Taylor Construction Group Pty Ltd v Strata Plan 92888 t/as The Owners Strata Plan 92888

on [2013] NSWCA 33 S v Crimes Compensation Tribunal [1998] 1 VR 83 Salter v Building Appeals Board [2013] VSC 279 Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 The Australian Gaslight Company v Valuer-General (1940) 40 SR (NSW) 126 Tumney (NSW Food Authority) v Nutricia Australia Pty Ltd (2008) 74 NSWLR 148; [2008] NSWSC 1382 Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12 Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 Texts Cited: Nil Category: Principal judgment Parties: Taylor Construction Group Pty Ltd (ACN 067 428 344) (First Plaintiff) Frasers Putney Pty Limited (Second Plaintiff) Strata Plan 92888 trading as The Owners - Strata Plan 92888 (Defendant) Representation: Counsel: G A Sirtes SC with B Le Plastrier (Plaintiffs) T Davie with A Power (Defendant)

Solicitors: Colin Biggers & Paisley Lawyers (Plaintiffs) JS Mueller & Co Lawyers (Defendant) File Number(s): 2020/253142 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil and Administrative Tribunal Jurisdiction: Appeal Panel Citation: [2020] NSWCATAP 163 Date of Decision: 4 August 2020 Before: S Westgarth, Deputy President D Robertson, Senior Member File Number(s): AP 19/55886

Judgment

1. The plaintiffs, Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd (together, the Appellants) are, respectively, the builder and the developer of two multi-story residential buildings erected on land at X and X Lardelli Drive, Ryde NSW (Buildings).
2. The defendant, the Owners Corporation of Strata Plan 92888, is the registered proprietor of the common property in the land the subject of that strata plan and the Buildings (Owners Corporation).
3. In these proceedings, the Appellants seek to appeal from a decision of an Appeal Panel of the New South Wales Civil and Administrative Tribunal (NCAT): Taylor Construction Group Pty Ltd v The Owners - Strata Plan No 92888 [2020] NSWCATAP 163.
4. The Appeal Panel upheld the decision of a Senior Member of the Consumer and Commercial Division of NCAT who found in favour of the Owners Corporation's claim that the use of "Biowood" combustible cladding on parts of the external walls of the Buildings does not comply with the Building Code of Australia (BCA) and breached statutory warranties implied into residential building contracts under s 18B(1) of the Home Building Act 1989 (NSW) (HB Act): The Owners Strata Plan No 92888 v Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd [2019] NSWCATCD 63.
5. Central to the decisions and this appeal is the finding that the use of Biowood does not comply with the BCA as it constitutes an undue risk of fire spread via the façade of the Buildings.
6. By their summonses filed on 1 September 2020, the Appellants seek orders that leave be granted to appeal from the whole of the Appeal Panel's decision, that their appeals be allowed, that the decisions of the Appeal Panel and the Senior Member be set aside, and that the Owners Corporation pay the Appellants' costs of the Appeal and of the NCAT proceedings.
7. Six grounds of appeal are raised, including whether the Appeal Panel erred in its formulation and application of the proper test under the BCA, whether there was evidence on which the finding that the use of the Biowood cladding constituted an undue risk of fire spread via the façade could be made, and whether the Appeal Panel's reasons are adequate.
8. Section 83(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) provides that, in the circumstances applicable in this case, an appeal to this Court is available by leave on questions of law only. The hearing proceeded on the basis that the parties' submissions would be treated as submissions on the appeal in the event that leave was granted.

Biowood and the Buildings

1. Biowood is a combustible material made from 70% reconstituted timber and 23% PVC and is installed on different areas of the Buildings. The location of the Biowood on the Buildings is depicted in photographs and diagrams in expert reports that were in evidence before the Senior Member and contained in the court book in these proceedings. Some of those images are reproduced in Annexure A to Annexure D of these reasons.
2. It may be observed from the photographs and diagrams in Annexure A to Annexure D that Biowood is installed on: 1. areas spanning vertically on the external walls of the Buildings, and about windows on different levels: see, for example, Annexure A , Annexure B and Annexure C. 2. areas known as "spandrels" [1] on the western and eastern façades of the Buildings: see Annexure B and Annexure C; 3. areas used as "shutters" on the south-western façade of one of the Buildings: see Annexure D; and 4. areas on the ground floor of the Buildings: see Annexure C and Annexure D;
3. The different locations of the Biowood and the vertical span alongside windows is of some significance, for reasons which I will come to.

