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

1. [1]

   The plaintiffs, Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd (together, the Appellants) are, respectively, the builder and the developer of two multi-story residential buildings erected on land at X and X Lardelli Drive, Ryde NSW (Buildings).

2. [2]

   The defendant, the Owners Corporation of Strata Plan 92888, is the registered proprietor of the common property in the land the subject of that strata plan and the Buildings (Owners Corporation).

3. [3]

   In these proceedings, the Appellants seek to appeal from a decision of an Appeal Panel of the New South Wales Civil and Administrative Tribunal (NCAT): Taylor Construction Group Pty Ltd v The Owners - Strata Plan No 92888 [2020] NSWCATAP 163.

4. [4]

   The Appeal Panel upheld the decision of a Senior Member of the Consumer and Commercial Division of NCAT who found in favour of the Owners Corporation’s claim that the use of “Biowood” combustible cladding on parts of the external walls of the Buildings does not comply with the Building Code of Australia (BCA) and breached statutory warranties implied into residential building contracts under s 18B(1) of the Home Building Act 1989 (NSW) (HB Act): The Owners Strata Plan No 92888 v Taylor Construction Group Pty Ltd and Frasers Putney Pty Ltd [2019] NSWCATCD 63.

5. [5]

   Central to the decisions and this appeal is the finding that the use of Biowood does not comply with the BCA as it constitutes an undue risk of fire spread via the façade of the Buildings.

6. [6]

   By their summonses filed on 1 September 2020, the Appellants seek orders that leave be granted to appeal from the whole of the Appeal Panel’s decision, that their appeals be allowed, that the decisions of the Appeal Panel and the Senior Member be set aside, and that the Owners Corporation pay the Appellants’ costs of the Appeal and of the NCAT proceedings.

7. [7]

   Six grounds of appeal are raised, including whether the Appeal Panel erred in its formulation and application of the proper test under the BCA, whether there was evidence on which the finding that the use of the Biowood cladding constituted an undue risk of fire spread via the façade could be made, and whether the Appeal Panel’s reasons are adequate.

8. [8]

   Section 83(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) provides that, in the circumstances applicable in this case, an appeal to this Court is available by leave on questions of law only. The hearing proceeded on the basis that the parties’ submissions would be treated as submissions on the appeal in the event that leave was granted.

9. [9]

   For the reasons that follow, I have concluded that leave should be granted but the appeal should be dismissed.

Background

1. [10]

   Biowood is a combustible material made from 70% reconstituted timber and 23% PVC and is installed on different areas of the Buildings. The location of the Biowood on the Buildings is depicted in photographs and diagrams in expert reports that were in evidence before the Senior Member and contained in the court book in these proceedings. Some of those images are reproduced in Annexure A to Annexure D of these reasons.

2. [11]

   It may be observed from the photographs and diagrams in Annexure A to Annexure D that Biowood is installed on:

3. [12]

   The different locations of the Biowood and the vertical span alongside windows is of some significance, for reasons which I will come to.

4. [13]

   It is common ground that the 2014 version of the BCA (now the National Construction Code) (2014 BCA) applied at the time of the relevant building work. The following sets out the relevant provisions in force at the time. It is not in dispute that Biowood is a combustible material and the Buildings are classified as Class 2 (as they contain two or more sole-occupancy units) and Class 7a (as they have a basement carpark) buildings for the purposes of the BCA.

5. [14]

   Section A of the 2014 BCA sets out the general provisions. Part A0 identifies that a Building Solution will comply with the BCA if it satisfies the Performance Requirements, which can only be achieved by complying with the Deemed-to-Satisfy Provisions or formulating an Alternative Solution, and that the ‘Objectives’ and ‘Functional Statements’ may be used as an aid to interpretation: A0.4, A0.5 and A0.6.

6. [15]

   A1.1 sets out the Definitions, which relevantly include:

7. [16]

   A2.4 of Part A2 provides that, where a Deemed-to-Satisfy provision requires a building component to have a fire hazard property, it must be determined for Spread-of-Flame Index, a material’s group number or smoke growth rate index, in accordance with Specification A2.4.

8. [17]

   Clause 2 of Specification A2.4 provides:

9. [18]

   Clause 3 of Specification A2.4 sets out the manner in which a material’s group number must be determined by reference to testing under AS/NZS 3837 (AS3837).

