Taylor Construction Group Pty Ltd v The Owners - Strata Plan No 92888 - [2020] NSWCATAP 163 - NSWCATAP 2020 case summary

NCAT Appeal Panel|2020-02-24

Solicitors: Crisp Law (First Appellant) Minter Ellison (Second Appellant) JS Mueller & Co (Respondent) File Number(s): AP 19/55886 Publication restriction: Nil Decision under appeal Court or tribunal: Civil & Administrative Tribunal Jurisdiction: Consumer & Commercial Division Citation: [2019] NSWCATCD 63 Date of Decision: 15 November 2019 Before: P Boyce, Senior Member File Number(s): HB 18/34135

Background

This is an appeal from a decision made in the Consumer & Commercial Division of the Tribunal by which orders were made requiring the Appellants (who were the Respondents at first instance) to "rectify the breach of the statutory warranties in s 18B(1)(b), (c), (e) and (f) of the Home Building Act by removing the Biowood attachments installed on the façade of 3 and 5 XXXX Drive, Ryde NSW, and replacing Biowood attachments with attachments to the external walls that comply with the codes, standards and statutory warranties". In addition, the Tribunal made an order for the Appellants to pay the costs of the Applicant (now the Respondent to this appeal). We will refer to the Applicant as the Respondent.
We will refer to the decision under appeal as the Decision.

Background and Contentions

To assist in the understanding of this decision, in the following paragraphs we have summarised the Decision.
The dispute concerned residential building work. The Appellants are the builder that carried out the residential building work and the developer of that work. The Respondent to the appeal is the registered proprietor of the common property held pursuant to Strata Title legislation. Central to the dispute was the "Biowood" cladding installed as attachments on the external walls of the building. The Respondent alleged that the Biowood attachments did not comply with the Building Code of Australia and posed an undue risk of fire. The Appellants asserted that the attachments did comply with the Code and did not pose an undue risk of fire.
At the time the building work was carried out, s 18B of the Home Building Act (the HB Act) set out warranties implied into contracts to do residential building work, to the effect that all materials supplied by the builder will be good and suitable for the purpose for which they are used (s 18B(1)(b)), that the work will be done in accordance with and will comply with "this or any other law" (s 18B(1)(c)), that the dwelling with be reasonably fit for occupation (s 18B(1)(e)) and a warranty to the effect that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result (s 18B(1)(f)). The terms of s 18B are set out below: 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-- (a) a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract, (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, (d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time, (e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling, (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.
The Decision made reference to the phrase "any other law" in s 18B(1)(c) and stated that, pursuant to cl 98 of the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation) all building work must be carried out in accordance with the requirements of the Building Code of Australia (the "BCA"). Clause 98 provided: 98 Compliance with Building Code of Australia and insurance requirements under the Home Building Act 1989 (cf clauses 78 and 78A of EP&A Regulation 1994) (1) For the purposes of section 4.17 (11) of the Act, the following conditions are prescribed in relation to a development consent for development that involves any building work - (a) that the work must be carried out in accordance with the requirements of the Building Code of Australia, (b) in the case of residential building work for which the Home Building Act 1989 requires there to be a contract of insurance in force in accordance with Part 6 of that Act, that such a contract of insurance is in force before any building work authorised to be carried out by the consent commences. (1A) For the purposes of section 4.17 (11) of the Act, it is prescribed as a condition of a development consent for a temporary structure that is used as an entertainment venue, that the temporary structure must comply with Part B1 and NSW Part H102 of Volume One of the Building Code of Australia. (2) This clause does not apply - (a) to the extent to which an exemption is in force under clause 187 or 188, subject to the terms of any condition or requirement referred to in clause 187 (6) or 188 (4), or (b) to the erection of a temporary building, other than a temporary structure to which subclause (1A) applies. (3) In this clause, a reference to the Building Code of Australia is a reference to that Code as in force on the date the application is made for the relevant - (a) development consent, in the case of a temporary structure that is an entertainment venue, or (b) construction certificate, in every other case.
The Decision referred to the requirements contained in the Environmental Planning & Assessment Act, 1979 (the EP&A Act) concerning the issue of occupation certificates. The Decision sets out ss 6.9, 6.10 and 6.30, which provide: 6.9 REQUIREMENT FOR OCCUPATION CERTIFICATE (cf. previous ss 109H(1), 109M, 109N) (1) An occupation certificate is required for-- (a) the commencement of the occupation or use of the whole or any part of a new building, or (b) the commencement of a change of building use for the whole or any part of an existing building. (2) However, an occupation certificate is not required-- (a) for the commencement of the occupation or use of a new building-- (i) for any purpose if the erection of the building is or forms part of exempt development or development that does not otherwise require development consent, or (ii) that is the subject of a compliance certificate in circumstances in which that certificate is an authorised alternative to an occupation certificate (such as a swimming pool or altered part of an existing building), or (iii) by such persons or in such circumstances as may be prescribed by the regulations, or (iv) that has been erected by or on behalf of the Crown or by or on behalf of a person prescribed by the regulations, or (b) for the commencement of a change of building use for the whole or any part of an existing building-- (i) if the change of building use is or forms part of exempt development or development that does not otherwise require development consent, or (ii) by such persons or in such circumstances as may be prescribed by the regulations, or (iii) if the existing building has been erected by or on behalf of the Crown or by or on behalf of a person prescribed by the regulations. 6.10 RESTRICTIONS ON ISSUE OF OCCUPATION CERTIFICATES (cf. previous s 109H) (1) An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent have been complied with. (2) An occupation certificate must not be issued to authorise a person to commence occupation or use of a new building (or part of a new building) unless-- (a) a development consent is in force with respect to the building (or part of the building), and (b) in the case of a building erected pursuant to a development consent (other than a complying development certificate), a construction certificate has been issued with respect to the plans and specifications for the building (or part of the building), and (c) the completed building (or part of the building) is suitable for occupation or use in accordance with its classification under the Building Code of Australia, and (d) such other requirements as are required by the regulations to be complied with before such a certificate may be issued have been complied with. (3) An occupation certificate must not be issued to authorise a person to commence a new use of a building (or of part of a building) resulting from a change of building use for an existing building unless-- (a) a development consent is in force with respect to the change of building use, and (b) the building (or part of the building) is suitable for occupation or use in accordance with its classification under the Building Code of Australia, and (c) such other requirements as are required by the regulations to be complied with before such a certificate may be issued have been complied with. 6.30 SATISFACTION AS TO COMPLIANCE WITH CONDITIONS PRECEDENT TO THE ISSUE OF CERTIFICATES (cf. previous s 109P) (1) A person who exercises functions under this Act in reliance on a certificate under this Part or complying development certificate is entitled to assume-- (a) that the certificate has been duly issued, and (b) that all conditions precedent to the issuing of the certificate have been duly complied with, and (c) that all things that are stated in the certificate as existing or having been done do exist or have been done, and is not liable for any loss or damage arising from any matter in respect of which the certificate has been issued. (2) This section does not apply to a certifier (other than a council) in relation to any certificate that he or she has issued.
An interim occupation certificate ("IOC") was issued for the residential building work on 8 August 2016. The Decision recorded that there was no contention that at the time the building work was carried out the 2014 version of the BCA applied. The Decision referred to Specification C1.1 cl 3.1 of the BCA the terms of which are as follows: In a building required to be type A construction - (b) external walls, common walls and the floor and floor framing of the lift pits must be non-combustible.
The Decision also referred to the provisions of Specification C1.1 cl 2.4 of the BCA which provides: Attachments not to impair fire-resistance (a) A combustible material may be used as a finish or lining to a wall or roof, or in a sign, sunscreen or blind, awning, or other attachment to a building element which has the required FRL if - (i) the material is exempted under C1.10 or complies with the fire hazard properties prescribed in Specification C1.10; and (ii) it is not located near or directly above a required exit so as to make the exit unusable in a fire; and (iii) it does not otherwise constitute an undue risk of fire spread via the facade of the building. (b) The attachment of a facing or finish, or the installation of ducting or any other service, to a part of a building required to have an FRL must not impair the required FRL of that part.
It can be seen that Specification C1.1 refers to both C1.1 and Specification C1.10 and the Decision sets out a table which formed part of Specification C1.10 which is a table setting out materials used as attachments to a building element that are excused from the requirement that building materials are required to be non-combustible by the BCA in C1.1 cl 3.1. The table is as follows: Table 1 - FIRE HAZARD PROPERTY REQUIREMENT Lining, material or assembly Requirement Other materials, including insulation Clause 7

Clause 7, referred to above, provides which combustible "Other materials" are permitted under Specification C1.1cl 2.4(a)(i) and specifies the indices that those materials must have for Spread of Flame Index and Smoke Developed Index, amongst other things, as follows: Table 4 - OTHER MATERIALS Material or Assembly Location Flammability Index Spread of Flame Index Smoke-Developed Index Other materials - 9 8 if the Spread of Flame Index is more than 5

At [33] the Decision records that the Respondent (ie. the applicant at first instance) alleged that the external "Biowood" cladding installed as architectural attachments on the external walls of the building is defective as it is combustible and fails to comply with cl 2.4 of the BCA Specification C1.1 and is therefore in breach of the statutory warranties in s 18B of the HB Act. The Respondent relied upon the expert report of AE&D Pty Ltd authored by a Mr Halstead. At [36] the Decision records that the Appellants denied that the Biowood cladding breaches the provisions of the BCA. They relied on the expert report, supplementary reports and evidence of Etienne Jordaan of Wood & Grieve Engineers as well as the expert reports of Danial Powell.
At [38] the Decision recorded the issues for determination 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?
The Decision records at [40] that Mr Powell identified a document published by the CSIRO entitled "Fire safety guidelines for external walls - a guide for high-rise construction in Australia" (Exhibit A7) as an example of relevant literature available in relation to the application of cl 2.4 and 3.1 of Specification C1.1. In that document, it is stated that: CSIRO considers that BCA Specification C1.10 cl 7 which specifies AS/NZS 1530.3 test requirements for other materials is not relevant for attachments used as external wall finish, lining or cladding.
The Respondent submitted that the indices in cl 7 are derived from a test conducted and certified by the CSIRO for Biowood and that for regulatory purposes the figures contained in the results correspond to the indices in the table set out below: Ignitability Index Spread of Flame Index Heat involved index Smoke-Developed Index (0-20) (0-10) (0-10) (0-10) 13 0 1 7

