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WA builder fined $40k after insurance trick and defective work
The Western Australia State Administrative Tribunal (SAT) has fined Schearar Developments Pty Ltd and its director Paramjeet Singh Khaira $40,000 following misleading conduct, defective work, invalid insurance, and a terminated contract across two projects.
Schearar Developments was formerly based in Canning Vale and is now in liquidation.
According to the SAT mediation, in December 2020, Schearar had been contracted to build a house in Mundaring, but used another builder’s name to apply for home indemnity insurance (HII).
At the time, Schearar did not hold the mandatory HII for home building projects over $20,000, which protects home owners if the builder fails to complete or fix the work.
After the Mundaring home owner questioned why the home indemnity insurance listed a different builder, Khaira terminated the contract, citing “unpleasant” interactions.
The terminated contract left the client ineligible for government grants.
Similarly, at the same period, Schearar Developments had been engaged to build a house in Ashfield, in which Khaira also used another builder’s name to successfully apply for a building permit and HII.
In November 2022, part of the Ashfield house’s second-storey wall collapsed, damaging a neighbour’s roof, with a building commissioner investigation later revealing serious structural defects, substandard materials and construction methods.
As Khaira had used a different builder name on the HII certificate, the unassuming Ashfield client was unable to claim insurance.
According to the agreed facts, Schearar Developments engaged in misleading behaviour by arranging HII under a third-party builder’s name for both construction and demonstrated harsh conduct by cancelling the Mundaring project.
Khaira, as the company’s nominated supervisor, and Schearar also failed to ensure that Ashfield building services were properly managed and supervised.
Building commissioner Phil Payne said the penalty reminded contractors and their nominated supervisors that they cannot offload their significant responsibilities.
“Although the parties no longer hold building registration, their past conduct was unacceptable,” Payne said.
“Without valid home indemnity insurance, home owners 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,” he concluded.
