The State Administrative Tribunal (SAT) has reprimanded a former building company and fined its director $40,000 for conduct that led to invalid insurance, defective work and a cancelled contract.
Schearar Developments Pty Ltd (BC102427, expired) and Paramjeet Singh Khaira (BP14537, expired) participated in SAT mediation for disciplinary matters under the Building Services Registration Act 2011 related to two projects in Mundaring and Ashfield.
Schearar, formerly based in Canning Vale, is now in liquidation.
According to agreed facts, Schearar was contracted in December 2020 to build a house at the Mundaring property, but it used the name of another builder to apply for home indemnity insurance (HII).
Schearar did not have access to HII, which is compulsory for home building projects valued at more than $20,000 to protect homeowners if the builder cannot complete or rectify work under certain circumstances.
When the Mundaring homeowner twice queried why the HII certificate named a different builder, Mr Khaira cancelled the contract due to “unpleasant” dealings with the client, who consequently missed out on government building grants.
Also in December 2020, Schearar was engaged to build a house at the Ashfield property. Without the client’s knowledge, Mr Khaira arranged for another contractor to be named as the builder on successful applications for a building permit and HII.
In November 2022, part of the Ashfield house’s second-storey wall collapsed and damaged the neighbour’s roof. An investigation on behalf of the Building Commissioner identified significant structural defects and materials and methods that did not meet the required standards.
Because the HII certificate named a different builder, the Ashfield client was unable to make a claim on this insurance.
According to the agreed facts, the company engaged in misleading or deceptive conduct by obtaining HII in the other builder’s name for both projects, and harsh conduct when it cancelled the Mundaring contract.
Schearar and Mr Khaira, as the company’s nominated supervisor, also both failed to ensure the Ashfield building services were properly managed and supervised.
Building Commissioner Phil Payne welcomed the significant penalty.
“This is a reminder that contracted builders and their nominated supervisors cannot offload their significant responsibilities,” Mr Payne said.
“Although the parties no longer hold building registration, their past conduct was unacceptable.
“Without valid home indemnity insurance, homeowners are left financially exposed, and I commend the client for raising the discrepancy with the builder.
“Consumers should receive a copy of the HII certificate and ensure the builder’s details are correct across the contract, building permit and insurance documents.”
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Media contact: BEmedia@lgirs.wa.gov.au
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