Residential Focus – 15 August 2018

Fair Trading Commissioner imposes building product use ban on unsafe cladding

The Commissioner for Fair Trading (Commissioner) has imposed the first building product use ban under the Building Products (Safety) Act 2017 (NSW) (Act) since the Act came into effect in December last year. The ban, which comes into effect today, prohibits the use of aluminium composite panels (ACP) with a core comprised of more than 30% polyethylene (PE) by mass (Building Product) in certain multi-storey buildings.

What buildings does the ban apply to?

The ban prohibits the Building Product from being used in any external cladding, external wall, external insulation, façade or rendered finish in:

• Type A construction – Class 2, 3 and 9 buildings with a rise in storeys of three or more and Class 5, 6, 7 and 8 buildings with a rise in storeys of four or more
• Type B construction – Class 2, 3 and 9 buildings with a rise in storeys of two or more and Class 5, 6, 7 and 8 buildings with a rise in storeys of three or more.

The Building Code of Australia defines the classes of buildings as follows:

• Class 2 – a building with two or more sole-occupancy units, which are each a separate dwelling
• Class 3 – a residential building, other than a Class 1 or 2 building, which is a common place of long term or transient living for a number of unrelated persons, such as a hostel. Class 1 generally includes domestic buildings such as a single dwelling
• Class 5 – an office building used for professional or commercial purposes, excluding Class 6, 7, 8 or 9 buildings
• Class 6 – a shop or building used for the retail sale of goods or supply of services to the public
• Class 7 – a car park, or a building that is used for storage or wholesale sale of goods
• Class 8 – a laboratory, or a building where processes are carried out for the trade, sale or gain of goods or produce
• Class 9 – a building of a public nature, such as a health care building, assembly building or an aged care building.

Exceptions

The ban will not apply where:

• the Building Product is not deemed combustible by passing a test in accordance with Australian Standard 1530.1-1994 ‘Methods for fire tests on building materials, components and structures’ or
• the Building Product and proposed external wall assembly passes a test for both external wall fire spread and building-to-building fire spread in accordance with Australian Standard 5113 ‘Fire Propagation testing and classification of external walls of buildings’, and a statutory declaration is made stating that the Building Product will be installed in an identical manner to the prototype wall in the test.

In both cases, the test results relied upon must:

• come from an Accredited Testing Laboratory
• describe the methods and conditions of the test and the form of construction of the tested building product or prototype wall assembly or façade
• be dated on or after 1 July 2017. 

Further details on the ban are available here.

Penalties for non-compliance

It is an offence under the Act to:

• cause a building product the subject of a building product use ban to be used in a building
• represent, in trade or commerce, that a building product is suitable for use in a building if that use would contravene a building product use ban.

The maximum penalties attached to these offences are fines of $1.1 million for corporations and $220,000 for individuals.

Implications for existing buildings in NSW with ACP

Importantly, the Building Product ban still applies in cases where the Building Product was used in a building before the ban came into effect.

If the Commissioner is satisfied a building has been constructed using the Building Product, the Commissioner may issue an affected building notice (Notice) under s 18 of the Act. The Notice will outline the location of the building, the particulars of the relevant ban and the particulars of the safety risk posed by the use of the Building Product. The Notice is to be distributed to the owners and occupiers of the building, the council for the area in which the building is located or other relevant enforcement authority and, if the use of the Building Product poses a risk of fire, the Commissioner of Fire and Rescue NSW. The Commissioner may also publish a Notice on the internet if it is in the public interest to do so. 

The relevant enforcement authority for the particular building is empowered by s 20 of the Act to make an order to do such things as are necessary to:

• eliminate or minimise the safety risk posed by the Building Product in the building
• remediate or restore the building after risk of the Building Product is eliminated or reduced.

The ban will remain in force until revoked.

Editorial: Christine Jones, Eleanor Grounds & Christopher Yong

In the media

New regulations failing consumers and builders, says HIA
The Housing Industry Association (HIA) has expressed concern about new legislation that has caused delays in getting power and meters provided to building sites. Under the new legislation, introduced in December 2017, all new electricity meters installed in new homes must be advanced or ‘smart’ (09 August 2018).  More...

