Qld builder collapses: What happened to Condev, Pivotal, BA Murphy Constructions
Thousands of Queenslanders have had their home ownership dreams thrown into chaos – and there could be more pain on the way. LIST OF BUILDER COLLAPSES
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Thousands of Queenslanders have had their home ownership dreams thrown into chaos – and there could be more pain on the way.
That was the grim warning from the Australian residential building sector, already hit by a succession of doomed builder collapses and bracing for more on the back of rising interest rates.
The Housing Industry Association’s Economic and Industry Outlook Report in February 2023 said nine consecutive rate increases had resulted in a housing construction plunge.
In January 2023 it was forecast that a string of other construction businesses could bite the dust due to pricing pressures and labour shortages.
In another worrying sign, in February 2023 Queensland’s building watchdog cracked down on more than 500 builders for failing to provide details of their financial position.
That’s on the back of a massive spike in the number of companies hitting the wall in 2022, costing creditors hundreds of millions of dollars as business owners succumbed to “sheer exhaustion”.
A total of 970 Queensland companies went bust during the year, up 47.9 per cent from 656 in 2021 – see below the details of the biggest Queensland builder collapses in recent years.
SEARCH ALL THE 2022 BUSINESS COLLAPSES HERE
DECEMBER 2021
FTI Consulting liquidators moved to take control of BA Murphy Constructions after weeks of uncertainty over its future.
According to documents lodged with ASIC, the company’s directors had “formed the view that the company was insolvent and unable to pay its debts when they became due.”
BA Murphy had signed or taken deposits on about 240 residential contracts with another 50 projects under way on site.
It also had 11 commercial contracts under way. About 100 customers are affected in NSW, 154 in Queensland and 35 in Victoria.
The Queensland Building and Construction Commission (QBCC) in December 2021 suspended the firm’s licence after complaints it was not paying subbies on its various projects around southeast Queensland.
The troubled firm abandoned millions of dollars worth of projects after the loss of the licence.
The firm had earlier told subcontractors it was exiting all its commercial projects including townhouse developments in Brisbane, Caloundra and Sippy Downs.
According to QBCC records, BA Murphy completed 98 projects worth $30.7m in 2020/21 and 100 jobs worth more than $27.5m the previous year.
BA Murphy founder Ben Murphy comes from a multi-generational family of builders and has more than 20 years’ experience in the sector.
MARCH 2022
Failed building giant Condev owed creditors and other suppliers more than $30m while its 107 workers were out of pocket for $2.45m.
In a report lodged with ASIC, Worrells insolvency partner Jason Bettles said unsecured and subcontractor retentions total almost $31m – owed to about 700 people and entities – while the Australian Taxation Office was owed $530,000.
Secured creditor Westpac was owed about $6.3m.
Condev collapsed in March after talks with developers about a $25m cash boost broke down and the directors considered liquidation was the only option for the company.
Mr Bettles said at the time he had been told by Condev directors that subbies, suppliers and other trade creditors had been paid to date but he was yet to determine how much the company owed.
“Because it is trading business, bills will continue to roll in,” said Mr Bettles.
Mr Bettles said the business had ceased trading and all ongoing construction projects were on hold until the liquidation process could establish options.
Condev had more than 100 employees whose outstanding entitlements were expected to be paid in full.
APRIL 2022
Homeowners scorned by the collapse of Queensland building firm Privium were in a “living nightmare” months after the company’s demise.
Privium, which was once one of the largest home builders in the country, went into liquidation in December 2021, leaving 890 homes unfinished and debts in excess of $80m.
The company had less than $400 in the bank after founder Rob Harder called in voluntary administrators in November, leaving homeowners in the lurch across Queensland, Victoria and NSW.
Annie Solomon and her family were one of the unlucky ones who were left with an empty plot of land in Birkdale after signing a contract with the now-disgraced company back in January 2021.
After signing with Privium, the couple knocked down their current home and moved into a rental for the remaining months before their estimated move in date in October 2021.
But at the end of the year, Privium had collapsed before they had even started construction, leaving the couple in the dark, and without their 5 per cent deposit worth $12,000.
