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Residential Focus

26 August 2020

#Property & Real Estate

Residential Focus

Appeal Panel decision delivered on Biowood

On 15 November 2019, the NSW Civil and Administrative Tribunal (Tribunal) determined that a treated wooden cladding product called “Biowood” was combustible, not sufficiently fire retardant and was in breach of the requirements of the Building Code of Australia (BCA) and awarded an owners corporation the cost of removing and replacing it from the façade of a residential apartment building.[1]

The decision was significant as it was the first decision of any court or tribunal in Australia after the Melbourne Lacrosse fire, where damages were awarded for the cost of replacing combustible cladding, other than for aluminium composite cladding (ACP), which is the subject of bans in NSW and other states. 

The defendant builder and developer both appealed the decision. The Appeal Panel of the Tribunal has now delivered its determination on the appeal, which upholds the original decision.[2]

Being an appeal, the Appeal Panel did not hear new evidence but was required to determine whether the Tribunal below had sufficient grounds for making its original decision and whether there had been any errors in making that decision.

The Appeal Panel determined that there was a reasonable basis for and no error in the original decision and that the owners corporation had sufficiently demonstrated the combustibility and risk of fire spread created by the product through its expert evidence, to establish that the product was not BCA compliant, imposed an undue risk on the occupants and users of the building, was accordingly not fit for purpose and amounted to a breach of the statutory warranties in section 18B of the Home Building Act 1989 (NSW) (Act).

Some likely consequences of the decision are below:

  • the owners of other residential buildings with Biowood on their facades are likely to be lining up to seek expert opinion on whether the installation of the product on their buildings also comprises a risk of fire spread in breach of the BCA, with a view to bringing proceedings against those responsible for its design and installation
  • now that the Design and Building Practitioners Act 2020 (NSW) (DBPA) has commenced, the class of buildings the owners of which are likely to claim may be broader, having regard to the retroactive statutory duty of care to avoid economic loss as a result of defects, applying alongside the statutory warranties under the Act. The defendants in such claims may also extend to include the design team now that the existence of a duty of care has been established by statute
  • the Biowood product and similar products may well be the subject of review by the NSW Government’s recently formed Cladding Product Safety Panel to determine whether it and other products, such as steel composite cladding and foam based cladding products, should be the subject of a product safety ban, alongside ACP.

Authors: Christine Jones & Marie-Louise Scarf

[1] https://www.caselaw.nsw.gov.au/decision/5df0887ce4b0ab0bf60748b1
[2] https://www.caselaw.nsw.gov.au/decision/173a260197982c9039cce483

In the media

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Australia’s emerging build-to-rent sector is starting to look like an attractive asset class and stimulus option, especially now. With Covid the sector benefits by being closer to “shovel ready” than traditional build to sell models (20 August 2020).  More...

Master Plumbers group urges caution with national licencing
Master Plumbers Australia and New Zealand (MPANZ), the collective voice for the Australian and New Zealand plumbing industry, is warning that a national occupational licensing scheme announced by Treasurer the Hon. Josh Frydenberg comes with potential risks for community safety and consumer protection (18 August 2020).  More...

Researchers develop spray-on clear coatings for cheaper smart windows
A simple method for making clear coatings that can block heat and conduct electricity could slash the cost of energy-saving smart windows and heat-repelling glass. Developed by researchers at RMIT University, the spray-on coatings are ultra-thin, cost-effective and rival the performance of current industry standards for transparent electrodes (14 August 2020).  More...

Gosford scaffolding collapse prompts calls for workplace safety reform
NSW passed amendments to the Work Health and Safety Act last month, but WorkSafe says almost half of all scaffolds have "missing parts" (21 August 2020).  More...

Why NSW’s BASIX tool needs some love 
While BASIX, the NSW-specific planning controls that override National Construction Code requirements on emissions and other sustainability criteria, started life as a market-leading tool, some say it’s now losing its edge and stymying progress towards next generation technologies such as heat pumps (20 August 2020).  More...

Expert panel to accelerate removal of high-risk cladding
The NSW Government has established an expert panel of building and construction specialists to help support the removal of unsafe cladding across the state (10 August 2020).  More...

