Coral Coast Homes collapse

You will no doubt remember the significant and lingering misery created in the Burnett and Bundaberg community after the recent collapse of Coral Coast Homes.

Hundreds of people, including tradesmen and homebuyers, have lost thousands of dollars each - millions of dollars in total. In some tragic cases, innocent people have lost their life savings and have been driven to the brink of financial, physical and mental ruin.

After hearing serious allegations at a public meeting that the government, through its department of Building Services Authority (BSA), allowed the company to continue trading with a valid building license even after the government was repeatedly warned by whistleblowers and customers for many months (almost a year) about alleged illegal and fraudulent behaviour, I wrote to the CMC on 1.6.09 requesting an investigation.

In the latest correspondence I have received from the CMC on 24.09.09, they confirm that in order to assess the concerns raised in my letter they are still waiting for a report to be produced by the BSA itself.

There is no indication from the CMC of a date when the BSA will supply that report. The CMC simply say they are expecting it shortly.

While I am pleased that the CMC is still taking these allegations seriously, this latest correspondence with the CMC however raises more concerns which I will be raising in a letter and in parliament with the Attorney-General and Premier.

My three major concerns are as follows:
1. Given the serious nature of the allegations and the amount of money lost by builders and homebuyers, is it appropriate for the CMC to allow the BSA for the last three and a half months to investigate allegations against their own senior officers?
2. I will be seeking a guarantee from the Premier that senior BSA officers, who were the subject of allegations of misconduct, were not involved in the production of the report which will be assessed by the CMC.
3. Will the report being made by the BSA and due to be passed onto the CMC shortly also be made available to myself or the people affected by the collapse of Coral Coast Homes?

It is my belief that the CMC do a great job, but is stretched to the limit and is deliberately under-resourced by this government which has a lot to cover up after 11 years of corruption and dysfunction.

More than 80% of the cases referred to the CMC are handed back for investigation to the government department from where the complaint first came!

This isn’t a healthy situation and certainly doesn’t encourage genuine whistleblowers to come forward with evidence of more corruption and misconduct, which suits this government perfectly.

In the case of the Coral Coast Homes crisis, I would have preferred that the CMC launch their own independent investigation using their special “Star Chamber” powers, which compel witnesses to truthfully answer their questions, rather than relying on a report by a less than independent Government source for their preliminary investigation.

The sooner we have a Royal Commission into corruption and cronyism in Queensland, the sooner justice will be delivered and the sooner victims like those caught up in the Coral Coast Home crisis will increase their chance of receiving fair compensation.

Rob Messenger MP

Building companys still owe $2.5m

TRADESPEOPLE and customers are still out of pocket for more than $2.5 million, after the collapse of two building companies in Bundaberg earlier this year.
SV Partners director David Stimpson said former Coral Coast Homes director John Biles had made little contact after he fled Bundaberg following the collapse of Coral Coast Homes and Steelsmart Homes in June - owing more than a million dollars.
“The director is still lying low - I don't believe he has gone bankrupt yet but it is still on the horizon,” he said.
Mr Stimpson said the company had very few assets, except for about $350,000 in Barter Trade dollars by Empire Trade Exchange.
“We have managed to get some money to a handful of creditors by way of EmpireTrade dollars, and we are hoping to make that option available to more people,” he said.
“The only problem is that is will cost creditors $500 to join EmpireTrade (to get the money).”
Mr Stimpson said the 100 creditors included the Tax Office, which was owed about $200,000.
“There's not a lot more to come out of it,” he said.
“John Biles has no assets, and no one has heard from him in a while.”
Mr Stimpson is also dealing with the liquidation of Bundaberg Master Homes, whose owner Grant Reedy also left town after the company failed in May.
The company owed more than $1.5m when it went into liquidation.
He said the company's only assets were two display homes, which were on the market.
“They can't seem to get the houses sold - they are not attracting buyers,” Mr Stimpson said.
“There's caveats all over the properties anyway, so there would be nothing for unsecured creditors.”
He said he was in contact with Mr Reedy and his wife, but appeared there was no more money to be recovered.
“I don't think there will be anything for creditors from Bundaberg Master Homes,” Mr Stimpson said.