“The lack of compassion that came from Privium was overwhelming. There was never any sincerity from them,” she said at the time.
“ … We’ve started completely from scratch again. It’s just been a living nightmare, it’s no longer an exciting process.
“We’ve had to reapply for all the mortgages again and do all the financials. It still has to go through all the approvals and the build is going to cost us so much more now as well with the current prices,” she said.
MAY 2022
Gold Coast-based construction firm Pivotal Homes went under in May with more than 200 new home builds thrown into chaos.
Managing director Michael Irwin revealed at the time rising labour and construction costs were the main reason the company was forced into liquidation.
A Queensland family was left reeling after learning that their $18,177 home deposit was in jeopardy because the building company went bust.
Mum-of-two Ashley Wu, 38, and her husband, bought a vacant lot in Ipswich, 40km from the Brisbane CBD, in October 2021.
They planned to build a dual property for $363,500 and signed with Pivotal Homes.
“I don’t know what to do now,” she told news.com.au.
“I don’t know what’s going to happen, I really hope we can get the money back.”
Ms Wu was especially blindsided by the shocking announcement because just a day before news broke of the collapse she had been negotiating a new price for the build and had come to an agreement, in what she said must have been a sign that staff had no idea of the company’s impending demise.
SEPTEMBER 2022
The development company behind a $500m masterplanned project on the Gold Coast called in administrators, leaving creditors including some of Queensland’s biggest builders owed about $80m.
Nerang Street Pty Ltd, which is developing the Queen Street Village at Southport, had been hit by funding problems as well as the impact of the Covid pandemic on the building industry.
Robson Cotter Insolvency Group, in a report to creditors lodged with ASIC, said Nerang St originally owned nine lots within the project but five blocks had been sold prior to his appointment.
Unsecured creditors of the company were estimated at $40.8m, including Brisbane construction firm Tomkin which is owed $16.2m.
“The directors disclosed the main reasons for the company’s financial circumstances included a change in property market valuations, inability to meet funding arrangements and prior to that the general impact of the Covid-19 pandemic,” the report said.
Secured creditors including were owed about $43m, including $22m to Hutchinson Builders.
SEPTEMBER 2022
A Brisbane building firm specialising in luxury home renovations collapsed owing almost $2m, joining the growing list of construction failures.
Jarvis Archer, restructuring partner at Revive Financial, was appointed administrator of New Farm-based Art Struct, which specialised in renovations of inner-city Brisbane homes.
Archer said at the time the builder had signed fixed-price contracts with customers but suffered significant losses due to cost blowouts on materials.
The company had ceased trading in January, with all 14 ongoing projects terminated by customers.
“The director attempted to complete some of the works under his own building licence,” Archer said.
Like many other building firms, Art Struct was caught out by a surge in labour and materials costs that have put many fixed-price contracts under water.
OCTOBER 2022
Hundreds of Queensland families’ dream home plans were thrown into disarray following the collapse of high-profile builder Oracle Homes.
Outraged Oracle customers took to Facebook group “Building with oracle (unofficial)” at the time to warn others to “lawyer up”.
Two young first homeowners Aidon McCool and Kaylah Phelps thought they were doing the right thing when they put their hard-earned money towards an Oracle build in 2020.
Mr McCool’s mother, Calli McCall, said the couple weren’t surprised by the collapse.
“There was just delay after delay,” Ms McCall said.
“They (Oracle) were blaming the steel company, you know, even sent through emails that the steel company had sent to them”.
She said she suspected the company was in trouble from the lack of communication and little to no building progress.
“They were sent a notice of variation for $55,500 at the start of this year,” she said.
“They just declined it, but again, we didn’t hear back from Oracle to acknowledge they even got that.
“I’m really disappointed in QBCC (Queensland Building and Construction Commission), that they’ve let it go for so long”.
NOVEMBER 2022
Melbourne Cup winner Paul Lanskey’s Queensland construction business owed subbies and other creditors more than $11m.
