Update on NSW regulatory response to the “cladding crisis” and recent case law developments
After the fires in Grenfell Tower, Lacrosse Tower and the Torch between 2014 and 2017, the use of potentially combustible cladding, in particular aluminium composite panels (ACP) containing polyethylene, has become a major crisis in the Australian construction industry.
Each of the state governments has responded to the issue differently.
This article summarises the measures adopted by the NSW Government to address the defective cladding already installed and prevent any further defective cladding from being installed, since the inter-agency Fire Safety and External Wall Cladding Taskforce was established on 16 June 2017, consisting of the representatives from various departments.
The most recent development was the issue of a notice of intention to issue an ACP ban by the NSW Commissioner for Fair Trading last week. However, we have on 4 December 2019 confirmed with Fair Trading that the notice was issued in error, and that there is no intention to issue a further or updated ACP ban.
Addressing existing problem
A range of measures have been introduced to identify existing affected buildings and to provide their owners of buildings which include or will include these types of products with pathways to address the problem:
Preventing future problems
In terms of restricting the future use of these types of products, the following measures have been introduced:
Recent case law developments
On 15 November 2019 the NSW Civil and Administrative Tribunal delivered judgment in the case of The Owners Strata Plan No 92888 v Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd  NSWCAT (Unreported, 15 November 2019).
It found that the Tribunal held the builder and the developer of the residential apartment building 100 per cent liable for the replacement of combustible timber cladding “Biowood” installed at the property.
The claim by the owners corporation was for breach of statutory warranties in section 18B of the Home Building Act 1989 (NSW).
This case demonstrates the difference between cases commenced in the Tribunal in NSW (where it is not possible to apportion statutory warranty claims or bring cross claims against consultants in NCAT) and in Victoria (where the Lacrosse claim was decided and the relevant consultants were joined to the proceeding and found partially liable for the defective cladding).
What 2020 holds and how we can help
We will provide a further update once the LC vote on the Bill has occurred. In particular we await a draft Regulation, which, it is assumed, will fill in the detail as to the Bill’s intended application.
Authors: Marie-Louise Scarf & Jeffery Shi
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Environmental Planning and Assessment Act 1979
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Blue Haven Pools South Pty Ltd v Maloney (No 2)  NSWCATAP 284
A hearing on costs is dispensed with under s 50(1)(c) of the Civil and Administrative Tribunal Act 2013 (NSW). COSTS Civil and Administrative Tribunal Act 2013, Civil and Administrative Tribunal Rules 2014
Visual Building Construction Pty Ltd v Armitstead (No 2)  NSWCA 280
Appeal dismissed with costs
CONTRACTS – termination – whether building contract validly terminated – whether, in the circumstances, 10 business days notice giving opportunity to remedy default needed to be given prior to termination – alternative bases for termination – Shepherd v Felt & Textiles of Australia Ltd. the Statutory Warranty Provisions of the Home Building Act in that the work was not done in accordance with ... done in accordance with and or complied with the Home Building Act or other Law. Environmental Planning and Assessment Act 1979 (NSW) ss 109F(1A), 121B, 149E(1)(a); Local Government Act 1993 (NSW)
Da Silva v Building Professionals Board  NSWCATOD 177
ADMINISTRATIVE REVIEW – accredited certifier – whether construction certificate plans inconsistent with development consent – whether development consent authorised variations – finding of unsatisfactory professional conduct – appropriate penalty
Macaulay v Bayside Council  NSWLEC 1568
ORDERS – unauthorised attic construction – compliance with National Construction Code – Building Code of Australia
Florida Kitchens Pty Ltd v Number One Cutting (T/S Number One Marble and Granite)  NSWSC 1568
APPEAL – security for costs – appeal from NCAT to Supreme Court – 106 grounds of appeal – decision of an Associate Justice – 30 grounds of appeal – whether appeal or judicial review – whether error of law – House v The King error
Wang v Building Professionals Board  NSWCATOD 174
ADMINISTRATIVE REVIEW – accredited swimming pool certifier – lack of understanding of legislative requirements - finding of unsatisfactory professional conduct – appropriate penalty
Dyldam Developments Pty Ltd v The Owners – Strata Plan No 85305 (No 2)  NSWCATAP 272
COSTS – appeal from Consumer and Commercial Division – whether r 38 and r 38A Civil and Administrative Tribunal Rules 2014 apply – whether appropriate order is order for costs in the cause
Bills passed by both Houses of Parliament – 22 November 2019
Better Regulation Legislation Amendment Bill 2019
Schedule 1 amends the following Acts—(a)Building and Construction Industry Security of Payment Act 1999 No 46,(b)Building and Development Certifiers Act 2018 No 63,(c)Building Professionals Act 2005 No 115,
Bills assented to
Better Regulation Legislation Amendment Act 2019 No 23 — Assented to 26 November 2019
For the full text of Bills, and details on the passage of Bills, see Bills.
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.
Published by Marie-Louise Scarf , Jeffery Shi