From your description, you have another layer of complication: While you "subcontracted" this responsibility, under the IRS's understanding, you may actually have hired a part-time employee.
For the most part, true subcontractors have their own tools and equipment -- there should have been no need for you to provide your valuable equipment to this worker. In addition, his slipshod work may be a reflection of the fact that he's inexperienced in the business. Perhaps he doesn't really have a business to speak of -- yet another indication that he’s not a true subcontractor.
Not paying him could run you into a complicated web, as employers generally don't have the right to withhold wages from their employees. Before you take any legal action against this worker, speak to a business-side (not employee-side) employment attorney in your area who can give you guidance on your situation.