The national building empire of Senator Bob Day could be fighting for its life as NSW regulators warn its state licence may not be renewed and customers and unpaid tradesmen ask questions about the solvency of the business.
As the Family First senator blames “others’ poor management decisions” for the crisis, an SBS investigation has established building work has all but stopped on the unfinished houses of 61 Huxley Homes clients in NSW.
Complaints extend to Huxley’s sister company in Victoria, Ashford Homes, where trades people – like those in NSW – say they wait months to get paid.
It emerged this week that Senator Day, who is also the sole director of the national parent company Home Australia, as well as Huxley, put his own Adelaide home up for security after falling behind on payments to a concrete supplier to Ashford Homes.
SBS has learned that Huxley Homes failed to meet the rent on its Baulkham Hills headquarters for several months and it is now paying off the arrears in instalments.
The Fair Trading department says Huxley’s building licence cannot be renewed on the due date of October 14 this year unless it complies with outstanding orders of the NSW Civil and Administrative Tribunal, to which customers have taken complaints of incomplete and faulty building works.
Of 40 Huxley customers contacted by Fair Trading, 80 per cent said they were “dissatisfied”. They include Sydney school teacher Will Naicker, who still has no occupation certificate for his Beecroft home 75 weeks beyond its contracted building period of 40 weeks.
Mr Naicker emailed Senator Day on Tuesday this week to ask: “Are you able to confirm that Huxley Homes Pty Ltd is in fact solvent, that is, has assets of sufficient value to cover its liabilities. As we have paid your company in full and your company has yet to complete our house, we technically have become creditors and, therefore, are entitled to query your company’s solvency.”
Senator Day did not respond to SBS’s specific question about his response to Mr Naicker’s email. Under Section 44 of the Constitution, a federal MP or senator cannot continue sit in the Parliament if he or she becomes an undischarged bankrupt or insolvent.
Senator Day narrowly survived the recent federal election to clinch the final Senate seat in South Australia. And he is a vital cross-bench supporter of the Turnbull government’s bid to re-establish the Australian Building and Construction Commission, which is meant to oversee the building industry.
SBS sent Senator Day extensive questions but his office replied that he “has nothing further to say”, although it referred SBS to his comments earlier in the day on his Twitter feed.
“Let’s be clear about two things here,” Senator Day wrote on Twitter. “Firstly, when I became a senator I left the building business. I only stepped back in to help after others’ poor management decisions affected some customers and suppliers.
“It is important to fix the problems and I am working to ensure everyone who is owed money is paid and every customer’s home is finished – as the company has done for over 30 years.
“Secondly, all businesses have problems.”
Following reports in The Australian this week, which noted company accounts showing Home Australia breached its loan conditions on at least $24.5 million owed to the National Australia Bank in 2014, Senator Day said on his Twitter feed:
“The only reason The Australian is interested is that the business is linked to a sitting senator. I’m disappointed that details of private meetings, and private emails which were sent in good faith, were given to the media, yet as can be seen, I have been personally seeking solutions to resolve problems.”
Among people waiting payment was Angela Ellis at Trussfab, a fabricator of wall braces and trusses based in Dandenong, who says the firm was owed more than $300,000 at one point – and had written off the final $10,000 it was owed.
But the $10,000 was paid on Thursday just hours after her story had been published in The Australian.
As Ms Ellis and her colleague repeatedly pleaded for repayment, Senator Day offered to pay off the debt at $3000 a day and offered answers such as: “we have been swamped. No excuse. Will follow up”; “I’m as disappointed in Ashford Homes as you are”; and “As you know, I’m in the middle of an election campaign with a week to go which has made it hard for me to give this matter the attention it deserves.”
As , Electoral Commission records showed the senator had provided Family First with political donations and loans worth more than $2 million over the past five years.
SBS then reported that more than 20 disgruntled clients had asked the NSW Fair Trading Minister, Victor Dominello, to suspend Huxley Homes. They complained about inordinately long delays to complete projects, defective work and failure to fix faults. Two more delegations of Huxley customers have met Mr Dominello since then.
