Skope supplier Fairview into administration
Signage industry supplier Fairview Architectural – which counted one of controversial outfit Skope Group's entities, Clear Skies, among its clients – is in voluntary administration, as it battles a class action lawsuit.
Administrators are John McInerney and Said Jahani of Grant Thorton in Sydney.
The firm has spent almost $1.5m defending the class action claim brought against it in relation to its aluminium composite cladding, and says the cost of continual legal defence threatened the company in the long-term. Fairview believes there was no legal liability on it, but has engaged in good faith settlement negotiations.
Facing such cumulative pressures, the directors have made the tough decision to place Fairview Architectural into voluntary administration, and says its directors will work closely with the Grant Thornton admninistrators. If the process goes as intended, it is hoped that Fairview’s business will continue to survive, that the 52 employees of Fairview will retain their jobs, and a resolution that is in the interests of stakeholders can be secured.
Fairview is a subject of a class action by William Roberts Lawyers – backed by litigation funding business IMF Bentham. The lawsuit centres on the aluminium composite panels sold by Fairview, used in signage and on buildings. ACM became a huge issue following the deadly Grenfell fire in London, which saw 72 residents perish in a fire exacerbated by the building's cladding.
The government is currently working to curtail the actions of class action litigation funders, who reap big rewards for successful actions, with targets often paying out to avoid even more expensive legal fees and bad PR. Typical class action suits come with a 25 to 40 per cent win fee for the lawyers, who add their costs on top. The class action law firms have just started an expensive PR campaign that has seen stories of battlers benefitting from the lawsuits spread over primetime commercial news and the metro broadhseets.
When Skope entity Clear Skies itself went into VA a year ago Fairview was owed $77,000 by the company. That was slashed by 70 per cent when Clear Skies managed to get a DOCA through that saw $1.5m of its $2.3m worth of debts wiped off. However, the whole tangled Skope Group, which at one point had revenues of $40m, owned by Ann and Charles Orren, collapsed earlier this year.
The local signage industry has spent much of the past year working through issues of combustible cladding. New Australian fire and building regulations, brought in to address safety issues with combustible composite cladding materials following the Grenfell fire disaster, are impacting on signage applications, with what the Australian Sign and Graphic Association (ASGA) says is “the potential to have significant detrimental outcomes for businesses in the sector”.
ASGA general manager Michael Punch told Print21, “It is vital for signage suppliers to understand just what changes have been made to regulations, and how that will impact on both the applications they produce and the substrates and media they use to produce their products,” adding that failure to do so could potentially leave the sign supplier liable for replacement or rectification should their work be judged non-compliant.
Punch says, “At the end of the day, it’s your responsibility to ensure you comply with all these new regulations, obtain all the required permits, and choose appropriate materials – for instance, substrates that meet the rules for combustibility and flammability where that is required,” he says.
“We don’t want to see any sign or display business exposed to unnecessary risk or cost and are doing our best to support the industry through this challenging transition.”