MBA: Builders Upbeat Despite Moderating Housing Market
Builders remain relatively upbeat despite the moderating housing market, according to the latest real time snapshot of business confidence in the building industry (02 August 2018).  More...

The toxic face of PVC manufacturing exposed
The building design sector should be careful when selecting building and furnishing materials containing PVC, with a new report finding mercury, asbestos, PFAS chemicals and other hazardous substances in the footprint of some chlorine-based materials (02 August 2018).  More...

Building approvals rebound as property sector shows resilience
If the property sector was starting to feel the chilled winds of a slowdown it wasn't evident in June, with developers winning approval for more than 19,000 new dwellings (31 July 2018).  More... 

Proposed ban on the use of certain types of aluminium composite panels
NSW Fair Trading Commissioner, Rose Webb, has given notice of her intention to impose a building product use ban under the Building Products (Safety) Act 2017. It is an offence for a person to contravene a building product use ban or to represent that a building product is suitable for use in a building if its use would contravene the ban. Corporations can be fined up to $1.1 million and individuals up to $220,000 (10 August 2018).  More...

Fair Trading reforms set to deliver big benefits for NSW consumers
Consumers are set to save big on time and money, and have disputes with businesses resolved quicker, thanks to new Fair Trading powers. Minister for Better Regulation Matt Kean said the Fair Trading Legislation Amendment (Consumer Guarantee Directions) Bill, granting the new powers, would be introduced into Parliament by mid-August (08 August 2018).  More...

Further funds to support Holbrook homeowners affected by loose-fill asbestos
Holbrook homeowners affected by loose-fill asbestos insulation will be better off with a funding boost of more than $26,000 from the NSW Government. This is a second round of funding, which followed an earlier $88,000 provided to Holbrook residents from the Community Assistance Package to help with things like reconnection fees, storage costs, and travel subsidies for builders and other trades (03 August 2018).   More...

In practice and courts

ABCC: Security of payments – nation-wide campaign commences
The ABCC has begun a nation-wide campaign to educate contractors on their responsibilities to pay their subcontractors on time under the Code for the Tendering and Performance of Building Work 2016. It’s important that contractors meet their obligations under the Code, otherwise they risk possible sanctions from tendering for Commonwealth funded projects (02 August 2018).  More...

ABCC: Zero tolerance for drugs and alcohol on construction sites
The ABCC regulates the Code for the Tendering and Performance of Building Work 2016. The Code has strict rules about fitness for work. Code covered contractors are reminded that they must ensure all of their sites have an approach to managing drug and alcohol issues in the workplace. The relevant drugs are those listed in Schedule 4 to the Building Code (02 August 2018).  More...

ABCC: Are you paying your workers correctly?
Over the past 12 months the ABCC has recovered $241,986 for 183 employees. The money related to the underpayment of wages and workers’ entitlements. The audits revealed that while more than 70 per cent of employers are compliant with their obligations some employers are misinterpreting award provisions relating to things such as travel and meal allowances (02 August 2018).  More...

ABCC: Information at your fingertips
The ABCC has now launched its free app for mobile devices. ABCC On Site enables people on building sites to have access to information at their fingertips.  More...

Current Consultations
Non-conforming building products
Status: Submissions Closed Date Referred: 11 October 2016 Next Hearing: 02 August 2018 Reporting Date: 16 August 2018

Proposed ban on the use of certain types of aluminium composite panels
Under the Building Products (Safety) Act 2017, the intended ban will prohibit the use of aluminium composite panels with a core comprised of more than 30 per cent polyethylene by mass in any external cladding in certain multi-storey buildings. There are exceptions for products that can pass stringent tests that meet certain Australian Standards (10 August 2018).  More...

BPB: Building and Development Certifiers Bill 2018
Comments are invited on the proposed Building and Development Certifiers Bill 2018 by 4 September 2018 (07 August 2018).  More...