The BCA: 2014 version

1. It is common ground that the 2014 version of the BCA (now the National Construction Code) (2014 BCA) applied at the time of the relevant building work. The following sets out the relevant provisions in force at the time. It is not in dispute that Biowood is a combustible material and the Buildings are classified as Class 2 (as they contain two or more sole-occupancy units) and Class 7a (as they have a basement carpark) buildings for the purposes of the BCA.
2. Section A of the 2014 BCA sets out the general provisions. Part A0 identifies that a Building Solution will comply with the BCA if it satisfies the Performance Requirements, which can only be achieved by complying with the Deemed-to-Satisfy Provisions or formulating an Alternative Solution, and that the 'Objectives' and 'Functional Statements' may be used as an aid to interpretation: A0.4, A0.5 and A0.6.
3. A1.1 sets out the Definitions, which relevantly include: Combustible means - (a) Applied to a material - combustible as determined by AS 1530.1. (b) Applied to construction or part of a building - constructed wholly or in part of combustible materials. External wall means an outer wall of a building which is not a common wall. Fire hazard means the danger in terms of potential harm and degree of exposure arising from the start and spread of fire and the smoke and gases that are thereby generated. Fire hazard properties means the following properties of a material or assembly that indicate how they behave under specific fire test conditions: (a) Average specific extinction area, critical radiant flux and Flammability Index, determined as defined in A1.1. (b) Smoke-Developed Index, smoke growth rate index, smoke development rate and Spread-of-Flame Index, determined in accordance with Specification A2.4. (c) Group number, determined in accordance with Specification C1.10. Smoke-Developed Index means the index number for smoke as determined by AS/NZS 1530.3. Spread-of-Flame Index means the index number for spread of flame as determined by AS/NZS 1530.3.
4. A2.4 of Part A2 provides that, where a Deemed-to-Satisfy provision requires a building component to have a fire hazard property, it must be determined for Spread-of-Flame Index, a material's group number or smoke growth rate index, in accordance with Specification A2.4.
5. Clause 2 of Specification A2.4 provides: 2. Assemblies 2.1 General requirement The fire hazard properties of assemblies and their ability to screen their core materials as required under Specification C1.10 must be determined by testing in accordance with this Clause. 2.2 Form of test Tests must be carried out in accordance with - (a) for the determination of the Spread-of-Flame Index and Smoke-Developed Index - AS/NZ 1530.3; and …

1. Clause 4 of Specification C1.10 provides that the group number of a material is determined by either physical testing in accordance with AS ISO 9705 or testing in accordance with AS3837 and that a material used as a "finish, surface, lining or attachment to a wall or ceiling must be a Group 1, Group 2 or Group 3 material used in accordance with Table 3 …": subcll 4(a) and (c). Table 3 in cl 4 identifies the relevant material group numbers permitted for the different classes of buildings.
2. Clause 7 of Specification C1.10 provides that materials and assemblies in a Class 2 to 9 building not included in cll 3, 4, 5 or 6, must not exceed the indices set out in Table 4, which relevantly provides: Table 4 OTHER MATERIALS Material or assembly location Flammability Index Spread-of-Flame Index Smoke-Developed Index Other materials or locations and insulation materials other than sarking-type materials. Notes 2 and 3. - 9 8 if the Spread-of-Flame Index is more than 5

Notes: … 3. In the case of a composite member or assembly, the member or assembly must be constructed so that when assembled as proposed in a building - … (b) the member or assembly, when tested in accordance with Specification A2.4, has a Spread-of-Flame Index and a Smoke-Developed Index not exceeding those prescribed in this Table; …

Home Building Act

1. Section 18B of the HB Act sets out the warranties implied into contracts to do residential building work and relevantly provides: 18B Warranties as to residential building work (1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work - … (b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new, (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, … (f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder's or person's skill and judgment. (2) The statutory warranties implied by this section are not limited to a contract to do residential building work for an owner of land and are also implied in a contract under which a person (the principal contractor) who has contracted to do residential building work contracts with another person (a subcontractor to the principal contractor) for the subcontractor to do the work (or any part of the work) for the principal contractor.
2. As to "any other law" referred to in s 18B(1)(c), pursuant to cl 98(1)(a) of the Environmental Planning and Assessment Regulation 2000 (NSW) (EPA Regulation), any building work performed pursuant to a development consent must be carried out in accordance with the requirements of the BCA.

Proceedings before the Senior Member

1. The proceedings before the Senior Member involved an application by the Owners Corporation for an order that the Appellants carry out works to rectify defects and non-complying work (described as General and Major Defects) and/or an order that they pay the Owners Corporation damages for the cost of rectification. The General Defects claim was resolved between the parties.
2. The Major Defects claim concerned the use of Biowood cladding as architectural attachments on the external walls of the Buildings. The Owners Corporation claimed that, as it is combustible, the use of Biowood failed to comply with cl 2.4 of Specification C1.1 of the 2014 BCA and was, therefore, in breach of the statutory warranties in s 18B(1)(c) of the HB Act. It also claimed that, even if compliant with the BCA, the Biowood cladding was otherwise not fit for purpose in breach of the statutory warranty in subss 18B(1)(b) and (f) of the HB Act.

Evidence before the Senior Member

1. The evidence before the Senior Member included expert evidence from three Fire Engineers, Mr Nathan Halstead for the Owners Corporation, and Mr Etienne Jordaan and Mr Daniel Powell for the Appellants. Mr Halstead, Mr Jordaan and Mr Powell provided written reports and Mr Halstead and Mr Jordaan gave concurrent evidence before the Senior Member. Mr Halstead's report dated 24 January 2019, Mr Jordaan's reports dated 17 August 2018, 1 November 2018 and 8 March 2019 and a transcript of the proceedings before the Senior Member are included in the court book in these proceedings.
2. Also before the Senior Member (and included in the court book in these proceedings) were three documents to which he referred in his reasons and which were relevant to the evidence given by Mr Halstead and Mr Jordaan.
3. The first document is a CSIRO Certificate of Test Report of Biowood in accordance with AS1530.3 dated 13 January 2011 entitled "CSIRO Certificate of Test Report No. FNE10012 - AS/NZS 1530.3:1999 Simultaneous Determination of Ignitability, Flame Propagation, Heat Release and Smoke Release" (CSIRO Certificate). The CSIRO Certificate identifies the test results for Biowood as follows: Ignitability Index Spread of Flame Index Heat Evolved Index Smoke-Developed Index (0-10) (0-20) (0-10) (0-10) 13 0 1 7

