Justice for Pacific Highway Contractors - Wave 5
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In September 2016 construction began on Wave 5 of the Woolgoolga to Ballina Pacific Highway Upgrade, a contract awarded to the construction firm of Seymour Whyte. As well as Seymour Whyte, the RMS had awarded a contract to a delivery partner for the upgrades, “Pacific Complete” a consortium formed by Laing O’Rourke and Parsons Brinckerhoff.
Wave 5A, the earthworks package, was subsequently contracted by Seymour Whyte to Ostwald Brothers, a construction firm also from Queensland. Ostwald then began works through the use of sub-contractors from Northern NSW. By November of 2016, there were a total of 23 sub-contracted companies working on the construction under Ostwald Brothers.
From the outset, there were challenges with payments and invoicing with many exceeding 30+ days elapsed. Work continued however, with Ostwald ensuring sub-contractors there was money available and that payments would be coming through at any time. Throughout this period, the sub-contractors had to fight for every payment, however continued work for fear of losing any contracts.
Come May 2017, payments to the sub-contractors had stopped completely with Ostwald still maintaining that there was money available. Ostwald continued to put remittances in to Seymour Whyte for contract payments, however in early August of 2017 Seymour Whyte withheld the July invoice to Ostwald Brothers. It is alleged that Seymour Whyte deliberately held this payment, knowing it would send Ostwald into administration. At this time, Seymour Whyte were being acquired (and subsequently was) by Vinci, a large international infrastructure firm.
Throughout this period, the delivery partner Pacific Complete were aware that Seymour Whyte were holding payment from Ostwald, and the impact that was going to have on the business. At no point did they intervene to ensure that Seymour Whyte paid, and that the construction continued as planned.
On August 25th 2017, Ostwald Brothers went into liquidation and Price Waterhouse Coopers were brought in as administrators. Ostwald Brothers was closed and $74million in unpaid debts ratified.
As of 09 April 2018, Seymour Whyte have not paid out any of the money owing to Ostwald Brothers, however a NSW Supreme Court judgement dated 5th April 2018 found that Seymour Whyte are liable to pay.
Since the collapse of Ostwald Brothers, many of the 23 sub-contractors involved have tried to get action on the issue. These contractors have made repeated attempts to solicit action from The Hon Melinda Pavey – NSW Minister for Roads, Maritime, and Freight. They have had numerous unsuccessful appeals to the NSW Small Business Commissioner and the Minister, The Hon John Barilaro.
The 23 affected sub-contractors are not just entities, they are family owned and operated. Many of them are facing extreme financial uncertainty, some have sold houses, some have lost spouses, and some are on the brink of suicide.
We want to see Minister Pavey and the Premier stand-up for these contractors and
GIVE THEM THE MONEY THEY ARE OWED.
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