A report lodged by liquidators FTI Consulting with the Australian Securities and Investments Commission (ASIC) in November 2022 revealed Lanskey Constructions Qld Pty Ltd’s 282 unsecured creditors including the Australian Taxation Office, suppliers and subcontractors were owed $11.2m.
Ben Campbell and John Park, of FTI Consulting, were appointed by directors to wind up the company in October.
“The liquidators will seek to manage the affairs of the company in a manner which maximises the outcome for its creditors,” they said in a statement at the time.
“There are currently no staff directly employed by the company. Creditors of Lanskey Constructions Qld will be updated in due course.”
Lanskey, founded in 1986 by Paul Lanskey and Ross Williams, was involved in large commercial projects across Australasia with offices in Brisbane, Sydney, Melbourne, Perth and Auckland.
Lanskey Construction Qld held a category 5 licence from the Queensland Building and Construction Commission (QBCC) with allowable annual turnover of $120m.
That licence was suspended by the QBCC in October for failure to meet Minimum Financial Requirements.
NOVEMBER 2022
A Queensland building company that specialised in small kit homes went under, owing more than $1m and leaving “numerous clients” in the lurch.
Dane Hammond, of Worrells, was appointed administrator of Pialba-based Just Kits, trading as JK Project Homes, after the 18-year-old company was hit by rising costs and materials in the construction industry.
According to the Queensland Building and Construction Commission (QBCC), Just Kits undertook 53 projects last financial year worth $5.1m.
In a report to creditors, Mr Hammond said the company was founded in 2005 and primarily supplied smaller kit homes and garages before taking on larger projects and changing its name to JK Project Homes.
“The insolvency of the company is attributed to continued trading losses, the downturn in the economy and common issues surrounding the building industry such as rising costs in materials and logistics and skilled labour shortages,” Mr Hammond said.
The company owed subcontractors and suppliers across southeast Queensland about $1.3m. Mr Hammond said the QBCC also had been included as a creditor for an undisclosed amount after “numerous customers” contacted the watchdog to make claims under Queensland’s home warranty insurance scheme.
“The QBCC will likely have recourse against the company for claims paid out,” he said.
Mr Hammond said that in February last year, the company started to take on larger work to build bigger homes.
“In order to assist clients with meeting the bank’s lending criteria, it changed its name to JK Project Homes,” he said. “It is understood finance was more difficult to source for the construction of kit homes.”
DECEMBER 2022
More than 120 jobs could be on the line after a Sunshine Coast business owner put his eight construction services companies in voluntary administration in a bid to reorganise his core kitchen cabinetry business after sustaining an almost $7m loss.
Hit by cost blowouts and the Covid-19 pandemic, the companies are part of the Scooter Group, run by sole director Scott Dwan. Mr Dwan was not available for comment.
The businesses in voluntary administration include Ultimate Spray Pty Ltd; Octeros Cabinets (QLD) Pty Ltd formerly ABC Manufacturing Pty Ltd, and Octeros Cabinets (VIC).
According to the Scooter Group’s financial statements submitted to the Australian Securities and Investments Commission it registered a loss of $6.783m in 2020-21 and $5.232m in 2019-20. The same report to the financial regulator revealed the group in 2020-21 has total equity of $11.875m.
Scooter Group revenue had climbed from $84m in 2019-20 to $144m in 2020-21.
JANUARY 2023
LDC Pty Ltd was the first Queensland builder to collapse in 2023, with the Holland Park-based company owing creditors more than $7m and leaving almost 50 uncompleted projects across the state’s south east.
Liquidator Bill Karageozis, of Mcleods Accounting, took control of the troubled builder, which started in 2018.
Initial investigations show the company owed subbies and other creditors about $7.03m.
“There are 48 building sites affected in South East Queensland and we’ve reached out to the QBCC and they’re aware of the company going into liquidation,” Mr Karageozis said.
“They will contact the lot owners who have had partially completed contracts. We will work with the QBCC and make sure they get what they need.”
LDC had two directors Azzemm Dannaoui and Hou Ming Law. The company was owned by Mr Dannaoui and Edison Law Pty Ltd.
