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Residential Focus

04 May 2022

13 min read

#Property, Planning & Development, #Construction, Infrastructure & Projects

Published by:

Simona Njaim

Residential Focus

Recent audit on building regulation – combustible external cladding

Combustible cladding continues to confront building owners, construction professionals and regulators and shall for some time yet, as the legacy stock of affected buildings is gradually identified and addressed.

The NSW Government’s regulatory response to combustible cladding has thus far included implementing a 10-point plan of action, establishing the NSW Government's Fire Safety and External Wall Cladding Taskforce (Cladding Taskforce) and facilitating the remediation of combustible cladding on Class 2 residential apartment buildings through Project Remediate.

The Cladding Taskforce is chaired by the Department of Customer Service, and the Department of Planning and Environment is a key member.

In an effort to monitor the concerns surrounding combustible external cladding, on 13 April 2022, the Audit Office of NSW (Audit Office) released the Building regulation: Combustible external cladding audit report (Report). The Report examines the reforms put in place by the Department of Customer Service and Department of Planning and Environment and how effective these reforms have been in addressing combustible external cladding.

The audit involved nine local councils involved in the NSW Government’s 10-point plan of action, namely:

  • Bayside Council
  • City of Canterbury Bankstown Council
  • Cumberland City Council
  • Liverpool City Council
  • City of Newcastle Council
  • City of Parramatta Council
  • City of Ryde Council
  • City of Sydney Council
  • Wollongong City Council.

This article summarises the key components of the Report. To obtain the full benefit of the Report’s contents, we recommend reading the Report in its entirety.

Audit criteria

To align with NSW Government’s 10-point plan, the criteria for the audit are set out in the below three questions (extracted from Appendix two – About the audit):

  • are the fire safety risks of combustible external cladding on existing buildings identified and remediated?
  • is there a comprehensive building product safety scheme that prevents the dangerous use of combustible external cladding products on existing buildings?
  • is fire safety certification for combustible external cladding on existing buildings carried out impartially, ethically and in the public interest by qualified experts?

Key findings

The Report provides a number of interesting insights. We have summarised the key findings of the Report below:

  • there is an absence of a reliable source to identify buildings that might have combustible external cladding
  • there has been a decrease in the number of buildings being registered as having combustible external cladding
  • the Department of Customer Service and Department of Planning and Environment have assisted and monitored compliance with the requirements of the Cladding Taskforce or Fire and Rescue NSW by local councils
  • there has been a lack of proactive management by government departments to deal with combustible external cladding on NSW Government-owned buildings
  • where the Department of Planning and Environment was the consent authority, it had an effective process for addressing the risks of combustible external cladding
  • there has been poor and inconsistent information and data management by the Cladding Taskforce
  • low-risk buildings have been neglected and not drawn to the attention of local councils
  • there has been confusion among councils and building and strata managers surrounding the criteria of the product use ban of 30 per cent polyethylene imposed by the Commissioner for Fair Trading, due to a lack of guidance from consent authorities
  • there is an absence of supporting documentation for enforcing the product use ban, such as enforcement strategies, policies or plans, which is a responsibility of the Department of Customer Service
  • when conducting inspections and risk assessments of buildings, the accredited and registered experts engaged are not acting under their registration or accreditation functions, but are acting as consultants to the building owner.


The Report recommends that the Department of Customer Service and the Department of Planning and Environment:

  • by October 2022, address the confusion surrounding the product use ban by implementing a holistic approach to allow for a variety of circumstances specific to each building. The risk assessments should be well-rounded, in that consideration should be given to the type, location, arrangement, installation method and amount of combustible external cladding installed
  • by October 2022, ensure that the Cladding Taskforce creates an action plan for buildings assessed as low-risk, which should include a cost versus benefit and risk assessment
  • by December 2022, improve information and data management systems to properly reflect the history of identifying, assessing and remediating buildings with combustible cladding.

With the deadlines set for the second half of this year, we will be keeping readers updated on progress reported by the Department of Customer Service and the Department of Planning and Environment on compliance with the recommendations in the Report.

Authors: Christine Jones & Simona Njaim

  • Christine Jones will be sharing an update on the Home Building Act, essential viewing for builders, developers and consultants in the residential sector in a webinar on 11 May 2022. Click here for more details and to register.

In the media

Building crisis hits rural communities as good seasons drive increased demand
Builders across the country became very busy, very quickly when the federal government's HomeBuilder program was announced in the middle of the pandemic in 2020. But with residential construction busier than ever, the motivation for builders to travel out of town for farm jobs disappeared (2 May 2022).  More...

