WA’s building regulator has fined a building company after the $230,000 fit-out of a chocolate store was carried out by an unregistered builder. But the business has hit back, suggesting the regulator has not told the full story.
The Building and Energy division of WA’s Department of Mines, Industry Regulation and Safety issued a public statement on Tuesday (23 July) in which it said that it had found Perth building company Ferhan Developments Pty Ltd to be negligent and fined it $5,000 over works conducted at the chocolate store in Fremantle.
According to Building and Energy, Ferhan Developments was engaged by the undisclosed retailer in November 2017 to “carry out renovation works, which involved the fit-out of a commercial premises valued at $236,158”.
Under state laws, building work over $20,000 in value that requires a building permit must be completed by a registered builder. Instead, the regulator said that Ferhan Developments “allowed” an unregistered third-party to complete the project.
Neither the chocolate company that paid for the work, nor any other parties, have complained about the quality of the work carried out, it said.
But regardless of the lack of complaints, Building and Energy executive director Saj Abdoolakhan (pictured) said it was a serious matter for a building company to have another party complete large-scale projects under its own name and registration, without supervising the work.
“This is a serious failure on the part of Ferhan Developments, which resulted in an unregistered builder undertaking major works without the involvement or even supervision of a registered builder,” Mr Abdoolakhan said.
“It was negligent for Ferhan Developments to outsource its duties and responsibilities to another company or person that has not demonstrated, through the registration process, that it has the competencies to carry out that work.
“All registered builders must comply with their regulatory responsibilities and be aware that, if their name is on the building permit, they could be held liable for all the work carried out under that permit.
He added: “They put themselves and the community at great risk when they relinquish control and offload those responsibilities to others, particularly if they are unregistered.”
A spokesperson for Building and Energy told My Business that the issue was only discovered during investigations of a separate matter.
“The Department noted discrepancies between who the building permit was issued to and who actually carried out the work on this project,” the spokesperson said.
“Building and Energy has received no complaints about the quality of the work. It is understood that a Certificate of Construction Compliance has been submitted to the City of Fremantle.”
Asked about whether action had also been taken against the third-party builder, the spokesperson simply said that the regulator “is continuing its inquiries on this matter”.
Building and Energy would not identify either the third-party builder or the chocolate business involved “for privacy and commercial confidentiality reasons”.
Department failed to acknowledge our co-operation: Ferhan
The owner of Ferhan Developments, Chrishan Fernando, hit back at the regulator over its statement, telling My Business that it made no mention of the oversight being unintentional or that his company had apologised for the mistake.
“I acknowledged to the department that I had made an error and unreservedly apologised for my unintentional conduct in this regard,” Mr Fernando said in a written response when approached for comment.
“[But] the notice published by the department fails to acknowledge that Ferhan agreed to the fine, that it was contrite and that the engagement occurred in error.”
Mr Fernando said that “all approvals and insurances were properly obtained” for the project.
Moreover, he claimed that it was the proprietor of the premises who had approached him to include a third-party builder as a contractor on the project.
“He approached me stating that he knew several contractors (having been a builder in the past) and said that he would like to work together with me to engage those contractors to bring down the cost of the works,” Mr Fernando said.
Hoping the project would lead to ongoing work, Mr Fernando said that he “did not want to refuse”, and believed the proprietor would simply act as a consultant on the project.
He added that he had “no inkling” that the proprietor and the proprietor’s own business would “effectively take over the works”.
“By the time I realised what was actually happening, it was too late,” he said.
“[They] retained the majority of the profits... Ferhan received barely anything.”
Mr Fernando said that the only positive outcome for himself and his own business was that the client “was extremely happy with the outcome of the works”.
The names of the proprietor and other parties involved have been omitted for privacy reasons.
Adam Zuchetti is the editor of My Business, and has steered the editorial direction of the publication since the beginning of 2016. Before joining My Business, he worked on fellow Momentum Media titles The Adviser and Mortgage Business.
The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Adam has written across both consumer and business titles, including for News Corp Australia and Domain.
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