If your company is facing financial difficulties, or if you are a creditor dealing with the insolvency of a company that owes you money, our insolvency lawyers Brisbane at Boss Lawyers can advise on your options. Call Mark Harley on 1300 267 711 or complete our enquiry form.
Brisbane pool builder Stunning Pools has collapsed into liquidation, leaving approximately 40 homeowners with unfinished pools and a trail of unpaid invoices to suppliers and subcontractors. If you are one of those homeowners, or a subcontractor or supplier owed money, you need to act quickly — and understand what legal options are available to you under Queensland law.
The collapse of a pool builder mid-project is more common than most people realise. Queensland’s construction sector has faced sustained financial stress since 2022, and pool building businesses — which carry significant upfront material costs and rely on progress payments — are particularly vulnerable when cash flow tightens. When your builder goes into liquidation, the steps you take in the first few weeks matter enormously.
What Happens When Your Builder Goes Into Liquidation?
Liquidation is the formal legal process by which a company’s affairs are wound up and its assets distributed to creditors. Once a company enters liquidation:
- A liquidator is appointed — either by the company’s creditors or by the court — to take control of the company’s assets and affairs
- All existing contracts (including your building contract) are in limbo — the liquidator may disclaim the contract or seek to complete it, depending on whether completion is commercially viable
- You become an unsecured creditor for any money you have paid in advance or any losses you suffer — and unsecured creditors typically receive cents in the dollar, if anything at all
- Legal proceedings against the company are automatically stayed — you cannot sue the company without the court’s leave
This is why the protections available outside the liquidation — particularly through the QBCC Home Warranty Insurance scheme — are so critical for homeowners. Do not rely on recovering money from the liquidation.
QBCC Home Warranty Insurance: Your Most Important Protection
The Queensland Building and Construction Commission (QBCC) administers the Queensland Home Warranty Scheme, which provides insurance protection to homeowners for residential construction work where the contractor has become insolvent.
What Does QBCC Home Warranty Insurance Cover?
The QBCC Home Warranty Scheme can provide coverage for:
- Non-completion of work — where the licensed contractor has become insolvent and cannot complete the contracted work
- Defective work — structural defects discovered within 6 years and 6 months of practical completion, and non-structural defects discovered within 6 months
- Subsidence damage — where the work causes land subsidence within 3 years of completion
For pool construction specifically, if Stunning Pools held a current QBCC licence and the contract value exceeded the applicable threshold, your contract should be covered under the scheme.
The Critical Steps: Lodge Your Claim Promptly
There are strict time limits for making a QBCC Home Warranty claim. Do not delay:
- Confirm QBCC registration: Check that your contract was registered with QBCC at qbcc.qld.gov.au. Home warranty insurance is only available for registered contracts.
- Notify QBCC of the insolvency: Contact QBCC directly and notify them that your builder has entered liquidation. This starts the clock on your claim.
- Lodge a formal claim: You must lodge your claim with QBCC within the applicable timeframe (typically 3 months of becoming aware of the insolvency, but confirm the current requirements with QBCC directly).
- Document everything: Gather your building contract, all progress payment receipts, photographs of the current state of the work, any communications with the builder, and any quotes to complete or rectify the work.
- Get an independent building report: A licensed building inspector’s report documenting the current state of work and the cost to complete will support your QBCC claim.
The most common reason homeowners’ QBCC claims are delayed or reduced is inadequate documentation at claim time. Start gathering evidence immediately.
What If QBCC Home Warranty Does Not Apply?
Not all pool construction contracts are registered with QBCC, and the scheme has threshold and eligibility requirements that not every contract will meet. If the Home Warranty Scheme does not cover your situation, other avenues may be available:
- Proof of debt in the liquidation: Lodge a proof of debt with the liquidator to formally claim your losses in the liquidation. You will be an unsecured creditor, which means recovery is limited — but lodging a proof of debt is a necessary step to participate in any distribution.
- PPSA claims (if you supplied materials): If you are a supplier who retained title to materials under a Retention of Title clause or a registered PPSA security interest, you may be able to recover those goods from the liquidation rather than proving as an unsecured creditor. Speak to a lawyer urgently — PPSA claims have strict timeframes.