1. The CSIRO Certificate states that: The results of this fire test may be used to directly assess fire hazard, but it should be recognised that a single test method will not provide a full assessment of fire hazard under all fire conditions.
2. The indices identified in the CSIRO Certificate test results for Biowood are referred to in Mr Halstead's and Mr Jordaan's reports.
3. The second document is a document authored by A Webb and N White, CSIRO, titled "Fire safety guideline for external walls - A guide for high-rise construction in Australia" and dated 18 April 2016 (CSIRO Guideline). The CSIRO Guideline is expressed to be a document intended to aid building practitioners in understanding the fire hazards of combustible materials and pathways to demonstrate compliance in relation to façade fire safety under the BCA. The CSIRO Guideline states, amongst other things: 4.1 Fire hazard properties … BCA Specification C1.1 Clause 2.4 does not explicitly state which fire hazard properties requirement prescribed in BCA Specification C1.10 are to be applied. However based on the wording in BCA Specification C1.10 Clause 4(c), CSIRO interprets that the relevant requirement for attachments used as a finish, surface or lining to an external wall is that the material must be minimum Group 1, 2 or 3 based on AS ISO 9705 or AS/NZS 3837. CSIRO considers that BCA Specification C1.10 clause 7 which specifies AS/NZS 1530.3 test requirements for other materials is not relevant or applicable for attachments used as external wall finish, lining or cladding. … 4.3 Risk of Fire Spread The attachment location and contribution to fire spread on the façade must be considered. … Compliance with the fire hazard property requirements does not automatically limit the risk of fire spread. In some cases a Group 1 rating may provide some indication that the "undue risk of fire spread" requirement is met. However because the arrangement and installation of materials and also the fire exposure is significantly different for an AS ISO 9705 test or an AS/NZS 3837 test compared to a full-scale façade fire, there may be cases where a Group 1 material would still support fire spread between levels in a full scale façade test. The risk that a material will support fire spread between levels is likely to increase for Group 2 and Group 3 materials. … 9.2 Fire hazard properties from AS/NZS 1530.3 … Practitioners must take care interpreting 1530.3 test data. For example, a spread of flame index of zero (0) does not indicate that the material will not spread flame in all fire situations. A group 3 material can achieve a spread of flame index of zero (0) in the AS/NZS 1530.3 and is highly likely to have flame spread the full extent of a vertical element once ignited.

Summary of Senior Member's decision

1. In his decision, the Senior Member sets out the relevant background, the legislative and BCA provisions, identifies the evidence before him and summarises the submissions of the parties: Senior Member's reasons (SR) at [1]-[115].
2. The Senior Member identified two issues for determination (at SR [38] and [116]), as: (1) Whether the Biowood, as installed, is compliant with applicable codes and standards? (2) Even if the cladding is compliant with the codes and standards is the Biowood, as installed, a material which is fit for purpose?
3. The Senior Member recorded that it was common ground between the experts that Biowood is a combustible material made from 70% reconstituted timber and 23% PVC and has a Group 3 classification according to AS3837 testing, which is distinct from Group 2 fire retardant timber and Group 1 non-combustible or near non-combustible material: at SR [39], [124], [127]. He noted that the experts agreed that the BCA is the test which applies to all cladding and that cl 2.4 of Specification C1.1 requires that attachments to external walls not impair fire resistance. He also described the experts' measure of risk as a function of at least three factors, namely, combustibility of the material, rate of flame spread and other safety measures: at SR [125]-[126].
4. The Senior Member's consideration and findings are set out at SR [117]-[162].
5. At [117]-[120], the Senior Member deals with submissions concerning the legal effect of the Interim Occupation Certificate that had been issued on 8 August 2016 (IOC), which is not relevant to this appeal.
6. The next topic addressed by the Senior Member is "Relevant codes and standards": at SR [128]-[135].
7. The Senior Member identified that he would consider "Clause 2.4 of the [BCA] Specification C1.1, Clause 7 and AS1530.3". He found that the effect of the relevant codes and standards was that the Buildings were required to be of a Type A construction, they must have non-combustible external walls, and that a combustible material may be used as an other attachment if it is exempted under C1.10 or complies with the fire hazard properties prescribed in Specification C1.10 and, amongst other things, does not otherwise constitute an undue risk of fire spread via the façade of the buildings: at SR [128]-[130].