The Decision records at [41] that 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 [sic] provide a full assessment of the fire hazard under all conditions". There is a typographical omission in this quotation contained in the Decision. The certificate, which is in evidence as Exhibit A6, included the word "not" so that this quotation should relevantly read "a single test method will not provide a full assessment of fire hazard under all conditions".
The Decision further recorded at [42] that the evidence of the engineer relied upon by the Respondent (namely Mr Halstead) was that he agreed with the CSIRO statement.
The Decision records at [43] the Respondent's submissions that whether cl 2.4 is applicable and whether or not Biowood is exempted under C1.10 or complies with the fire hazard properties prescribed in Specification C1.10, the authors of the CSIRO document (Exhibit A7) and Mr Halstead's evidence should be preferred to the evidence of Mr Jordaan on the issue of whether the AS/NZS 1530.3 test is relevant and applicable. The Decision records the reasons of the Respondent in support of that submission.
In summary, these reasons were: 1. the test was designed for fires within a room and fires under different conditions (ie. external fires) may behave differently; 2. there is no reason to disregard the views of the authors of the CSIRO report, Mr Halstead agreed with the CSIRO report and Mr Jordaan did not provide reasons to justify disregarding the CSIRO report.
At [43(2) - (3)] it is recorded that the Respondent further submitted: that cl 2.4 was not applicable as Biowood is not "another attachment" that is exempted under C1.10 or complies with the fire hazard properties prescribed by Specification C1.10; it is not "other material"; and that, even if cl 2.4 were to be regarded as potentially applicable, the evidence is to the effect that the material is not exempted under C1.10 and there is no evidence that it complies with the fire hazard properties prescribed by Specification C1.10.
The Decision records that the Appellants submitted that the Respondents bore the onus of proof to show that the building and material do not comply with the BCA and have the onus to adduce evidence to rebut the presumption which arises from the existence of the IOC.
The Appellants submitted that the Biowood falls into the category of "other materials including insulation" described in table 1 C1.10. Therefore, cl 7 and AS/NZ 1530.3 applies [47].
The Appellants submitted that Mr Jordaan was unchallenged when he said in his report that the Biowood sample tested achieved a group number of 3 (a technical term defined in the BCA) and that Biowood is suitable as it passes the alternate test suggested by the CSIRO [50].
The Appellants submitted that the issue of the IOC created an irrebuttable presumption of law and conclusive evidence that all requirements in respect of its issuance have been complied with. The Appellants submitted that the Tribunal is bound to accept that the IOC is valid and it cannot "go behind" the certificate. It must be accepted that the building and cladding are BCA compliant. The basis for this submission is found in s 6.30 of the EP&A Act (set out earlier).
The Decision records that the Respondent submitted that the Biowood constituted an undue risk of fire spread. That submission relied upon the evidence of Mr Halstead. In contrast, the Appellants submitted that the opinion of Mr Jordaan should be adopted. His conclusion was that Biowood did not present an undue risk.
The Decision noted that the BCA required that materials and construction be fit for the purpose for which they are intended and that s 18B(1)(f) of the HB Act implies a warranty in every contract that the work and any materials used will be reasonably fit for the specified purpose if it is expressly made known to the holder of a contractor licence the particular purpose for which the work is required. Here, the building contract was not in evidence except for one page. The contract was described in the Decision as the AS4902-2000 Australian Standard General Conditions of Contract for Design and Construct. The Respondent submitted that such a contract makes known to a builder the particular purpose for which the work is required and the result to be achieved for the developer. In such circumstances, "the builder and developer cannot deny s 18B(1)(f) does not [sic] apply to the contract" [95].
The Appellants submitted that other than one page of the contract there was no evidence that the original owner made it known to the Appellants that there was a particular purpose or result desired. There was no evidence of reliance by the original owner on the Appellants for their expertise in respect of the carrying out of the purpose or to achieve the particular result. An assumption cannot be made in the absence of evidence and the Respondent has failed to prove the elements required under s 18B(1)(f) [105].
The Decision recorded submissions concerning s 18B(1)(b), which concerns the requirement that the material provided must be suitable for the purpose for which it is used. The Decision recorded that the building in this case is a multistorey residential building of type A construction and that it is required to have non-combustible external walls.

The Decision: The Findings

The following is a summary of the findings of the Tribunal which are recorded in the Decision from [116] onwards: 1. In respect of the submission concerning the IOC, the Tribunal was not satisfied that the IOC creates an irrebuttable presumption of law, that it is conclusive evidence that the building and cladding are BCA compliant, or that the Tribunal is bound by the issue of the IOC. The Decision made reference to a case cited by the Appellants, namely Burwood Council v Ralan Burwood Pty Ltd [2013] NSWLEC 173 but followed the decision in Dyldam Developments Pty Ltd v The Owners SP 85305 [2019] NSWCATAP 229. The Decision records that the Tribunal held that it was not bound by the administrative issue of an IOC and that the issue of an IOC does not prevent the Tribunal from determining whether cladding as an attachment complies with the BCA or not. 2. At [124] the Tribunal noted that it was common ground between the experts that Biowood achieved a Group 3 number classification as per AS/NZS3837 [1] test results (Exhibit A7) and that that meant it was a timber product as distinct from a Group 2 fire retardant timber or Group 1 which is non-combustible or near non-combustible. The Decision also noted at [125] that the experts agreed that the BCA "is the test" which applies to all cladding and that it is C1.1 cl 2.4 of the BCA that requires attachments to external walls not to impair fire resistance. The Decision also noted that it was not disputed that Biowood is combustible [127]. 3. The Tribunal found that the effect of the relevant Codes and Standards is that the subject buildings are required to be of Type A construction. Such buildings must have non-combustible external walls (Cl 3.1 of Specification C1.1 of the BCA) [129]. A combustible material may be used as a finish or lining to a wall or other attachment to a building element which has the required FRL if the material is exempted under C1.10 or complies with the fire hazard properties prescribed in Specification C1.10 and, amongst other things, it does not otherwise constitute an undue risk of fire spread via the façade of the building (cl 2.4 of Specification C1.1 of the BCA) [130]. 4. The Tribunal found that the fire hazard property requirement for exemption under C1.10 specified for "other materials including insulation" (that is for use as an attachment) is that the materials must satisfy the criteria specified for "Other materials" in cl 7 of C1.10. Those criteria are that the material used must have a Spread of Flame Index of 9 and a Smoke Developed Index of 8 if the Spread of Flame Index is more than 5. The Tribunal found the findings of the CSIRO report that the specifications of the AS/NZS1530.3 test for other materials are not relevant for attachments to buildings used as external wall finishes, lining or cladding to be highly persuasive [131]. 5. The Tribunal found that the evidence of Mr Jordaan did not provide reasons to justify disregarding the views of the CSIRO or Mr Halstead [132]. 6. The Tribunal found that Biowood is not "another attachment" that is exempted under C1.10 as there is no evidence that it complies with the fire hazard properties prescribed in C1.10 [133]. 7. The Tribunal was satisfied that Mr Halstead's "adoption of the opinions of the CSIRO is persuasive evidence that Biowood is a combustible material and complies with the fire hazard properties prescribed by C1.10"; that Biowood is assessed as a timber Group 3 material in accordance with AS 3837; and that there is a risk that Biowood will support fire spread between floors along the façade of the building. The Tribunal preferred the opinion of Mr Halstead based upon AS 3837 to the opinion of Mr Jordaan that the alternative test in accordance with AS1530.3 is more relevant than AS3837 [135]. 8. The Tribunal found that even though there is no evidence of a large scale fire testing of Biowood, it is "indisputably combustible, and any risk that it will support fire spread between levels of the building presents an undue risk, falling within the opinion of the highly persuasive and proper CSIRO report in Exhibit 7" [136]. The Tribunal found that a slow rate of fire spread does not necessarily prevent an undue risk. Any risk of fire spread is sufficient to satisfy the measure of undue risk [136]. 9. The Tribunal referred to the evidence concerning other safety measures, such as sprinklers. The Tribunal found that it was not satisfied that Mr Halstead had had no regard to other fire safety measures. His evidence was that sprinklers would have no relevance to external cladding as an attachment. The Tribunal accepted Mr Halstead's expertise and expressed its satisfaction that the measure of risk factor and other safety measures had been considered and found not to be relevant. The Tribunal found that Mr Jordaan's evidence did not satisfy the Tribunal that there was no undue risk of fire spread between compartments of the building [138]. 10. The Tribunal expressed its satisfaction that Mr Halstead had established that there is undue risk of fire spread via the Biowood extending up the façade of the building which would allow fire spread into the building. Mr Halstead was found to be well qualified and experienced to give his "expert judgment" [139], 11. The Tribunal referred to the Appellant's contention that in considering undue risk of fire spread via the façade, cl 2.4(a)(iii) of Specification C.1 does not require that the attachment to the external wall be assessed as part of the external wall but that rather it requires that the attachment not impair the fire resistance of the external wall itself. The Tribunal found that to interpret cl 2.4(a)(iii) in that manner "defies common sense". The Tribunal found that "Any undue risk of fire spread by an attachment, even if it complies with codes and standards for use, must be viewed from the perspective of the type of building it is used on [in this case] a Type A building requiring external walls to be non-combustible". The Tribunal found that Biowood constitutes an undue risk: [141] and [142]. 12. The Tribunal then considered the spandrels, which are the vertical separations of openings in the external walls, and hence part of the external walls. The Tribunal found that they must be of non-combustible material having an FRL of not less than 60/60/60. The Tribunal was satisfied that an attachment to a spandrel must comply with C1.1 cl 2.4, meaning that it must either be exempted under C1.10, comply with fire hazard properties prescribed in C1.10, or not otherwise constitute an undue risk of fire spread via the façade of the building. The Tribunal found that Biowood used as an attachment to the spandrels creates an undue risk of fire spread from compartment to compartment via the façade of the building [144]. The Tribunal found that the Biowood attached to the spandrels does not comply with C1.1 cl 2.4 [145]. 13. The Tribunal found that the use of Biowood as an attachment to the façade breaches the statutory warranty in s 18B(1)(b) as it was not suitable for the purpose used [155]. At [158] the Tribunal found that by reason of the type of contract to which the builder and developer were parties (namely a Design and Construct contract, which the Tribunal inferred was a standard Design and Construct contract) the developer had made known the particular purpose for which the building work is required. The Tribunal found, on the balance of probabilities, that the developer relied upon the builder's skill and judgment, and by doing so incorporated the statutory warranty of fitness for purpose. 14. The Tribunal referred to its finding that the use of Biowood did not comply with the BCA and that therefore there was a breach of the warranty that the work must comply with "any other law" arising pursuant to s 18B(1)(c). 15. In short, the Tribunal found that the use of Biowood as attachments to the external walls was a breach of the statutory warranties contained in s 18 B(1)(b), (c) and (f) [161].