Investment to unlock homes in booming west
The NSW Government is ramping up its investment in vital infrastructure to support the delivery of more than 30,000 new homes in areas of Western Sydney that are experiencing record growth (29 April 2022).  More...

How a bushfire-ravaged NSW community is helping to build disaster-resilient homes
"The whole concept is to build houses that have a far better chance of not burning down or being flooded" stated Greg Webb, Lake Conjola resident (28 April 2022).  More...

More construction companies to go under: Hutchinson Builders
Australia’s largest privately owned construction company, Hutchinson Builders, has warned that more companies and subcontractors were likely to hit the wall as the material supply crisis shows no sign of abating (27 April 2022).  More...

Housing supply, tax reforms urged ahead of election
A Sydney-focused think tank has called for the federal government to roll out a “real long-term strategy” to make housing more affordable. The Committee of Sydney paper noted only 30 per cent of houses in NSW are approved via a complying development pathway, a planning and construction approval process involving a fast-tracked assessment by a council or an accredited certifier (26 April 2022).  More...

2022 HIA-CSR Australian Housing Awards winners
“HIA is committed to recognising the outstanding achievements of our members. The HIA-CSR Australian Housing Awards allow us to acknowledge the skill and commitment of our members who excel in building exceptional homes, kitchens and bathrooms and have highly successful businesses,” stated Graham Wolfe, HIA Managing Director (23 April 2022).  More...

Forestry sector hopes pulp log trial will ease nation's growing structural timber deficit crisis
"Australia is not going to be able to build the new homes that it needs into the future if we don’t take urgent action now to ensure we have the softwood supply the country needs," stated Michael O’Connor, Construction Forestry Maritime Mining and Energy Union national secretary (20 April 2022).  More...

Published – articles, papers, reports

Building regulation: Combustible external cladding audit report
The report focuses on how effectively the Department of Customer Service (DCS) and Department of Planning and Environment (DPE) led reforms addressing the unsafe use of combustible external cladding on existing residential and public buildings. Read more here.

Sydney housing supply forecast
The Sydney housing supply forecast is the best available NSW government information on where, when and how many new homes are likely to be built in the Sydney area in the next five years (27 April 2022). Read more here.

National Construction Supply Chain Strategy Needed to Maintain Building Confidence
The Australian Institute of Architects’s Federal Election Policy Statement A Time For Action, calls for the next Australian Government to establish nationally consistent supply chain laws that include product testing and certification and address modern slavery, child labour and the displacement of communities around the world (27 April 2022). Read more here.

HIA Comments on Improving Demolition Licensing in NSW
HIA provides comment on the draft Work Health and Safety Amendment (Demolition Licensing) Regulation 2022 and accompanying Consultation Paper (26 April 2022). Read more here.

Tents to Castles: Building Energy Efficient, Cost-Saving Aussie Homes
The Climate Council’s new report Tents to Castles: Building energy efficient, cost saving Aussie homes has found living in a 7-Star, all-electric house in any capital city in Australia would save occupants on average $450 per year on heating and cooling costs compared to the current building standard of 6-Stars (21 April 2022). Read more here.

How the right productivity gains can get Australia’s infrastructure up to speed
Australia’s infrastructure sector has long been challenged by barriers to innovation, as well as flaws in procurement processes and training. A new Engineers Australia policy discussions paper looks to address that (21 April 2022). Read more here.

Practice and courts

NSW Fair Trading - Toplace Pty Ltd Building Work Rectification Order 11-15 Charles Street Canterbury NSW 2193
Toplace Pty Ltd is required to cause building work to be carried out to remediate the potential serious defects as set out in paragraph 8 of this Order. Failure to comply with this Order is a criminal offence (22 April 2022). Read more here.

Our strategy for auditing Design and Building Practitioners
We want to give the people of NSW confidence in the building industry. Our audit strategy is designed to help keep design practitioners and other practitioners accountable (21 April 2022). Read more here.

Corrigendum to NCC 2019 and NCC 2019 Amendment 1
This corrigendum changes expiry dates contained in NCC 2019 and NCC 2019 Amendment 1 relevant to some NCC referenced documents (14 April 2022). Read more here.


