UTS freezes payments in construction spat

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This was published 11 years ago

UTS freezes payments in construction spat

By Leonie Lamont

The University of Technology Sydney withheld a payment from the embattled Reed building group, after Reed allegedly lied about having paid subcontractors all money that was due.

The accusation comes as Reed faces a deadline next Monday set by the NSW Finance and Services Minister Greg Pearce, to prove it can finish major road works throughout the state. Work on Reed road projects has ceased as subcontractors have downed tools after not being paid.

An independent panel headed by Andrew Rogers QC, which is examining Reed’s financial viability, will report before the deadline. The panel has examined up to $97 million in payments retained by the state and federal governments, but owed to Reed, in an impasse over rectification issues.

The dispute with UTS came to light in court action by one of the subcontractors working on the Broadway site, Mainland Civil.

In early March, Mainland notified Reed it intended to suspend works because of the non-payment of certified amounts claimed in December and January. It sued Reed in April, and in judgement on May 2, the Supreme Court found in favour of Mainland, and issued a debt certificate for $777,724.

Court documents show that when UTS contacted Mainland in late March to check it had been paid, as per the statutory declaration from Reed, Mainland’s lawyer responded ’’that the content of that declaration is false’’ and that Mainland ’’had been carrying significant expenses on behalf Reed’’.

The UTS solicitor responded that UTS was not processing Reed’s final payment claim for $268,000 which was due under the $9 million contract. ’’UTS has issued a notice to Reed that they have breached the construction contract in providing an untrue declaration regarding payment of subcontractors in the broadway building excavation,’’ he said.

Reed has rejected that the statutory declaration was false. In a statement to BusinessDay, Reed said that ’’as at that date, in accordance with the subcontract conditions and agreed payment terms between Reed and Mainland Civil (NSW), the declaration was validly made’’.

’’Conditions precedent to payment had not been met by Mainland at the date of the declaration and as such no further payment was due and payable.’’

Brian Parker, state secretary of the Construction, Forestry, Mining and Energy Union said it was commonplace across the industry for builders to make false statutory declarations about payment of subcontractors.

llamont@smh.com.au

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