The Notice of Appeal

The Appellants filed a Notice of Appeal on 13 December 2019. Later, amended grounds of appeal were filed. The grounds of appeal following the amendment may be summarised as follows: 1. The Tribunal erred in applying an improper construction of Part 4A of the EP&A Act [2] 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. 1. 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. 2. 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; 3. This ground was not pressed at the hearing. 4. The Tribunal erred in finding that the Biowood attachment presented an undue fire risk. In respect of s 18B(1)(b): 1. 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. 2. 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): 1. 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. 2. The Tribunal erred by finding as a fact that: 1. the contract for building works made known to the developer the particular purpose for which the building work was required, and 2. the developer relied upon the builder's skill and judgment in achieving the particular purpose. 1. The Tribunal erred in finding that the Biowood material was not reasonably fit for the specified purpose for which it was used. 2. In addition, the Appellants sought leave to appeal upon the basis that the decision was against the weight of evidence. In particular the Appellants submitted that there was evidence put before the Tribunal that there was no risk of fire spread from the Biowood, which was not contested and that the mechanism by which the fire may spread was not known. Despite that, the Tribunal found that the Biowood presented an undue risk. The decision was not one that a reasonable Tribunal could reach.
The Appellants sought orders to the effect that the appeal be allowed, the decision under appeal be set aside and that the Respondent pay the Appellants' costs of the appeal and costs below.

Reply to Appeal

The effect of the Reply to Appeal was that the Respondent submits that there was no error made by the Tribunal nor any ground available justifying the grant of leave.

Structure of this Decision

It may be helpful to explain how the Appellants presented their submissions. The First Appellant filed written submissions (summarised below) to which the Respondent responded in writing (summarised below). The Second Appellant then filed written submissions (summarised below) to which the Respondent responded at the hearing and in post-hearing written submissions. At the hearing Mr Chan for the First Appellant spoke to grounds 1 and 2 and in respect of the balance of the grounds adopted Mr Weinberger's submissions (both written and oral) made on behalf of the Second Appellant. With our leave, the Respondent and Second Appellant provided brief submissions in writing after the hearing. In addition to the written submissions we have had the benefit of the oral submissions presented at the hearing.

Submissions of the First Appellant

The following is a summary of the submissions of the First Appellant.
Grounds 1 and 2: 1. It was not in dispute that the building was the subject of an IOC which was issued on 8 August 2016 pursuant to ss 109C(1)(c) and 109H(1)(a) of the EP&A Act (as it then was). An IOC must not be issued unless the BCA had been complied with (s 109H(3)(c)) and the building will not constitute a hazard to the health or safety of the occupants of the building (reg 154(1) EPA Regulation 2000, as it was then). It is also an offence to occupy a building without an occupation certificate: ss 109C, 109M(1) , and presently ss 6.4, and 6.9. 2. The Tribunal found that it was not bound by the IOC and a reading of the Decision demonstrates that the Tribunal placed no weight on the existence of the IOC. In not considering the effect of a valid IOC the Tribunal did not give proper weight to the evidence that the building was BCA compliant (State Rail Authority of NSW v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588). The Appellant relied upon the decision in Ralan in which Sheahan J said, at [308], that one cannot go behind a Part 4A certificate because of the provisions of s 109P. 3. The effect of the EP&A Act is that is that there is a statutory presumption that all conditions precedent have been complied with, such that one is not permitted to challenge the underlying facts: see Ralan at [295] and [308]. If an IOC has been issued there is an irrebuttable statutory presumption that the building was BCA compliant. 4. The issue of an IOC is an administrative act and might be the subject of a collateral challenge as to which see [113] and [115] of Dyldam Developments Pty Ltd v The Owners - Strata Plan non 85305 [2019] NSWCATAP 229. The question is whether the collateral attack in the present case is one which is permitted as being an error on its face, or of another kind namely whether the IOC should have been issued at all. A challenge of the latter kind which requires the decision-maker to adjudicate on whether the issuing authority was in fact satisfied as to any statutory requirements is impermissible (see Ousley v The Queen (1997) 192 CLR 569 at 80 (Toohey J); 87 (Gaudron J) 124-7 (Gummow J) and Gould v DPP (Cth) [2018] NSWCCA 109 at [52] (Basten JA, Johnson and Adamson JJ agreeing). In the present case, the issue identified by the Tribunal was whether the BCA had been complied with. It was raised in defence that the IOC had a statutory precondition to its issuance; that is, the building was BCA compliant and that it had been certified as such. In choosing to ignore the IOC and the statutory precondition that the building was BCA compliant the Senior Member embarked on a collateral attack on the IOC. The attack being encapsulated in the finding that the building was not BCA compliant by reason of the Biowood presenting an undue fire risk. Implicit in such a finding is that the relevant certifier should not have issued the IOC on the basis that the statutory requirement under s 109H(3)(c) of the EP&A Act had not been complied with. Such an attack is the kind which was ruled impermissible in Ousley at 80. 5. Further, where there is an express provision under s 124 of the EP&A Act (presently s 9.46) for the Land & Environment Court to deal with and set aside certificates wrongly issued it is the intention of the legislature that no other authority may deal with that issue: see R v Wallis; ex parte Employers' Association of Wool Selling Brokers (1949) 78 CLR 529 at 550. The existence of an express provision for challenge in the EP&A Act implies that no other form of challenge is permitted. That is, the IOC cannot be collaterally challenged (other than for an error on its face) in another forum. 6. If the collateral challenge were permissible the Appellants submitted that the Tribunal should not have permitted it in any event. In Dyldam at [115] and [116] the Tribunal considered whether in the event a collateral challenge was permissible, it should be permitted. At [116] the Tribunal considered the relevant principles to be addressed in considering whether a collateral challenge was permissible. These principles included whether the grounds of challenge would likely involve the adducing of substantial evidence, whether all proper parties may be heard, whether a collateral challenge would bypass judicial review protective mechanisms such as standing, whether there was any relevant statutory provision, whether the issue raised was clearly answered by authority, whether other similar cases were pending and whether there was a more appropriate forum in terms of expertise such that a collateral challenge should not be permitted. In the present case, any collateral challenge on the IOC would: 1. involve the adducing of substantial evidence as evidenced by the expert evidence, 2. would not involve all proper parties. Such parties would involve Vic Lilli & Partners (the IOC certifiers), the owners for each lot for potential breach of occupation without a valid occupation certificate, 3. ignores the legislative framework of the EP&A Act which provides for the Land & Environment Court to make such orders as it sees fit in the event of a breach of the EP& A Act, 4. disregards judicial authority that an occupation certificate can be set aside in judicial proceedings. 1. In the above circumstances, it is not appropriate to permit a collateral challenge to the IOC even if such a challenge were permissible.
Ground 3 and 4: 1. At [136], the Tribunal found that "any risk" of fire from a combustible material presents an undue risk. Specification C1.1 cl 2.4 of the BCA states that a combustible material may be used if it does not otherwise constitute an undue risk of fire. That wording contemplates that combustible material may be used as an attachment. It does not say that combustible material of itself presents an undue fire risk. 2. At [138], the Tribunal referred to the need to show an elimination of risk. That is not what the wording of the BCA requires. The wording accepts that the use of combustible material will carry a degree of risk which cannot be eliminated. The question is whether that risk is undue. To ask whether there is an elimination of risk, or whether there is any risk at all is to apply the wrong test and fall into error. 3. In interpreting the BCA, the Tribunal required the Appellants to show an absence or elimination of all risk. Examples of where this has occurred can be found in [72(4)], [115(2)], [136]-[137]. The onus of proof falls on the Respondent to show that there was an undue risk for the purposes of the BCA. It does not require the Appellants to show that there was no undue risk, or no risk. 4. At [90], the Tribunal found that the crucial factor of whether a material presented an undue fire risk was related to the "spread of flame" index. The evidence of Mr Halstead was that the Biowood presents an undue risk because there is a risk of fire spread. At [136] the Tribunal found that the Respondent's expert (Mr Halstead) accepted that the heat given off by the burning of the Biowood would not be sufficient to ignite adjacent Biowood of itself. The Tribunal then accepted that there was no evidence of a large scale fire testing of the Biowood. The Tribunal accepted that there was a slow rate of fire spread, but found that the existence of a risk of spread was sufficient for it to be an undue risk. Without any evidence as to the degree of that spread the Tribunal should not have found that there was any undue risk.
Ground 7: 1. The opinion of Mr Halstead was that the Biowood presented an undue fire risk because there was a risk of fire spread which could enter the building from the façade. Implicit in that opinion is that the risk of fire spread from the Biowood is such that it will spread across the façade. However, under cross-examination, Mr Halstead admitted that the risk of fire spread was unknown (a concession adopted by the Tribunal at [136]). Mr Halstead further accepted that the risk was a combination of heat from the original flame source and the heat given off by the burning of adjacent Biowood. Having accepted that Biowood does not self-ignite then the risk is only attributable to the original flame source. In other words, the risk arises from something other than the Biowood, and the Biowood poses no or little risk of flame spread in and of itself. 2. In accepting that there was a slow spread of fire, no self-ignition of the Biowood and an unknown risk of fire spread the Tribunal should not have found that there was an undue risk of flame spread for the purposes of the BCA.
Ground 5: 1. At [153] the Tribunal found that the Biowood attachment diminishes the fire resistance of the external walls. As a result of that the Biowood was not fit for purpose. The Tribunal made the finding after referring to the undue fire risk which the Tribunal had found. However, the existence of an undue fire risk assessed by reference to combustibility, flame spread and other factors is not evidence that the attachment diminishes the fire resistance of the external walls. No evidence adduced by the parties refers to an undue risk of fire diminishing the fire resistance of the external wall. There was an absence of evidence to support the Tribunal's finding in that regard.
Grounds 8-12: 1. At [156] the Tribunal made reference to the "common sense" test and applied it for the purposes of ss 18 B(1)(b) and (f). The Tribunal found it to be illogical to allow non-combustible external walls to be covered by combustible attachments. The Tribunal ignored the existence of the BCA in particular C1.1 cl 2.4, which expressly allows for combustible material to be used as an attachment to a building element. The common sense test applied properly requires a consideration of the building type, purpose and the legislative regime under which it operates. The words "good and suitable" and "reasonably fit for purpose" used in ss 18B(1)(b) and (f) must be taken to be read with regard to the BCA. The Tribunal should have found that there was little or no risk of fire spread, and therefore the material was fit for purpose. 2. At [158], the Tribunal found that the contract was a standard "Design and Construct contract" to satisfy s 18B(1)(f). There was no evidence of what the balance of the contract was. It was not called for by the Respondent at the hearing. It follows that the Tribunal fell into error when making such a finding in the absence of evidence. What the Tribunal should have found was that a breach of s 18B(1)(f) could not be made out.

