Residential Focus

Fire spread in façades – how much is too much?

In a November 2019 decision, the NSW Civil and Administrative Tribunal (Tribunal) determined that a treated wooden cladding product called "Biowood", developed for use on building façades, was combustible, not sufficiently fire retardant and was in breach of the requirements of the Building Code of Australia (BCA). As a result, the Tribunal awarded the claimant owners corporation the cost of removing and replacing the Biowood from the façade of a residential apartment building, on the basis that the developer and builder had breached the statutory warranties contained in section 18B of the Home Building Act NSW (1989) (Statutory Warranties).

The decision was significant, as it was the first in Australia to consider the compliance of a combustible cladding product, other than aluminium composite cladding (ACP), after the Lacrosse fire in 2014.

Both the builder and developer appealed to the Tribunal’s Appeal Panel. The Appeal Panel delivered its decision in August 2020. It determined that there was a reasonable basis for, and no error in, the Tribunal’s original decision and that the claimant had sufficiently demonstrated the combustibility and risk of fire spread created by Biowood (to establish that the product was not BCA compliant) imposed an undue risk on the occupants and users of the building. Therefore, Biowood was deemed not fit for purpose and amounted to a breach of the Statutory Warranties.

Both the builder and developer sought leave to appeal the Appeal Panel’s decision in the Supreme Court of NSW (Court) on six grounds, including:

• whether the Appeal Tribunal made errors in formulating and applying the test under clause 2.4(a)(iii) of the BCA to the facts (and whether that application gave rise to the wrong conclusion)
• whether the Appeal Tribunal made an error in finding there was “undue risk”
• without providing sufficient reasons, whether the Appeal Tribunal made an error in finding the use of Biowood breached the Statutory Warranties.

Appeal decision

The Court delivered its decision in October 2021. It granted the builder and developer leave to appeal, then dismissed all six grounds of the appeal. The Court upheld the Appeal Panel’s decision that the Biowood installed on the building is a combustible material and is not compliant with the BCA, as it creates an undue risk of fire spread.

In reaching this decision, the Court found that:

• the correct application of the test in clause 2.4(a)(iii) of the BCA involves ordinary principles of interpretation and an evaluation of the circumstances in which the cladding product is used as an attachment to the building’s external walls. The test involves determining whether the use of the cladding product (Biowood) constitutes an undue risk of fire spread via the façade of the building
• the radiant panel test in AS1530.3 under the BCA is limited and not ‘really’ relevant for external uses in the context of the CSIRO Guideline
• the rate of flame spread was not necessarily material in determining whether fire spread was undue or not
• whether there is a high likelihood of fire spread or a low one is also not determinative of whether the risk is undue
• the risk will be undue where the effect of the fire spread is excessive and likely to have significant consequences with regard to the location of the combustible material and the nature of the particular building
• there was evidence to support a finding that burning Biowood creates a material risk of fire spread between the floors of the building, creating an undue risk of fire spread. 

Significance

The decision provides clarification of the approach that Australian courts and tribunals are likely to take to determine the compliance of various cladding products.

The approach involves considering the cladding in the context in which it is installed and whether the combustible qualities of the product mean that it is likely to cause fire spread between floors, representing an undue risk of fire spread. However, the speed and degree of likelihood of the spread are not determinative of whether there is an undue risk.

Given this approach, it seems likely that there will be further claims in relation to other façade products if expert evidence suggests that burning those products creates a material risk of fire spread between floors, even if it is not at the same rapid rate of spread as seen in the Lacrosse fire and fires in other buildings clad with products that contained polyethylene.

Authors: Christine Jones, Marie-Louise Scarf & Isabella Costa

In the media

Cost of land rises twice as fast as building materials
"The cost of residential land has risen more than twice as fast as the cost of building materials over the past year," said HIA Chief Economist, Tim Reardon (27 October 2021).  More...

Social housing sector urged to get moving
Housing affordability is going backwards, social housing waiting lists are growing and the time has come to “stop running pilots and actually start replicating” (26 October 2021).  More...

Labour shortfalls push Australia down global construction index
Australia has ranked 15th in world for construction workers as the country battles with a skills shortage and a building boom. Builders in Australia were continuing to report wage pressures due from skills shortages, according to the latest Australian performance of construction index, and the pressure of the HomeBuilder scheme was adding to this (25 October 2021).  More...

