Non-compliant cladding extends to ‘Biowood’ composite cladding used as an external attachment

The Owners Strata Plan No 92888 v Taylor Constructions Group Pty Ltd and Frasers Putney Pty Ltd [2019] NSWCAT [15 November 2019, Senior Member Boyce] (Taylor Constructions)

The first decision in NSW involving combustible cladding has been handed down by the NSW Civil and Administrative Tribunal.

Whilst most of the attention in recent times has been on aluminium composite panels, in an important development, Taylor Constructions did not involve the use of aluminium composite panels.  Rather, it involved the use of a proprietary architectural product called ‘Biowood’.  Biowood is a wood-plastic composite product comprising (predominantly) 70% reconstituted timber and 23% polyvinyl chloride and is marketed for use as a material for decking, wall panelling, privacy screening, and façade and cladding applications.

Background

The dispute concerned a multi-storey residential building in Ryde, NSW.  Whilst the façade of the building was predominantly brick, Biowood was used in various locations as a feature attachment to the façade.

The 2014 version of the Building Code of Australia (BCA) applied to the development.

The owner of the common property brought proceedings against the builder (and the developer) alleging breaches of the statutory warranties contained in section 18B(1) of the Home Building Act 1989 (NSW) (HBA).  In particular, the owner alleged that the use of Biowood cladding as an attachment to the external façade did not comply with ‘any other law’ (specifically, the BCA) (section 18B(1)(c)), was not suitable for purpose (section 18B(1)(b)), and was not reasonably fit for a specified purpose (section 18B(1)(f)).

Outcome

The Tribunal found that the use of Biowood as an attachment to the external façade of the building did not comply with the combustibility requirements of the BCA and that each of the above (3) statutory warranties had been breached.

In particular, the Tribunal found that irrespective of whether Biowood complied with the fire hazard properties prescribed in C1.10 of the BCA (being one prerequisite to permitting the use of a combustible material as an attachment to an external wall), the use of Biowood nevertheless constituted an ‘undue risk of fire spread via the façade of the building’.^[1]  The Tribunal did so on the basis that ‘any risk of fire spread is sufficient to satisfy the measure of undue risk’.^[2]  In coming to this finding the Tribunal embraced and adopted the views expressed in the CSIRO publication ‘Fire Safety Guidelines for External Walls 2016’ (CSIRO guideline) relied upon by the owner.

The Tribunal ordered that the breaches be rectified by removing the Biowood and replacing it with ‘attachments to the external walls that comply with the codes, standards and statutory warranties’.^[3]

The case highlights that, in circumstances where relevant versions of the BCA apply, the use of a combustible material as an attachment to the façade of a building must not constitute an undue risk of fire spread via the façade of the building notwithstanding the (combustible) material might otherwise satisfy BCA prerequisites to its use.

Discussion

1. The application of the BCA combustibility requirements to Biowood

It was common ground between the parties’ experts that Biowood is a combustible material and that the BCA is the test applicable to all cladding. The focus was on whether the exclusions found in the BCA permitted its use.

The BCA requires buildings of the relevant type to have external walls that are non-combustible.  However, specification C1.1 clause 2.4 of the BCA (C1.1 – cl 2.4) also provides that a combustible material may be used as an attachment to an external wall if certain conditions are met.  These include if the material is (a) expressly exempted under C1.10^[4], or (b) complies with the fire hazard properties prescribed in C1.10 (fire hazard properties)^[5], and, in either case, (c) does not otherwise constitute an undue risk of fire spread via the façade of the building (undue fire spread risk requirement).^[6]  It is to be noted that the undue fire spread risk requirement is cumulative.

The first part of the debate focused on a technical analysis of the trail through the BCA’s provisions, in particular, the appropriate test for complying with the fire hazard properties exemption and the reference to (and applicability to this matter of) the tests set out in AS1530.3.  The builder placed reliance on the test set out in AS 1530.3 which requires ‘other material’ to 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).  There was evidence that Biowood satisfied this test.

On the other hand, the owner’s position was that AS 1530.3, whilst it might apply to internal fires within a room, was inapplicable to external cladding on the façade of a building.  The owner placed reliance on the views and opinions set out in the CSIRO guideline.  The CSIRO guideline states:

(a)        C1.1 – cl 2.4 does not explicitly state which fire hazard properties requirements prescribed in Specification C1.10 are to be applied;^[7]

(b)        based on the wording in Specification C1.10 clause 4(c), the relevant requirement for attachments to an external wall is that the material must be minimum Group 1, 2 or 3 based on AS ISO 9705 or AS 3837;^[8] and

(c)        related to (b) above, Specification C1.10 clause 7, which specifies AS 1530.3 test requirements for ‘other materials’, is not relevant to attachments used as an external wall finish, lining or cladding.^[9]

In particular, in relation to the testing procedures under AS 1530.3 (described as a ‘corner burn test’) the owner submitted that the test was inappropriate because it was designed for fires within a room and says nothing about how fires behave and spread externally on the façade of a building.  In that circumstance, a full scale façade test is required.