HIA: Update on COVID-19: ACT & NSW
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Practice and courts

Standards Australia: Drafts open for public comment
Standards Australia are seeking your feedback on a range of standards concerning the plumbing and drainage trade. On this page you will find a complete list of drafts currently open for public comment from August to October 2020. For more information, please consult the Standards Australia Public Commenting Guide(17 August 2020).  More...

AS/NZS 5131:2016 Amd 1:2020
Structural steelwork - Fabrication and erection Standards Australia.  More...

Build Australia discussion paper: Draft National Registration Framework for Building Practitioners
A discussion paper on a draft National Registration Framework (NRF) for Building Practitioners has been developed in response to BCR recommendations 1 and 2. The discussion paper seeks stakeholder feedback on the draft NRF outlined in the consultation form, until 23 August 2020. Only comments submitted using the online form will be considered. More...

ABCB: Consultation on minimum accessibility standards for housing closes 31 August
This is your opportunity to provide feedback (17 August 2020).  More...

ABCB: Proposal to include minimum accessibility standards for housing in the NCC
Consultation RIS open for public consultation, closing 31 August 2020. It examines regulatory options that are based on the Livable Housing Design Guidelines (LHDG) Silver-level and Gold-level specifications, as well as a ‘Gold-plus’ specification developed through stakeholder consultation. The ABCB has also released a project overview and RIS explainer document that explain the project, its timelines and the RIS process.  More...

GBCA: draft Green Star Homes Standard for consultation
Part of the Green Building Council of Australia’s Future Homes Strategy, the Standard is a key tool to help drive transformation in the residential sector to create a market for healthier, more resilient, energy efficient homes. Consultation on the draft standard will run until 30 October 2020.  More...

2020 National Housing Research Program commences
Research is underway for the suite of projects funded by AHURI as part of the 2020 National Housing Research Program (NHRP). The research will be undertaken by collaborative teams from AHURI’s eight national university research partners. For more details of the 2020 NHRP projects please click here.  More...

NSW Revenue: HomeBuilder program
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Cases

CaseNote: High court clarifies personal leave accrual
On 13 August the High Court handed down a decision that clarified the accrual of personal leave. The decision and what it means: The Court declared that the expression ‘10 days’ in the Fair Work Act in regards to personal leave accrual refers to 10 ‘notional days’ rather than 10 ‘working days’. The full decision of the High Court is available at 

In the matter of Vista Del Mare Pty Ltd [2020] NSWSC 938
CORPORATIONS — Winding up — Statutory demand — Whether statutory demand should be set aside by reason of offsetting claim — Where Plaintiff makes offsetting claim for defective construction works — Where expert evidence provides opinion on rectification cost.

Decision restricted [2020] NSWCATAP 163
BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Statutory warranty — In accordance with the law - Building Code of Australia – Whether issue of interim occupation certificate creates an irrebuttable presumption that the building is BCA compliant – Whether attachment of “Biowood” to the exterior walls constituted an “undue risk of fire spread via the façade of the building” – Words and phrases – “undue risk”

Price v Commissioner for Fair Trading [2020] NSWCATOD 93
ADMINISTRATIVE LAW – administrative review – licensing – whether Applicant meets requirements for Issue of builders licence - application of Instrument as policy – experience requirements not met – not unfair or unjust to apply policy - Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Evidence Act 1995; Home Building Act 1989 

Florida Kitchens Pty Ltd v Number One Cutting Service Pty Ltd trading as Number One Marble and Granite [2020]
Summons seeking leave to appeal dismissed, with costs. APPEALS – leave – dismissal of appeal from order for provision of security for costs – orders made against sole director and shareholder – no question of principle – leave refused - Civil and Administrative Tribunal Act 2013 (NSW), s 83; Civil Procedure Act 2005 (NSW), s 56; Home Building Act 1989 (NSW); Uniform Civil Procedure Rules 2005 (NSW), rr 49.4, 51.12, 51.18, 59.11

F.E. V Mono Constructions Pty Ltd v Beattie [2020] NSWSC 1093
CIVIL PROCEDURE – stay of proceedings – pending appeal – where there is no practical benefit of imposing a stay CIVIL PROCEDURE – summary disposal – dismissal of proceedings – where action may be maintainable
The remaining plaintiff corporation, which is unrepresented, is suing the law practice defendants for professional negligence in the performance of legal work and the provision of legal advice in a home building dispute brought against the plaintiff by former customers, originally in the Consumer Trader and Tenancy Tribunal, and continued in the Civil and Administrative Tribunal (NCAT