Summary of Appeal Panel's decision

1. Twelve grounds of appeal were included in the Appellants' Amended Notice of Appeal of which eleven were recorded in the Appeal Panel's reasons (AR) (at [30]) as being pressed before them as follows: (1) The Tribunal erred in applying an improper construction of Part 4A of the EP&A Act namely that on the issuance of an interim occupation certificate that Act does not create an irrebuttable presumption that the building is compliant with the BCA. (2) The Tribunal erred by failing to give proper weight to the evidence that the building had been previously certified as compliant with the BCA on 8 August 2016 where to do so would have affected the decision that the building was not so compliant. (3) The Tribunal erred in applying an improper construction of cl 2.4 (a)(iii) of the BCA, namely: (a) that any risk of fire is an undue risk of fire, (b) by assigning no meaning to, or by disregarding, the word "undue" found in that clause. (4) The Tribunal erred in applying the wrong legal test to the facts, namely by reversing the onus of proof and requiring the Appellants to prove that there was no undue fire risk for the purposes of cl 2.4 of the BCA. (5) The Tribunal erred by finding as fact that the Biowood attachment diminishes the fire resistance of the external walls in the absence of evidence of that fact. (6) This ground was not pressed at the hearing. (7) The Tribunal erred in finding that the Biowood attachment presented an undue fire risk. In respect of s 18B(1)(b): (8) The Tribunal erred in applying the common sense test incorrectly to the facts, when determining whether the Biowood material supplied was good and suitable for the purpose for which it was used. (9) The Tribunal erred in finding that the Biowood material was not good or suitable for the purpose for which it was used. In respect of s 18B(1)(f): (10) The Tribunal erred in applying the common sense test incorrectly to the facts when determining whether the Biowood material used was reasonably fit for a specified purpose or result. (11) The Tribunal erred by finding as a fact that: (a) the contract for building works made known to the developer the particular purpose for which the building work was required, and (b) the developer relied upon the builder's skill and judgment in achieving the particular purpose. (12) The Tribunal erred in finding that the Biowood material was not reasonably fit for the specified purpose for which it was used.

Appeal to this Court

1. Six grounds of appeal are raised by the Appellants' summonses as follows: 1. The Appeal Panel erred in its formulation of the test when determining whether Biowood constituted an "undue risk" of fire spreading via the façade of the Respondent's building. 2. The Appeal Panel erred in its application of the proper test to the facts, giving rise to an erroneous conclusion. 3. The Appeal Panel erred in its application of the BCA to the facts, giving rise to an erroneous conclusion. 4. The Appeal Panel found the existence of "undue risk" in the absence of evidence. 4A. The Appeal Panel erred in finding that the use of "Biowood" breached the statutory warranties in subss 18B(1)(b), (c) and (f) of the HB Act in the absence of evidence and/or by application of the errors identified in grounds 1 to 4 above. 5. The Appeal Panel failed to provide adequate reasons.

Should leave to appeal be granted?

1. This appeal is brought pursuant to s 83 of the CAT Act, which relevantly provides: 83 Appeals against appealable decisions (1) A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings. ... (3) The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following - (a) an order affirming, varying or setting aside the decision of the Tribunal, (b) an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court.
2. The parties referred to the recent decisions of Bronze Wing International Pty Ltd v SafeWork NSW [2017] NSWCA 41 (Bronze Wing) and Corcoran v Far [2019] NSWSC 1284 (Corcoran) for the applicable principles governing appeals to this Court, which were summarised as follows: 1. appeals lie to the Supreme Court from the Appeal Panel on a question of law pursuant to s 83 of the CAT Act: Bronze Wing at [54]; 2. the appeal to the Supreme Court is confined to the decision of the Appeal Panel rather than the Tribunal: Bronze Wing at [10] (Basten JA), [37] (Gleeson JA), [61] (Leeming JA); Corcoran at [21]; 3. the appellants must demonstrate something more than that the decision of the Appeal Panel was arguably wrong. Ordinarily, leave will only be granted concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable: Corcoran at [24], citing Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46] (Campbell JA, Young and Meagher JJA agreeing); Be Financial Pty Ltd as trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [33] (Basten JA, Tobias AJA agreeing); and 4. the proper approach on an application under s 83 of the CAT Act is to identify the questions of law on which leave is sought in the Summons seeking leave to appeal: Corcoran at [26].
3. The Appellants submit that the appeal raises issues of principle as the Appeal Panel's decision has application to cladding cases generally and is of public importance for disputes in NCAT and this Court concerning cladding work undertaken up to 12 March 2018, being the date on which cl 2.4 of Specification C1.1 was removed from the 2016 Amendment 1 version of the BCA.

Threshold issue - is the appeal moot?

1. The Owners Corporation's contention that leave to appeal should be refused is based on the submission that the Senior Member's decision is to the effect that the Biowood combustible cladding is not "another attachment" and does not satisfy cl 2.4(a)(i) of Specification C1.1 of the BCA. The Owners Corporation contends that, as a consequence, success by the Appellants in this appeal on grounds that only concern undue risk under cl 2.4(a)(iii) could not affect the Senior Member's conclusion that the Biowood combustible cladding does not fall within cl 2.4 or satisfy the requirements of cl 2.4(a)(i) and, thus, fails to comply with the BCA.
2. In support of that submission, the Owners Corporation contends that the Senior Member found that Biowood is not exempted under C1.10 or "another attachment" that complies with the fire hazard properties in Specification C1.10, at SR [133]. It submits that the effect of the Senior Member's findings at SR [135] is that, even though the Biowood sample tested complied with the fire hazard properties in Specification C1.10 (being that referred to in cl 7), the Senior Member preferred Mr Halstead's opinion adopting the views expressed in the CSIRO Guideline that the AS1530.3 test for cl 7 of Specification C1.10 is not relevant or applicable to external cladding.
3. The Owners Corporation says that the Senior Member's findings at [133] and [135] reflected and upheld its submissions to the effect that the AS1530.3 test is not relevant or applicable to external cladding and that compliance with that test does not necessarily exempt it as "another attachment" that complies with the fire hazard properties for "other materials" under cl 7 of Specification C1.10. It submits that the Senior Member's findings at [133] and [135] were sufficient to determine the Owners Corporation's claim in its favour and justify the order made. The Owners Corporation says that those findings were not the subject of the grounds of appeal to the Appeal Panel and are not (and could not be) the subject of appeal to this Court.
4. The Appellants dispute the Owners Corporation's characterisation of the Senior Members' findings and what was, and was not, raised in the appeal to the Appeal Panel. They also submit that, if the Owners Corporation's understanding of the Senior Member's decision is correct, insofar as this appeal does not include a ground of appeal in relation to cl 2.4(a)(i), the Court should grant leave to the Appellants to appeal in relation to the findings on the basis that the Senior Member erroneously applied AS3837, rather than AS1530.3.

