2 August 2023

Bureaucrats unaware of public liquidation notice on insolvent company chosen to build Wagga housing

| Oliver Jacques
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Housing Minister Rose Jackson has said she is looking into why tradies still haven’t been paid for building the public housing block at 16 Spring Street, Wagga. Photo: Chris Roe.

The NSW Government’s Land and Housing Corporation (LAHC) claims it did not know the company it appointed to build a public housing block in Wagga was in liquidation until almost four weeks after this information was published online and visible to the general public.

The latest revelation in the long-running saga comes as current NSW Housing Minister Rose Jackson indicated she was investigating the matter.

As Region revealed in July, LAHC appointed an already insolvent company, Matrix Group Co, to construct a $1.5 million, two-storey public housing building at 16 Spring Street in 2021.

READ MORE NSW Government department chose insolvent company to build Wagga public housing

Documents seen by Region show Matrix Group Co had been insolvent at least since 1 July, 2020, meaning it was unable to pay its debts and legally not allowed to trade. Nevertheless, LAHC announced Matrix as the Wagga project’s principal contractor seven months later in a media release it has since deleted from its website.

LAHC maintained its contract with Matrix until November 2021, after the company officially went into liquidation and left several mum-and-dad subcontractors owed tens of thousands of dollars for the work they did to build the dwelling.

LAHC defended its actions in a statement to Region.

“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.”

However, federal regulator the Australian Securities and Investment Commission (ASIC) published a notice on its website stating Matrix Group Co was in liquidation as early as 29 October, 2021. This notice has been visible online to the general public since that date.

ASIC liquidation notice

This liquidation notice has been on the ASIC website since 29 October, 2021, but LAHC says it did not know about the liquidation until 21 November.

Region asked LAHC why, given its “due diligence” and “ASIC data” checks, it failed to see a public online ASIC notice stating Matrix was in liquidation for almost four weeks after it was first published online. We also asked the department whether it continued to pay Matrix after the liquidation notice was published online. LAHC did not respond to either question.

Wagga councillor Richard Foley, who says he is still owed $55,000 for plastering work he did on the Spring Street dwelling, is outraged that the NSW Government kept paying an insolvent company taxpayers’ money for a full year after it first became insolvent.

“It’s malfeasance and a breach of duty of care by the State Government,” he said.

In July, Amy Burns of Yarrawonga-based Oasis Scaffolding and Bricklaying, who says she is owed $90,000 for work on the Spring St dwelling, was herself sent a letter by liquidator Westburn Advisory, demanding she pay a further $59,565 within 14 days.

READ ALSO Tradies fight back after receiving demands for payment to ‘fix NSW Government’s mistake’

In its letter, the liquidator claimed Ms Burns “should have been aware that the Company [Matrix] was insolvent”.

“How the hell would I know that Matrix was insolvent if the NSW Government didn’t even know?” Ms Burns asked. “We are a small family business six hours away.”

Region also asked ASIC whether it was aware of Matrix’s financial status before publishing its liquidation notice on 29 October, 2021, and whether it exchanged any information with LAHC on Matrix. In response, ASIC said according to its “public comment on ASIC’s regulatory activities” policy, it could not comment on either question.

Both Mr Foley and Ms Burns have appealed to Minister Jackson to help tradies left out of pocket by the Spring Street project, which occurred under the previous Liberal/National government.

“This was a mess created under the watch of the National Party,” Mr Foley said. “It’s incumbent on the Labor Party to now fix this for the working-class people they represent.”

Minister Jackson’s office has sought documents and information on the LAHC Wagga matter obtained by Region during our investigations.

“We hear the concerns facing the community and are looking into this matter. We will provide an update on this soon,” a spokesperson for Minister Jackson said.

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