Thousands in limbo as 'orphaned' homes crisis affects Australia's building industry
Thousands of homeowners are being stranded with "orphaned" houses they cannot live in because of regulatory failures and bureaucratic dithering, industry experts say (22 October 2021).  More...

Under construction: Building new industry standards
A new industry culture standard to improve the mental health and wellbeing of the 1.2 million Australian construction workers released for comment. The standard is expected to be finalised by the end of this year and implementation pilots are due to start in NSW and Victoria in 2022, with other states and territories expected to follow soon after. Have your say on the draft culture standard here (20 October 2021).  More...

Australians are living in 'glorified tents' and it's costing our wallets and the environment
Companies are developing lower carbon building materials, and voluntary standards offer a green rating for buildings and homes. But experts say a mandated, national definition of what green means could have greater benefits (20 October 2021).  More...

NSW Government boosts local economy with new housing development
The New South Wales Government has announced the construction of a $55 million residential project in West Ryde, that will deliver housing, jobs and economic activity in a time when it is needed most. Led by the NSW Land and Housing Corporation and its partners, the development will provide homes for around 285 people (28 October 2021).  More...

'Taking sustainability up a notch': New developments to be rated on construction emissions
New major developments will be scored on how carbon intensive they were to build under a planning framework being developed by the NSW Government to bolster the drive towards net-zero (28 October 2021).  More...

Parliamentary hearing told real estate agents failing to warn apartment buyers of 'serious defects'
Real estate agents selling apartments in two Sydney high rise buildings found to have "serious defects" by government inspectors have been targeted in a fiery New South Wales parliamentary hearing (27 October 2021).  More...

$2.2B Ivanhoe Estate readies for stage two of development
Ivanhoe Estate, the biggest integrated social and affordable housing project in Australia, is getting ready for the next stage of development. Located in Macquarie Park, north-west Sydney, the Ivanhoe Estate redevelopment is part of the NSW Government’s $22 billion communities plus building program and will deliver more than 3000 residential units (26 October 2021).  More...

Building order finds 'hazard to human life': Awning in new Sydney development in danger of collapse
Government inspectors find potential "serious defects" in the 15-storey Baulkham Hills Modena complex in Sydney's north-west, including an awning in danger of collapse, according to a building work rectification order (18 October 2021).  More...

Published – articles, papers, reports

ABCC Industry Update – 20 October 2021 edition
In the October edition of Industry Update we explain how to show your proof of vaccination for COVID-19, share highlights from our annual report, litigation news and more. Read the October 2021 edition.

Practice and courts

ABCB WMTS:535–2021 – public comment draft round one
For public comment technical specification for the WaterMark Certification Scheme. This specification includes requirements for air valves for plumbing applications. Closes 2 December 2021. Click here for more information.

ABCB: Residential energy efficiency consultation RIS now open for comment
We are now seeking comment on a CRIS providing an analysis of proposed amendments to the residential energy efficiency provisions included in stage two of NCC 2022 public comment draft. The CRIS will be available for comment until 7 November 2021. Click here for more information.

ABCB: WMTS:533–2021 – public comment draft round two
For public comment technical specification for the WaterMark Certification Scheme. In resolving round one public comment for draft WMTS-533, technical changes were identified, which required redrafting. Closes 17 November 2021. Click here for more information.

GBCA: Registrations for Green Star – Design & As Built close 17 December 2021
At the time of launch we announced a transition period: Whereby applicants could register projects using either Green Star – Design & As Built, or Green Star Buildings. This transition period ends on 17 December 2021 and applicants will no longer be able to register their projects under Green Star – Design & As Built (21 October 2021). Click here for more information.

HIA submissions
NCC 2022 energy efficiency and condensation proposed changes
18 October 2021 – this response sheet is to be used for submitting responses to the National Construction Code 2022 public comment draft.

Residential Apartment Buildings (Compliance and Enforcement Powers) Act orders register
Orders are issued by the Building Commissioner under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020. The register is updated to 22 October 2021. Click here for more information.

Guide for design practitioners and engineers
Consult Australia, Engineers Australia and the Australian Institute of Architects have joined forces to develop the Guide for design practitioners and engineers to help their members tackle the recent NSW Building Confidence reforms. There are multiple new obligations on design practitioners, engineers and building practitioners throughout the life of a building under the NSW Design and Building Practitioners Act 2020 and the Design and Building Practitioners Regulation 2021.

