operator operates with  excavator
operator operates with excavator

Builder shuts down after licence suspension

A MAJOR Far North construction firm is shutting its doors after having its licence suspended under strict new contractor asset laws - but the boss is going down swinging.

Cairns builder Laurie Lindner Constructions has been in the game for 27 years specialising in remote commercial and residential projects in places like Cape York and the Torres Strait.

The Queensland Building and Construction Commission cancelled the company's licences yesterday for failing to meet minimum financial requirements.

Investigations started in February after the QBCC received "a number of complaints" about the company.

Now owner Laurie Lindner says stringent new asset liquidity rules have gone too far, and as much as half of Queensland builders would be unable to comply with them.

Laurie Lindner (second right) in 2005 with (from left) Lou Raubenheimer, Michael Noblett and Darren Bennett. PICTURE: MICHAEL WATT
Laurie Lindner (second right) in 2005 with (from left) Lou Raubenheimer, Michael Noblett and Darren Bennett. PICTURE: MICHAEL WATT

They were the same rules that led to major Cairns builder Kenfrost Homes having its licences suspended for about 24 hours in July until owner John Richardson injected a significant amount of his own money.

"I certainly feel bullied, that's for sure," Mr Lindner told the Cairns Post.

"There's a guy I know up here who manages a company that's got a national base.

"They, too, were sent questions by the QBCC and they offered up an $88 million bank guarantee, but that wasn't deemed sufficient because it wasn't 'liquid'.

"It means that unless you've got a couple lazy millions sitting around in your bank account, you're not going to be able to build."

Mr Lindner has penned a letter to Cairns MP Michael Healy outlining the situation he says led to the company's current woes - a new administration building in Weipa for the Western Cape Community Trust.

The Willis Island weather station, built by Laurie Lindner Constructions, won the innovation in environmental management gong at the Master Builders Awards in 2007. PICTURE: SUPPLIED
The Willis Island weather station, built by Laurie Lindner Constructions, won the innovation in environmental management gong at the Master Builders Awards in 2007. PICTURE: SUPPLIED

A dispute has arisen, meaning the practical completion sign-off and the money that comes with it has been withheld while the matter goes to the courts.

"This project has had a drastically negative effect on what was Laurie Lindner Constructions and it is the recent process administered by the QBCC that is the cause for concern," he wrote.

"I felt you should be aware of this conduct as no doubt there is a floodgate about to burst open from the sheer number of builders and subbies who will not comply with the two MFR (minimum financial requirements) ratios now required, the asset ratio and the liquidity ratio.

"Builders and subbies alike will be required to change entirely their asset portfolios just to make attempts to comply, and there will be many who simply won't make the transition.

"The average concrete subbie in Cairns, as everywhere else, has his liquidity ratio housed in the front of his ute about to be diminished in the porcelain at the Red Beret Hotel.

"That's how it is."

Mr Lindner believes up to half of Queensland builders would be unable to comply with the new rules. PICTURE: SUPPLIED
Mr Lindner believes up to half of Queensland builders would be unable to comply with the new rules. PICTURE: SUPPLIED

Mr Lindner said he was winding up the company - which was legally able to turnover up to $89 million a year - with its contracts to be novated into another company he has operated for about a decade, DBL-Space.

He believed it would be able to tread the fine line between ratio compliance and licence suspension.

A QBCC spokesman said more than 90 per cent of licensees that were required to submit their financial information since the new laws were introduced had been compliant.

"Everyone in the building and construction industry knows the devastation that occurs when a construction company collapses, and for too long subbies and tradies at the bottom of the chain have worn the financial implications of big companies going under," he said.

"It is a requirement that QBCC-licensed contractors have sufficient net tangible assets for their maximum or actual revenue and have an asset to liability ratio of at least 1:1.

Kenfrost was back to work within about a day of their licence being suspended back in July. PICTURE: STEWART MCLEAN
Kenfrost was back to work within about a day of their licence being suspended back in July. PICTURE: STEWART MCLEAN

"Part of the requirement is for licensees to have an appropriate level of assets to support their annual turnover.

"This asset base helps ensure that the company is viable, sustainable and it helps to minimise the risk of collapse.

"Since January, we've seen licensees inject more than $1.3 billion of working capital into their businesses to meet the asset requirements."

Mr Lindner said he was a supporter of licensing generally but the new process was "vexatious and untested".

"Both subbies and builders suffer from going belly up in an industry that is risky - it's what we do," he wrote.

"We need a system but what's in action now is a tough gig and unreasonable."

Laurie Lindner Constructions had "pared back a whole pile of staff in the past couple of years" and now has only four workers in its office.