Respondent's Amended Submissions

On 13 February 2020 the Respondent filed amended submissions (there is no need to refer to the initial submissions). They may be summarised as follows.
Ground 1: 1. The issue of an IOC does not create an irrebuttable presumption that the building complies with the BCA. 2. The Respondent referred to Ku-ring-gai Council v Chan [2017] NSWCA 226 [88] in which the Court of Appeal stated that the occupation certificate does not in terms or effect certify that the building work does not, or is not likely to, contain latent defects or that the works comply with relevant plans and specifications or the conditions of the development consent. 3. The prohibition on issuing the certificate if the work is not compliant with Codes and Standards is not directed to the person who has the benefit of a development consent, but is directed to the person who is empowered to issue it: see Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404 at [167]. 4. The Respondent did not seek to challenge the IOC. Proceedings concerning the preconditions to the issuing of a certificate do not necessarily involve a challenge to the validity of the certificate. Contrary to the Appellants' submissions, the Tribunal did not permit a collateral challenge to the validity of the IOC. The issue of an IOC cannot bind the Tribunal. It is not a collateral challenge to the IOC to embark on a determination of whether there has been a breach of the statutory warranties under the HB Act. 5. An IOC is no more than an administrative opinion from a person that certain matters have been complied with. Whether that opinion is correct is another issue. The EP& A Act itself recognises the building work can be defective notwithstanding the issue of an occupation certificate and indeed contemplates that time will begin to run on a claim for defective work after an occupation certificate is issued: see s 6.20(2) of the EP&A Act. 6. The Tribunal was correct in finding at [120] that the issue of the IOC does not prevent the Tribunal from determining whether cladding as an attachment complies with the BCA or not. 7. Section 6.30 of the EP&A Act (formerly s 109P) does not create any presumption in respect of the Tribunal exercising jurisdiction under the HB Act. Section 6.30 only creates an entitlement for certain persons to rely on certain matters. The Appellants' reliance on s 6.30 of the EP&A Act is misguided when the Tribunal was clearly not exercising functions under the EP&A Act in "reliance on an occupation certificate" being the legislative precondition to such entitlements. 8. The decision in Ralan does not assist the Appellants as that decision was a challenge to the validity of construction certificates. The present case is not a challenge to a Part 4A certificate. Furthermore, Ralan is not authority that one is not permitted to challenge the underlying facts, nor is it authority that there is an irrebuttable statutory presumption that the building was BCA compliant if an IOC had been issued, as the Appellants submit.
Ground 2: 1. This ground from the Amended Notice of Appeal submits that the Tribunal failed to give proper weight to the evidence that the building had been properly certified. No error of law has been articulated and nor is there an identifiable issue of fact.
Ground 3: 1. This ground concerns the submission that the Tribunal erred in applying an improper construction of cl 2.4(a)(iii). The Tribunal did not find that "any risk" of fire is an undue risk of fire. Rather, the Tribunal found that "any risk that Biowood will support fire spread between levels of the building presents an undue risk" and that any risk of fire spread is sufficient to satisfy the measure of undue risk: [136]. 2. The Tribunal did not apply an improper construction of cl 2.4(a)(iii) and the ground proceeds on an incorrect premise. 3. The Appellants' submission concerning [138] of the Decision is inaccurate in asserting that the Member referred to the need to show an elimination of risk. In that paragraph, the Tribunal was explaining why it did not accept the evidence of the Appellant's expert, Mr Jordaan.
Ground 4: 1. This ground concerns the Appellant's submission that the Tribunal erred in applying the wrong legal test to the facts by reversing the onus of proof. The Tribunal found that there was a risk of fire spread between levels of the building and hence an undue risk falling within cl 2.4. The submission that the Tribunal required the Appellants to show an absence or elimination of all risk does not appear to be consistent with the decision itself.
Ground 5: 1. This ground concerns the Appellants' submission that the Tribunal erred by finding as a fact that the Biowood attachment diminishes the fire resistance of the external walls. The Tribunal did not find as a fact that the Biowood attachment diminishes the fire resistance of the external walls, but instead found that combustible Biowood used as an attachment to a non-combustible external wall presents an undue risk of fire spread, and as such the Biowood attachment diminishes the fire resistance of the external walls. It is clear, as a matter of common sense, that what the Tribunal means is: if the external wall is over clad with combustible material then the wall and the cladding should realistically be considered together.
Ground 7: 1. This ground concerns the Appellants' submissions that the Tribunal erred in finding that the Biowood attachment presented an undue fire risk. No error of law has been identified. To the extent that it is suggested that the Tribunal made an error, that could only be an issue of fact which has not been shown to be against the weight of evidence and, in any event, is not wrong. The issue of whether or not Biowood would support self-sustained fire spread was put to Mr Halstead in cross-examination and Mr Halstead said that that risk arises from both the original source of the fire and the burning of the adjacent Biowood.
Ground 8: 1. This concerns the Appellants' submission that the Tribunal erred in the application of the common sense test when determining whether the Biowood material was not good and suitable for the purpose for which it is used. The Tribunal's finding at [156] that it is illogical to stipulate that the external walls must not be combustible and then allow them to be covered in combustible attachments, was not the test applied by the Tribunal in determining whether the Biowood material was good and suitable for the purpose for which it was used, but rather was a test used in the process of reasoning leading to the conclusion that the Biowood was not fit for purpose. There is no error of law or identified issue of fact.
Ground 9: 1. This concerns the Appellants' submission that the Tribunal erred in finding that the Biowood material supplied was not good or suitable for the purpose for which it is used. The Respondent repeated their submissions concerning Ground 8.
Ground 10: 1. This concerns the ground that the Tribunal erred in the application of the common sense test when determining whether the Biowood material was not good and suitable for the purpose for which it was used. The Respondent submitted that this ground duplicates Ground 8 and repeated their submissions concerning Ground 8.
Ground 11: 1. This concerns the ground that the Tribunal erred by finding that the contract for the building works made known the purpose for which the building was required and the developer relied upon the builder's skill and judgment. The Respondent submitted that the Tribunal was entitled to draw the inference at [158]. This is an appeal ground as to a finding of fact and must fail. 2. The Respondents were not party to the contract and it was peculiarly within the power of the Appellants to adduce evidence of the existence and terms of whatever contract was between them. When a court or tribunal weighs or assesses evidence it must bear in mind the extent to which it was in the power of one party to produce and in the power of the other to contradict evidence bearing on the fact in issue (per Lord Mansfield CJ in Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63; 98 ER 969 at 65,970 respectively. The criticism that there was no evidence of what the balance of the contract was and that therefore the Tribunal was not entitled to draw an inference from that part of the contract that was in evidence is misplaced.
Ground 12: 1. This ground concerns the alleged error in finding that the Biowood material was not reasonably fit for the purpose for which it was used. This ground does not raise any issue of law or identifiable issue of fact and the Respondent repeated their submissions concerning grounds, 8, 9 and 10.

Second Appellant's Submissions

The Second Appellants' submissions are summarised in the following paragraphs (noting that there were no submissions concerning grounds 1, 2 and 6).

