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Where’s the highway money?

Geoff Helisma |

The plight of 23 Clarence Valley sub contractors who have not been paid for their work on Pacific Highway upgrade is now a part of the NSW political dynamic, following a question put to Premier Gladys Berejiklian by NSW Opposition leader Luke Foley and a subsequent meeting with the contractors in Sydney on Sunday May 20.

Mr Foley asked the Premier in the Legislative Assembly on Thursday May 17: “Given that the government engaged Pacific Complete as delivery partner on the Wave 5 section of the Pacific Highway upgrade, and given that the government’s delivery partner promised that all subcontractors would be paid for works performed, why has the government allowed 23 subcontractors to be left unpaid to the tune of $7.3 million?”

Ms Berejiklian said, in part: “When organisations let other organisations down, there are systems and processes in place to ensure that both the Small Business Commissioner and RMS are engaged.

“From preliminary advice I have received, I understand that both RMS and the Small Business Commissioner have been on this case.

“The government always endeavours to ensure that there is timely support for those businesses working for and with the government.

“The government believes in not only doing things fairly and correctly, but also pushing ahead with the regional roads program, in particular.”

Ms Berejiklian also said that the “Minister for Roads, Maritime and Freight”, who was not in the Assembly at the time, “is working to resolve the issue as soon as possible and will consider what else can be done”.

A Labor Opposition media release issued following the hour-long meeting said: “The businesses had worked on grading and digging the Ballina to Woolgoolga section of the Pacific Highway and had been sub-contracted by Ostwald Brothers, which went into liquidation last year owing $7.3 million”.

“But eight months on and countless pleas to the State Government later, the affected businesses have yet to receive a cent, forcing some out of business, while others have laid off staff,” Opposition leader Luke Foley said.

Meanwhile, a NSW Supreme Court judgement on April 5, 2018, traces the money to the major contractor that engaged Ostwald Bros.

Justice James Stevenson ruled in a technical case, which considered the appropriate notice and timely payments to Ostwald Bros.

“Seymour Whyte has not paid Ostwald any part of the scheduled amount,” he wrote, in part, in his judgement.

“There is a dispute as to when such payment was due.

“On 27 September 2017, relying on Seymour Whyte’s failure to pay the scheduled amount [$2.5million], Ostwald made an adjudication application under s 17(1)(a)(ii) of the Act…

“There is a dispute as to whether that purported adjudication application was made within the time prescribed by s 17(3) of the Act.

“On 6 November 2017, the Adjudicator issued an adjudication determination pursuant to s 22 of the Act in which he determined that the amount due by Seymour Whyte to Ostwald was $5,074,218.27.”

Justice Stevenson also wrote: “However, now that Ostwald is in liquidation, and as it and Seymour Whyte have had ‘mutual dealings’ of the kind referred to in s 553C of the Corporations Act, they must follow the procedure specified in that section.

“Accordingly, I propose to order that any judgment obtained by Ostwald arising from the filing of an adjudication certificate be stayed until that procedure is finalised.”

The Independent’s editorial deadline passed before any comment could be obtained from the relevant parties; more in next week’s edition.

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