Conclusion on leave to appeal

1. Having regard to my conclusion on the threshold issue, I am satisfied that the outcome of this appeal has the potential to change the decision of the Senior Member and is therefore not futile.
2. The parties are agreed, and I accept, that the appeal raises issues of principle that may have some broader application to other cladding cases, notwithstanding that cl 2.4(a) of Specification C1.1 has been amended.
3. I am also satisfied that the appeal grounds raise questions of law, although there are issues with the manner in which grounds 2 and 3 have been articulated and pressed, which I deal with below. Subject to that qualification, the grounds of appeal were not, in my view, unarguable,
4. For those reasons, and subject to what follows, I consider that it is appropriate to grant leave to appeal in this case.

Approach to dealing with grounds of appeal

1. The Appellants' submissions address appeal grounds 2 and 3 together with other grounds of appeal. First, they make submissions on grounds 2 and 3 together with ground 5, which asserts error due to inadequate reasons. Second, they make submissions on grounds 2 and 3 together with ground 4, which asserts error from finding undue risk in the absence of evidence. The Appellants' submissions in respect of grounds 2, 3 and 4 (grouped together) are expressed to be "in the alternative" to their submissions on grounds 2, 3 and 5.
2. The Appellants' approach to grouping the grounds of appeal makes it difficult to discern precisely what is alleged to be the errors of law in respect of each of grounds 2 and 3. This is not assisted by the formulation of grounds 2 and 3 which are in general terms and do not particularise the alleged errors. That said, I note the Amended Statement for Summons for Leave to Appeal alleges two errors of law which appear to be intended to relate to grounds 2 and 3 as follows: the Appeal Panel's finding that testing under AS1530.3 did not apply even though the BCA expressly mandated that it did (at [3(b)]); and the application of the "test" as formulated by the Appeal Panel being comprised of nothing more than a statement that findings made by the Senior Member were "open", with an implicit conclusion that those open findings satisfied the "test", giving rise to error in the application of both the proper test and the BCA to the facts and an erroneous conclusion (at [3(c)]).
3. The lack of clarity as to what is asserted to be the errors of law in respect of each ground of appeal in the groups referred to in the written submissions was raised with the Appellants' Senior Counsel at the hearing. His explanation was that the "paucity of reasons" made it "very difficult to neatly compartmentalise them" (T42.25-7). He indicated that one of the grounds is that the Appeal Panel erred by not applying the relevant test at all; the other is that, if the Appeal Panel applied a test, then they made an ultimate finding (of undue risk) based on subsidiary findings that are not findings of fact at all and that were not open on the evidence (T42.29-35). The Appellants' Senior Counsel also stated that there were a number of ways the "error" could be characterised and the grounds overlapped considerably, but this was all a consequence of a failure to provide adequate reasons (T43.3-5).

Ground 1: The Appeal Panel erred in its formulation of the test when determining whether Biowood constituted an undue risk of fire spread via the façade of the Buildings

Submissions

1. The Appellants submit that the Appeal Panel's error was the failure to formulate a test in deciding whether the use of Biowood cladding as an attachment to the Buildings was an "undue risk".
2. In support of this ground, reference was made to AR [96], where the Appeal Panel referred to the meaning of "undue risk" and stated: A central question in the appeal concerns the meaning of "undue risk". We take it to mean unwarranted or excessive (to adopt the ordinary meaning of undue as contained in the Macquarie Concise Dictionary). Here, in the context of cI 2.4(a)(iii), it is intended to refer to a level of risk of fire spread via the façade of the building, which constitutes non-compliance with the BCA because it "impairs fire resistance" (being the phrase used in the heading of cI 2.4).
3. The Appellants submit that the Appeal Panel was wrong to link the meaning of "undue" to the concept of "impairs fire resistance" because the latter phrase is not used in the heading of cl 2.4. It is submitted that the Appeal Panel's statement to that effect was predicated upon a misreading of that clause.
4. The Appellants also submit that the Appeal Panel merely applied the synonyms "unwarranted or excessive" in substitution for "undue" without saying anything about how or why a risk is unwarranted or excessive. The Appellants argue that this approach offered no workable test, process or framework that can be applied in other instances to arrive at the ultimate finding of "undue risk" or through which the Tribunal or a Court can distinguish between an "unwarranted or excessive risk" and a risk that is "warranted" or not "excessive".
5. It is submitted that all the Appeal Panel did was identify the BCA standard without any interpretation or articulation of what is intrinsically a comparative and evaluative standard and, as a result, the Appeal Panel's approach invited ipse dixit or arbitrary determinations and constituted an error of construction without regard to proper interpretation principles. Reference is made to two legal principles that are submitted to have direct application, namely the "well-recognised" danger of making a "fortress out of a dictionary" when interpreting a statute and the antipathy towards the use of slogans in the process of legal construction: Commissioner of Taxation v BHP Billiton Ltd (2011) 244 CLR 325; [2011] HCA 17 at [49]; Attorney-General (Cth) (Ex rel McKinlay) v The Commonwealth (1975) 135 CLR 1 at 17; [1975] HCA 53.