Ground 3 - Failure to properly interpret the meaning of "undue risk"

The Tribunal was required to determine the proper construction of the words of cl 2.4(iii) and in so doing erred in deciding at [136] that "any risk of fire spread is sufficient to satisfy the measure of undue risk". The Tribunal erred in attributing a meaning to the words "undue risk" based solely on expert evidence, which was against the weight of the evidence. The Tribunal should have accepted the approach of the Court in The Owners SP 69312 v Rockdale City Council & Ors [2012] NSWSC 1244 at [108] to the effect that "reference to what may, or may not, be the opinion of an expert or an assumption about the practical operation of the BCA among fire control experts" is not permitted. At [139] the Tribunal Member records that he has reached his conclusion as to the measure of risk relying upon the "expert judgment" of Mr Halstead, that Biowood is combustible, that slow rate of fire spread does not necessarily prevent an undue risk and therefore "any risk of fire spread that it will support fire spread between the levels of the building presents an undue risk": [136]. The Tribunal did not give due weight to the evidence of Mr Jordaan.
The Tribunal Member also adopted the opinion he gleaned from the CSIRO report that any risk that combustible material supports fire spread between levels of the building presents an "undue risk": [136]. That report is a mere industry guideline that is neither binding on industry participants nor required to be followed when applying the provisions of the BCA. The CSIRO report was not tendered as an expert report and its author was not called to give evidence. It should not have been relied upon to interpret the words "undue risk". In addition, the CSIRO report does not state that "any risk" of fire spread between the levels of a building constitutes "undue risk". Rather, it states, at page 9, that the "precise definition of 'undue risk' will vary case by case and that the CSIRO considers that a large-scale fire test provides the clearest and most reliable basis for assessment of risk of fire spread". The Respondent conducted no such tests.
The Tribunal should have undertaken an exercise of statutory interpretation to arrive at the meaning of the words "undue risk". This approach to interpreting the BCA was adopted by the Tribunal in the decision of the Victorian Civil & Administrative Tribunal (VCAT) in the decision referred to as the Lacrosse decision at [34]: see Owners Corporation v LU Simon Builders Pty Ltd [2019] VCAT 286.
The Tribunal disregarded that cl 2.4 specifically permits the use of combustible materials as attachments to a building and instead concluded that Biowood is "indisputably combustible and any risk that it will support fire spread between levels of the building presents an undue risk": [136]. The Tribunal disregarded that cl 2.4 is a deemed-to-satisfy provision of the BCA which, if satisfied, permits the use of combustible attachments to an external wall. Further, the Tribunal disregarded that the BCA treats attachments to external walls very differently to external walls, specifically permitting combustible materials to be used as attachments, in contrast to external walls which are required to be non-combustible. The Tribunal disregarded the definition of "non-combustibility" in the BCA which is defined in Part A1 of the BCA by reference to the performance of a material when subjected to the test set out in AS1530.1 and does not mean "zero" or "no" fire risk.
The Tribunal arrived at the meaning of "undue risk" without considering the purpose cl 2.4, in light of Performance Requirement CP2 of the BCA, is intended to achieve. Performance Requirement CP2 requires that a building must have elements which will, to the degree necessary, avoid the spread of fire where the avoidance of the spread of fire "must be appropriate" to each of the 11 elements set out in CP2(b) of the BCA.
The Tribunal disregarded the words "does not otherwise constitute an undue risk" in cl 2.4(a)(iii) which makes it clear that the "undue risk" of fire spread must be over and above any risk posed by the permissible use of combustible materials as attachments that satisfy cl 2.4(a)(i) meaning that, prima facie, a material that is either exempt under C1.10 or complies with the fire hazard properties prescribed in Specification C1.10 is permitted to be used as a combustible attachment to an external wall, provided it "does not otherwise constitute an undue risk".
The Tribunal interpreted the words "undue risk" in isolation from the other limbs of cl 2.4 and without regard to how those matters in subclause 2.4(a)(i) and (ii) impact the measure of risk in subclause 2.4(a)(iii).
The Tribunal did not interpret the meaning of the words "does not otherwise constitute" at the beginning of cl 2.4(a)(iii) and how those words relate to the requirements of cl 2.4(a)(i) and (ii) which permit the use of Group 3 materials, materials that do not significantly increase the hazards of fire, and combustible materials that that are located on the external walls of a building provided that they are not located near or directly above a required exit so as to make that exit unusable in a fire.
The Tribunal treated the words "undue risk" as though they were a separate element of cl 2.4(a) rather than one of the three limbs to be satisfied cumulatively.
The Tribunal did not consider a number of matters which may have informed the meaning of "undue risk". The submissions identify a number of phrases set out in Specification C1.10 which were not considered by the Tribunal and submit that by not undertaking a statutory interpretation of the words "undue risk" and instead accepting the expert evidence of Mr Halstead that Biowood is a combustible material and represents an undue fire risk, the Tribunal assigned no meaning to the word "undue" leaving that word having no work to do. This cannot be correct in the context of Specification C1.1, cl 2.4(a) as a whole, which contemplates that combustible materials (including Group 3 materials) are permitted to be used as attachments.
Had the Tribunal undertaken a "statutory interpretive" approach to arrive at the meaning of the words "undue risk" the Tribunal ought to have arrived at a measure of "undue risk" that had regard to the text, context and purpose of Specification C1.1, cl 2.4 of the BCA which: 1. contemplates that a combustible material may be used as an attachment and therefore it cannot follow that any risk is an undue risk; 2. contemplates that the use of a combustible material as an attachment results in some degree of fire spread, and not zero fire spread, or any fire spread; 3. refers to the fire hazard properties of materials that are acceptable for use prescribed in Specification C1.10 such as "other materials" in Table 4 of Specification C1.10 which are permitted have a Spread of Flame Index of 9 (and not zero) which contemplates that for certain buildings the use of materials with a degree of flame spread is permissible and acceptable; 4. contemplates that a combustible material can be used on a building provided it is not located near or directly above a required exit and makes that exit unusable in a fire; 5. does not require the combustible material to have "no risk" or "zero risk" of fire spread; 6. does not prohibit the use of combustible materials or require that the use of attachments achieve "non-combustibility" as that term is defined in Part A1 of the BCA; 7. does not require the use of non-combustible materials as that term is defined in Part A1 of the BCA; 8. is a deemed to satisfy provision of the BCA which is intended to achieve Performance Requirement CP2, which does not aim to ensure that a building has elements that provide no (or zero) risk of fire spread, but rather that a building has elements, which will, to the degree necessary, avoid the spread of fire appropriately having regard to each of the factors listed in CP2 at paragraph 10(e).

Errors on Findings of Fact concerning C1.10, Specification C.1.1, cl 2.4(a)(i) and Specification C1.10 cll 2, 4 and 7 of the BCA

The findings in the Decision at [135] and [136] contain the following errors: 1. The Tribunal confused the requirements of C1.10 and the requirements of Specification C1.10 of the BCA which are two different alternative requirements for the purposes of Specification C1.1, cl 2.4(a)(i). The Tribunal ignored C1.10(c) which sets out the "exempted" materials for the purpose of Specification C1.1 cl 2.4(a)(i). In doing so the Tribunal did not consider whether Biowood "significantly increases the hazards of fire" such that it is an "exempted" material under C1.10(c)(xiv). The Tribunal, absent any evidence as to whether Biowood significantly increases the hazards of fire, found that Biowood is not an "exempted" material under C1.10 at [133]. This finding was not open to the Tribunal on the evidence. The Tribunal did not consider whether Biowood is an attachment to a wall for the purposes of Specification C1.10 cl 4(c) yet the Tribunal concluded that it is a Group 3 material that complies with the fire hazard properties prescribed by C1.10. In doing so, it must follow that the Tribunal considered that Specification C1.10 cl 4(c) applies and not Specification C1.10 cl 7 which expressly permits the use of a Group 3 material as an attachment to a wall of both sprinklered and unsprinklered Class 2 to 9 buildings (see Table 3 of cl 4 of Specification C1.10).

Failure to Statutorily Interpret the Meaning of "undue risk" - Spandrels

At [145], the Tribunal states that Biowood attached to a spandrel must comply with Specification C1.1 cl 2.4. The Second Appellant submitted that the Tribunal applied the wrong test as Specification C1.1 cl 2.4(a)(i), (ii) and (iii) are cumulative and not alternatives and that for the reasons previously stated the Tribunal had erred in concluding that the use of Biowood as attachments to the spandrels did not comply with the BCA

Ground 4

The Second Appellant submitted that the onus of proof falls on the Respondent to show that the Biowood did not comply with Specification C1.1, cl 2.4, including that the use of Biowood poses an "undue risk". It does not require the Appellants to show that there was no undue risk or no risk. Having established that there was no evidence of how Biowood in fact performs in a fire, the Tribunal could not have been satisfied that the use of Biowood presented an undue risk. Absent evidence of a large-scale fire test and having dismissed, wrongly, the evidence of Spread of Flame Index by reference to AS1530.3 the Tribunal should not have been satisfied that the Respondents discharged their onus by reference to a generic test that classifies Biowood as a Group 3 material and which establishes prima facie that Biowood can be used as an attachment by virtue of Specification C1.10 cl 4(c). The reliance on the classification of Biowood as a Group 3 material was at best speculative, and not factual, evidence of how Biowood would perform in a fire. It ought not be given weight, particularly when an AS1530.3 test had been performed by CSIRO.

Ground 5

At [153] the Tribunal found that the Biowood attachment diminishes the fire resistance of the external walls. In reaching this finding, the Tribunal was not provided with any evidence as to whether the use of Biowood diminishes the fire resistance of an external wall, did not take into account that the external wall itself was non-combustible, relied only upon the Respondent's evidence that Biowood is a material that has the risk of permitting fire spread, and had no evidentiary basis to support the finding that Biowood diminishes the fire resistance of the external wall of the building.

