Melbourne builder Dome goes into liquidation as $6.5m loan unravels
Melbourne-based Dome Building Projects, which did high-end home building and renovation work for customers in Melbourne’s leafy inner-eastern suburbs, went into liquidation on Friday after falling short on payment demands to a former director.
Jason Stone and Paul Allen of PKF were appointed as liquidators to South Melbourne-based Dome on the same day that directors Andrew Crellin and Jamie Brockman said they failed to meet their financial obligations to former director and shareholder Scott Wilcox.
Dome Building Projects last year completed this luxury home in Erica Avenue, Glen Iris, designed by Pandolfini Architects. Rory Gardiner
Company records show that in November Mr Wilcox, who had stepped down as a director in August last year, lent an entity linked to Mr Crellin $6.5 million – secured against the company’s assets – to allow Mr Crellin to purchase Mr Wilcox’s two shares in the company.
“If Crellin is able to comply with the terms of the loan agreement, the financial standing of the company will not be affected,” an explanatory memorandum to the agreement states. But it was not able to meet those terms, the directors told customers, staff and subcontractors in a letter.
“Due to the extraordinary financial hardship builders have endured over the last 12 months we have been unable to meet our annual obligation to the former director in full for this year,” the directors said in their Friday letter, seen by The Australian Financial Review.
“We have been attempting to negotiate revised payment terms that would still allow full payment to him in a manner that would also allow the Dome business to survive. However, the revised payment terms have not been accepted and ultimately negotiations have failed.”
The Glen Iris home, a knock-down-and- rebuild project, included a large garage to house the owner’s car collection. Rory Gardiner
The liquidators were contacted for comment. A representative of Mr Wilcox was also contacted for comment.
There are some signs that home builders are through the worst of the crunch they faced when caught by soaring COVID-era cost escalations and the fixed-price contracts they’d signed with customers.
Veteran developer Nigel Satterley told The Australian Financial Review Property Summit last month that the country’s largest builders had weathered the “cyclone” of unprofitable contracts and builder collapses that ripped through the sector.
Earlier this month ASX-listed and family-run home builder Simonds Group said it had eked out its first profit after two years of losses. But many companies remain vulnerable.
The collapse of Dome, which started in 2002 renovating Melbourne terrace homes and then focussed on high-end residential projects is the latest in a surge of construction-industry insolvencies that as of last week numbered 783 – nearly one-third of all corporate failures in the year to date.
“They did two on my street in the past year, both $3 million to $4 million renovations,” Melbourne buyer’s agent David Morrell said on Saturday.
“That’s why people are paying up for stuff that’s done. [Collapses are] a major problem out there.”
Last month, Dome said it had expanded to Byron Bay in conjunction with Shaun Lockyer Architects.
“With a legacy of two decades building homes across Victoria, we’re proud to announce we have gone national. Our new office in Byron Bay, staffed by a dedicated and experienced team, marks an exciting chapter in our journey,” the company posted on its Facebook page on September 19.
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