Plenty of subbies do great work, invoice on time, and still get burned — not because of anything they did wrong, but because of where they sit in the queue when a builder collapses.
What happened
Porter Davis Homes was one of the largest home builders in the country, with around 1,700 homes under construction across Victoria and Queensland when it went into liquidation in March 2023. Customers were left with half-built houses. And the subcontractors and suppliers who had been doing the work — the framers, plumbers, sparkies, concreters, tilers — were left with invoices that may never be paid in full.
Many of those subbies had done nothing wrong. They turned up, did the job, sent the invoice. The problem wasn't their work. The problem was what happens to an unpaid invoice when the company that owes it runs out of money.
The bit nobody explains: the insolvency waterfall
When a company is wound up, there usually isn't enough money to pay everyone it owes. So the law sets a strict order for who gets paid first out of whatever cash is left. Think of it as a waterfall — the money fills the top bucket first, and only what spills over reaches the next one down.
The order, top to bottom
- The liquidator's costs. The people running the wind-up get paid first, out of the pool.
- Secured creditors. Usually the bank — anyone who lent money against an asset and registered security over it.
- Employees. Outstanding wages, superannuation and entitlements of the company's own staff.
- Unsecured creditors. This is where most subcontractors and suppliers sit. You're near the bottom of the waterfall.
By the time the money reaches the unsecured creditors, there's often little or nothing left. Subbies frequently recover only cents in the dollar — sometimes nothing at all.
That's the hard truth of the Porter Davis collapse for the trades. You can be owed tens of thousands of dollars, be completely in the right, and still be near the back of a line that runs dry before it gets to you.
Why this case matters
If a big chunk of your work comes through one builder or one head contractor, their financial health is your financial health — whether you realise it or not. You can't control when a client goes under, but you can control how exposed you are when they do.
How to protect your business as a subbie
- Don't let one client become your whole book. If a single builder is 60–70% of your revenue, their collapse is your collapse. Spread the risk across more clients.
- Watch the warning signs. Payments stretching from 30 to 60 to 90 days, part-payments, excuses, changes to payment terms — slow pay is often the first visible symptom of a cash problem upstream.
- Invoice fast and chase faster. The longer your money sits in someone else's account, the more of it is at risk. Tight invoicing isn't admin — it's protection.
- Know your security options. Depending on your trade and your contracts, tools like the Personal Property Securities Register (PPSR) and security of payment legislation can change where you sit in the queue. This is worth getting advice on before you need it.
- Keep a cash buffer. If your biggest client stopped paying tomorrow, how many weeks could you survive? If the answer is "not many," that's the real risk to fix first.
The lesson of Porter Davis isn't "don't work for big builders." It's that good work doesn't protect you from someone else's insolvency — structure and cash discipline do. The subbies who came through it best were the ones who weren't betting their whole business on one client.
This article is general information only and is based on publicly reported information current as at the date of publication. It is not legal, financial or insolvency advice and does not take into account your specific circumstances. The order of priority in an insolvency can vary with the facts. Please speak to a qualified adviser about your own situation. Precision Business Services is based in Cronulla, NSW.