Interview: Terror Australis
Unions: Graeme Beard's Second Dig
Industrial: The Hell of Troy
Organising: Miners Strike Gold
Economics: The Accepted Wisdom
History: Vicious Old Lady
International: Out of Sight, Out of Mind
Review: War Unfogged
The Locker Room
Getting Away With Murder
The Hell of Troy
Special Report by Jim Marr
It's a Tuesday evening and half a dozen working men are sitting around a table at the Salisbury Hotel in Sydney's inner-west, yarning and sharing the occasional laugh. Nothing unusual in that you might think but, for the most part, they're not drinking.
They've driven from all parts of the city to renew friendships and try to figure out how one man almost ruined their lives.
Collectively, they reckon, Troy Kenneth Stratti dudded them of hundreds of thousands of dollars when he put his company, their former employer Stratti Ocean and Earthworks, into voluntary administration in June, 2003.
They weren't the biggest losers, not by a longshot. Taxpayers dropped a cool half million when the ATO was denied the fruits of a court victory it had secured only days earlier. That too, though, was just a drop in the $5,494,484 ocean of debt Stratti had swum clear of.
But these men were closest to the action and there are some things they can't understand.
Why, for example, is Stratti still effectively operating at least four other registered companies - Detail Rock Tools Australia Pty Ltd, Sandstone Australia Pty Ltd, Stratti Contracting Pty Ltd, and Detail Rock Tools Pty Ltd - from the Alfred Rd, Chipping Norton address, that until recently housed Stratti Ocean and Earthworks?
When, they wonder, will any action be taken over the following opinions in the report to creditors issued by Stratti Ocean and Earthworks own administrator, Woodgate and Co?
- that the company which ceased trading on May 31, 2003, had been insolvent since "on or around" January 7, 2002
- " ... it appears that there are a number of creditors who have received unfair preference payments ..."
When John Bestel tells colleagues that, according to the administrator's report, "all employees had either resigned and been paid all entitlements owing, or had their contracts of employment transferred to a related party, where continuity of service would apply," the reactions range from disbelief to derision.
Each denies receiving any entitlement and, at least one, swears he still hasn't been notified of the company's failure or the loss of his job.
When labourer Justin Graves, returned from a fortnight's holiday last July, he says, Stratti told him there was no work available but "hang loose and I'll get back to you".
After weeks of this he approached his solicitor. They worked out he hadn't been paid his last two week's wages, his holiday pay, travel allowance, or any super contributions. They fired off a letter of demand for $23,500, and haven't heard from Stratti or his administrator from that day to this.
Most of the utterances from under Graves' big, black sun hat are laconic and pitched for a laugh but not when he recounts the response he got from the Federal Government's GEERS scheme, set up to pay basic entitlements when employers hit the wall.
"They told me I wasn't eligible because I had been terminated before the company closed down," he said. "It was news to me."
Former workmates are intrigued when Bestel tells them the administrator reported he had written to all employees on August 18, 2003. Given that seven months have elapsed they are surprised none of those communications have arrived in any of their letter boxes.
Then the stories start to flow. They tell of a good business turned bad.
Ocean and Earthworks - Stratti was formally deleted from the title 13 days before the appointment of an administrator - was the first company in Sydney to perfect tools that could efficiently prise gigantic sandstone blocks from the earth. The family owned a quarry and cornered the market in the recovery and sale of sandstone that was all the rage for the restoration of historic buildings up and down the state.
The work was hard but there was plenty of it.
Looking back, they conceded, warning signals had been flashing for some time.
There was, they say, the refusal to supply pay slips, and the non-payment of super and other entitlements. There were bouncing cheques, dishonoured credit cards, unregistered vehicles, underpayments, oversights, sheriff's visits, and, in latter years, the problems on unionised sites that led their employer to the Cole Royal Commission.
"The unions would make sure he paid super and the like out on the sites but the guys in the sheds didn't get it," Rex Titoko explains.
