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19/08/2020 – ‘Combustible Cladding’ litigation in NSW: An Update

If you joined us for our informed by Planned Cover ‘State of Play’ webinar earlier this year, you would have heard me discuss the outcome of the first ‘combustible cladding’ case to be decided in New South Wales. The decision was appealed by the property developer and builder, with the appeal judgment being handed down earlier this month.

Unlike the much publicised Lacrosse Tower fire case, where litigation resulted from a fire which was spread via Aluminium Composite Panels (‘ACPs’) installed on the façade of building, the case of The Owners – Strata Plan No. 92888 v Taylors Construction Group Pty Limited and Frasers Putney Pty Ltd [2019] NSWCAT involved Biowood, a product made from 23% PVC and 70% reconstituted timber, which was installed as architectural attachments to the external walls of an apartment building in Ryde, New South Wales.

Both the Lacrosse and Ryde buildings were required to be of Type A construction and as such were required by the BCA to have external walls that were non-combustible. It was alleged by the Owners of the Ryde building that the Biowood cladding installed as an attachment to the external walls of the apartment blocks did not comply with the BCA and posed an undue risk of fire.

The matter was heard in the Consumer and Commercial Division of the New South Wales Civil and Administrative Tribunal (NCAT) last year. Judgment was handed down by Senior Member Boyce on 15 November 2019.

The Tribunal found that, even though there is no evidence of large scale fire testing of Biowood, it is “indisputably combustible” and the use of Biowood as an attachment to the façade of the Ryde building constituted an “undue risk” of fire spread between levels of the building and breached a number of the statutory warranties under the Home Building Act, including that it was not suitable for the purpose used.

The Tribunal rejected the submission by Frasers Putney and Taylors Construction that an Interim Occupation Certificate (‘IOC’) which had been issued for the property created an “irrebuttable presumption of law and conclusive evidence” that all requirements in respects of its issuance had been complied with and that it must be accepted that the building and cladding are BCA compliant. The Tribunal held that it was not bound by the administrative issuing of an IOC.

Orders were made requiring the Respondents to rectify the breaches of the Home Building Act by removing the Biowood attachments installed on the façade of the building and replacing them with attachments that complied with the relevant codes, standards and statutory warranties.
The decision of the Tribunal was appealed by Frasers Putney and Taylors Construction with the matter being heard by the NCAT Appeals Panel earlier this year. Judgment was handed down on 4 August 2020.

In a 46-page judgment, the Appeals Panel dismissed the Appeal, rejecting each of the twelve grounds of the appeal. The Appeals Panel affirmed the order made by the Tribunal requiring the removal of the Biowood from the building. The parties are to agree a reasonable time by which the removal of the Biowood is to take place.

As more ‘combustible cladding’ cases make their way through the Courts, including two class actions which are currently on foot, it will likely not be long until we see further decisions in this area.

Natalie Sullivan
Risk Manager (NSW)

This article is only general advice in respect of risk management. It is not tailored to your individual needs or those of your business, nor is it intended to be relied upon as legal or insurance advice. For such assistance you should approach your legal and/or insurance advisors.

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