Ground 7

The Tribunal found that Biowood presents an "undue risk" of fire spread via the Biowood extending up the façade which would allow fire spread into the building [139]. The Second Appellant submits that this finding of fact was not open to the senior member for a number of reasons. These are: 1. Having found that Biowood complies with the fire hazard properties prescribed by C1.10 and is a Group 3 material, the starting point was that the Biowood was permitted to be used by Specification C1.10 cl 4(c) of the BCA unless "otherwise" found to be an undue risk. The Tribunal relied upon the Biowood being a Group 3 material to conclude that it posed an undue risk. This was not enough to establish that the Biowood posed an undue risk. 2. The Tribunal acknowledged that Mr Halstead conceded that the heat emitted from burning Biowood is insufficient to ignite surrounding Biowood. There was no evidentiary basis to support the Tribunal's finding that there was a risk of fire spread, extending up the façade of the building. 3. Having dismissed the evidence based on testing under AS1530.3 there was no factual evidence before the Tribunal of how Biowood performed in a fire. The Tribunal acknowledged the absence of a large-scale fire test and the importance of that evidence, having regard to the CSIRO report: [136]. 4. The Tribunal was satisfied that Mr Halstead exercising his expert judgment was satisfied that there is an undue risk of fire spread via the Biowood extending up the façade. The Tribunal should not have given weight to that evidence. Mr Halstead formed his opinion by undertaking a visual inspection of the building only and without undertaking any testing of Biowood. Mr Halstead sought to bolster his opinion by reference to generic statements about Group 3 materials in the CSIRO report which does not make any specific comment about the Biowood material. Mr Halstead accepted that Biowood has a Spread of Flame Index of zero under an AS1530.3 test. Mr Halstead gave evidence that the "ability of flame spread in Biowood is unknown because it has not been tested". Mr Halstead gave evidence that the classification of Biowood being a Group 3 material was an "internal lining rating" and therefore no better indicator of flame spread than the internal AS1530.3 test that he criticised. Mr Halstead was aware the Biowood had not been subjected to a large-scale fire test. He acknowledged that based on the rate of flame spread evidence, Biowood has a slow rate of fire spread, and not a fast or high rate which would undoubtedly impact the risk of fire spread. Mr Halstead concluded that the cladding may cause undue fire spread via the façade, which was a speculative assessment and not a factual assessment. Mr Halstead accepted that Biowood at ground level did not need to be removed and accepted that Biowood shutters on the south west face of the façade do not present an undue risk of fire spread. He accepted that the BCA did in fact permit the use of combustible materials such as plasterboard where non-combustible materials were required to be used. 5. In accepting that there was slow spread of fire, no self-ignition of the Biowood, no large-scale fire testing, the acceptable use of Biowood on the ground level of the building and an unknown measure of fire spread, the Tribunal should not have found that, if ignited, the Biowood would allow fire spread via the façade and that there was an undue risk of fire spread. 6. The Second Appellant submitted that the measure of the Spread of Flame Index for the purposes of C1.12(f)(iv) is akin to the measure of the Spread of Flame Index for the purposes of Specification C1.10 cl 7. In applying the Lacrosse decision the Tribunal ought to have accepted the evidence that Biowood has a Spread of Flame Index of zero as recorded in the CSIRO certificate based on an AS1530.3 test. The findings in the Lacrosse decision should outweigh the opinion expressed in the CSIRO report. 7. Underpinning the Tribunal's findings of fact is the finding that the Spread of Flame Index of 0 recorded in the CSIRO test was predicated on an AS1530.3 test which the Tribunal found was not relevant based on findings in the Lacrosse decision. This finding of fact is not supported by the Lacrosse decision. No AS1530.3 test had been conducted on the product the subject of that decision. The Tribunal in Lacrosse accepted that an AS1530.3 test will satisfy the requirement of C1.12(f)(iv) of the BCA being that a material has a Spread of Flame Index of 0 (see Lacrosse at [344]). In applying Lacrosse, the Tribunal should have accepted the evidence that Biowood has a Spread of Flame Index of 0.

Grounds 8-12

With respect to the finding that the use of Biowood as an attachment to the façade is not fit for purpose (because it diminishes fire resistance of the external wall), the Tribunal (at [156]) was informed by the "common sense test" referred to in Lacrosse which required the Tribunal to consider the purpose and type of building, namely that this was a multi-story residential building Type A construction. The Tribunal concluded that the common sense test dictates that it is "illogical to stipulate that the external walls must not be combustible, and then allow them to be covered in combustible attachments" [156]. The Tribunal erred in that, in applying the common sense test, the Tribunal ignored that in Lacrosse the combustible material was part of the external wall and was not an attachment, as it is here. The Tribunal also erred in applying the wrong meaning to the word "non-combustible" used in Specification C1.1 cl 3.1(b) by suggesting that those words mean that the external walls of a Type A construction must not be combustible - that is, it must have zero fire risk. The Tribunal ignored the definition of "non-combustible" in part A1 of the BCA that effectively provides that a material is non-combustible if the material passed the test in AS1530.1. That definition does not make reference to a zero fire risk.
The Tribunal erred in not drawing on the correct provisions of the BCA as referred to above in that the Senior Member did not consider CP2 of the BCA being the Performance Requirement that must be met and which requires avoidance, not elimination, of any risk of fire spread. CP2 refers to avoidance having regard to 11 factors described in CP2(b). The BCA permits performance solutions to be used to achieve compliance. Having regard to these provisions and those referred to in the paragraph above, it is illogical to conclude that non-combustible external walls cannot have combustible attachments or that because combustible attachments have been used the fire resistance of the external wall has been diminished. If the Tribunal erred in its finding as to undue risk of fire spread it follows that the Tribunal erred in finding that the Biowood is not fit for purpose.
The Tribunal also erred in finding that Biowood poses a "real" risk of fire spread [136]. That finding was not open.
The finding that there is a diminution of fire resistance was not open as it was not alleged by the Respondent that Biowood is unfit for purpose because it diminishes fire resistance of the external walls and also because the finding was unsupported by evidence that the fire resistance of the external walls diminished.
At [158], the Tribunal found that the contract was a standard design and construct contract. There was no evidence of what the balance of the contract was and therefore the finding was made in the absence of evidence. The breach of s 18B(1)(f) could not be made out.

Reply Submissions of First Appellant

The First Appellant filed reply submissions on 19 and 28 February 2020. The following is a summary of those submissions: 1. The First Appellant disputes the relevance of the judgment in Ku‑ring‑gai v Chan (relied upon by the Respondent) on the basis that in that case, there was no challenge to the validity or effect of the occupation certificate. 2. The First Appellant also disputes the relevance of the Court of Appeal decision in Burwood Council v Ralan Burwood Pty Ltd (No 3). That case concerned whether a construction certificate issued in breach of s 109F(1)(a) of the Environmental Planning Act (the EP Act) would be invalid. The question before the Tribunal in the present case is the effect of a validly issued IOC. A collateral challenge to the validity of the IOC is not permitted in the Tribunal. In effect, that creates an irrebuttable presumption of fact that the BCA was complied with. 3. The First Appellant contested the Respondent's submission that the IOC is no more than an administrative opinion which cannot bind the Tribunal. Relying upon the judgment in Ousley v The Queen (1997) 192 CLR 69 at [87], the First Appellant submitted that even if the IOC was an administrative act, it is not open to be challenged on the sufficiency of the material supporting the application for its issue. Here the question is whether the Respondent can claim that the building is not in compliance with the BCA in circumstances where a valid IOC is in existence. 4. In respect of Ground 3, the First Appellant submitted that the Respondent had misinterpreted the Tribunal's interpretation of the word "undue" in cl 2.4(a)(iii) of the BCA. Paragraphs 135, 138 and 141 of the Decision should be read together. In essence, the Tribunal erred in deciding that any risk is an undue risk. 5. In respect of Ground 7, the First Appellant submitted that this ground is an appeal from a finding of fact and is not an appeal on a question of law. The Respondent's submission that Biowood might self-ignite is contrary to the evidence of Mr Halstead: see [136] of the Decision.

Consideration

Having summarised the submissions and findings recorded in the Decision, the grounds of appeal and the parties' submissions with respect to those grounds, we now turn to our determination of the appeal.
Appeals from decisions made in the Consumer & Commercial Division of the Tribunal are regulated by s 80(2)(a) and (b) of the Civil & Administrative Tribunal Act (the NCAT Act). This means that there is an appeal as of right on any question of law or with the leave of the Appeal Panel on other grounds. However, the leave grounds are modified by cl 12 of schedule 4 of the NCAT Act. That means that an Appeal Panel may grant leave under s 80(2)(b) only if the Appeal Panel is satisfied that the Appellant may have suffered a substantial miscarriage of justice because of one of the grounds set out in subparagraphs (a), (b) or (c) of cl 12.
The primary question in this appeal is whether the Biowood material used as an attachment to external walls was used in conformity with the requirements of the BCA.
We will deal with the grounds of appeal individually.

Grounds 1 and 2 - The IOC

These grounds concern the First Appellant's submissions that the issue of the IOC created an irrebuttable presumption that the building complied with the BCA. This submission relied upon the terms of the EP Act, particularly s 6.10 (formerly s 109H) and s 6.30 (formerly s 109P). In our view, s 6.30(and s 109P) is directed to the position of "a person who exercises functions under this Act" and provides that such a person is entitled to assume that the certificate has been duly issued and that all conditions precedent have been duly complied with. The Appellants placed reliance on the judgment of Sheahan J in Burwood Council v Ralan Burwood. That case went on appeal (Burwood Council v Ralan Burwood Pty Ltd (No 3)). The case concerned an application brought by the Council which sought to obtain a declaration that construction certificates were void and of no effect. The Council was unsuccessful. Sackville JA held that s 109P operates to limit the liability to third parties of a person who exercises functions under the EP Act such as a council certifier [196]. At [198] his Honour said that it was difficult to see why s 109P would be intended to limit the liability of persons who have the benefit of development consents. His Honour rejected Ralan's construction of s 109P that the subsection limits the liability of a developer to third parties for loss or damage arising from "any matter in respect of which the certificate has been issued" and said "Legislation having such a far reaching potential effect on the rights and duties of private individuals under the general law can be expected to use clearer and more specific language to achieve such a result."
The decision of the Court of Appeal in Ku-ring-gai Council v Chan is also relevant. That case concerned the issue by the Council of an occupation certificate. In doing so the Council failed to identify certain defects. The subsequent owners incurred costs in rectifying the defects and bought proceedings against the owner/ builder, an engineer and the Council. The court was concerned with the issue of whether the Council owed a duty of care to the subsequent purchaser. The court held, at [87], that such a person would have the benefit of the statutory warranties under the HB Act. At [88] the court held that the "occupation certificate does not in terms certify that the building work does not, or is not likely to, contain latent defects". Further the court said that the certificate is not directed to the "economic incidents of property ownership, as distinct from the occupation and use of buildings by those entitled to do so or their invitees. That subject matter is necessarily narrower than the subject matter of the statutory warranties."
In our view, based on the authorities referred to above, the issue of the IOC does not create an irrebuttable presumption that the warranties under the HB Act (including s 18B(1)(c), which warrants that the work was done in accordance with any other law and therefore cl 98 of the EP Act Regulation) have been complied with. The consequence in our view is that the IOC does not preclude a claim based upon the building not complying with the BCA. Such a claim does not constitute a challenge (direct or collateral) to the validity of the IOC. Grounds 1 and 2 are rejected.

