NSW Construction Industry Inquiry

The NSW Government has become so concerned about the fragility of construction firms  in that state that it has launched a formal inquiry.

The inquiry, announced by NSW Finance and Services Minister Greg Pearce and being led by Sydney barrister Bruce Collins QC, will look at the construction industry insolvency with the aim of safeguarding the interests of sub-contractors in the sector.  But the terms of reference for the inquiry include how initiatives such as insurance schemes, trust arrangements, compulsory contract provisions or other mechanisms, could help to safeguard the interests of subcontractors in the sector.

They're calling for submissions from all parts of the sector and from other interested parties by 14 September 2012 and say that 'the views of legal professionals and insolvency practitioners with first hand experience in this area, together with the views of any other interested parties will also be sought.'

The cynical me thinks that this inquiry is largely motivated by the fact that two of the largest recent construction business collapses, St Hilliers and Reed Group, involved significant government projects and have led to some very messy litigation.  

But, regardless of that, strata stakeholders should take this opportunity to remind the NSW Government of the impact of construction firm collapses on strata corporations that are over 3 storeys and do not have Home Warranty Insurance.  In other words, those strata corporations have no-one to sue for defective work and have to bear the cost of rectifying defects entirely themselves.

You can find out more about the enquiry and lodge a submission here.

Francesco ...