The building empire of Senator Bob Day is imploding around him.
HomeWorld has removed the Family First senator’s NSW outfit, Huxley Homes, from its display-home sites. Huxley’s landlord has also sent the firm an eviction notice, demanding it vacate its head office at Baulkham Hills by Monday because it is months behind on rent.
And Huxley management has been openly telling customers that funds have dried up and it cannot complete their homes, and cannot guarantee they will be refunded.
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As Senator Day declines to answer questions about the solvency of his operation – and as he approaches a Friday deadline to seek the renewal of Huxley's licence to operate in NSW – several customers say the company’s general manager, Lew Deegan, has told them there is no money left in the business to complete their long-delayed houses.
“I’ve got four kids,” Elizabeth Scuteri told SBS alongside her husband, Dominic, on the vacant lot at Harrington Grove, in Sydney’s south-west, where Huxley was meant to build their dream home. “We had to sit down and tell them yesterday what was going on. My kids were crying.”
The Scuteris had met Mr Deegan on Monday to explain they wanted to find another builder, and she recalled him apologising to them. "He said ... we have no money to build this house. We have no money to pay our tradespeople. We’re not even paying rent. We don’t know what’s going to happen.”
Within a day, Huxley had received an eviction notice from its landlord because the rent was as much as $60,000 in arrears.
Huxley, the Scuteris said, wanted them to terminate their contact. When they asked about their $26,000 deposit, “he said to us there’s no guarantee we’re going to get our money back”, Mr Scuteri recalled.
His wife said: “I just started balling my eyes out because that’s my family dream.”
Elizabeth and Dominic Scuteri walk on their undeveloped block of land. (SBS News) Source: SBS News
The Scuteris are far from alone. SBS has spoken to seven customers who say Huxley has told them explicitly that there are no funds left to continue their projects.
One couple agreed to terminate in return for a token walk-away payment, only to be told that Senator Day had said there was no money to pay them, after all.
Work has all but stopped on the home sites of 61 Huxley customers, while another 21 clients of its sister company, Ashford Homes in Victoria, are worried about their projects and delays have reportedly spread to Senator Day’s operation in South Australia, where he is based.
All firms belong to his five-state home-building group, Home Australia. But Senator Bob Day – the sole director – did not respond to detailed questions about the future of Huxley, the impact on his national business, or any implications for his position in parliament. Politicians cannot remain in parliament if they become bankrupt or insolvent.
“Senator Day is not providing comment on the matter today and is therefore unavailable for interview,” his spokeswoman emailed. He has previously used Twitter to blame the poor management of others involved in his business.
The senator is a vital crossbench supporter of the Turnbull government’s bid to re-establish the Australian Building and Construction Commission to oversee the building industry.
SBS has spoken to several tradespeople and suppliers who fear they will not be paid. Senator Day put his Adelaide home up as security to ensure a concrete company kept pouring on his building sites in Victoria.
Mr Deegan told SBS in an email that Senator Day was “the only person who can answer the questions you have put to him”.
“I have been here for three weeks as a consultant (not staff), however, I understand from a conversation with Bob Day yesterday that he is working with an investor that he hopes will secure funding this week,” Mr Deegan said.
“Only two customers have terminated their contracts on mutual termination agreements in the last three weeks. Both terminations included financial compensation from Huxley Homes.
“Customers are not being asked to terminate their contracts by anyone at Huxley, however, we have received some requests from customers. Their concerns are being heightened by the media coverage.”
HomeWorld CEO Phil Jones said: “We are aware of consumers’ concerns but we are advised to refer them to the company [Huxley] and to Fair Trading.”
Mr Jones could not discuss the reasons for Huxley’s removal from its display home sites. It was a commercial contract and all companies displaying at HomeWorld had to meet performance agreements.
Huxley’s landlord at its Baulkham Hills headquarters, Capital Corporation, did not wish to comment when asked about the eviction.
Of 40 Huxley customers contacted by the NSW Fair Trading Department, 80 per cent said they were “dissatisfied”, while the company and Senator Day have been fined for failing to meet rectification orders. The company is unable to insure new projects under its current eligibility profile with the Home Building Compensation Fund.
Elizabeth Scuteri says her family is devastated by Huxley Homes' failure to build their home. (SBS News) Source: SBS News
While Huxley’s licence is due for renewal on Friday, it cannot be approved while the company is the subject of outstanding orders from the NSW Civil and Administrative Tribunal following complaints of late and unsatisfactory work.
The firm had not applied to renew its licence by Tuesday this week. If an application is lodged by Friday, the licence will remain current while Fair Trading carries out its assessment. Beyond that, there is a three-month period in which a licensee can apply to restore the licence by paying an additional fee.
Even if the licence was secured, Huxley may struggle to operate without its display homes, without insurance on new projects, without tradespeople willing to do the work, and without sufficient funds to cover its operating costs.
Last month, Huxley customer Will Naicker – who has no occupation certificate for his Beecroft home 77 weeks beyond its contracted building period of 40 weeks – emailed Senator Day 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 is yet to respond to Mr Naicker or SBS on that question.
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.
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On their vacant lot at Harrington Grove, Dominic and Elizabeth Scuteri became close to tears on Wednesday.
“Our dream was to build our home that we’ve been planning for the past 15 to 20 years,” Mr Scuteri said.
“We put down 26 hard-earned thousands of dollars. We’re losing almost $2000 a month with the outlay of rent and solicitors’ fees. That’s on top of the $26,000.
“It hurts me to know that Huxley has taken money off us knowing that they can’t produce what we’ve asked for. I know myself, as a cabinet maker, that I couldn’t take someone else’s hard-earned money knowing I couldn’t supply them with the product they were after.”
Elizabeth Scuteri said: “When I called the Department of Fair Trading, [it] said, ‘Oh, is it the Huxley company? Lodge it and we’ll go from there.’"
Of Senator Day, she said: "And supposedly he’s part of the Family First.”
Her husband echoed the refrain of an unhappy customer: “He hasn’t put our family first.”