Grounds 3 and 4

These grounds concern submissions that the Tribunal erred in applying an incorrect construction to cl 2.4(a)(iii) of Specification C1.1 of the BCA, and in holding that any risk of fire is an undue risk, and erred in reversing the onus of proof by requiring the Appellants to prove that there was no undue risk of fire.
In resolving these grounds of appeal it is necessary to construe the provisions of the BCA. In doing so, we adopt the approach of Lindsay J in The Owners - Strata Plan no 69312 v Rockdale City Council & Anor; Owners of SP 69312 v Allianz Aust Insurance [2012] NSWSC 1244 to the effect that the task of the court (which we take to include this Tribunal) is to construe the BCA as a formal document designed to provide standards for the promotion of public safety in the construction of buildings. The task is to construe the BCA according to law and not by reference to what may or may not be the opinion of an expert or an assumption about the practical operation of the BCA amongst experts.
Section C of the BCA is headed Fire Resistance. Clause C01 sets out the objectives of this section. They include to safeguard people from illness or injury due to a fire in a building, to safeguard occupants from illness or injury while evacuating a building during a fire and to avoid the spread of fire between buildings.
Under the heading "Functional Statements" there are a number of other requirements. Clause CF2 provides that a building is to be provided with safeguards to prevent fire spread. Under the heading "Performance Requirements" there are further provisions. Clause CP2 provides that a building must have elements which will, to the degree necessary, avoid the spread of fire to exits and in the building (to mention a portion of that clause). The clause provides that avoidance of the spread of fire must be appropriate to the matters mentioned. These include the function or use of the building and the number of storeys.
Clause C1.10(a) provides that the fire hazard properties (which are to be determined by reference to Specification A2.4) of linings materials and assemblies in a class 2 to 9 building (which includes the building the subject of these proceedings) must comply with Specification C1.10 but clause C1.10(c) specifies that these requirements do not apply in certain circumstances including in respect of "any other material that does not significantly increase the hazards of fire" (C1.10(c)(xiv)).
Specification C1.1 cl 3.1(b) requires a building of the kind the subject of this dispute to have external walls that are non-combustible. However, by cl 2.4 of Specification C1.1 a combustible material may be used as an attachment to a building element (such as an external wall) if that material has the required FRL (ie. fire resistance level) and if: 1. the material is exempted under C1.10 or complies with the fire hazard properties specified in Specification C1.10; and 2. … [not relevant to this matter]; and 3. it does not otherwise constitute an undue risk of fire spread via the façade of the building.
It is necessary to say something further about Specification C1.1, cl 2.4(a)(i). As stated above, C1.10(a) of the BCA provides that the fire hazard properties of the "following linings, materials and assemblies" must comply with Specification C1.10. However, C1.10(c)(xiv) provides that the requirements of (a) do not apply to a material or assembly if it is "any other material that does not significantly increase the hazards of fire". The Second Appellant was critical of the Decision on the basis that the Tribunal did not consider the effect of C1.10 (c)(xiv) which, as stated, excuses other materials that do not significantly increase the hazards of fire from compliance with C1.10 (the terms of which require compliance with Specification C1.10).
We do not consider that sub-clause C1.10(c)(xiv) has any relevance to the interpretation of Specification C1.1 or clause 2.4(c)(iii) in particular. Although, as we have noted above, the BCA is a formal document given the force of law, it is necessary to bear in mind the source of the BCA as a publication of the Australian Building Codes Board and its predecessors: Toomey V Scolaro's Concrete Constructions Pty Ltd (in liq) (No 2) [2000] VSC 279 at [139]; Shire Of East Pilbara v FMG Pilbara Pty Ltd [2009] WASC 110 at [17]; The Owners - Strata Plan no 69312 v Rockdale City Council at [41]. It should not be assumed that it has been drafted by lawyers, let alone specialised legislative drafters. As Simpson J held in relation to the Food Standards Code in NSW Food Authority v Nutricia Australia Pty Ltd (2008) NSWLR 148 at [71] - [74]: 71 In construing the Code, it seems to me to be appropriate to bear in mind that, while it has legal force, it is a document drafted, apparently, by non-lawyers. That being so, it may be appropriate to take a more liberal, or more purposive, approach to its construction. … 74 I have come to the view that the more liberal approach to construction which I have mentioned above ought to be adopted. In particular, considerable weight ought to be given to what can be discerned to be the intention of those who compiled the Code, and the purpose for which it, and its individual provisions, were formulated.
In our view, the BCA is not to be construed as if it were a statute. In Owners Corporation v LU Simon Builders Pty Ltd at [35] the Victorian Civil and Administrative Tribunal adopted a submission made on behalf of the building surveyor that: The Tribunal is tasked with construing various provisions of the BCA and it must do so as an exercise of statutory interpretation. The task is complicated because the instrument which is to be interpreted and given the force of regulations, is not drafted in the form of legislation or regulations, or by those experienced in the act of legislative drafting. … However, the task of interpreting the provisions of the BCA is a matter for the Tribunal and not predicated upon the opinion of experts. The text, context and purpose of the provision to be interpreted ought to be taken into account in the ordinary [way], whilst recognising that what is to be interpreted is a technical document not drafted in the same way as Acts of Parliament and is to be applied by those in the construction industry on a daily basis, and not ordinarily by lawyers. … in undertaking that task, the Tribunal will be aided by reference to dictionaries and technical dictionaries.
It is not necessary, as would be the case with a statute, to reconcile the operation of different parts of the Code to ensure that each part has a field of operation. The tests set out in C1.10(c)(xiv) and clause 2.4(a)(iii) of Specification C1.1 are in different terms and have different emphases. There is no reason to restrict the meaning of either by reference to the existence of the other. In our view C1.10 is concerned with the fire hazard properties of materials whereas clause 2.4 (a)(iii) is concerned with whether a combustible material does or does not otherwise constitute an undue risk of fire spread via the façade of the building. That concern involves a consideration beyond the properties of the material and may include a consideration of the extent of the material and its relationship to other parts of the building such as windows and balconies. This approach is consistent with the considerations to which Mr Halstead had regard. We refer to his reasoning in the paragraphs below.
Turning to the findings of the Tribunal under appeal concerning the requirement contained in Specification C1.1, cl 2.4(a)(iii) that the Biowood does not "otherwise constitute an undue risk of fire spread via the façade", the relevant findings of the Tribunal are as follows: 1. In Mr Halstead's opinion, the Biowood will support fire spread between floor levels along the façade. The test recorded in AS1530.30 is not relevant because that test is concerned with fires occurring inside a building [135]. 2. Although burning Biowood will not ignite adjacent Biowood there remains a risk of burning Biowood supporting fire spread [136]. 3. A slow rate of fire spread does not preclude a finding that there is undue risk [136]. 4. Any risk that Biowood would support fire spread between levels of the building presents an undue risk [136].
The Appellants submitted that there was an insufficient basis to accept the evidence of Mr Halstead because he had failed to expose sufficiently the process of reasoning from which his opinions had been formed. We are of the view that that submission should be rejected because, in our view, the report of Mr Halstead contained sufficient exposure of his reasons to justify the Tribunal in accepting his opinions. In particular, we note from Mr Halstead's report (commencing at page 252 of the appeal book) that: 1. his opinions relate to the subject building which is a multi-storey residential development with basement [1.2]; 2. cladding in the form of Biowood has been installed to numerous areas of the façade. Biowood is a combustible cladding material and has fire properties that allow ignition and spread of flame [4.1]. The Spread of Flame Index is 0 [4.1]; 3. the Biowood extends up the façade in numerous locations, as shown in a table attached to the report. It extends over three storeys in many cases [4.3].
Mr Halstead's conclusion was that fire spread via the external walls where the Biowood is located could enter the building from the façade by windows and balconies from level to level. As the Biowood extends up the façade and joins each level it may (if ignited) allow fire spread into the building [4.3].
The opinion of Mr Halstead was in our view based upon the combustible nature of the Biowood, its location as cladding to external walls, its extent over a number of storeys and the possibility of the Biowood, if ignited, allowing fire spread into the building via windows and balconies.
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 cl 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 cl 2.4). To elaborate, it is our view that cl 2.4(i) and (iii) are to be construed such that if an attachment constitutes an undue risk of fire spread via the façade then it may not be used even if the attachment is exempted under C1.10 or complies with the fire hazard properties described in Specification C1.10. An attachment may have Spread of Flame Index of 0 under the test determined by AS/NZS 1530.3 but may still constitute an undue risk of flame spread. For the reasons given by Mr Halstead (namely that the test described in the AS/NZS 1530.3 is a test in respect of fires inside a building and not relevant to external cladding) it is not surprising and indeed logical that the BCA has required an assessment to be made of undue risk of fire spread even if the material in question complies with cl 2.4(a)(i).
In our view the findings of the Tribunal contained in paragraphs 135 and 136 were open and display neither an error of law nor a ground for the grant of leave to appeal.
The First Appellant's submission that the Tribunal found that there was a need to establish an elimination of risk is misconceived. At [138] the Tribunal rejected Mr Jordaan's method of assessing risk in favour of Mr Halstead's evidence that Biowood carries a risk of fire spread. The misconceived submission is that the Tribunal thought it necessary to establish that there was no risk (ie. an elimination of risk) in the use of Biowood. In our view, the Tribunal did not find that there was no evidence of elimination of risk. Rather, the Tribunal found that Mr Jordaan's evidence did not establish the elimination of undue risk. This finding was in addition to the finding that Mr Halstead's evidence supported the finding that there was undue risk of fire spread.
We are of the view that the Tribunal did not rely upon the interpretation of Mr Halstead as to the meaning of undue risk. Rather the Tribunal relied upon Mr Halstead's view as to the matters described above and the rate of fire spread applying to Biowood and his opinion that that fire spread would allow fire spread into the building [139]. That opinion was held notwithstanding his view that burning Biowood will not give off sufficient heat to ignite adjacent Biowood [136]. These findings do not in our view fall within the description of findings based merely upon an expert's opinion, the basis of which is not explained. In our view, the Tribunal has not accepted the ipse dixit of Mr Halstead. Rather the basis for his reasons was explained.
It is necessary to add that we were informed by counsel for the Respondent that the Spread of Flame Index of zero does not indicate that the material does not spread flame. Zero is a relative term to indicate a slower rate of fire spread. That submission was not objected to by counsel for the Appellants. We also note that the CSIRO guide referred to in the Decision specifically states that "a Spread of Flame index of zero (0) does not indicate that the material will not spread flame in all situations. A Group 3 material can achieve a Spread of Flame Index of zero (0) in the AS/NZS1530.3 and is highly likely to have flame spread the full extent of a vertical element, once ignited" (page 38 Appeal Book).
The Second Appellant submitted that the Tribunal failed to consider the Performance Requirement CP2 of the BCA which requires that a building must have "elements, which will, to the degree necessary avoid the spread of fire" and that avoidance of the spread of fire must be appropriate to one or more of 11 matters in subparagraphs (b)(i) to (xi). These include the functional use of the building and the number of storeys. We were not taken to any evidence of such matters which if accepted and taken into account could have thrown into doubt the findings of the Tribunal concerning undue risk. Accordingly, this submission does not persuade us to doubt the correctness of the Decision.
Earlier we referred to the Second Appellant's submissions that the Tribunal erred in relation to the findings at [135] and [136]. In particular, the Second Appellant submits that the Tribunal ignored C1.10(c) which, the Second Appellant submits, sets out the "exempted" materials for the purpose of Specification C1.1 cl 2.4(a)(i) and in particular that there is an exemption for "any other material that does not significantly increase the hazards of fire" (see (xiv)). The Respondent objected to this submission on the basis that it was not incorporated as a ground of appeal. We are of the view that the submission does not assist the Second Appellant given that in our opinion the Decision was not in error in applying Specification C1.1, cl 2.4(a)(iii), ie that Biowood in the circumstances of this building did otherwise constitute an undue risk of fire spread via the façade and that the provisions of cl 2.4(a) are cumulative. As we have observed above, the meaning of cl 2.4(a)(iii) is not to be restricted by reference to the provisions of clause C1.1(c)(xiv).
We also reject the Second Appellant's submission that the Tribunal in effect required the Appellants to show the Biowood did not present an undue risk and thereby reversed the onus of proof. We agree with the Respondent's submissions that the Tribunal found that there was an undue risk of fire spread based on the evidence of Mr Halstead. Those findings were not based on a failure by the Appellants to show an absence of undue risk.
The Second Appellant submitted that the Tribunal did not give due weight to the opinion of Mr Jordaan. The Tribunal found at [136] that Mr Jordaan's conclusions in respect of the matters that may be relevant to a finding that Biowood may constitute an undue risk were based on "assumptions" that Biowood "will not support self-sustained fire spread. Those assumptions are made in the absence of any test data." The Tribunal's reasoning was that the absence of test data concerning Biowood (other than as a result of the test referred to in AS/NZ 1530.3) did not preclude a finding that there was an undue risk. We agree with that logic. The Tribunal relied on Mr Halstead's evidence for its findings of undue risk and we see no error in that approach or in the Tribunal's findings.

