Tasmanian building companies: Golden Homes (Tas) Pty Ltd in external administration

A couple involved in a northern construction company which left 12 clients without finished homes were paid more than $1m by the company while it was allegedly trading insolvent, administrators have claimed. Where he says the the funds came from.

Devonport based residential construction company Golden Homes (Tas) Pty Ltd.

A couple involved in a northern construction company which left 12 clients without finished homes were paid more than $1m over two years by the firm while it was estimated to be insolvent, its administrators have claimed.

Devonport-based residential construction company Golden Homes (Tas) Pty Ltd entered voluntary administration on August 30 – more than three years after it was established in January 2020.

The company is headed by Emmett Davidson.

In a recently-released report to creditors, joint administrators Michael Carrafa and Richard John Cauchi stated the company’s total estimated liabilities currently sat at $3,627,647.

This included $3,288,097 owed to 71 unsecured creditors, according to company records.

Emmett Davidson is the director of Golden Homes (Tas) Pty Ltd.

In the report, Mr Davidson attributes the company’s financial difficulties to the underquoting of projects, price increases and the resignation of its licenced builder, Jarrod Stubbs, who was also an employee.

The company has not traded since administrators were appointed.

The administrators noted Golden Homes’ troubles were also the result of: poor management of the company and its business operations, insufficient revenue generated to meet its increasing cost of sales and operating expenses, and insufficient cash flow to meet its day to day operations.

Mr Davidson himself is also listed as a creditor to the amount of $260,026.11.

On its financial performance, the report noted the company experienced net losses and that the company had held “insufficient assets to meet its liabilities” since its inception.

The preliminary investigations of the administrators revealed the estimated date of the company’s insolvency was June 30, 2020.

And while further investigations were said to still be required, the report noted the company was balance sheet insolvent from that time, and for all subsequent periods.

Devonport based residential construction company Golden Homes (Tas) Pty Ltd.

The company was also said to have continued trading losses from that time and for all subsequent periods, was unable to meet creditors’ payment terms from that time, onward.

“Based on the information currently known, we do not believe the Director has any defence available to avoid personal liability from a potential insolvent trading claim,” the report stated.

The report noted that from January 20, 2021 until August 11, 2023 Mr Davidson “and/or” his spouse received payments of approximately $1.2m from the company – while it was insolvent.

It was noted $1.2m had been made by Mr Davidson to the company, and when the source of the funds were queried, Mr Davidson said he had sold “a number of personal assets including real property” that had been sold and used to fund the company’s business.

Mr Davidson in the report stated the company was owed $38k by a homeowner for works completed for a residential build – but that same homeowner had since lodged a statement of claim in the Supreme Court of Tasmania against Golden Homes and Mr Davidson.

“The statement of claim alleges that as a result of the incompetence, negligence, breach of statutory warranties and/or breach of duty of the above parties, the homeowner has suffered loss and damage with respect to the build,” the report stated.

A third party was said to have shown some interest in taking over the company and/or some of its builds.

A second meeting of creditors will be held on Wednesday.