Building company collapses owing $3m as boss declares bankruptcy

A Queensland building firm has collapsed after the company’s boss went bankrupt, plunging the fate of 35 homeowners into limbo.

A Queensland building firm has collapsed after the company’s boss went bankrupt, plunging the fate of 35 homeowners into limbo.

The owner of Brisbane-based construction firm AQWA Constructions, Paul Galvin, recently declared himself bankrupt, leaving behind nearly $3 million in debt.

Mr Galvin appointed Bill Cotter from insolvency firm Robson Cotter Insolvency as his bankruptcy trustee in April.

A report to creditors found that 100 creditors are owed $2.8 million. The creditors include suppliers spanning across four Australian states – NSW, Queensland, Western Australia and South Australia.

The award-winning renovation company has been in business since 2002, but the bankruptcy trustee found that in the years following the Covid-19 pandemic, it hit a rough patch.

Mr Cotter wrote that AQWA racked up debts as it borrowed excessively and had to fight multiple legal cases.

AQWA Constructions advertised itself as a “one stop shop” for all things building and landscaping.

AQWA’s building licence with the Queensland Building and Construction Commission (QBCC) was cancelled in June after its owner filed for bankruptcy.

Previously, AQWA Constructions had drawn the ire of the building regulator and had accrued several infringement notices.

Those including failing to pay for insurance, taking excessive deposits, carrying out unlicensed contracting and improperly using a building licence through an unlicensed contractor.

Without a licence, it’s impossible for the builder to finish the 35 projects it still has on its books.

“It is apparent the construction businesses operated by the bankrupt grew very quickly over the period of several years during and following the Covid-19 period, and a combination of under-capitalisation, poor accounting practices, increasing labour and material costs and lack of management oversight and control, have likely contributed to the ultimate failure of the business,” the trustee, Mr Cotter, wrote.

“In any event, it is quite difficult to pinpoint precise dates of insolvency and our investigations are ongoing in relation to same.”Do you know more or have a similar story? Get in touch | [e-mail]

The company is unable to complete its projects. This is a picture posted on its website.

It comes as a number of other builders have failed this year, adding to a growing pile of company corpses.

NSW builder Alurt Construction went bust earlier this month with debts of more than $2 million.

Project Coordination (Australia) plunged into administration, leaving $120 million worth of projects up in the air.

Rork Projects, which operated across NSW, the ACT, Victoria and Queensland, collapsed with debts of nearly $30 million.

Cubitt’s Granny Flats and Home Extensions collapsed several months ago with 120 projects across two states impacted.

Earlier this week, news.com.au reported that Melbourne builder Holbrook Homes also appears on the brink of collapse as construction sites languish and homeowners take legal action.

A staggering 2349 construction firms have collapsed in Australia in the past year — with expectations that more may fall soon.

In times of economic hardship and inflation, building companies are usually the first to feel the pinch as they run on such small margins.

Indeed, of the 8471 business collapses for 2023, almost 28 per cent were in the building and construction industry, according to data put out by the corporate regulator.

The previous Morrison government’s HomeBuilder grant, which was introduced in June 2020 and handed out $2.52 billion to owner-occupiers who wanted to build or substantially renovate a home, turbocharged the sector.

More than 130,000 customers signed on for the program, with many tradies agreeing to the work under fixed-price contracts that soon became unsustainable as prices began to soar.

[e-mail]