Cases

NSW

Impressive Builders Pty Ltd v Cleary [2021] NSWCATAP 331
Leave to appeal is refused. The appeal is otherwise dismissed.
APPEALS – whether error of law – whether leave to appeal should be granted.
Civil and Administrative Tribunal Act 2013 (NSW), Home Building Act 1989 (NSW), sections 7AAA, 10, 48MA and 48O, section 80 and Scheme 4, clause 12.

Monument Building Group Pty Ltd v Kapila (No. 2) [2021] NSWCATAP 339
COSTS – costs on appeal – whether special circumstances established – where party given leave to be legally represented on the condition that it may not recover legal costs – the Appeal Panel received written submissions from the owner dated 13 September 2021 in which she sought an order for costs; from the appellant.

Shoringco Pty Ltd v Dynamic Excavation and Demolition Pty Ltd [2021] NSWDC 588
CHARGING ORDER – types of property in relation to which a charging order can be made – monies of a person with contractual obligations to a judgment debtor cannot be subject to a charging order unless within section 126(1) of the Civil Procedure Act 2005 (NSW).
Affidavit states that payments of $50,030.69 have been received by the plaintiff pursuant to a garnishee in reduction of the judgment debt. The amount owing by the defendant is thus $164,177.26. Paragraph 7 of the affidavit makes clear that the proposed chargee is Hogar.

Impressive Builders Pty Ltd v Cleary [2021] NSWCATAP 331
APPEALS – whether error of law – whether leave to appeal should be granted.

Transwest Fuels Pty Ltd v Knee [2021] NSWCATAP 330
ADMINISTRATIVE LAW – particular administrative bodies – NSW Civil and Administrative Tribunal – hearing rule – notice – time to prepare case – time to prepare case not given by failure to serve evidence on opponent prior to hearing – no procedural unfairness in refusing to admit evidence not served in advance of the hearing.

Ray Vella Designer Homes Pty Ltd v Watling [2021] NSWCATAP 324
APPEALS – whether error of law – whether leave to appeal should be granted.
Civil and Administrative Tribunal Act 2013 (NSW), section 80 and Scheme 4, clause 12.
The appellant appeals and seeks leave to appeal from a decision of the consumer and commercial division of the tribunal delivered on 15 July 2021, by which the builder was ordered to pay $3774.90 to the respondent.

Pregard Pty Ltd v Ballinger [2021] NSWCATAP 321
(4) Any party opposing an application for costs of the appeal file and serve submissions in support of such opposition not exceeding five pages within fourteen days.
HOME BUILDING – costs – distinct issues.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Act 2014 (NSW); Home Building Act 1989 (NSW).

Scott v Stewart [2021] NSWCATAP 326
CONTRACT LAW – termination on notice – substantial breach – meaning of “substantial”.
REPUDIATION – election – manner by which repudiation can be accepted – reasonable time to make election – conduct in performance of contract while considering notice under contract.
Civil and Administrative Tribunal Act 2013 (NSW) – section 80(2)(b); Fair Trading Act 1987 (NSW) – section 79U(1); Home Building Act 1989 (NSW) – 4(1).

Taylor Construction Group Pty Ltd v Strata Plan 92888 t/as The Owners Strata Plan 92888 [2021] NSWSC 1315
ADMINISTRATIVE LAW – appeal pursuant to section 83 of the Civil and Administrative Tribunal Act 2013 (NSW) – decision of appeal panel of civil and administrative tribunal that use of “Biowood” attachments to external walls of multi-storey residential buildings constitutes undue risk of fire spread – whether incorrect formulation and application of proper test and the Building Code of Australia – whether finding of undue risk made in absence of evidence – appeal dismissed.

Legislation

NSW

Regulations and other miscellaneous instruments
Environmental Planning and Assessment Amendment (Owner's Consent and BASIX Certificates) Regulation 2021 (2021–614) – published LW 22 October 2021

Bills passed by both Houses of Parliament – 22 October 2021
Better Regulation Legislation Amendment (Miscellaneous) Bill 2021
Schedule 1 amends the following Acts and instrument: (c) Building and Construction Industry Long Service Payments Act 1986 No 19, (d) Building Products (Safety) Act 2017 No 69, (f) Design and Building Practitioners Act 2020 No 7, (k) Home Building Act 1989 No 147.

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 article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Christine Jones

Marie-Louise Scarf

Isabella Costa

Share this