Ground 5

This ground concerns the submission that the Tribunal found that Biowood diminished the fire resistance of the external walls. We agree with the Respondent's submission that what the Tribunal found at [153] was that "Biowood used as an attachment to a non-combustible external wall presents an undue risk of fire spread and as such diminishes the fire resistance of the external walls because the Biowood has the risk of permitting fire spread via the façade". When this paragraph is taken as a whole it is clear that the Tribunal did not find, as the Appellants contend, that the attachment of Biowood diminishes the fire resistance of the external wall (considered separately from the attached Biowood).

Ground 7

This ground concerns the submission that the finding of undue risk of fire spread was not open on the evidence. The First Appellant submits that there was insufficient evidence on which to base the finding that there was an undue risk of flame spread. The Tribunal accepted that Biowood does not self-ignite. The Second Appellant submitted that Mr Halstead conceded that the heat emitted from burning Biowood is insufficient to ignite surrounding Biowood. There was no factual evidence of how Biowood performed in a fire.
In our view, the Respondent is correct in stating that this ground does not involve an error of law and is properly categorised as an alleged error of fact, arguably a finding against the weight of evidence. In our view, there was evidence sufficient to make it fairly open to the Tribunal to find that there was an undue risk of fire spread. That evidence was that Biowood is a combustible material. It has a rate of fire spread (albeit a slow rate relative to higher rates). Further, we read Mr Halstead's concession recorded at [136] of the Decision that Biowood will not be sufficient to ignite Biowood of itself to mean adjacent Biowood could ignite through the original source of the fire. Mr Halstead's report stated that the Biowood extends up the façade in numerous locations and in many cases extends over three storeys. He said that fire spread via the external walls where the Biowood is located could enter the building from the façade via the windows and balconies.
For the same reasons as given for Grounds 3 and 4 this ground is rejected.

Grounds 8 to 12

These grounds concern the findings of breach of the statutory warranties contained in s 18B of the HB Act. The relevant warranties are set out earlier in this decision and in summary are the following: 1. Section 18B(1)(b) - all materials will be good and suitable for the purpose for which they are used; 2. Section 18B(1)(c) - a warranty that the work will be done in accordance with this and any other law; 3. Section 18B(1)(f) - a warranty that the work and any materials will be reasonably fit for the specified purpose or result if the person for whom the work is done reasonably makes it known to the holder of the contractor licence the particular purpose for which the work is required.
It follows, from the opinion we have already expressed that the Tribunal was correct in finding that the Biowood did not comply with the provisions of the BCA, that there has been a breach of the warranty contained in s 18(i)(c). In particular, the finding at [159] of the Decision is in our view correct.
We are also of the view that the finding of the Tribunal recorded in [155] of the Decision that there was a breach of s 18B(i)(b) is correct. The purpose behind the provisions of the BCA is, as stated earlier, to safeguard people from illness or injury due to a fire and also to safeguard occupants while evacuating and to facilitate the activities of emergency services as well as to avoid the spread of fire between buildings (see section C, cl C01 of the BCA). Material installed in a multi-storey residential building which, for the reasons already indicated, does not comply with the BCA is, in the circumstances of this matter, material that is not suitable for the purposes for which it is used because its installation does not achieve the objectives set out in cl C01.
With respect to the finding of the Tribunal that there was a breach of s 18B(1)(f), the Tribunal's finding was based upon the findings at [158] of the Decision to the effect that the first page of the contract (being the only part of the contract in evidence) disclosed that the contract was the standard AS 4902-2000 form of contract entitled Australian Standard General Conditions for Design and Construct. In our view it was reasonable for the Tribunal to infer, as it did, that the contract was a standard design and construct contract and to conclude from that proposition that it was made known to the Appellants that the purpose for the use of the Biowood was as a cladding for a residential building. The fact that the balance of the contract was not in evidence does not in our view detract from the fact that the Tribunal was entitled to make the inference which it did. Furthermore, there was no evidence drawn to our attention from the Appellants which might have explained why the Appellants could not have known of the purpose for which the Biowood was intended to be used.
The Appellants were the builder and developer of a multi-storey residential tower. There is an air of unreality to a submission that the builder, entering into a contract identified by its front page as a design and construct contract, was not thereby informed of the purpose for which all of the building work which it contracted to carry out was intended, that is a multi-storey residential tower, or did not know the purpose for which material which it installed on the façade of that tower was intended.
Grounds 8 to 12 are rejected.

Orders and Costs

In the circumstances, we propose to make orders dismissing the appeal and affirming the orders made by the Tribunal. We note that order 1 which requires the Appellants to remove the Biowood does not contain a time limit for that to occur. Should the parties fall into dispute as to a reasonable time by which order 1 must be complied with we propose that that dispute be remitted to the Consumer & Commercial Division for the purposes only of imposing a date by which the Appellants must comply with order 1 The stay granted on 20 December 2019 is lifted. That would appear to be appropriate notwithstanding that the parties may fall into disagreement as to the date for compliance.
The Respondent may be entitled to costs of the appeal and we intend to make directions for the parties to make written submissions concerning costs.
The Appeal Panel's orders are as follows: 1. Appeal dismissed; 2. The orders made by the Tribunal at first instance are affirmed; 3. If the parties fall into dispute as to the date by which order 1 made at first instance must be complied with they are at liberty to relist the matter not less than three months from the date of this order before the Consumer & Commercial Division of the Tribunal for the purposes only of enabling the Tribunal to determine and make an appropriate order as to the date by which the Appellants must comply with order 1; 4. The stay of orders 1 and 2 granted on 20 December 2019 is lifted. 5. If the Respondent seeks costs of the appeal the Respondent must file and serve written submissions in support of such order within 14 days; 6. The Appellants must file and serve written submissions in opposition to the Respondent's submissions on costs within 14 days thereafter; 7. The submissions on costs should address whether the Appeal Panel may decide costs on the papers and dispense with a hearing on costs.

Endnotes

The Tribunal referred to AS 3387 but it is AS 3837 that is referred to in the BCA.
As in force at the time of certification in 2016. Since 1 March 2018 the relevant provisions have been contained in Part 6. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 04 August 2020 - Date of decision corrected. 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: 04 August 2020

Administrative Tribunal Act 2013(NSW)

Assessment Act 1979(NSW)

Taylor Construction Group Pty Ltd v The Owners - Strata Plan No 92888

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