NBN subcontractor accused of fraud in payments spat

A Sydney NBN subcontractor has been accused of fraud by a Supreme Court judge in a legal fight over the payment of nearly $150,000 in fibre-laying invoices.

Justice Michael Ball today knocked back claims by civil construction outfit Civicomm that it is owed $149,622 for work performed on behalf of NBN Co contractor QC Communications.

QC stopped paying Civicomm after NBN Co conducted an audit into its work and raised a number of issues with the performance of the telecommunications subcontractor.

Despite the problems, Civicomm commissioned a construction industry adjudicator to go after the outstanding cash.

Ball today overturned the demands, determining that the adjudicator’s document had been “procured by fraud” and alleging the subcontractor routinely falsley topped up its invoices.

The judge accused Civicomm of sneaking charges for fake items into the invoices it sent to QC Communications, and said QC Communications could not be compelled to pay the invoices in the face of convincing evidence Civicomm and director Karl Zakaria were lining their own pockets.

“Amounts were claimed in the invoices submitted by Civicomm to QC Communications for work done at particular addresses which were not shown on the invoices submitted by the subcontractors for the work that they did at those addresses,” Ball said, after the court heard evidence from a series of workers charged with digging bores laying the cables.

QC Communications said it would undertake a “forensic audit” of the invoices issued by Civicomm and if necessary, would go after the firm for any money it was overcharged.

Ball labelled the fraud "sufficiently significant and widespread” that it nullified the payment determination made by Civicomm’s adjudicators in December 2015.

He ordered Civicomm to pay all costs in the proceedings. No formal fraud charges, however, were laid against any of the parities.