Consideration and determination

1. At the outset, it is appropriate to record that I accept that ground 1 raises a question of law. The assertion of an error in the formulation of the applicable test under the BCA raises a question of the proper construction of cl 2.4(a)(iii). The effect or construction of a provision in the BCA, even if the meaning has been established, albeit by the ordinary meaning of words, may involve a question of law: Salter v Building Appeals Board [2013] VSC 279 at [34]-[35]; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 397; [1996] HCA 36.
2. The first matter raised by the Appellants' submission is an assertion of error by reason of Appeal Panel's reference to "impairs fire resistance" in the fifth line of AR [96]. Contrary to what is said by the Appellants, the phrase "impair(s) fire-resistance" is used in the heading to cl 2.4, which heading states "Attachments not to impair fire-resistance" (emphasis added). It follows, in my view, that the Appeal Panel's reasoning does not involve a misreading of the clause and the Appellants have not established any error of interpretation or construction of cl 2.4(a)(iii) in that regard.
3. The primary thrust of the Appellants' submission concerns what is alleged to be the Appeal Panel's error in failing to articulate the proper test for determining undue risk under cl 2.4(a)(iii). The Appellants' contention of error is premised on the submission that the Panel gave no content to what "unwarranted or excessive risk" entails, which constituted error because it was without regard to proper interpretation principles. As was put at the hearing, the Appeal Panel "stop[ped] there" at the identification of the meaning of "undue" (T40.41) and failed to identify what the Appellants described as the correct test, which is that unwarranted risk must mean the particular material in question makes the spread of fire both likely and likely to occur in a way that will contravene the overall aims as stated in the BCA (T41.1-7).
4. I am not persuaded by that submission. In my view, the Appeal Panel's reasons make clear that it approached the issue of the construction of cl 2.4(a)(iii) and the assessment of the Senior Member's finding of undue risk in accordance with ordinary principles of construction. In particular, reference was made to the BCA being designed to provide standards for the promotion of public safety in the construction of buildings and to the objectives of Section C relating to Fire Resistance: at AR [83]-[84]. The Appeal Panel then went on to consider the context in which subcll 2.4(a)(i) and (iii) of Specification C1.1 appeared by reference to other clauses in the BCA, as referred to at [72]-[74] above. In other words, the Appeal Panel approached the task of construing what was required by cl 2.4(a)(iii) by reference to the context and purpose of the provision.

Ground 5: The Appeal Panel failed to provide adequate reasons Ground 2: The Appeal Panel erred in its application of the proper test to the facts, giving rise to an erroneous conclusion Ground 3: The Appeal Panel erred in its application of the BCA to the facts, giving rise to an erroneous conclusion

Submissions

1. The Appellants' submissions on these grounds focus on the Appeal Panel's reference to the Senior Member's findings at AR [92] (set out at [75] above), which the Appeal Panel identified as the findings relevant to the requirement in cl 2.4(a)(iii) of Specification C1.1 that Biowood does not otherwise constitute an undue risk of fire spread by the façade. The Appellants submit that the absence of the application of the proper test was exposed when the Appeal Panel took those four "facts" as found and held, without exposing any reasoning, that the facts made Biowood an undue risk.
2. The Appellants submit that the Appeal Panel failed to undertake any risk evaluation or ask itself whether the relevant findings at AR [92] gave rise to an unwarranted or excessive risk of fire spread. They submit that, to the extent the Panel articulated a test (such as that the risk had to be excessive), it failed to apply that test, and jumped from the so-called "facts" to a conclusion of undue risk that was an ipse dixit. The Appellants contend that the extent of the Appeal Panel's reasons comprised a finding that the facts set out at AR [92] were "open and display neither an error of law nor a ground for the grant of leave to appeal" (at AR [97]) and no steps were taken to identify whether the facts were "facts" at all, whether they informed the question of risk and, if so, why. They submit that the Appeal Panel's failure to expose why the four "facts" made the use of Biowood an undue risk was an error of law because it failed to undertake an evaluation to assess whether Biowood was a risk or an undue risk and no adequate reasons were given for that conclusion.
3. The Appellants say that nothing in AR [98]-[104] considers why the Senior Member's findings gave rise to an unwarranted or excessive risk of fire spread, nor was there any exposition as to how the conclusion of undue risk co-existed with, or was available in light of, his findings of a risk of fire spread (AR[92(2)]), that Biowood would not ignite adjacent Biowood (at AR [92(2)]), or a slow rate of fire spread (at AR [92(3)]).
4. The Appellants submit that paragraphs AR [92] and AR [98]-[104] lack sufficient detail to enable the Court to ascertain whether the Appeal Panel's reasons for finding that Biowood creates an undue risk are sound as they draw no connection between the findings at AR [92], the matters discussed at AR [98]-[104], and the conclusion that there was an unwarranted or excessive risk of fire spread. They say that this means the Court cannot determine whether the Appeal Panel did err in law in reaching its decision, which is in itself is an error of law, referring to Amaca Pty Ltd (under NSW administered winding up) v Raines; Seltsam Pty Ltd v Raines [2018] NSWCA 216 at [19] and Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [55].