- Personal liability of directors: In some cases, directors of insolvent companies can be personally liable — particularly if they continued to trade while insolvent, or engaged in conduct that caused loss to creditors. A legal assessment of the company’s pre-insolvency conduct may reveal additional avenues.
- Statutory demand or winding up (if the company is not yet in liquidation): If your builder has not yet entered formal insolvency, a statutory demand or winding up application may accelerate the process and preserve your rights.
For Subcontractors and Suppliers: Your Options Are Different
Subcontractors and suppliers to Stunning Pools face a different legal landscape to homeowners. The QBCC Home Warranty Scheme does not cover commercial debts owed to subcontractors — it is a homeowner protection scheme. However, subcontractors and suppliers have their own avenues:
Security of Payment (BIF Act)
If you are a subcontractor who has not yet been paid for work performed, and the company is not yet in formal liquidation, you may be able to use the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) to make a payment claim and force adjudication. Once a company enters liquidation, the BIF Act process becomes more complex — seek legal advice immediately if the company is about to collapse and you have unpaid work.
Creditor in the Liquidation
As a creditor, you have the right to:
- Attend creditor meetings and vote on resolutions (including on the choice of liquidator in a creditors’ voluntary liquidation)
- Lodge a formal proof of debt to participate in any distribution of the company’s assets
- Request information from the liquidator about the company’s assets, debts, and the likely return to creditors
- Apply to the court for examination of the company’s officers or for orders against third parties in appropriate circumstances
Unfair Preference Claims: Two-Way Risk
If you received payment from the builder in the six months before the liquidation date (or four years in certain circumstances), the liquidator may seek to recover those payments as unfair preferences under s 588FA of the Corporations Act 2001. This can be a significant shock for subcontractors who thought they were being prudent by pursuing payment before the collapse. Defences are available — including the good faith defence — but they require prompt legal advice.
When to Get Legal Advice
If your pool builder has gone into liquidation, you should seek legal advice as soon as possible if:
- You have paid a deposit or progress payments and the pool is unfinished
- Your QBCC claim has been rejected or reduced
- You are a subcontractor or supplier owed significant money
- You have received a letter from the liquidator about a preference claim against you
- You believe the directors traded the company insolvently or engaged in conduct that caused you loss
- There is a dispute about the amount owed or the quality of work completed
Time limits are strict in liquidation matters. The earlier you seek advice, the more options are available to you.
If you are a homeowner or subcontractor affected by the collapse of a Queensland construction company, our construction lawyers Brisbane are ready to help. Call Boss Lawyers on 1300 267 711 or complete our online enquiry form for a confidential discussion. We act for creditors, homeowners and subcontractors in Queensland construction insolvency matters.
Frequently Asked Questions
- Does QBCC Home Warranty Insurance cover pool construction?
- Yes, in most cases. The QBCC Home Warranty Scheme covers residential construction work by licensed contractors, including pool construction, where the contractor becomes insolvent, disappears, or dies. The contract must have been registered with QBCC and meet the applicable threshold requirements. Contact QBCC directly to confirm your specific contract is covered and to lodge your claim.
- How long do I have to make a QBCC Home Warranty claim after my builder goes into liquidation?
- You must lodge your QBCC Home Warranty claim within the applicable timeframe after becoming aware of the insolvency — typically three months, though the exact timeframe depends on the type of claim and when the event occurred. Do not delay. Contact QBCC immediately when you learn your builder has entered liquidation to confirm the current claim lodgement requirements.
- Can a liquidator sue me for payments I received from the builder before it collapsed?
- Yes. If you received payment from the company in the six months before the liquidation date (or longer in some cases), the liquidator may seek to recover those payments as “unfair preferences” under the Corporations Act. Defences are available — including showing you acted in good faith, without suspicion of insolvency, and provided equivalent value. Get legal advice promptly if you receive a preference recovery demand from a liquidator.
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Disclaimer: This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances before taking any action. For advice on your specific situation, contact Boss Lawyers on 1300 267 711.