10. [19]

    Specification A1.3 lists AS/NZS 1530, Part 3 (AS1530.3) as a document referable to BCA A1.1 and Specification A2.4 and AS/NZS 3837 as a document referable to A1.1 and Specifications A2.4 and C1.10.

11. [20]

    Section C of the 2014 BCA is headed “Fire Resistance” and contains many of the provisions relevant to these proceedings.

12. [21]

    The Objective of Section C is stated as follows:

13. [22]

    Section C sets out Performance Requirements, which include:

14. [23]

    Part C1 contains the Deemed-to-Satisfy Provisions and Specifications. C1.1(b) provides that Type A construction, the most fire-resistant type of construction, is required for Class 2 buildings of three or more storeys and Class 7 buildings of four or more storeys: Table C1.1.

15. [24]

    Clause 3.1 of Specification C1.1 states that:

16. [25]

    The critical provision for the purposes of these proceedings is cl 2.4(a) of Specification C1.1 which provides:

17. [26]

    It is common ground that cl 2.4(a) of Specification C1.1 was removed in the 2016 Amendment 1 version of the BCA. The replacement clause was not included in the court book in these proceedings.

18. [27]

    C1.10, which relates to fire hazard properties, provides as follows:

19. [28]

    C1.12 provides that certain combustible materials may be used wherever a non-combustible material is required.

20. [29]

    Specification C1.10 sets out the requirements in relation to the fire hazard properties of linings, materials and assemblies in Class 2 to 9 buildings as set out in Table 1 in cl 2, which relevantly provides:

21. [30]

    Clause 4 of Specification C1.10 provides that the group number of a material is determined by either physical testing in accordance with AS ISO 9705 or testing in accordance with AS3837 and that a material used as a “finish, surface, lining or attachment to a wall or ceiling must be a Group 1, Group 2 or Group 3 material used in accordance with Table 3 …”: subcll 4(a) and (c). Table 3 in cl 4 identifies the relevant material group numbers permitted for the different classes of buildings.

22. [31]

    Clause 7 of Specification C1.10 provides that materials and assemblies in a Class 2 to 9 building not included in cll 3, 4, 5 or 6, must not exceed the indices set out in Table 4, which relevantly provides:

23. [32]

    Section 18B of the HB Act sets out the warranties implied into contracts to do residential building work and relevantly provides:

24. [33]

    As to “any other law” referred to in s 18B(1)(c), pursuant to cl 98(1)(a) of the Environmental Planning and Assessment Regulation 2000 (NSW) (EPA Regulation), any building work performed pursuant to a development consent must be carried out in accordance with the requirements of the BCA.

Proceedings before the Senior Member

1. [34]

   The proceedings before the Senior Member involved an application by the Owners Corporation for an order that the Appellants carry out works to rectify defects and non-complying work (described as General and Major Defects) and/or an order that they pay the Owners Corporation damages for the cost of rectification. The General Defects claim was resolved between the parties.

2. [35]

   The Major Defects claim concerned the use of Biowood cladding as architectural attachments on the external walls of the Buildings. The Owners Corporation claimed that, as it is combustible, the use of Biowood failed to comply with cl 2.4 of Specification C1.1 of the 2014 BCA and was, therefore, in breach of the statutory warranties in s 18B(1)(c) of the HB Act. It also claimed that, even if compliant with the BCA, the Biowood cladding was otherwise not fit for purpose in breach of the statutory warranty in subss 18B(1)(b) and (f) of the HB Act.

3. [36]

   The evidence before the Senior Member included expert evidence from three Fire Engineers, Mr Nathan Halstead for the Owners Corporation, and Mr Etienne Jordaan and Mr Daniel Powell for the Appellants. Mr Halstead, Mr Jordaan and Mr Powell provided written reports and Mr Halstead and Mr Jordaan gave concurrent evidence before the Senior Member. Mr Halstead’s report dated 24 January 2019, Mr Jordaan’s reports dated 17 August 2018, 1 November 2018 and 8 March 2019 and a transcript of the proceedings before the Senior Member are included in the court book in these proceedings.

4. [37]

   Also before the Senior Member (and included in the court book in these proceedings) were three documents to which he referred in his reasons and which were relevant to the evidence given by Mr Halstead and Mr Jordaan.