BPB: Certifiers can now issue CDCs for lead-in infrastructure
A1, A2, A3 and B1 certifiers may now issue complying development certificates (CDCs) for ‘lead-in infrastructure’ under clause 130 of State Environmental Planning Policy (Infrastructure) 2007 (03 August 2018).  More...

BPB: Certification data reporting – fifth software option available
Greenlight Online Permit Manager has been verified as fully compliant with the data reporting requirements for local councils and private certifiers (31 July 2018).  More...

NSW Planning: Have your say - Plans
Draft Design Guide for Heritage closes 17 August 2018.

Cases

Levick v Building Professionals Board [2018] NSWCATOD 125
ADMINISTRATIVE REVIEW – accredited certifier – finding of unsatisfactory professional conduct – conduct not sufficiently serious to amount to professional misconduct – appropriate penalty.

Bajic v Paraskevopoulos [2018] NSWCATAP 192
BUILDING AND CONSTRUCTION – building contract – adequacy of reasons – whether Tribunal erred in failing to consider a party’s admission against interest – resulting effect on weight to be given to expert report.

Scoular v Ostle [2018] NSWCATAP 189
CONTRACT – Supply of solar power system – Terms of contract – Claim for unpaid purchase price – Rebate unrecoverable –Deduction of rebate from unpaid purchase price where purchaser decommissions system.

The Owners – Strata Plan No 66375 v King [2018] NSWCA 170
BUILDING AND CONSTRUCTION – claim by owners corporation against persons alleged to be “developers” as defined by Home Building Act 1989 (NSW) s 3A – question of fact as to whether alleged “developers” were parties to building contract.
APPEALS – drawing of inferences on appeal – evaluation of competing inferences – where primary judge failed to draw inference that respondents were parties to the building contract.
BUILDING AND CONSTRUCTION – whether developers liable for “design defects” – statutory construction of Home Building Act 1989 (NSW) ss 18B and 18C – scope of notional contract pursuant to s 18C – whether breach of statutory warranty pursuant to s 18B(c). 

Mitsiou v Zanatta; Jenalp Pty Limited v Mitsiou [2018] NSWCATAP 187
APPEAL – extension of time for filing of appeal – application to rely upon new evidence.
HOME BUILDING CLAIM – measure of compensable loss where contract for supervisory works is only part-performed – question of fact as to whether payments in cash were made.

Chris Akrivos v Commissioner for Fair Trading [2018] NSWCATOD 120
ADMINISTRATIVE LAW – administrative tribunals - Civil and Administrative Tribunal (NSW) – absence of internal review – jurisdiction The application is dismissed. Administrative Decisions Review Act 1997 (NSW); Home Building Act 1989 (NSW).

Catapult Constructions Pty Ltd v Denison No 2 [2018] NSWCATAP 186
APPEAL – Home Building Act – s 48O, terms of order to rectify.

In the Matter of ACN 092 745 330 Pty Ltd [2018] NSWSC 1185
CIVIL PROCEDURE –Originating process – Amendment. Relevantly, for present purposes, the Liquidator contends that there were three companies which, in succession, carried on the same building and construction business.

Legislation

New South Wales
Consultation or Exposure Bills – 10 August 2018
Building and Development Certifiers Bill 2018

Regulations and other miscellaneous instruments
Building Professionals Amendment (Accredited Certifiers) Regulation 2018 (2018-409) — published LW 3 August 2018

Contacts:
Christine Jones, Partner - Construction & Infrastructure (Dispute Resolution) 
T: +61 2 8083 0477 
E: christine.jones@holdingredlich.com

Stefanie Dunnicliff, Senior Associate 
T: +61 2 8083 0464 
E: Stefanie.Dunnicliff@holdingredlich.com

Divya Chaddha, Associate 
T: +61 2 8083 0457
E: Divya.Chaddha@holdingredlich.com

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.

Published by:

Christine Jones

Eleanor Grounds, Christopher Yong

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