The owner further submitted that the authors of the CSIRO report ‘were correct because a test designed for fires within a room and external fires may behave differently and consequently there is no reason to disregard the view expressed by the authors of the CSIRO report’.^[10]

The Tribunal preferred the owner’s submissions.  The Tribunal held that the CSIRO guideline is highly persuasive with its findings that the AS 1530.3 test for ‘other materials’ is not relevant to attachments to buildings used as external wall finishes, lining or cladding.  In arriving at this conclusion the Tribunal was heavily influenced by the VCAT judgment in the Lacrosse matter, where a similar argument failed:

‘In the Lacrosse fire case the Alucopanel was found by VCAT to have satisfied AS/NZS 1530.3 test with a spread of flame index of 0, but proved to be dangerously inflammable when subject to a full scale façade test.  A spread of flame index of 0 identifies the relative speed of flame spread rather than the actual flame speed. … Predicating a spread of flame index of 0 in the AS/NZS 1503.3 test does not necessarily exempt Biowood under C1.10’. ^[11]

2. Was the use of Biowood in breach of the undue fire spread risk requirement?

The owner’s primary contention was that, irrespective of whether or not Biowood was compliant with the fire hazard properties, its use constituted ‘an undue risk of fire spread via the façade of the building’ in breach of C1.1 cl 2.4(a)(iii) of the BCA.  Again, in accepting this submission, the Tribunal was heavily influenced by the CSIRO guideline.

The CSIRO guideline states that the determination of an undue risk of fire spread ‘usually requires the expert judgment of a suitably qualified and experienced person such as a fire safety engineer and dependent on the nature of the building design and materials may require evidence from large scale fire testing.’^[12]

The CSIRO guideline also states that the ‘precise definition of ‘undue risk’ will vary case by case’ and ‘the attachment location and contribution to fire spread on the façade must be considered.’  A full scale façade test ‘provides the clearest and most reliable basis for assessment of risk of fire spread’ and that any such test ‘must suitably represent the specific façade design and materials’.^[13]

The CSIRO guideline also emphasises the CSIRO’s view that ‘compliance with the fire hazard property requirements does not automatically limit the risk of fire spread’.^[14]  This proposition was, in a nutshell, the owner’s case.

The Tribunal accepted that risk of fire spread is a function of (a) combustibility of material, (b) rate of flame spread and (c) other safety measures.  Biowood is undoubtedly a combustible material – which left a consideration of the remaining two risk factors, that is, (b) and (c).  In turn, this involved a consideration of the ‘spread of flame index’.  Whilst this was risk was low it was nevertheless sufficient for the Tribunal to find that the use of Biowood did constitute an undue fire risk:

‘A slow rate of fire spread does not preclude a finding that there is undue risk.  The Tribunal accepts 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 … Any risk of fire spread is sufficient to satisfy the measure of undue risk.’^[15]

In reaching this conclusion the Tribunal rejected the builder’s submission that the appropriate approach/test to assessing what might constitute undue risk was the ‘as low as reasonably practicable’ (ALARP) measure.  The Tribunal held that the ‘ALARP method of assessment of risk to find there is no undue risk does not eliminate that risk and does not satisfy the assessment that there is no undue risk of fire spread between the compartments of the building.’^[16] (emphasis added)

In assessing undue fire risk, the Tribunal also accepted the owner’s submission that the (presumably internal) fire sprinkler system ‘will have no relevance to external fire spread and that the concern is the fire spread from compartment to compartment of the building via the external façade.‘^[17]

The Tribunal summarised its main finding:

‘The Tribunal is satisfied that [the owner’s expert] has 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.  The CSIRO report says that the determination of undue risk of fire spread via the façade of the building requires the expert judgment of a suitably qualified and an expert person, such as a fire engineer.  [The owner’s expert] is well qualified and experienced to give expert judgement.  His opinion is that Biowood is combustible and that [any compliance with the] fire hazard property requirements [does] not automatically limit the risk of fire spread.’^[18]

The Tribunal concluded that ‘combustible Biowood used as an attachment to a non-combustible external wall presents an undue risk of fire spread.’^[19]‘

3. Breach of the statutory warranties in the HBA

As a consequence of this finding, the Tribunal found that each of the statutory warranties relied upon by the owner had been breached.

