ABOUT GSG CONTRACTING>>

The Sunshine Coast-based construction company went through a rigorous financial audit before it had its building licence suspended in October.

Hervey Bay's Paul Keightly, who owns and operates Wide Bay Floor Sanding, worked on laying the hall's wooden floors as well as sanding and polishing the 650sq m of floor across a two-week period.

He says he is owed payment for the second half of his contract, worth $21,000.

"I'm a one-man operator and it has just killed me, I can't just recover $21,000 quickly," he said.

 

Paul Keightley from Wide Bay Floor Sanding - out of pocket $21,000 after the Maryborough City Hall main contactor went bust. Photo: Alistair Brightman
Paul Keightley from Wide Bay Floor Sanding - out of pocket $21,000 after the Maryborough City Hall main contactor went bust. Photo: Alistair Brightman

 

"I owe between $12,000 and $13,000 for materials to do the job. I had to ring my supplier and apologise and thankfully they understood but I am going to have to sell some assets.

"The job was six times a normal house."

The 64-year-old estimates he will have to sell his beloved boat which he bought to retire on.

Mr Keightly, who has been in business in the region for 28 years, said he was blindsided after two months of chasing his pay check.

"I found out last Thursday and I am feeling pretty rotten, I've been pretty rotten all week with sleepless nights about how I am going to have to pay my debt for this job.

"An employee at GSG Contracting was on the phone to me every day in the beginning and then just disappeared off the face of the planet."

Mr Keightly took the matter to member for Hervey Bay, Ted Sorensen's office, who told the Chronicle he was investigating further.

Maryborough's Elite Electrical Refrigeration and Airconditiong owner Alex Rowe is also owed $6000 from the hall's mechanical ventilation and hasn't seen a cent.

"So many local businesses have been affected, we just have to absorb this and move on. It isn't fair," he said.

"It has affected our business, for a small business in town $6000 could be the bottom line for the month."

Mr Rowe said he chased the Queensland Building and Construction Commission and the liquidators straight away.

"There are people out there who haven't put in claims yet," he said.

"We spent about one week on this job. We fitted the in-line fan, we built a new control box in the workshop and also fitted that.

"As a business owner we have to pay wholesalers and employees and thankfully people are understanding because I have never been behind with my wholesalers before."

Allen Gillespie Electrical in Maryborough was also not paid its full contract for the job.

GSG Contracting's high-level Queensland Building and Construction Commission licence was suspended on October 28 for failing Minimum Financial Requirements and its State Government Pre-Qualified Contractor status has been made inactive.

Earlier in November, the Sunshine Coast Daily reported the liquidator lodged information with the Australian Securities and Investments Commission showing GSG Contracting had assets of $1 million against liabilities of $1.4 million.

Simon Graye, the company's construction manager, did not return request for comment.

Previously he told the Daily the QBCC's licence suspension had made the decision for the company to go into liquidation.

"We were of the view until that point that we could continue on," Mr Graye said.

"Overall it has been a difficult 12 months trading compared with previous years."

GSG Contracting started on the Sunshine Coast in 2013 prior to which Mr Graye operated a subcontracting business.

"Without a doubt we will be one of many (to go into liquidation) as the QBCC moves into businesses with smaller allowable turnover," he said.

A Department of Housing and Public Works spokesman said the Maryborough City Hall renovation was not a Queensland Government project.

"The department is aware that since 2015, four contractors working on Department of Housing and Public Works projects in the Maryborough area have gone into liquidation, and for which sub-contractor payment concerns have been raised," he said.

"Where such issues arise, the department works with subcontractors to recoup payment through the legal system."

 

Council reacts to wages plea

THE Fraser Coast Regional Council has vowed to do what it can to support sub-contractors left in the lurch after the main contractor for the Maryborough City Hall renovations went bust without paying businesses in full for the job.

Director of organisational service Keith Parsons said the council was disappointed subcontractors associated with the $550,000 renovation works had not been paid.

The project included rebuilding the subfloor foundations and replacing the timber flooring.

"Not all of the funds were paid directly to GSG Contracting; the $170,000 for the hardwood timber was paid directly to the local supplier. Council has changed its procurement processes so that financial viability assessments are part of all tenders with a value of more than $200,000," Mr Parsons said.

 

What comes next for workers?

Worrells Sunshine Coast director Paul Nogueira was appointed liquidator to GSG Contracting Pty Ltd on November 4.

"Creditors can lodge a claim with us all the way up to the point where distribution is made to creditors, you can do this through our website or emailing us," he said.

Mr Nogueira said about half a dozen businesses from Maryborough and Hervey Bay area where listed as creditors.

A statutory report will be sent out in early 2020 which will outline the firm's findings with assets and recovery and whether there will be dividends for creditors.

Mr Nogueira said when paying dividends, the insolvent company's employees were the first priority, then any mortgages and all creditors.

 

UPDATE: GSG Contracting manager responds

THE construction manager for the main contractor of the Maryborough City Hall renovation, which went into voluntary liquidation leaving local subbies high and dry, has spoken out.

GSG Contracting construction manager Simon Graye has told the Chronicle "it is a disappointing outcome for everyone."

He also said that when he took the Maryborough City Hall contract he had no idea the company would go into liquidation.

"It wasn't our decision (to go into liquidation), it was the Queensland Building and Construction Commission," he said.

"This happened because we had our building licence suspended by the QBCC."

The firm's high-level Queensland Building and Construction Commission licence was suspended on October 28 for failing Minimum Financial Requirements and its State Government Pre-Qualified Contractor status has been made inactive.

When asked why the QBCC suspended his builders licence he said it was a "complicated situation" he would "rather not go into at the moment".

Mr Graye said he let several of the Maryborough City Hall contractors know about the liquidation on the day it happened and was advised liquidators had told the rest within one to two days.

Mr Graye confirmed he was still operating an earth moving business called Power Civil which was "a completely separate business in a completely different industry".



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