BSA to act on owner's pleas for home help

LEO Chaplin has lost count of the letters he has sent to the Building Services Authority.
However, after months of campaigning, he has finally been offered help to get his house fixed.
Mr Chaplin's woes began shortly after he signed a contract with now-defunct building company Coral Coast Homes in October 2006.
He expected to be able to move in by September 2007, but instead countless delays and shoddy building work led him to cancel the contract in November last year.
When he approached the BSA for help, Mr Chaplin was told initially he was ineligible for insurance because he was six days over the two-year deadline for terminating his contract.
“We didn't even know there was a timeframe on it,” Mr Chaplin said.
“We had been in touch with the BSA regularly before that, and no one had ever mentioned it.”
He was facing a bill worth tens of thousands of dollars to fix the numerous flaws in his property - from loose bricks and an incorrectly placed septic system to missing insulation, screws and glue visible on shelving, and cupboard doors that did not sit flush.
Mr Chaplin described his experience as a nightmare.
However, he received the good news last week that the BSA will cover the repairs under its insurance scheme.
“It's very positive, but I won't really believe it until the work is done,” he said. “Why didn't they just do it in the first place?”
The Building Services Authority's deputy general manager, Col Wright, said the BSA has sent a letter to Mr Chaplin on September 14 advising him that he had an entitlement under the BSA's Home Warranty Insurance Scheme.
“As Mr Chaplin's representative made contact with the BSA within the two years of contracting with Coral Coast Homes, Mr Chaplin has an entitlement for the completion of his home - less any retention under the initial building contract,” Mr Wright said.
Mr Wright said the letter also asked Mr Chaplin for a meeting at his house with a BSA building inspector to assess the work necessary to complete the home under the original contract.

Kit home customers fall through cracks ?

SUE and Steve Stanger face the miserable prospect of a second loan on their Avondale plot, after falling through the cracks between the Building Services Authority and the Office of Fair Trading.

Like Shane McMuhttp, who was arrested on Sunday after a confrontation with Public Works Minister Robert Schwarten, the Stangers paid Steelsmart Homes for a kit they have never received.

Mrs Stanger said the couple had no help from the Building Services Authority (BSA) because they were owner-builders, and they had little hope of assistance from the Office of Fair Trading.

“You've got to get a BSA licence to build the home - yet they won't help us,” Mrs Stanger said.

She said the BSA should have more powers to assist former Steelsmart Homes customers, particularly due to the company's close ties to Coral Coast Homes.

“We ordered bricks and window fittings through (Steelsmart Homes), and they used the same BSA number as Coral Coast Homes,” she said.

But Public Works Minister Mr Schwarten said that consumer protection legislation in Queensland was structured around consumers contracting with a licensed building contractor for both the supply and construction of their home.

“Whether or not the components of the home are in a kit form is of no concern to the consumer, provided they enter a contract with a licensed building contractor which incorporates the kit as part of the total contract price,” he said.

“It was for this reason that the BSA was able to assist the majority of clients who had contracts with Coral Coast Homes Pty Ltd for construction based on a kit.

“People who purchase a kit home with the intention of constructing it themselves as an owner-builder need to take the same precautions as any prudent consumer would take when making a substantial purchase.”

He said customers should consider paying only a small deposit, and putting money into trust, with the bulk of the purchase price paid when goods were received.

Coral Coast victim has Bligh's sympathy

AN angry exchange, which allegedly involved a jug, has potentially landed one man in hot water - but yesterday there was sympathy in Bundaberg from Queensland Premier Anna Bligh.
“Clearly no-one wants to be in a situation like this,” Ms Bligh said.
“This person was in very distressing circumstances.”
Mr McMullen lost $70,000 after he signed up to build a house with Coral Coast Homes and then the company collapsed earlier this year.

The pensioner was charged with a public nuisance offence and obstructing police following the alleged incident at Sunday's community cabinet.
Sporting an injury to his hand, Minister for Public Works Robert Schwarten fronted the media yesterday after a cabinet sitting in the Bundaberg Civic Centre.
When asked about the injury the minister replied: “Better my hand then my head.”
“You don't expect to go to a community cabinet and for that to happen.
“But I'm more concerned for that man.”
Yesterday Mr McMullen was resting at home.
The pensioner said he felt all avenues to getting his money back were exhausted.
“I'm totally exhausted and devastated by the whole thing,” Mr McMullen said.
“I'm on a disability pension and raising a child by myself.
“I'm renting and paying off my mortgage.”
Mr McMullen said that for the first time in his life, he had to take a food voucher so he could feed his family.
“It's good someone is there to help, but I've always given to people - this is the first time I've taken and I'm embarrassed that I had to go.”
During the press conference after the cabinet meeting in Bundaberg, Ms Bligh again addressed the concerns raised by more than a 100 unionists outside the community cabinet on Sunday.
Union members from multiple organisations including Queensland Teachers' Union, the Electrical Trades' Union, and CFMEU expressed outrage about the Bligh government decision to sell off state-owned assets.
The Premier repeated that scrapping the sale meant the government's building program would also have to go.
“We are absolutely determined to protect the building program and the jobs it creates,” she said.
Ms Bligh said she did not like the idea of the sale either.
“But there is really no alternative,” she said.