Section 18(1)(c) – compliance with any other law

The Tribunal’s finding that the use of Biowood presented an undue fire risk in noncompliance with cl 2.4(a)(iii) of the BCA necessarily founded a breach of the warranty to comply with the HBA and other laws.  The BCA is incorporated into the statutory building control regimes in the various States and Territories.  In NSW this is achieved by regulation 98 of the Environmental Planning and Assessment Regulations 2000 (NSW).

Section 18B(1)(b) – not suitable for purpose

In relation to the breach of this statutory warranty:

‘The Tribunal finds that Biowood where used as an attachment to the façade of the building breaches the statutory warranties in section 18B(1)(b) as it was not suitable for the purpose used.’^[20]

And:

The Tribunal is informed by the ‘common sense test’ referred to in the Lacrosse fire case, that is, it must consider the purpose and type of building.  The building is a multi-storey residential building, Type A construction.  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.’^[21]

It is interesting to observe that the Tribunal interchanged the concepts of ‘fit for purpose’ and ‘suitable for purpose’ in its consideration of this warranty, but nothing appears to have turned on that distinction.

Section 18B(1)(f) – not reasonably fit for a specified purpose

The Tribunal found a breach of this warranty notwithstanding that only the first page of the standard form AS4902-2000 design and construct contract was tendered in evidence:

‘While the complete contract is not in evidence, the Tribunal is prepared to infer that as the first page is that of AS 4902-2000 that the contract was a standard ‘design and construct’ contract.  As such the developer has made known to whom the particular purpose for which the building is required.  As such, on the balance of probabilities, the Tribunal finds that the developer relied on the Builder’s skill and judgement and by doing so; the statutory warranty of fitness for purpose is incorporated.’^[22]

Further Comments

In assessing the ‘undue fire spread risk requirement’, the Tribunal rejected the ALARP (‘as low as reasonably practicable’) test.  The Australian Building Codes Board generally adopts this measure.  This contrasts with the (arguably) more stringent test of eliminating risks to health and safety so far as is reasonably practicable, and, if it is not reasonably practicable to eliminate such risks, to minimise those risks as far as is reasonably practicable (SFAIRP).  Whilst not expressly referred to in the judgment, the latter SFAIRP test appears to have been implicitly adopted by the Tribunal.

The difference between the two approaches to risk assessment is articulated in the ‘Practice Guide Façade/External Wall Fire Safety Design’ published by the Society of Fire Safety – a division of Engineers Australia.  Page 4 of that Practice Guide states: ‘The key difference between the ALARP and SFAIRP approaches is that the former is risk focussed whereas the latter is precaution focused and criticality driven. … it is irrelevant how low the estimated risk is, if more can be done for very little exertion then the failure to do so will be negligent.’

The Practice Guide recommends the SFAIRP approach to assessing fire risk.  Further, it is worth noting the Practice Guide is expressly incorporated in and adopted by The Insurance Council of Australia’s ‘Insurance Industry Aluminium Composite Panel and Other Combustible Façade Materials Residual Hazard Identification Reporting Protocol’.

The interpretation of the BCA by the Tribunal in Taylor Constructions is consistent with the above recommendations and reinforces the (quite understandably) ‘conservative’ interpretation of the BCA in the current climate.

Further, as noted above, it is important to identify which version of the BCA is applicable to any particular circumstance.  There have been changes to the combustibility requirements across recent versions of the BCA.  For example, the exemption contained in C1.1 cl 2.4 (under consideration in Taylor Constructions) has been abolished.  The abolishment of this provision formed an important plank of the owner’s case:

‘[the owner’s expert evidence ] is that the exemption contained in C1.1 cl 2.4 has now been abolished on the basis that it is now considered inappropriate to have combustible external cladding.  The applicant submits that common sense dictates that it is illogical to stipulate that external walls must not be combustible but then allow them to be covered with combustible cladding.  If material is BCA compliant it does not follow that it is therefore fit for purpose, particularly in light of recent amendments to the BCA because of serious concerns as to appropriateness of using such combustible cladding’.^[23]

In addition to amendments to the combustibility provisions of the BCA since the Lacrosse fire, Standards Australia has introduced AS 5113:2016 ‘Fire propagation testing and classification of external walls of buildings’.  AS 5113 was incorporated into the BCA in 2018 as part of the introduction into the BCA of a new verification method (CV3) for meeting fire safety performance requirements for external walls.  The new CV3 verification pathway as a new performance solution option introduced, for the first time in Australia, fire safety performance requirements for façade fire spread.  Unlike the applicability or otherwise of small scale bench tests under AS1530 under debate in Taylor Constructions (and Lacrosse, as described above), AS 5133 draws heavily on international standards (for example, ISO 13785-2 and BS 8414) and mandates testing of materials within full façade wall system assemblies.