Les Williams with Beau Hartshorn pictured last year were both heavily impacted by the 2013 Walton collapse. Mr Williams today has won the right in the Federal Court of Brisbane for a Special Purpose Liquidator who will be appointed to pursue claims against the NAB and Walton director, Craig Walton.
Les Williams with Beau Hartshorn pictured last year were both heavily impacted by the 2013 Walton collapse. Mr Williams today has won the right in the Federal Court of Brisbane for a Special Purpose Liquidator who will be appointed to pursue claims against the NAB and Walton director, Craig Walton. John McCutcheon

Subbies win right to pursue NAB over company collapse

CLAIMS amounting to in excess of $70m now appear likely against Walton Construction and Walton Queensland sole director Craig Walton and his financier the National Australia Bank following a judgment handed down in the Federal Court of Brisbane.

Justice John Reeves on Friday granted an application by Sunshine Coast company Williams and Kersten Pty Ltd trading as WK Civil and Page Steel Fabrications seeking appointment of a Special Purpose Liquidator to pursue the bank and the director for actions in the lead up to the October, 2013, collapse of the two companies.

WK Civil was left owed about $800,000 for work done on the Nambour Coles project which cost Sunshine Coast subbies nearly $3m.

Director Les Williams who formed and heads advocacy group Subcontractors Alliance after the decision said special purpose liquidator Michael Caspaney would now review all documents relating to the collapse with a view to making a claim for the full amount of money lost and any damages caused.

"We expect two claims will be made seeking to recover money owed and damages," he said.

"There will be a statement of claim issued within weeks.

"I'm hopeful our claim will also highlight the damage being done to Australian subbies through the involvement of banks and the lack of enforcement by regulatory agencies."

Walton Queensland and Walton Construction allegedly left 1400 unsecured creditors unpaid.

Mr Williams said funding was available to pursue the actions but had been dependent on the appointment of a special purpose liquidator.

"It's full steam ahead from here," he said. "There has been significant reporting about bank behaviour.

"We shouldn't have had to wait so long. There's been public money spent on public examinations.

"Claims against the bank and the director should have happened well before now.

"To date we have relied on processes and have been frustrated by them. We have had to take matters into our own hands."

Mr Williams said he and another creditor, Brisbane developer Lenny Harris, had written to the National Australia Bank at the end of last year outlining what had occurred and asking them to address what he said had been an injustice.

"They told us to seek legal advice so we have," Mr Williams said.

"I would like to thank NAB for its advice.

"There is a long way to go yet. But we have gathered a significant legal team including two barristers, a lawyer and a Melbourne-based QC.

"By pursuing this claim we hope to assist others who will be coming behind us."

In his findings Justice Reeves said the applicants' intent was to pursue Mr Walton for breach of director's duties and the NAB for its alleged involvement.

Reference was made to findings by Justice Derrington in a judgment handed down in the Federal Court of Brisbane last December that schemes had been put in place from April to October, 2013, while the Walton companies were insolvent to ensure they traded on with funds diverted to pay down money owed NAB.

Justice Derrington found the process created new unsecured debts which otherwise wouldn't have been if the companies had been wound up and that because funds were being diverted to NAB were unlikely ever to be paid.

Justice Reeves found appointment of a special purpose liquidator would allow a second opinion about the viability of any proceedings which may be brought against Mr Walton or the NAB.

Liquidator Michael McCann of Grant Thornton gave evidence that he had considered advice from two different lawyers that no viable claim could be brought against the bank before deciding not to do so himself.

A NAB representative said: "We don't have any further comments on this particular case".

The appointment of the special purpose liquidator comes nearly five years and 10 months after Sunshine Coast subcontractors had been left devastated by Walton collapse that came after their engagement on the Nambour Coles supermarket project.

Young businessman Beau Hartshorn was forced into bankruptcy, closing his landscaping business Earthscapes, laying off 10 employees and having to sell his home and his children's horses.

The family still lives with Beau's parents as they struggle to recover from the disaster wrought by schemes Justice Derrington found were meant to relieve Craig Walton of his liability to the NAB while leaving new unsecured creditors unlikely to be paid.

Walton Queensland closed the doors of its Montpelier Road, Bowen Hills, Brisbane premises in the first week of October, 2013, only for them to re-open the next day with the same staff in place re-badged as Peloton, later to be renamed Tantallon.

Vehicles Walton Queensland had leased through NAB continued to be used by the phoenix company until early the next year, then strategic business services division head Geoff Green was to later describe as a mistake.

Tantallon and Lewton Asset Services, the other company set up to absorb Walton projects, both were to go into administration and then liquidation in early 2014.

The nature of the Walton "collapse" galvanised Mr Williams with Subcontractors Alliance becoming a key industry lobby group with goals to change legislation, hold wrongdoers to account and where possible to secure restitution for subbies destroyed by poor industry behaviour.

He was to give evidence to the 2015 joint Senate inquiry into construction industry insolvency and to travel across Australia to hearings and to lobby politicians.

His efforts were to make then South Australian independent Nick Xenophon's support for the Australian Building and Construction Commission contingent on a national inquiry ultimately headed by industry specialist John Murray which made more than 80 recommendations now being considered by several states.

They were also to engage the Queensland Government which is now rolling out its new Building Industry Fairness Act.

News Corp's Save Our Subbies campaign launched early this year was ultimately to lead to the establishment of a Special Joint Task Force headed by Justice Byrne into construction sector fraud which has resulted in 108 matters being identified for further investigation.

The Save Our Subbies campaign identified in excess of 60 construction sector failures since the Walton collapse had left trade suppliers and sub contractors owed in excess of $500m.

State Housing and Public Works Minister Mick de Brenni has repeatedly made commitments the Palaszczuk Government would ensure subbies were paid in full, on time, every time.

A public examination would be held starting on August 8 in the Federal Court of Brisbane into directors and persons of influence in last year's failure of central Queensland builder JM Kelly Builders Pty Ltd.

The examination conducted by liquidator PwC would be funded by the Queensland Building and Construction Commission.

A public examination of Queensland One Homes was also due to start soon.

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