When a subcontractor liquidates mid-job: protect the site and the cost-to-complete file

The job does not wait for the paperwork

When a formwork subcontractor collapses mid-job, the first problem is usually practical. The site still needs to be made safe, materials may be left behind, and other trades cannot keep moving while the gap stays open. The quickest way to lose money is to treat the liquidation as only a paperwork issue.

At that point, your main task is not to argue about the whole debt. It is to stop the problem spreading. Secure the area, keep the job moving where you can, and preserve the record of what was left on site before anything shifts or disappears.

Lock down the site and anything left behind

Start by photographing the work area, loose materials, plant, tools and any equipment that may belong to the subcontractor. Keep the images dated and in one folder. If the site is live, make sure access is controlled so no one accidentally removes or damages property that may later matter in the liquidation.

Do not assume abandoned gear is yours to use or dispose of. Once a company is in liquidation, the liquidator controls the process and creditors are meant to deal with that office, not the old site crew. A careful handover note is worth more than a quick site clean-up that later turns into a dispute.

Source: Official guidance

Ask the liquidator what belongs to the company

As soon as you know who has been appointed, contact the liquidator and ask one narrow question: what equipment or materials on site do you say belong to the company, and what do you want done with them? Keep the conversation factual. Note the date, the person you spoke with and the items discussed.

If you have hire papers, delivery dockets, retention of title wording or serial numbers, pull them together now. You are not trying to prove ownership in a phone call. You are creating a clean record so the liquidator can identify what is theirs, what is not, and what should remain untouched while the claim is sorted.

Replace fast and price the real gap

Do not wait for the liquidation to solve your program. Get replacement quotes quickly and compare the whole cost to complete, not just the headline rate. That means mobilisation, labour, plant, supervision, freight, delays and any rework caused by the collapse. The cheapest replacement is not always the cheapest completion.

business.gov.au recommends written contracts that spell out timeframes, delivery terms, warranty periods and dispute resolution. Use that same discipline for the replacement job. Keep the quote, the acceptance email and the revised start date together, because the extra cost difference is the number you will later need to explain with confidence.

Build the proof of debt around your extra cost

The proof of debt should not stop at the unpaid subcontract balance. If the collapse forced you to pay more to finish the work, include that extra completion cost and explain how it arose. ASIC says the liquidator must give at least 14 days’ notice of the deadline for lodging the proof, and supporting documents matter.

Build one file with the original subcontract, progress claims, photos, the liquidator’s notice, replacement quotes and the final cost difference. If you can show what was left, what it cost to finish and why the cost increased, your claim is much easier to assess. A loose estimate is much weaker than a documented overrun.

Send the file, then keep the next step simple

The practical next move is to secure the site, notify the liquidator, place the replacement work and lodge a proof of debt that includes the extra cost to complete. That sequence keeps the job moving and protects the record while the facts are still fresh. Do not leave the cost gap in someone’s memory.

If you want help organising the creditor file and pressure-testing the numbers, call CRP today about creditor management. We coordinate independent qualified professionals. This article is general information only and is not legal advice.