Consideration and determination

1. The principles relevant to an appellate review where the adequacy of a Tribunal's reasons is raised were recently considered by Bell P in NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (NSW Land v Orr) at [66]-[77].
2. His Honour recognised that adequate reasoning on the part of a Tribunal, such as the Appeal Panel in this case, is informed by s 62(3) of the CAT Act which requires there to be set out in reasons, when requested by a party (at [71]): (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based; (b) the Tribunal's understanding of the applicable law; and (c) the reasoning processes that led the Tribunal to the conclusions it has made.
3. His Honour identified that the notion of adequacy is informed by a recognition for the need for practical as well as principled restraint in the context of decisions made by a Tribunal that is not under any express statutory obligation to provide reasons unless a party makes a request, the volume of applications that tribunals deal with each year, and statements from well-known administrative law decisions relating to the limits of judicial review in that context: NSW Land v Orr at [70], [76]. See also Collins v Urban [2014] NSWCATAP 17 at [57]; Pozzolanic at 287.
4. His Honour also referred (at [75]) to the statement of Basten JA in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWCA 112 at [46], which is also of relevance in this case, as follows: Generally, the concept of 'reasons' requires an explanation connecting any findings of fact with the ultimate decision. Where the legal test to be applied involves an evaluative judgment, it may well not be practicable to provide a detailed articulation as to how specified (and conflicting) factors have been weighed in the balance; the scope of the obligation must recognise that constraint. (A different question arises if mandatory considerations have not been identified.)
5. His Honour summarised the relevant principles at [77], which I gratefully adopt (citations omitted): (i) "Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole"; (ii) the court should not read passages from the reasons for decision in isolation from others to which they may be related; (iii) the reasons must be read fairly and as a whole; (iv) the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error; and (v) there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips.

Ground 4: The Appeal Panel found the existence of "undue risk" in the absence of evidence Ground 2: The Appeal Panel erred in its application of the proper test to the facts, giving rise to an erroneous conclusion Ground 3: The Appeal Panel erred in its application of the BCA to the facts, giving rise to an erroneous conclusion

Submissions

1. The Appellants' submissions on grounds 4, 2 and 3 were expressed to be "in the alternative" if the Court found that the Appeal Panel did disclose its reasoning. In support of these grounds, the Appellants submit that the "relevant findings", being those referred to by the Appeal Panel at AR [92] (referred to at [75] above), could not support a conclusion that there was an "unwarranted or excessive risk".
2. The Appellants' submissions refer to aspects of the relevant findings and contend, in summary, the following: there was no evidence to support the findings; there was no analysis of some of the findings; the finding in relation to AS1530.3 was, in addition to not being based on evidence, an error in misconstruing the BCA; and the findings involved an ipse dixit and non-findings.
3. In relation to appeal ground 4, the Owners Corporation contends that the issue is not whether the Appeal Panel found the existence of "undue risk" in the absence of evidence, but whether the Appeal Panel erred in law in determining the appeal from the Senior Member's decision. It submits that there was no "no evidence ground" of appeal before the Appeal Panel and, absent such a ground, the jurisdiction of this Court to determine a question of the Appeal panel is not enlivened.
4. The Owners Corporation also submits that, in any event, there was evidence to support the decision of the Appeal Panel and the finding that there was a certainty of risk of fire spread between levels by reference to Mr Jordaan's 8 March report.
5. The Owners Corporation also submits that there was evidence from which a Tribunal could find that there was an undue risk of fire spread via the façade of the Buildings. Seven evidentiary matters were identified as follows: first, that Biowood cladding is combustible; second, the risk is that the fire will spread beyond the floor of origin because the material will support fire spread between levels; third, there was positive evidence from a suitably qualified and experienced fire safety engineer that there is an undue risk; fourth, the evidence of Mr Jordaan rested entirely on AS1530.3, an inapplicable test which did not demonstrate that the Biowood combustible cladding would not support fire spread between levels; fifth, there was nothing to support the implicit contention that a slower rate of fire spread does not present an undue risk in comparison with a comparatively higher rate of spread; sixth, the evidence of Mr Halstead was that the aluminium cladding the subject of the Lacrosse fire also satisfied the requirements of the 1530.3 test but, when subjected to a full-scale façade test, readily facilitated the spread of fire between levels, so that the assumption that a Spread of Flame Index of '0' meant that there was no risk was misplaced; and seventh, the fact that combustible cladding was a Group 3 material again points to the conclusion that it would enable the spread of fire between levels in the Buildings.

