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 hes 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.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.