4 August 2023

NSW Government department chose insolvent company to build Wagga public housing

| Oliver Jacques
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Wagga Spring St dwelling with Michael Cassel insert

Former LAHC boss Michael Cassel is taking a “career break”, according to his LinkedIn profile. Photo: Supplied.

A NSW Government department chose a company that had been insolvent since 2020 to build a major 2021 public housing project in Wagga, kept paying the company for 15 months while it was in the red, then deleted evidence of its decision from its website, a Region investigation has revealed.

The government-run Land and Housing Corporation (LAHC), which sits within the Department of Planning and Environment (DPE), published a media release on 12 February 2021 announcing controversial Sydney-based Matrix Group Co as the principal contractor to build a $1.5 million two-storey, four-unit development at 16 Spring Street. Clicking on the media release now takes you to a “page not found” error message, but Region retrieved the original document using the Wayback machine, an archiving site that captures webpages from past dates.

The removed publicity statement titled “Boost for new housing and jobs in Wagga Wagga” quotes then-Matrix Group Co director Troy Loh saying: “We value our long-term working relationship with LAHC as we continue to deliver new social housing projects across NSW and it is rewarding to know that we are playing a part in supporting local businesses while assisting in improving the lives of many …”

A few months later, Mr Loh was the subject of an expose by Channel Nine’s A Current Affair, with tradies across NSW claiming Matrix owed them tens of thousands of dollars.

The Spring Street development proved a disaster for several mum and dad tradies who were employed by Matrix as subcontractors. Oasis Scaffolding and Bricklaying ($90,000), Plaster Pros Wagga ($55,000), Wagga Glass and Aluminium ($42,000) and New-Crete Concreting ($28,000) have told Region they are still owed large sums of money for the work they did on the now complete government housing block.

Page Not Found screenshot

A glowing LAHC media release quoting Matrix boss Troy Loh has mysteriously vanished from the government website. Photo: Screenshot.

The subcontractors complained to LAHC that Matrix wasn’t paying them as early as August 2021. Nevertheless, LAHC continued to pay Matrix until just before the company when into liquidation in October 2021 – at least 15 months after the company first become insolvent. But the department continues to refuse to pay several tradies who actually built the dwelling.

READ MORE NSW Government refuses to pay Wagga tradies who helped build Spring Street public housing units

The liquidator – Westburn Advisory – has now sent Amy Burns of Oasis Scaffolding and Bricklaying a demand for payment letter to retrieve money it claims Matrix paid her small business.

“I don’t understand how they could do this,” Ms Burns said. “Where is the moral compass on this? We are mum and dad tradies … our nightmare continues.”

In its letter, Westburn Advisory says that under law, it can retrieve money from subcontractors who allegedly received what the liquidator calls “unfair preference payments” from an insolvent entity – a company that is unable to pay its debts.

“My investigations indicate that the company [Matrix] was insolvent from at least 1 July 2020 onwards and remained insolvent until the date of liquidation, being 29 October 2021,” the letter states.

The liquidator revealed Matrix Group Co had an adjusted net asset position of minus $593,452 as early as 30 June 2020, seven months before DPE and then-National Party housing minister Melinda Pavey announced them as the principal contractor for the Spring Street project in the now deleted online media release. By June 2021, Matrix was almost $2 million in the red, yet the department kept paying them.

“Why the hell did LAHC choose an insolvent company for this project,” Ms Burns asked. “LHAC need to help us”.

Region asked DPE why it chose the insolvent company for the Spring Street development, why it subsequently deleted the online media release revealing this decision from its website and whether it intends to help subcontractors who receive demand for payment letters. The department did not answer any of the above questions.

As late as 5 November 2021, Michael Cassel, then-chief executive of LAHC, defended the decision to keep paying Matrix. He was asked at a NSW Parliament hearing why LAHC continued to pay the company even after Ms Burns’ complaints that the insolvent entity wasn’t paying her.

“The process of paying contractors is very clear and outlined in the Security of Payments Act. You cannot just not pay somebody because somebody has made a phone call to us and said, ‘He hasn’t paid me’,” he said.

READ ALSO ‘Almost ruined me’: Tradies detail hardship caused by government housing project in Wagga

Mr Cassel was later promoted to become secretary of DPE, but his LinkedIn profile indicates he’s been taking a “career break” since June 2023. DPE did not answer our questions on whether he misled the parliamentary hearing or on whether he’s still employed by the department.

The LinkedIn profile of former Matrix boss Troy Loh now states he is a “professional father” and says he’s been on a “health and well-being career break” since October 2021.

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