A court has ordered a building company to go into liquidation after it failed to pay back its debts.
On Wednesday morning, the Victorian Supreme Court placed Joestarr Homes Pty Ltd into liquidation after failing to pay an excavation contractor $73,000, with the unpaid invoices dating back as far as May 2021.
Judicial registrar Kim Woronczak ordered the company into liquidation on the grounds of insolvency under the Corporations Act. Mathew Dieter Windsor Blum has been appointed as liquidator.
No representative showed up for Joestarr Homes so the wind-up was initiated unopposed.
Melbourne-based Joestarr Homes traded under the name Joestarr Group and was expecting the outcome, having sent a blunt email to customers last month warning them that the company would soon liquidate.
Joestarr Group, which is registered under the name Joestarr Homes Pty Ltd and has been a registered company since 2008, said on its website most of its builds are done “in and around Melbourne”.
News.com.au understands at least 30 homes have been impacted.
The company’s director, Joe Frazzica, told news.com.au in a statement: “It is an unfortunate situation for everyone involved.
“This was not something I wanted to happen and I tried absolutely everything to save my business. Unfortunately the price rises during covid have impacted the building industry and my business.”
Earlier, news.com.au spoke to a devastated customer who said the builder’s collapse is “soul destroying”.
Jen*, a healthcare worker, told news.com.au she was shattered to learn that her builder had gone bust.
“It’s our dreams, we’ve done everything right. We’re financially and mentally ruined,” she said.
Jen and her partner Damien* signed a $370,000 building contract with Joestarr Group in 2021 and nearly two years later, the house is still unfinished.
“We’re currently paying $450 a week rent and also paying a $500,000 mortgage for this property we can’t live in. It’s financially destroying us,” Jen said.
The couple, in their late 20s and early 30s, who are based near Geelong, live in a rental a five-minute drive away from their building site.
“We don’t like to drive past it, it’s too upsetting,” Jen added.
What has left them even more frustrated is the fact they recently paid a $126,000 invoice for the lockup stage of their build.
Just four days later, Joestarr Group warned them of the impending liquidation.
They also visited the site and realised it was not complete. There are no doors or cladding, according to the customers, and there’s also no tap, no stormwater drain and no sewage system.
Another customer who preferred to remain anonymous said their building site had not been touched since December last year.
“Trying to get responses to emails or return phone calls has been impossible,” the told news.com.au.
“This is an absolute nightmare for all of us, but sadly we know there are so many like us out there.”
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This is the sixth building company in the past week that has gone into external administration amid an industry-wide crisis.
So far this year, more than a dozen builders have collapsed as labour shortages and the rising costs of materials creates a perfect storm.
Last week, a number of construction firms have liquidated, including three more in Melbourne – Construct Homes Pty Ltd, placed into receivership on Thursday, Kleev Homes which owes $3.29 million to 162 unsecured creditors and Avra Group, leaving at least one family with an unfinished home.
On Monday, Sydney building company Allura Homes Pty Ltd went into liquidation, plunging 39 homes into jeopardy, leading to 11 people losing their jobs and with debts of $3.3 million to 102 creditors.
Earlier that same day, a prominent Western Australian builder Modco Residential went into voluntary administration.
Australia’s 13th biggest builder, Porter Davis, also collapsed earlier this year, placing 1700 projects and another 779 empty blocks of land in jeopardy across Victoria and Queensland, while more than 1000 unsecured creditors owed a whopping $71 million.
alex.turner-cohen@news.com.au
Names withheld for privacy reasons