Failed Melbourne builder Hallbury Homes owes up to $12m

Creditors are likely to be left empty-handed after tipping a failed Melbourne builder into liquidation amid claims it traded while insolvent.

A Melbourne builder which became the first major Australian residential construction company to collapse in 2023 will be wound up potentially owing up to $12m amid calls for more transparency in the industry.

Hallbuild, which trades as Hallbury Homes went into voluntary administration on January 5 leaving 42 homeowners whose building sites were in various stages of completion and over 400 creditors.

Menzies Advisory principal Michael Caspaney, who was initially appointed administrator, was made liquidator last week after a fiery meeting in Melbourne with Hallbury clients and creditors.

Mr Caspeney said by the end of the liquidation process the company will probably owe between $8m and $12m once the cost of housing completions was assessed.

“At this stage I’m not forecasting any returns except to employees. This is usually the case where the builder has run the company dry,” Mr Caspaney said.

“In my report I identified that the company was probably insolvent for most of 2022 and my estimate is a conservative $6m while they were trading.”

A completed Hallbury Homes property in Melbourne.

Hallbury Homes collapse is a part of a long and growing list of well-known Australian builders collapsing.

According to the company’s trading history it recorded revenue of $23.42m in 2028-19 and net profit before tax of $273,185 while by 2021-22 it had a revenue of $16.759m and net loss before tax of $535,951. In the just over six months the award-winning builder was trading in 2022-23 it recorded a net loss before tax of $1.186m.

Association of Professional Builders co-founder Russ Stephens said the only way to stem the bleeding in the construction industry was by insisting on full visibility of all company financials.

“Already this year we have seen Gold Coast company LDC on its knees, and this past month alone two construction companies in Western Australia have gone under and the latest to collapse is EQ Constructions in NSW.

“While the collapses are being blamed on labour shortages and increasing construction costs, the truth of the matter is that the mismanagement of funds and lack of financial education are significant contributors.”

Mr Caspeney said he expected the liquidation to take a couple of years to finalise.

“I’m currently in the process of selling the assets of the company but I can’t give any details at this stage,” he said.

Hallbury could not be reached for comment.