Privium Homes' liquidation brings some certainty, but no cash back

The outcome will likely leave many affected would-be Hunter home-owners tens of thousands of dollars out of pocket. They stand in line behind secured creditors, including the Bank of New York, which is said to be owed $22 million, and Westpac.

The liquidators, FTI Consulting, said they could now delve deeper to determine whether any recovery actions were viable or commercial to pursue. They include related party transfers and dividend payments worth upwards of $22 million.

Creditors were told the group was insolvent from at least August 2021, past which time a number of Hunter residents were still signing contracts with the company and its related entities, and that there was insufficient cash flow from July 1, 2019 through to the liquidators' appointment in November.

How the company was allowed to continue trading past that point would be subject to further investigation, creditors were told

They were also told that a number of offences have likely been committed, including failure to pay insurance leaving large numbers unable to claim for damages and leaving others with no form of redress after handing over deposits of up to $16,000 without insurance, except as unsecured creditors.

Home owners remained unclear, however, if they were automatically released from their contracts, allowing them to engage other builders to start, or complete their homes. The answer was it varied from state to state but if they were entitled to break their contracts due to liquidation, their contracts were now void.

That was the news that Jarrod Sansom and his partner Katie Smee have been waiting for, hoping they would not have to engage a lawyer to fight that battle, adding to their losses which already include the $16,000 they've lost on their deposit.

"It is the outcome we wanted, hopefully we can now move forward," Mr Sansom said. "I just want to be rid of them. And I am prepared, it's crazy I know, to lose that $16,000 if it means we can be free to go elsewhere."

It won't be in time for Christmas, he said, and it was unlikely he would know before the end of the year, which was disappointing, as the liquidators need to see each individual contract to make sure. "I am not paying $1500 more to a lawyer to see, we have done nothing wrong here, we have lost enough."

John Goddard of Subbies Unite said it would make it easier for those people with partial-builds and live contracts to employ a new builder.

"They couldn't cancer their contract until it went into liquidation," he said. "They're going to have to chase up a lot of related party transfers, like $22 million in dividends, in the 2020 financial year, the same year there was a $28 million loss, which could have been a buffer against any COVID-related price increases, and right up until the death they were still taking deposits and transferring them out so I hope the liquidator finds enough money to investigate all of these issues," Mr Goddard said.

Either way, people would not see their deposits back and it was important they were not given false hope, he said.

Affected home-owners have collected close to 1400 signatures on a petition calling for more protections to be put in place so that others, like the many thousands before them caught up in other construction company collapses, are not caught out in the same way.

Sara Conlan, who is among those leading the charge, said even those who had insurance attached to their contracts would only get up to 20 per cent of their contract price, leaving them out of pocket.

"We are heartbroken and shocked," she said. "We want everyone affected to be adequately taken care of and prevent this from happening to anyone else."

The petition is calling on the state government to put in place protections as per the Collins Review made 44 recommendations, chief among them to introduce statutory trusts to the construction industry. "We're also calling on state bodies, Icare (NSW), VMIA (VIC) and QBCC (QLD) to cover costs and support hundreds of families in their endeavour to build their homes."

The NSW state government has come under fire for sitting on those recommendations, as well as similar findings highlighted in a review completed by John Murray AM.