Subbies United calls for QBCC overhaul after the collapse of Oracle

Subbies say the Queensland building regulator should have taken action against Oracle months before it collapsed and fear its debts could blow out to $40m.

Queensland subbies believe the impact of the Oracle Homes collapse will be greater than first thought and have called for a shake-up of the building regulator.

The Logan-based builder went into liquidation last week owing about $14m.

The company – which trades under a number of names including Oracle Platinum Homes and Oracle Hunter Homes – made headlines in April when it sought tens of thousands of extra dollars from clients to complete their homes amid the deepening financial crisis in the construction sector.

Subbies United boss John Goddard said the Queensland Building and Construction Commission (QBCC)— should have been “all over the company” when they started demanding more money from homeowners.

“The QBCC Act needs to be changed to give the dinosaurs in charge, the power to dispatch a mortally wounded builder,” he said.

“Oracle strung their clients out to the bitter end. Experience tells us if the liquidators say the builder owes $14m, it will be $30m to $40m.”

Up to 300 homeowners in Queensland and NSW have been affected by the collapse of Oracle Homes.

In response to questions over claims that the QBCC failed to respond to red flags a spokesman said building watchdog has a number of regulatory tools available to take action against any licensee if they have concerns about their financial position.

“These can range from financial audits of a licensee or obtaining management accounts, to issuing show-cause notices and licence suspensions and cancellations,” he said.

“The QBCC issued a public warning earlier this year urging the public to seek legal advice before making payments that fall outside the terms of a fixed price building contract, to protect themselves from unwarranted payments.”

Mr Goddard said there were going to be many disappointed homeowners.

“We’ve had subbies talking about it for months waiting for this to happen.” he said.

“Privium happened last November but many of those customers are still in limbo almost a year later and don’t know what to do to get out of the mess.”

The collapse of the Queensland builder left many clients with partially-built homes and out of pocket.

Meanwhile liquidator Bill Cotter of Robson Cotter Insolvency Group said an early estimate of Oracle’s 2021-22 revenue put it around $74m, up from the previous financial year of $67.4m and $49.8m in 2019-20 when Covid government stimulus measures such as HomeBuilder first kicked in.

A closer look at the company’s books revealed a very thin profit margin of about 2.6 per cent in 2020-21.

In the 12 months to June 2021 contract assets grew by 64 per cent and liabilities by 73 per cent while income in advance – what the company had to deliver on the contracts it had signed – grew from $10m to $19m.

Mr Cotter confirmed Oracle had current estimated liabilities of about $14m, with some $8.5m owing to 200 suppliers.

The initial estimate was that the company had about 300 live contracts on its books, with roughly a 50-50 split between Queensland and NSW.

Mr Cotter expected to start communicating with creditors this week.

“It’s early days and we have secured a whole bunch of material and there’s a lot to get through,” he said.