Reliance Financial Services Pty Ltd v Antalija Developments No 4 Pty Ltd [2022] NSWSC 519
CONTRACTS – misleading conduct under statute – misleading or deceptive conduct – third and fourth defendants operate residential development business through second defendant – second plaintiff through her agent arranges for residential development project with third and fifth defendants – first defendant incorporated to purchase land on unit trust for second plaintiff, third defendant and fifth defendant themselves as trustees of separate discretionary trusts – plaintiffs claim enforcement of contract between unit holders containing clause giving rise to breach of contract by third defendant and liability of first defendant to second plaintiff for loan at substantial interest rate – whether particular clause of contract void for misleading or deceptive conduct by agent of second plaintiff – development arrangements made in quasi-familial context – request by third defendant of agent of second plaintiff whether legal or financial advice required in respect of contract – response by agent of second plaintiff that contract contained ‘standard’ or ‘simple’ terms – failure by agent of second plaintiff to bring third defendant’s attention to unusual term – declaration that particular clause void ab initio;
EQUITY – trusts and trustees – breaches of trust – plaintiffs claim that first defendant as corporate trustee breached its duties by securing loan over trust property to pay other corporate vehicle of third and fourth defendants – plaintiffs claim that first defendant breached its duties by making unauthorised repayment of third and fifth plaintiffs’ contribution to development arrangement – plaintiffs claim that first defendant breached its duties by entering into costs agreement with defendants’ solicitors – plaintiffs seek replacement of first defendant as trustee of unit trust – plaintiffs seek account of unit trust;
AGENCY – liability of principal – relations between principals and third parties – second plaintiff bound by misleading or deceptive conduct of agent in respect of third defendant
Australian Consumer Law, ss 18, 237, 243; Fair Trading Act 1987 (NSW), s 28; Competition and Consumer Act 2010 (Cth), Sch 2; Trustee Act 1925 (NSW), s 70.

The Owners - Strata Plan No 33368 v Gittins [2022] NSWCATAP 130
LAND LAW – strata schemes – duty to repair common property – scope of duty – remedial orders – whether excessive.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Strata Schemes Development Act 2015 (NSW); Strata Schemes Management Act 2015 (NSW); Strata Schemes Regulation 2016 (NSW).

Tom v Commissioner of Fair Trading [2022] NSWCATAD 130
ADMINISTRATIVE LAW – REVIEW OF DECISION BY EXTERNAL DECISION-MAKER – decision to cancel contractor licence and disqualify a licence holder pursuant to section 62 of the Home Building Act 1989 (NSW);
PRACTICE AND PROCEDURE – INTERLOCUTORY ORDER – interim decision – factors relevant to exercise of the power to make the interim decision under section 60 of the Administrative Decisions Review Act 1997 (NSW) – interlocutory decision to take effect retrospectively.
Administrative Appeals Tribunal Act 1975 (Cth); Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Home Building Act 1989.

Renbar Constructions Pty Ltd v Sader; Sader v Renbar Constructions Pty Ltd (No 2) [2022] NSWSC 472
COSTS – where plaintiff successful on its claim and cross-claimant substantially successful on his cross-claim; whether plaintiff bettered its Calderbank offer; whether plaintiff should have a proportion of its costs rather than there being costs orders following the event in the claim and cross-claim.

Teng v FEV Mono Constructions (No 2) [2022] NSWCATCD 36
COSTS – Civil and Administrative Tribunal Act 2013 (NSW)



Environmental Planning Instruments

Campbelltown Local Environmental Plan 2015 (Amendment No 26) – LW 29 April 2022
Campbelltown Local Environmental Plan 2015 (Amendment No 27) – LW 29 April 2022
Cobar Local Environmental Plan 2012 (Map Amendment No 1) – LW 29 April 2022
Cumberland Local Environmental Plan 2021 (Amendment No 4) – LW 29 April 2022
Lachlan Local Environmental Plan 2013 (Map Amendment No 1) – LW 29 April 2022
Lake Macquarie Local Environmental Plan 2014 (Map Amendment No 3) – LW 29 April 2022
Lithgow Local Environmental Plan 2014 (Amendment No 6) – LW 29 April 2022
Liverpool Local Environmental Plan 2008 (Amendment No 63) – LW 29 April 2022
Liverpool Local Environmental Plan Amendment (East Leppington Precinct) 2022 – LW 29 April 2022
Mid-Western Regional Local Environmental Plan 2012 (Map Amendment No 3) – LW 29 April 2022
Sutherland Shire Local Environmental Plan 2015 (Amendment No 23) (2022-183) – LW 29 April 2022
Wentworth Local Environmental Plan 2011 (Map Amendment No 1) – LW 29 April 2022
Wollongong Local Environmental Plan 2009 (Amendment No 50) – LW 29 April 2022

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:

Simona Njaim

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