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Builders of the new Royal Adelaide Hospital – HYLC – plead guilty in proceedings issued by the Small Business Commissioner

The joint venture builders of the new Royal Adelaide Hospital, HYLC, today pleaded guilty to a charge concerning a failure to provide the South Australian Small Business Commissioner with information relating to subcontractor arrangements.  

HYLC is a joint venture between Hansen Yuncken, and CPB Contractors formerly known as Leightons Contractors.

Following complaints from three subcontractors seeking the return of their retention monies, the joint venture partners were issued with a Notice in May 2017 by the Small Business Commissioner, John Chapman, requiring them to provide information under Section 12 of the Small Business Commissioner Act 2011 (Act). Subcontractors are often required to lodge substantial cash bonds or bank guarantees which head contractors claim are necessary to ensure completion of work and to cover any defects.  

After some initial discussions, HYLC refused to provide information in its possession which included details of all the subcontractors working on the project. Mr Chapman subsequently issued a formal Notice under the Act which required HYLC to give the information to him.  

“I was concerned that because of the ongoing delays on this project, subcontractors may have been waiting years for the return of their retentions when the delays in the project were not their fault,” Mr Chapman said.  

“We were trying to work with HYLC on an outcome which would have helped the three subcontractors who came to me and, as it turns out, 157 other subcontractors who were caught up in what became totally unacceptable delays.”  

“Unfortunately, alternative routes did not work out and I had little option but to issue a legal demand for the information.”  

Mr Chapman then commenced criminal proceedings against HYLC for their failure to comply with the Section 12 Notice. The Act provides for a fine of up to $20,000 if found guilty.  

Today in the Adelaide Magistrates Court, HYLC pleaded guilty to the offence and agreed to pay all costs incurred by the Small Business Commissioner in prosecuting the matter. Magistrate Kym Millard accepted the guilty plea and fined each of the joint venture partners $1800 plus victims of crime levy and Court costs.  

The Court did not record a conviction after consideration of submissions made by each of the joint venture partners.    

“Put simply the behaviour of HYLC towards the valid concerns of the three subcontractors was unacceptable,” Mr Chapman said.  

The Small Business Commissioner said he expected all businesses to respond fairly and positively to his office when disputes arose.  

“I look forward to working with each of the joint venture partners in a much more cooperative manner in the future on any outstanding issues involving their small business suppliers or subcontractors,” Mr Chapman said.

“I would also expect that the prime contractors in the building and construction sector take serious note in the future of any requests they receive from my office as we try and help subcontractors and suppliers get paid in a timely manner.”

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