An 11-year veteran, he is the only one at the table not chasing Stratti for money. Titoko learned early in the piece there was a down side to the long hours and good pay.
The big man recalls a 1997 opportunity to move his wife and six kids into a home of their own. The then-foreman went to see the bank about a loan on the Cranbrook property he had set his heart on.
He was told he needed proof of earnings and for weeks he was on Stratti's case about wage records. Finally, he was given three print outs which he took straight round to the loans officer.
"He looked at them - and said 'you're going backwards," Titoko recalls.
When the bank officer showed him the year to date earnings Stratti had produced, each subsequent week showed a lesser figure.
"I didn't get it," he says of the loan.
Titoko did, however, buy in Cranbrook. It just took him four more years and an extra $150,000.
Mick Toohey is built for hard work. At stages of his 10-year service, he was closer to Stratti than most, valuable for his mind as well as his muscle. One of his strengths was the ability to design and build big industrial saws.
Twice he travelled to the US to sell the company's state of the art rock saws.
Toohey is the only one present who "might" have been transferred from Ocean and Earthworks to another Stratti venture at the time of the administration. Not that it did him much good.
He is still waiting to be paid for his last two months on the job. His accountant informs him he is owed $65,000, all-up, including $30,000 in unpaid super contributions.
Toohey says in all his time with Stratti Ocean and Earthworks he only received $1500 in super payments, along with a $9500 credit from the ATO. He asked and asked, he says, but never received.
"He told me he had financial problems and I gave him time, then one day I went in to work and the locks had been changed on the buildings. That was it," he said.
Toohey tells of years spent calming the sheriff; trying to pacify suppliers who hadn't been paid; cheques that bounced; and flights he had to pay for himself because company credit cards left him stranded at check-in counters.
"We all paid for things out of our own pockets because, if we didn't, the jobs wouldn't have got done," he said.
Then he recounts how one evening, years ago, he ran into the back of a car in a company vehicle. He filled in an accident form and gave it to Stratti to submit to his insurance company, Suncorp.
Imagine Toohey's surprise, four years later, when a bailiff arrived at his Liverpool home armed with a demand for $22,500 to cover the write-off. Stratti, it transpired, had "forgotten" to submit the claim and Suncorp knew nothing about it.
That took months to resolve and came back to bite Toohey, just weeks ago, when a $6500 bill arrived - interest, fees and excesses that Suncorp wouldn't wear because of the delay.
"The accident was my fault but the vehicle was registered to Troy Stratti and he denied ownership," Toohey explained.
Toohey's tale reminds Bestel of the time he sliced the top off his finger and had to get medical treatment. Eleven months later, he received an account from the Governor Macquarie Medical Centre for $445.88.
When he took the issue up with Stratti, he says, he was assured the claim had been submitted to Workers Compensation and that the company had no knowledge of the outstanding bill. Concerned, Bestel returned to the doctor who had a different story. She told him repeated phone calls, then faxed demands for payment, to Stratti Ocean and Earthworks had failed to elicit any response.
Bestel has kept meticulous records. He has in his possession every one of the eight wage slips he received during 38 months employment with Stratti Ocean and Earthworks.
He also has three cheques he says were "manufactured" by Stratti to support claims his superannuation was being paid.
Super is important to the 60-year-old mechanic. His records show he is still owed $5899.36 and he wants it.
Bestel says super, or more accurately the lack of it, was an ongoing source of tension between himself and his former employer. Two years and "many confrontations" into the job, he said, he extracted a promise that it would be paid every three months.
One year and no deposits later, he hit Stratti up again. As a result, during 2002, he was given copies of cheques purporting to have been paid to Navigator Personal Retirement Plan on January 4, July 17, and October 2.
Trouble was, he discovered, none of these cheques had been received by Navigator.
Stratti's insistence that they had been sent, however, was so vehement that Navigator conducted a lengthy internal investigation before confirming its original advice.
