Former Nicheliving customers have so far been paid out more than $30 million worth of taxpayer-underwritten insurance claims, as new builders take on the unfinished work.
Former Nicheliving customers have so far been paid out more than $30 million worth of taxpayer-underwritten insurance claims, as new builders take on the unfinished work.
Since the state government banned the builder from operating and declared it would foot the insurance bill in October last year, 218 customers have lodged claims to access up to $200,000 apiece in home indemnity insurance.
Insurance provider QBE has so far settled 164 of those claims and paid out $30.5 million to affected customers, who can use the funds to appoint new builders to finish the job.
The total bill is expected to be north of $40 million, given more than 200 homes on the books of Nicheliving’s building arm, Projex Management & Construction, remain unfinished.
“There are now 164 former Nicheliving customers whose homes are being completed by a new builder, meaning they will soon be able to move into their long-awaited home,” Commerce Minister Sue Ellery told this masthead.
“Without the decisive action of the Cook Labor government, these customers would still be waiting for their homes to be completed.
“The steps we have taken ensured these customers could access home indemnity insurance and select a builder of their choice to finish the work on their homes.”
When the state government reached the deal with Nicheliving directors Ronnie Michel-Elhaj and Paul Bitdorf, it waived the builder’s insurance liability on advice recovery rates would be low, meaning the directors weren’t going to be pursued to cover the costs.
As a result, taxpayer funds are solely being used to underwrite compensation up to $200,000 per customer.
The use of taxpayer dollars, and the absence of a financial penalty for the directors, was a point of contention for state opposition leader Shane Love.
“In December, I called on the premier to come clean about his secretive deal with Nicheliving’s former directors; an arrangement that imposed no financial penalties while leaving Western Australian taxpayers to foot an insurance bill that has now reached tens of millions of dollars,” Mr Love said.
“The scale of this crisis was entirely predictable, and I expect the final payout figure to be even higher.
“Since 2020, this issue has spiralled out of control, and despite repeated warnings, Roger Cook has failed to act.”
Nicheliving directors Paul Bitdorf (left) and Ronnie Michel-Elhaj repurchased the holding company and the building arm for $2.7 million.
The deal between the state government and the builder's directors was made possible after Nicheliving agreed to drop its fight to reinstate its builder’s registration, held under Projex, after it was cancelled on financial grounds.
Shortly after, administrators were called in to restructure three of the builder's entities. Nicheliving's directors then successfully regained control of the holding company and the building arm for $2.7 million after passing a creditors' vote.
The state government-imposed ban also covered the directors and their wives from operating or launching a new registered building contractor businesses for at least 10 years, and from accessing home indemnity insurance themselves.
Earlier this week, reports emerged that the directors were back in the business with a new entity, now subject to an investigation by the state government.
“Imagine how Nicheliving customers felt this week, hearing Roger Cook suddenly claim he’ll take action, months after it became clear the company was trading again,” Mr Love said.
“The lack of urgency is staggering, and serious doubts now hang over Labor’s ability to regulate the construction industry effectively.”
Mr Love also called on the Australian Securities and Investment Commission to investigate insolvent trading claims.
ASIC has previously confirmed it was monitoring developments in the Nicheliving matter, but could not be drawn to comment further.
Nicheliving has been contacted for comment.
