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.