Nikki and Trevor Drake’s son Chris was an elite athlete and professional surfer. He was just 23 years old when on a warm March afternoon at North Curl Curl he was snatched out to sea by a large wave after hitting his head on a rock. He’d just saved the life of a young swimmer struggling in a rock pool his last words as he helped her to safety were “Are you alright?”
He’s been gone four years now and in that time his parent’s business, which was inspired through his surfing, has gone through many difficult times. It’s only now on the cusp of taking off.
“It breaks our heart,” says his mum Nikki. This business is his living legacy and that’s what gets us out of bed every day.”
For more than twenty years Nikki and Trevor ran a business specialising in wood custom joinery but that changed the day they made Chris a set of surfboard racks as a gift.
“We had some material left over so we made some racks for the CEO of surf brand O’Neill, Rod Bain, as they were sponsoring Chris at the time. He loved them so much he called us and said ‘oh guys these are the best surfboard racks I’ve ever seen’ and we laughed, we thought he was joking.
But his praise stuck with me, so we made a few more to try our luck selling them. Chris and I took our surfboard racks and went from Palm Beach to Cronulla and signed up twenty five shops on the spot, and it went forward from there.”
That one idea has grown into Solid Racks, a business that manufactures custom wall systems used in gyms, hospitals and rehabilitation centres. The Drakes have patented the design in Australia, United States, United Kingdom and New Zealand and to do it the Drake’s had to sell everything they owned.
“Trevor and I made a decision to sell the family home, sell the investment property, sell the factories that we worked in because we believed in what we were doing. When Chris was still here he said ‘mum and dad I one hundred per cent support you, don’t worry about me sell the family home it doesn’t matter just get a one bedroom apartment, I can sleep on the sofa.’
All up the couple poured $1.4 million of their own money into the business, as a loan, which was then being repaid to them by the business whenever cash flow would allow.
They had no idea that those repayments would land them in trouble in a workers’ compensation wages audit.
“We do everything above board, every single thing. So when the auditors came in we welcomed them through the door because we had nothing to hide and we’ve always had a great reputation in business.”
The auditors decided the loan repayments, which at that stage was a total of $305,618, were wages for workers’ compensation purposes, and the remaining $1.1 million yet to be repaid back to the Drakes would also be treated as wages.
The auditors slapped them with a $10,500 bill, money the Drakes didn’t have and had no way of paying.
“We were like a poker game, all in. We’d sold everything, we invested that money (after tax) into the business to keep us afloat, so when we got the auditor’s report we were gobsmacked.”
Desperate for advice Nikki sought the services of the New South Wales Business Chamber. The Chamber’s Policy Manager for Workers Compensation, WHS and Regulation, Elizabeth Greenwood looked into it.
“Nikki called me in a panic and when I looked at the material she and her accountant sent to me, the auditor’s reasoning just didn’t add up,” says Elizabeth Greenwood.
Elizabeth helped draft a letter to the auditors who then reviewed Solid Racks’ case. It agreed the money should not be included in the wages and the $10,500 bill was withdrawn.
In its most recent publication the nominal insurer, icare, announced that it had “Completed audits of the wage declarations of almost 1,700 NSW employers in the last financial year. The total result was $19.6 million in premiums payable, and just over 2 million in premiums refunded …successfully identifying incorrect wage declarations by over 97% of employers who were selected for audit.”
“After reading this, and given Solid Racks’ experience, it’s possible that many other businesses have been overcharged too,” says Ms Greenwood.
Nikki agrees that other businesses may have fallen victim to an unfair audit.
“I think most of those businesses would have been wiped out and we could well have been one of those statistics if not for the help of the NSW Business Chamber.”
The audit behind them, Nikki and Trevor are getting on with growing the business. And with everything they do, their son Chris is always on their mind.
“You know one of our friends said to us, ‘As hard as this may sound, Chris’s passing will define you and it will define the direction of your lives and what you do.’ It was hard to hear but it really has, this is an Australian family invention, it was Chris’s vision and we’re about to export into numerous countries all across the world,” says Nikki.
Ellesa ThrowdenSenior Public Affairs and Communications Advisor