Consideration and determination

1. The first issue raised by the submissions is whether the "no evidence ground" is open to be raised on this appeal. In my view, it is. Although not expressed as a "no evidence ground", the Appeal Panel accepted that ground 7 (the Senior Member erred in finding that the Biowood attachment presented an undue fire risk) concerned the question of whether the finding of undue risk of fire spread was not open on the evidence, and dealt with it on that basis: at AR [106]-[108]. While the appeal to this Court could have been expressed as whether the Appeal Panel erred in upholding the Senior Member's decision in the absence of evidence, I am satisfied that a question of law in respect of the Appeal Panel's decision is enlivened by ground 4, that this Court has jurisdiction to determine it and that leave to appeal should be granted.
2. It is an error of law to make a finding for which there is no evidence: Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91]; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (Australian Broadcasting Tribunal v Bond) at 355-6 (Mason CJ, Brennan J agreeing); [1990] HCA 33. The question whether a particular inference could be drawn from facts found or agreed is a question of law and the drawing of inferences in the absence of evidence is also an error of law: Australian Broadcasting Tribunal v Bond at 355 (Mason CJ, Brennan J agreeing).
3. A finding of fact cannot be disturbed if the facts upon which the finding is based are capable of supporting that finding and there is evidence to prove those facts. Conversely, a finding of fact can be disturbed if there is no evidence to support the facts on which the finding is based or if the facts as found, even those supported by the evidence, are incapable of justifying the finding of fact: The Australian Gaslight Company v Valuer-General (1940) 40 SR (NSW) 126 at 138 (Jordan CJ).
4. Turning to the findings as referred to by the Appellants, they contend that there was no evidence to support the findings (at AR [92(1)] and [92(2)]) that there is a risk that burning Biowood supports fire spread and that Biowood would support fire spread between floor levels along the façade of the Buildings. I disagree. In addition to the fact that Biowood is a combustible material, in my view, there is evidence from both experts that supports those findings.

Ground 4A: The Appeal Panel erred in finding that the use of Biowood breached the statutory warranties in subss 18B(b), (c) and (f) of the HB Act in the absence of evidence and/or by application of the errors identified in appeal grounds 1 to 4.

1. At the hearing, the Appellants accepted that ground 4A is linked to the finding of undue risk and non-compliance with the BCA and that if I am against them on "undue risk" as raised by grounds 1 to 4, they cannot succeed on ground 4A (T69.21-9).
2. In other words, the Appellants accept there was no error on the part of the Appeal Panel in upholding the Senior Member's decision that each of the statutory warranties in subs 18B(1)(b), (c), and (f) of the HB Act were breached having concluded that the use of Biowood did not comply with the BCA as the material presented an undue risk of fire spread (noting they take issue with the finding of undue risk). Accordingly, based on my conclusions on the other appeal grounds, appeal ground 4A also fails and will be dismissed.
3. As it was the subject of submissions, I should record that there was debate about the findings on breach of the fitness for purpose warranties. The Appellants submitted that the Appeal Panel's findings of breach were based on reasoning of non-compliance with the BCA and undue risk, an acceptance that the BCA sets the minimum standard against which fitness for purpose was to be assessed, and its correct rejection of the Owners Corporation's submission before the Senior Member that s 18B(1)(f) is breached by the use of Biowood even if the BCA requirements are met.
4. The Owners Corporation submits that the Senior Member's finding that Biowood combustible cladding was not fit for purpose was not contingent upon there being a failure to comply with the BCA (T59.11-30). It also submits that, in addition to the evidence, there are two additional factors justifying the conclusion that Biowood cladding is not fit for purpose even if it complies with the BCA. Those matters are, first, the subversion of the fundamental fire safety requirement that external walls be non-combustible by cladding them with combustible attachments and, second, the recognition of this illogicality by the changes introduced to cl 2.4 of Specification C1.1 in response to "recent fires".
5. In my view, the Appeal Panel's findings that the Senior Member was correct in concluding that the use of Biowood breached the statutory warranties in subss 18B(1)(b), (c) and (f) were predicated on the finding that the use of Biowood constitutes an undue risk of fire spread and, thus, is not compliant with the BCA. The Appeal Panel accepted the correctness of the Senior Member's decision that Biowood breached s 18B(1)(b) by reasoning that material installed in a multi-storey residential building which "does not comply with the BCA is … material that is not suitable for the purposes for which it is used…": at AR [111].

Conclusion, costs and orders

1. In conclusion, I do not accept that the Appellants have established any of their grounds of appeal against the Appeal Panel's decision that upheld the Senior Member's decision. The appeal to this Court pursuant to s 83 of the CAT Act will be dismissed.
2. I see no reason why the usual order that costs follow the event should not apply and propose to make an order for the Appellants to pay the Owners Corporation's costs of these proceedings. As the parties did not address the issue of costs, I have deferred entry of the proposed costs order for 14 days to enable a party to make an application if they consider a different order should be made. In that event, that party should confer with the other parties and, before the order takes effect, notify my Associate by email that a different costs order is sought together with their written submissions on that issue (of no more than three pages) and an agreed date for submissions in response, with a view to the issue being determined on the papers.
3. For these reasons, I make the following orders: 1. Grant leave to appeal. 2. Dismiss the amended summons filed by the First Plaintiff and the cross-summons filed by the Second Plaintiff. 3. Unless any party makes an application for a different costs order within 14 days, the Defendant's costs of these proceedings be paid by the First and Second Plaintiffs on an ordinary basis as agreed or assessed.

Annexure A - Biowood vertical span, south-eastern façade (Images in Annexure A reproduced from Mr Jordaan's 8 March 2019 report)

Annexure B - Biowood spandrels and vertical span, western façade (Images in Annexure B reproduced from Mr Jordaan's 8 March 2019 report)

Annexure C - Biowood spandrels, vertical span and ground floor, eastern façade (Images in Annexure C reproduced from Mr Jordaan's 8 March 2019 report)

Annexure D - Biowood shutters, south-western façade and Biowood at ground level (Top three images in Annexure D reproduced from Mr Jordaan's 8 March 2019 report. Bottom image reproduced from Mr Halstead's report)

Endnote

1. A spandrel is the vertical separation of openings in external walls. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 October 2021