One of the state’s largest building surveyors, John Massey Group, has been placed into liquidation after it warned an insurance impasse could hike up costs.
One of the state’s largest building surveyors, John Massey Group, has been placed into liquidation after it warned an insurance impasse could hike up costs.
HLB Mann Judd Insolvency WA has been appointed to wind down JMG, which trades as JMG Building Surveyors.
The business specialises in providing building certifications.
Earlier this year JMG director John Massey told Business News he was concerned about indemnity policies; in Australia’s construction sector, surveyors are required to get professional indemnity insurance as a means to cover their legal liabilities in providing services.
At the time, Mr Massey said events worldwide surrounding flammable cladding on buildings had led to insurers abandoning issuing policies for building surveyors – this had made it difficult to renew JMG’s professional indemnity policies.
The work of building certifiers has come under greater scrutinity after the 2017 Grenfell Tower fire in West London, and concerns over defects in the 36-storey Opal tower in Sydney were raised earlier this year.
COVID-19 had also posed an additional challenge, Mr Massey had said in March, and was concerned about the unreasonable exemptions, unviable excesses and excessively high premiums.
In March JMG had issued more than $6 billion in insurance certifications for active WA construction and infrastructure projects and had said it found it difficult to renew its professional indemnity policies.
State governments in Victoria and New South Wales had taken steps to assist surveyors with obtaining insurance, but WA was reportedly yet to provide support.
HLB Mann Judd Insolvency WA principal Kim Wallman, who has been appointed liquidator, said the company was unable to get insurance for its cladding work, and without that insurance, JMG was unable to secure new work.
Additionally, Mr Wallman said insurance excess had increased fivefold in just two years.
According to the JMG website, the business has worked on sizeable projects across Perth, including Midland Health Campus, the Old Treasury Precinct and the Perth Arena.
The group falls within the top 20 WA surveyors, according to the Business News Data & Insights list, as ranked by number of qualified surveyors in WA.
Business News contacted JMG for comment.
Master Builders Association of WA executive director John Gelavis said the news was an extremely disappointing outcome and had sent shockwaves through the industry.
“Building certifiers have a statutory role in ensuring a building complies with the Australian Building Code, they are required to have professional indemnity insurance and this has now become a major issue,” Mr Gelavis told Business News.
“At the Building Ministers Forum in July, an agreement was reached for a national approach to implement recommendations of a building industry report by Peter Shergold and Bronwyn Weir and the state government has been releasing a number of consultation papers that deal with many of the recommendations in the Shergold and Weir Report.
“It is critical now that the state government crack on in implementing these reforms that formed the agreement that they committed to in July to adopt a more coordinated approach on indemnity insurance.
“While industry has been extensively consulted we would like to see actual outcomes that improve building confidence and professional indemnity insurance, so we just need to progress as quickly as possible.”
