Tradies fight back after receiving demands for payment to 'fix NSW Government's mistake'

Small businesses owed tens of thousands of dollars on a botched Wagga public housing project have vowed to fight back after receiving payment demand letters because the NSW Government’s choice of principal contractor went into liquidation.

As Region revealed last week, the NSW Government’s Land and Housing Corporation (LAHC) chose an already insolvent company – Matrix Group Co – to build a sleek two-storey public housing building at 16 Spring Street in 2021.

Matrix had been in the red from at least 1 July, 2020, yet LAHC announced it as the Wagga project’s principal contractor seven months later in a media release that has since been deleted from its website. LAHC kept paying Matrix until October 2021, until the company went into liquidation and left several subcontractors unpaid for the work they did to build the Spring Street dwelling.

Subcontractors Oasis Scaffolding and Bricklaying ($90,000) and Newcrete Concreting ($28,000) both told Region they had been chasing money owed to them for almost two years, but LAHC had been ignoring their pleas.

Representatives of both companies said they were shocked to then receive demand for payment letters from Matrix’s appointed liquidator Westburn Advisory in July 2023.

“Why are they demanding money from us? We are the ones owed money. We already lost $90,000, and we can’t afford to pay another $60,000 to fix the NSW Government’s mistake,” Amy Burns of Oasis Scaffolding and Bricklaying said.

“It’s making me feel sick. I’m having to deal with this every day. I wake up at 2 am every day and wonder how this has happened. We honoured our contract, we were just trying to make a living.”

Newcrete Concreting accountant Andrea Dunstan said her company first thought it was a scam when it received a letter demanding payment of $121,943.81 within 14 days.

“Newcrete poured in excess of $28,000 of our own funds into building this community housing on behalf of NSW Land and Housing Corporation,” she wrote in an emailed reply to the liquidator.

“We never had any knowledge that Matrix was insolvent. We signed a contract to provide concrete works, we met our end of the contract by supplying materials and labour and we were left out of pocket on a NSW government project.

“It is an absolute disgrace on behalf of the NSW government procurement system that this is allowed to happen but to now receive your 67 pages regurgitating what we would rather forget, shame on you.”

Shumit Banerjee of Westburn Advisory said in liquidation matters, it was common to pursue money from creditors – companies that were themselves owed money as a result of a liquidation.

“We have issued a substantial number of demand for payment letters. We do not handpick which ones to pursue and we are obligated to pursue these claims for the benefit of creditors, including employee creditors who are owed outstanding entitlements.

“As a liquidator, we can’t differentiate between who is well off and who is not when investigating potential recoveries … liquidators are required to fulfil my obligations under the Corporations Act.

“It’s an unfortunate set of circumstances. I genuinely do sympathise with those who have received demands for payment and are themselves experiencing financial hardship.”

LAHC has continued to deny any wrongdoing and has not provided assistance to tradies owed money on the LAHC Wagga project.

“The NSW Land and Housing Corporation (LAHC) was first made aware that Matrix Group had gone into liquidation when we received correspondence from the liquidator, Westburn Advisory, on 21 November, 2021,” a spokesperson said.

“LAHC’s due diligence and public records, including ASIC data and the National Personal Insolvency Index, indicated that Matrix Group was solvent when the contract was entered into by LAHC in late 2020.

“Under the Building and Construction Security of Payments Act, the NSW Land and Housing Corporation (LAHC) is not permitted to pay any subcontractors directly.

“This matter remains in the hands of the appointed liquidator working to call in funds to repay outstanding debts to Matrix Group’s creditors, including LAHC and subcontractors engaged by Matrix Group.”

Michael Cassel, the chief executive of LAHC at the time Matrix Group Co was announced for the Spring Street project, is no longer employed by the department. Simon Newport is the current LHAC CEO.

Ms Burns said she was frustrated by what she called LAHC’s inaction and has written to current Housing Minister Rose Jackson, asking her to intervene to help the many tradies receiving demand for payment letters (LAHC appointed Matrix for the Wagga contract under the previous Liberal/Nationals state government).

Wagga MP Joe McGirr described the situation as “a mess” and said he was also taking it up with the Minister.

“I was not previously aware that there was evidence that Matrix were insolvent from at least 1 July, 2020,” Dr McGirr said.

”Now that I know, I’ll be following this up with the Minister again.”

Minister Jackson’s office said: “We hear the concerns facing the community and are looking into this matter. We will provide an update on this soon.”

Original Article published by Oliver Jacques on Region Riverina.