Senator Bob Day’s Construction Group Goes Under 5

Tuesday, October 18th, 2016
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The group of companies owned by Family First senator Bob Day has collapsed, leaving more than 200 home building customers across the country with unfinished homes and more than 1,000 subcontractors concerned about the prospect of not being paid as well as causing the senator to resign from parliament.

In an announcement, liquidators McGrathNicol announced they had been appointed as liquidators of Home Australia Pty Ltd and seven of its subsidiary companies, including Homestead Homes Pty Ltd, Collier Homes Pty Ltd, Newstart Homes (SE Qld) Pty Ltd, Ashford Homes Pty Ltd, Huxley Homes Pty Ltd, Nationwide Australian Investments Pty Ltd and Smart Road Property Rentals Pty Ltd.

According to the statement, the group has 207 residential homes which are yet to be completed across five states under five different brands.

This include 57 homes under the name of Ashford Homes in Victoria, 56 homes under the name of Huxley Homes in New South Wales, 48 homes under the name of Homestead Homes in South Australia, 29 homes under the name of Collier Homes in Western Australia and 17 homes in under the name of Newstart Homes in Queensland.

In its statement, McGrathNicol said customers with homes under construction should first contact the insurer named on the insurance certificate which was issued with their home building contract.

In cases where no insurance certificate has been issued, it said the customers in question may have a claim against the relevant Home Australia entity.

McGrathNicole said the liquidator would work with customers and insurers to ensure that work on all uncompleted homes can be recommenced with an alternative builder.

In an email reportedly sent to colleagues, Day said he had been in business for more than 40 years and had been ‘naturally devastated’ by the events.

Day said that all homes under construction had been covered by Home Owners Warranty insurance whilst he had always agreed to sign personal guarantees to creditors.

However, he indicated that liabilities would exceed assets and that as a result, he would lose his family home and would resign his role as a senator.

“With great sadness I am writing to let you know that earlier today, the Home Australia Group of companies went into liquidation …,” Day’s email reads, as published on InDaily.

 “As for my role as a Senator, I will of course resign.”

In addition to customers, thousands of subcontractors face the prospect of not receiving money owed to them on projects.

Adrian Cartledge, secretary of the South Australian branch of the Construction, Forestry, Mining and Energy Union said many subcontractors ‘run in small gangs of four to six guys’ and would not be able to sustain losses of this magnitude.

“They will be deemed as subcontractors and hence in the mix with all of the other creditors, and probably will get very little of the money they are owed,” Cartledge is quoted as saying on the ABC web site.

“This is a disaster for those small subcontractors.”

South Australian senator Nick Xenophon said the latest collapse demonstrated the need for greater protection for subcontractors, and has indicated that his team could vote against legislation to reintroduce the ABCC if greater subcontractor protections are not afforded.

Prior to the last election, Labour, the Greens, Xenophon and then senator Glen Lazarus gave either full or in-principle support for all recommendations of the Senate Inquiry into Construction Industry Insolvency.

Despite that report having been handed down late last year, however, the government is yet to provide a response.

A creditors meeting for the latest collapse is set to be held at some stage on or before November 4th.


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  1. Linda J

    Ironic the name of the political party he was a senator for is called "Family First"…. looks like a lot of SA Families will feel like a the name sound be Families Second.. and politically connected first!

  2. Mick

    I feel sorry for the staff, client's, trades and suppliers who have been mislead. (Note most larger suppliers would have known of this coming). Bob Day is another "Clive Palmer" who has used company funds to pay for political campaign, stolen from floundering, poorly managed head office, which was robbing state run branches of funds to construct client houses. The company was Bleeding skilled staff who could see the writing on the wall over the last couple of years. Misleading and leaving the clients hard workers ripped off. The government needs to have a royal commission into political donations, to ensure candidates are not gutting companies to fund their political dreams.
    Will family first refund payments to Home Australia staff, clients, suppliers, and trades.

  3. Les Williams

    Senator Day was a supporter of the federal governments ABCC Bill in its current form. He was also a former president of the HIA who stringently oppose the use of secured trusts for payment of subcontractors and suppliers and protection of consumers.
    This will be another huge and sad loss for industry small business and consumers because our state governments have continually allow security of payment legislation to be influenced by peak industry bodies and completely failed consumers and subcontractors . We have met with Senator Xenophon about federal intervention and federal security of payment legislation – it is now a must for Mr Turnbull. He however will be listening to people like Senator Day and groups like the HIA
    This insolvency has similarities to the Walton collapse of late 2013 (a) worsening financial position since 2012 (b) ongoing non-payment of subcontractor issues (c) defective work claims (d) one group company financially affecting the other companies (e) The involvement of the same bank who was reportedly owed $24.5m – [this involvement may be significant] (f) an investor — [a white knight to save the company that doesn't work out].
    What must be identified is the time Day's company were trading insolvent.
    That innocent small business and consumers are still denied any payment security, despite ongoing pleas for proper S.O.P legislation and consumer protection, free from influence, is a complete indictment on the way we are represented, our current democratic process and is not in the public interest.

  4. Charles Litho

    If the Building companies acted within the law they would have received only payments on completion of stages and perhaps the deposit. If Australians had the same inner strength they had a few decades ago they would go to the Bank providing finance and finish off of the building themselves. It is so sad to see Australians as weak and hopeless creatures that need someone to hold their hand in every stage of life.
    The problem is that few people understand that Sydney is another country to the rest of Australia. A business that works in South Australia will not work in Sydney or India.
    Every year I look back with more fondness of the heroic Australian on a basic wage that borrowed a pick, shovel & kerosene lamb to go after work to dig the footings of their house late into the night. I live in a street where most houses were constructed by owner builders. Some families had three generations, men women and children on the week end to do any labouring to build 300 to 400 square metre houses.
    The Stalinist laws that mask themselves as consumer protection work to undermine peoples independence. We need more competition and an open economy to protect the weakest people in our society. A few ratbags have sullied the idea of the free enterprise system.
    It used to be that 60% of bankruptcies were connected with people in the building industry. This may not have changed very much. We need to recognise the fact and enable the consumer to change over builders in a matter of weeks. This means taking power away from certain groups and giving it to the citizen.

  5. David Chandler

    Perhaps this insolvency might prove to be the one too many. The construction industry has a lamentable record of insolvency with the ATO reportedly expecting as many as 7000 construction company failures in the coming year. Bob Day is a decent operator and built a reputable and reliable construction business. He will be devastated. But someone has taken their eye off the ball here, big time. Who is yet to be determined. Notwithstanding the construction sector has some serious soul searching to do if it is to modernise and catch up with other industries that put their customers first. The industry has a culture of rough enough is good enough. Industry custom and practice becomes the norm which replaces Australian standards and building in accordance with design specifications. The industry is represented by associations that advocate for the lowering of accountability and best practice. The Australian Standards call for minimum compliance levels which are then leveraged to accommodate some atrocious results. Any attempt by policy makers to lift the status quo is seen as more fed tape and ferociously fought back. For an industry that enjoys so much public subscription its time for a rethink.
    Re-thinking Home Owner Warranty Insurance and establishing a quality rating system that was reflected in the premium charged to builders based on their track record would be a start. Extending the warranty period to 2 years would be the next and making the mechanism for redress more meaningful to the industry's customers would be next. Better quality construction does not cost more. The savings of waste, re-work and compromised buildings would lead to lower costs and insurance premiums. One size fits all approaches just don't work.