Builders’ misconduct exposed owners to insurance risk

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Nicola Multari, the sole director and secretary of Tonic Homes Pty Ltd (BC 13741 – expired), and Barry Douglas Windsor (reg. BP11375 & BC11375 – expired), the nominated supervisor of Fremantle Building Company Pty Ltd, have been fined for misconduct in connection with building work at a White Gum Valley property in 2013.

In a settlement reached through separate mediations in the State Administrative Tribunal (SAT), Mr Multari admitted to engaging in negligent and misleading conduct and Mr Windsor to engaging in misleading or deceptive and negligent conduct, in connection with carrying out a building service.

The SAT ordered the pair to pay the Building Services Board, as the initiator of the disciplinary action, fines of $7,500 each plus costs of $500 each.

The allegations related to a contract Tonic Homes entered into for the construction of a residence valued at $327,906.

With its eligibility for home indemnity insurance (HII) having been suspended by the insurer, Tonic Homes was unable to obtain the required HII policy for the contract in its name. Instead, Mr Windsor obtained the HII policy for the building work in his name despite neither him nor his company being a party to the contract.

Mr Multari’s conduct was negligent in that, on behalf of Tonic Homes, he failed to obtain a valid policy of HII prior to demanding and receiving a deposit from the owners. His conduct was misleading in that, in support of Tonic Homes’ application for a building permit, he submitted to the City of Fremantle a HII policy certificate that was not taken out in Tonic Homes’ name.

Mr Windsor’s conduct was misleading or deceptive in that he represented to the insurer that Fremantle Building Company was the building contractor that would carry out the home building work when it was not. His conduct was negligent in that he obtained the HII policy for the contract when neither he nor his company were contracting parties.

“It is important that builders meet their obligations in regards to home indemnity insurance because failing to do so can expose owners to significant financial and personal loss,” Building Commissioner Peter Gow said.

“In this particular case, Tonic Homes became insolvent part-way through the building project. As the HII policy was taken out by a third party to the contract, the insurance was invalid and the owners’ claim was rejected.”

While Mr Windsor currently holds a building practitioner registration, both his and Tonic Homes’ building contractor registrations have expired. This means neither builder is entitled to contract for building work valued over $20,000 in Western Australia.

Mr Gow said, “The Building Commission will continue to hold to account and name those who put the public interest and the reputation of the building industry at risk.”

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01 Dec 2016

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