After complaints of construction delays and unpaid suppliers, company folds
Yet another builder has collapsed, owing $14 million and leaving close to 300 homes unfinished in Queensland and New South Wales.
Queensland-based Oracle Group had already drawn attention earlier this year when it sought tens of thousands of dollars in extra payments from clients to complete their homes amid a worsening crisis in the construction sector, according to a report by The Australian.
With its collapse, the builder – which trades under several names, including Oracle Platinum Homes and Oracle Hunter Homes – left close to 300 homeowners impacted, according to liquidators Bill Cotter and Roland Robson of Robson Cotter Insolvency Group.
“Projects range from not yet commenced through to nearing completion,” they said in a statement. “We understand that total creditor claims, including secured and unsecured creditors, may be in the vicinity of $14 million.”
Oracle is the latest in a string of Queensland building firms – including Privium Homes, BA Murphy and Condev – to collapse as supply chain issues and materials costs cut into revenues, The Australian reported.
Cotter and Robson said Oracle director Tom Orel was fully cooperating to maximise the recoveries for Oracle’s creditors.
“Mr Orel has highlighted the well-known difficult circumstances prevailing in the construction industry, including the recent and rapid rise of construction costs,” they said. “These factors resulted in cost overruns and delays in project completions, which severely impacted the company’s cash flows and its capacity to continue to operate despite the owners’ and staff’s best endeavours.”
Read next: Construction sector may be through the worst – CBA
Creditors and suppliers have been pursuing the company over unpaid debts in recent months, The Australian reported. Dynamic Bradview Roofing launched Supreme Court action earlier this month to recover $910,000 from Oracle over supplying building materials. At least two other suppliers – Raven Roofing and Regency Showscreens and Wardrobes – had also launched legal action against the builder to recover debts.
As its finances fell, Oracle demanded up to $120,000 from some homeowners before they could move into their homes – spurring the building watchdog to warn that homeowners should seek legal advice before paying any extra money. In a letter to customers earlier this year, Orel said the company demanded the extra money due to supply shortages caused by “ongoing ripple effects” of the pandemic.
At that time, the company was reportedly working on 300 new homes across Queensland, about half facing price increases, according to The Australian. Clients have continued to cite long delays – some of up to a year – to complete their homes.
A spokesman for Queensland construction watchdog QBCC told The Australian that it had set up a dedicated team to handle non-completion claims by homeowners affected by Oracle’s collapse.
“We will be doing everything we can to help them continue to get their homes built,” he said.