Calderwood v Department of Planning, Industry and Environment; Calderwood v Campbelltown City Council; Department of Planning, Industry & Environment v City of Ryde [2020] NSWCATAD 200
GOVERNMENT INFORMATION- Combustible [Flammable] Cladding Register- disclosure of addresses of buildings on Register- agency can rely on additional factors in Table negative to disclosure other than those referred to in access decision-denial of access affirmed

Michael Kuehn & Jennifer Kuehn v Masterton Homes (NSW) Pty Ltd t/as Masterton Homes (NSW) Pty Ltd [2020] NSWSC 1049
CONTRACT – Whether parties compromised or settled proceedings between them – One of the plaintiffs sued the first defendant house builder in the NSW Civil & Administrative Tribunal (NCAT) for damages, alleging defective construction of their house – The first defendant alleged that on 29 July 2019 when the proceedings were before NCAT, a binding compromise or settlement of the claims of both plaintiffs was entered into
HELD – No binding compromise or settlement was entered into because the other plaintiff was not a party to any arrangement and, in any event, the objective intention of the parties was that there would be no binding arrangement until the terms of it were embodied in a formal deed signed by all of them.

One Pro Baulkham Hills Pty Ltd v Ming Tian Real Property Pty Ltd [2020] NSWSC 1043
CONTRACTS – building contract – construction – conditions precedent – whether conditions precedent were to formation of contract or parties’ performance of their obligations under the contract – whether defendant contractor obliged to commence work under contract – whether failure by defendant to provide bank guarantees and evidence of home warranty insurance caused plaintiff to suffer damage
CONTRACTS – ambit of exclusion clause – whether exclusion clause survived consensual termination of contract
CONTRACTS – remedies – damages – whether plaintiff principal proved it had suffered damage by reason of defendant’s conduct
CONSUMER LAW – misleading or deceptive conduct – where director of defendant represented guarantee was genuine – where bank guarantee was not genuine – where plaintiff general manager saw at once that bank guarantee was not genuine – whether plaintiff has suffered any loss by director’s conduct

Loneragan v The Owners - Strata Plan No 16519 [2020] NSWCATAP 177
APPEAL — NCAT — questions of law — leave to appeal from decision of Consumer and Commercial Division of NCAT
LAND LAW — strata title — common property — maintenance and repair of common property ─ relationship between ss 106 and 108 of the Strata Schemes Management Act 2015
 EVIDENCE — expert evidence — whether Tribunal permitted to consider whether witness was an expert in proceedings in which NCAT Procedural Direction 3, Expert Evidence did not apply

Crea v Bedrock Construction and Development Pty Ltd; Bedrock Construction and Development Pty Ltd v Crea & Anor [2020] sadc 124
CONTRACTS - Building, Engineering and related contracts - performance of work
CONTRACTS - Building, engineering and related contracts - the contract - construction of particular contracts and implied conditions - variations 

Legislation

Regulations and other miscellaneous instruments

Residential Apartment Buildings (Compliance and Enforcement Powers) Regulation 2020
(2020-475) — published LW 14 August 2020

Road Transport Amendment (Miscellaneous) Regulation 2020
(2020-476) — published LW 14 August 2020

Western City and Aerotropolis Authority Amendment (Operational Area) Regulation 2020
(2020-479) — published LW 14 August 2020

Administrative Arrangements (Administration of Acts—Amendment No 5) Order 2020
(2020-389) — published LW 3 July 2020

Home Building Amendment (Fees) Regulation 2020
(2020-314) — published LW 26 June 2020

Building and Development Certifiers Amendment (Provision of Information) Regulation 2020
(2020-300) — published LW 26 June 2020

Home Building Amendment (Miscellaneous) Regulation 2020 (2020-179)
published LW 1 May 2020

Environmental Planning Instruments

State Environmental Planning Policy Amendment (Western Gateway Sub-precinct) 2020
(2020-480) — published LW 13 August 2020

Bills assented to

State Revenue Legislation Amendment (COVID-19 Housing Response) Act 2020 No 19 — Assented to 11 August 2020

For the full text of Bills, and details on the passage of Bills, see Bills.

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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