There was, at least, agreement that they hadn't been drawn on, so Stratti Ocean and Earthworks sent two further cheques that Navigator actually received. Both, however, were dishonoured by the bank.
Bestel's story draws sighs, expletives and knowing looks, particularly from those who had access to the office.
Then, Ainsley Graves trumps it.
In August, 2002, the owner-driver was paid $83,000 - the outstanding amount on his contract to haul loads of giant sandstone blocks from Piermont, and Branston, near Cessnock, to Dead Man's Creek in Sydney's south west.
After months of hassling, he says, Stratti had given him an electronic receipt from St George Bank.
Days later, though, the money still hadn't appeared in Graves' account so he rang St George, quoting the receipt number. He was shocked to be told it wasn't actually a receipt in the understood sense of the term, more a guarantee that St George would honour the transaction if there was money in the account to cover it.
"He got me, I admit it," Graves says, "when he gave me that receipt, I thought, finally, I had my money. If I added up all the hours I had spent chasing him it would have cost me thousands but, at the time, I was just relieved."
It's a major issue to Graves who can't afford to throw away $83,000 and hundreds of hours of back breaking work.
"Over the last four or five months I have got to the point where I wonder what the hell I am doing. I have no money, I am paying all these bills and just wondering what the point of it all is," Graves says.
His contract, stating full payment would be made within a month of the job's June, 2003, finish, is with Stratti Contracting, rather than the defunct Ocean and Earthworks.
But eight months of waiting, arguing and hoping has worn him down. On February 28, 2004, Graves had his solicitor file for the winding up of Stratti Contracting.
Another employee says he is in a hole for $20,000, while a second contractor claims to be out of pocket by more than $40,000 but neither would be identified.
Stratti denied owing any former employee anything, arguing former workers had "stolen" from him.
He blamed the HIH collapse and the bad debts of other companies for anything Ocean Earthworks still owed.
"I am not aware of what you are saying," Stratti said. "We have had some employees who have stolen from us who have alleged things and tried to make trouble for us.
"These employees are trying to cover up other concerns about the misappropriation of their positions."
Stratti said a "key point" was that he had opposed administration and tried to keep the company afloat.
When he was asked about ongoing company directorships he held, Stratti responded: "I don't really want to talk to you, to be honest."
Ten minutes and two phone calls later, he was offering an official of the NSW Public Works Department as a character witnesses. He said he wanted to clear his name and that less than $500,000 of Ocean and Earthworks debt would remain outstanding.
Last month, however, Sam and Troy Stratti and one of their companies, were ordered to pay former business partners, Patricia and Lefty Metaharis, $48,000. The orders followed a court finding that the Strattis had reneged on a contract with the husband-wife partnership.
"The evidence showed that Mr and Mrs Metaharis' concern about, and distrust of, the respondents, flowed from their failure to pay the applicant what was owed to it for work performed, either on time or at all," Justice Schmidt found in an IRC Court Session.
Workers Online understands that Korean engineering giant Hella is chasing the Strattis for nearly $1 million. The original Hella claim was thrown out when a court ruled the statutory demand, prepared by accountants rather than lawyers, was flawed.
On June 6, last year, the equity division of the NSW Supreme Court dismissed an Ocean and Earthworks appeal against a statutory demand issued by the ATO for $496,309 in unpaid taxes.
In doing so, the court pointed out Ocean and Earthworks was in default of a number of court orders, and rejected its claim that it might have paid because, according to its accountant, its financial records were "a shambles".
"Apparently the Plaintiff's present accountant has been completely unable to reconcile the Plaintiff's accounts despite doing considerable work since the commencement of these proceedings," that decision reads.
"In the circumstances which I have recounted, it seems to me that there was no justification for the Plaintiff to assert as it did in commencing these proceedings, that the Deputy Commissioner's debt was genuinely disputed."
The judge said the company was in breach of its obligations under the Corporations Act and its conduct warranted the imposition of indemnity costs .
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