Home Australia’s statement in 2012 to the corporate regulator, the Australian Securities and Investments Commission, included a warning from the company’s independent auditor casting “significant doubt on the consolidated entity’s ability to continue as a going concern” and discharge its liabilities.
Its liabilities exceeded its assets by $29,931,123. And the auditor said the directors’ goodwill valuation for Huxley Homes of $10,065,887 should instead be written down to zero.
Senator Day is a former president of the Housing Industry Association and in 2003 he was made an Officer of the Order of Australia for services to the building industry and social welfare, particularly the homeless.
Mr Dominello’s office referred SBS to his department’s actions against Huxley Homes.
Fair Trading said Huxley was yet to lodge an application for the renewal of its licence, due on October 14. But it warned: “Huxley has several outstanding tribunal orders. If it has not complied with the orders, any renewal application may be refused.”
Fair Trading has twice issued “show cause” notices against Huxley and Senator Day. In February it issued penalties of $20,000 and $7000 against the company and Senator Day respectively for failure to comply with eight rectification orders. In September, further fines $10,000 and $3500 were issued but the legal advice to Fair Trading was that the offences were not sufficient to justify suspending Huxley’s licence.
In August this year, Fair Trading wrote to Huxley raising concerns that Senator Day was not “exercising adequate supervision over the company”. It required Huxley to nominate a NSW-based supervisor. Alan French took on the job but soon notified Fair Trading he was resigning, effective September 21.
SBS has learned he was among about eight staff to leave the company in succession. They included its construction manager and he is yet to be replaced.
Senator Day remains Huxley’s licensed builder but he is not in NSW to vouch for its projects. SBS asked him if this was appropriate but it was among the questions that received no reply.
Fair Trading has demanded that Huxley find a replacement for Mr French.
This week, Huxley was listed for the second time on Fair Trading’s new complaints register, which is triggered when there are 10 or more complaints against a firm in a month.
The department also warned that Huxley was unable to insure new projects under its current eligibility profile with the Home Building Compensation Fund. Its last project insured was a duplex on July 11 this year.
But Fair Trading cautioned consumers that they could only claim on HBCF insurance if a contractor dies, is insolvent, has disappeared, or if their licence is suspended for non-payment of a tribunal monetary order.
Stuart and Dr Melinda Bunt outside their half-finished home in Sydney. (Supplied) Source: Supplied
“In the case of Huxley, consumers will not be able to claim on HBCF insurance if Fair Trading suspends or refuses to renew Huxley’s licence,” the department warned.
SBS has spoken to two tradesmen this week who said Huxley owed them $40,000 and $10,000. Other trades people – who have worked for Senator Day’s company’s in NSW, Victoria and Queensland – have told SBS that payments have been delayed for as long as six months.
At Beecroft, Will Naicker and his wife Mairead are in the 115th week of a building process that was meant to take 40 weeks. They still they do not have a certifier’s permission to occupy the house.
It is the same story for Lisa and Cornelius Duba, who had no choice to move into their Castle Hill home without an occupation certificate.
Mr Duba told SBS he was worried about the insurance implications but, after three years of dealing with Huxley, he could not afford to pay rent as well as the mortgage on the unfinished house.
Estimating he had lost $40,000 – and worried that an onsite stormwater detention “disaster” will not be fixed – he said: “I suppose we’re living in the house illegally, but I was going to the wall.”
At Mona Vale, Dr Melinda and Stuart Bunt have given up on Huxley. They severed ties with the company and hired other builders to finish the job. They hope Huxley can cover the bill when they send it to the company.
Dr Bunt told SBS in June, just before the federal election: “To see Bob Day campaign at the moment with the mantra, ‘For every family a job and a house’, when so many people in NSW building with Huxley Homes still don’t have a home finished, we don’t feel like he’s putting our family first.
They said then that they had been advised “directly by management at Huxley Homes” that there was a cash-flow problem.
“So it’s galling for us to see Senator Bob Day bankrolling his campaign – and we’re still in a house that’s unfinished,” Dr Bunt said.