Documents lodged with the Australian Securities and Investments Commission showed LDC owed $7.032m. That figure was made up of more than 130 subcontractors and suppliers, LDC shareholders and three other parties who lent just over $2m to the company, the ATO and Commonwealth Bank.
According to a report to creditors filed with ASIC, LDC owned land worth more than $1m and has $304,000 worth of work in progress.
Mr Karageozis said at the time of his appointment LDC had 45 full time, part-time and casual staff.
“We are looking into the affairs of the company and see why it went down and try to get as much money as possible for the people who are owed money,” he said.
According to QBCC records, LDC completed 29 projects worth $19.4m in 2021-22 and wrapped up 59 projects worth $31.1m the previous year.
FEBRUARY 2023
Liquidators moved to take control of a north Brisbane construction firm as industry leaders warn the home building sector is in its worst slump in a decade.
Robson Cotter Insolvency Group was appointed liquidators of North Lakes-based Pantha Homes, a category three builder that was licensed for work valued at up to $30m each year.
According to the Queensland Building and Construction Commission, Pantha Homes completed 48 home projects in 2020/21 valued at $13.6m but only 11 projects valued at $4.1m in the past two years.
Founded in 2005, the family-owned builder offered “innovative and contemporary home designs” as well as house and land packages.
Robson Cotter liquidator Roland Robson said building costs were a factor in the failure of the company but it was too early to say how much creditors were owed or how many homes were uncompleted.
The QBCC had started the regulatory process of cancelling the company’s licence.
The Housing Industry Association’s latest economic and industry outlook report said nine consecutive interest rate increases have seen housing construction starts plunging.
HIA chief economist Tim Reardon said further RBA cash rate increases in 2023 will accelerate the downturn.
“There was a large volume of work in the pipeline when rates started to rise in May 2022, and there remains a record number of homes under construction, but this will shrink quickly as market confidence continues to fade,” he said.
In the industry recorded 120,000 detached housing starts in 2022 and has forecast 109,000 in 2023.
In 2024 the number of detached housing starts will fall below 100,000 starts per year for the first time in a decade to just 96,300, compared to a 149,000 starts in 2021.
MARCH 2023
An award-winning national construction company abandoned its development sites, leaving projects across Australia in limbo, including tower and townhouse developments on the Gold Coast.
PBS Building is part-way through Marquee Developments’ 19-level Shoreline at Old Burleigh Rd in Surfers Paradise, and sold-out Serenity Reserve townhouse project at Helensvale.
Both sites were locked up and deserted aside from security officers. Calls to the company’s offices were going unanswered.
Subcontractors at some PBS sites began removing equipment before the weekend, while the company’s website was removed from public viewing and its social media pages deleted.
PBS Building is based in Canberra and has offices in Sydney and Brisbane, however its past and present projects are scattered from Sydney to Hervey Bay.
The group has delivered residential, commercial, industrial, retail, office, apartment, aged care and mixed-use developments along the east coast and directly employs 190 people.
MARCH 2023
Sunshine Coast building firm National Construction Management collapsed only weeks after the regulator flagged concerns about its financial stability.
Dane Hammond and Paul Nogueira, of Worrells, were appointed liquidators of the 17-year-old company in March 2023, amid concerns it was not paying subcontractors and other suppliers.
Mr Hammond said he was still working to determine how much creditors were owed, but company records indicated approximately $3m was owing, including an amount to the Australian Taxation Office.
He said he believed the company had only three incomplete projects and these had been terminated prior to his appointment.
“The company had been struggling with many of the same issues that have plagued the building and construction industry over the past few years,” said Mr Hammond.
“This included a shortage of available trade labour, increases in raw material and contractor prices and projects either being delayed or shelved.”
The Queensland Building and Construction Commission (QBCC) in February placed controls on the licence of the Forest Glen-based company to prevent it providing tenders and quotes unless prior approval was given by the watchdog.
Originally published as Qld builder collapses: What happened to Condev, Pivotal, BA Murphy Constructions
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