5. [38]

   The first document is a CSIRO Certificate of Test Report of Biowood in accordance with AS1530.3 dated 13 January 2011 entitled “CSIRO Certificate of Test Report No. FNE10012 – AS/NZS 1530.3:1999 Simultaneous Determination of Ignitability, Flame Propagation, Heat Release and Smoke Release” (CSIRO Certificate). The CSIRO Certificate identifies the test results for Biowood as follows:

6. [39]

   The CSIRO Certificate states that:

7. [40]

   The indices identified in the CSIRO Certificate test results for Biowood are referred to in Mr Halstead’s and Mr Jordaan’s reports.

8. [41]

   The second document is a document authored by A Webb and N White, CSIRO, titled “Fire safety guideline for external walls - A guide for high-rise construction in Australia” and dated 18 April 2016 (CSIRO Guideline). The CSIRO Guideline is expressed to be a document intended to aid building practitioners in understanding the fire hazards of combustible materials and pathways to demonstrate compliance in relation to façade fire safety under the BCA. The CSIRO Guideline states, amongst other things:

9. [42]

   The third document is titled “Technical Report No 3 – A review of fire retardant treatments, fire performance tests methods, and building codes in United States of America and Australia and their influence on the marketing opportunities for forest products”, WD Gardner, NSW Timber Advisory Council, Sydney 1986 (NSW Timber Technical Report). It states, amongst other things that the AS1530.3 test method is “based on observations of the performance of the wall lining materials in corner burn tests … designed to simulate the performance of wall lining materials in the early stages of a developing fire within a room”: at 2.1.2.1.

10. [43]

    Mr Halstead’s report records that, in his opinion, all Biowood except where used as shutters on the south western façade and at ground level (which is subject to a “Performance Solution by Wood & Grieves”) should be removed as it represents an undue fire risk via the façade. Mr Halstead’s report states:

11. [44]

    Mr Jordaan’s 8 March 2019 report records that, in his opinion, the Biowood cladding used as an external attachment complies with Specification C1.10, either as wall linings under cl 4 based on achieving a group number of 3 under the AS3837 test or as “other materials” under cl 7 based on the AS1530.3 results, and would not present an undue risk of fire spread. Mr Jordaan’s 8 March report states:

12. [45]

    As noted above, Mr Halstead and Mr Jordaan were cross-examined. Aspects of their evidence are referred to in the Senior Member and the Appeal Panel’s decisions and later in these reasons.

13. [46]

    In his decision, the Senior Member sets out the relevant background, the legislative and BCA provisions, identifies the evidence before him and summarises the submissions of the parties: Senior Member’s reasons (SR) at [1]–[115].

14. [47]

    The Senior Member identified two issues for determination (at SR [38] and [116]), as:

15. [48]

    The Senior Member recorded that it was common ground between the experts that Biowood is a combustible material made from 70% reconstituted timber and 23% PVC and has a Group 3 classification according to AS3837 testing, which is distinct from Group 2 fire retardant timber and Group 1 non-combustible or near non-combustible material: at SR [39], [124], [127]. He noted that the experts agreed that the BCA is the test which applies to all cladding and that cl 2.4 of Specification C1.1 requires that attachments to external walls not impair fire resistance. He also described the experts’ measure of risk as a function of at least three factors, namely, combustibility of the material, rate of flame spread and other safety measures: at SR [125]–[126].

16. [49]

    The Senior Member’s consideration and findings are set out at SR [117]–[162].

17. [50]

    At [117]–[120], the Senior Member deals with submissions concerning the legal effect of the Interim Occupation Certificate that had been issued on 8 August 2016 (IOC), which is not relevant to this appeal.

18. [51]

    The next topic addressed by the Senior Member is “Relevant codes and standards”: at SR [128]–[135].

19. [52]

    The Senior Member identified that he would consider “Clause 2.4 of the [BCA] Specification C1.1, Clause 7 and AS1530.3”. He found that the effect of the relevant codes and standards was that the Buildings were required to be of a Type A construction, they must have non-combustible external walls, and that a combustible material may be used as an other attachment if it is exempted under C1.10 or complies with the fire hazard properties prescribed in Specification C1.10 and, amongst other things, does not otherwise constitute an undue risk of fire spread via the façade of the buildings: at SR [128]–[130].

20. [53]

    The Senior Member found the CSIRO Guideline to be “highly persuasive” with its findings that AS1530.3 for other materials was not relevant for attachments to buildings used as external wall finishes, linings or cladding, and that achieving a Spread of Flame index of 0 pursuant to the AS1530.3 test does not necessarily exempt Biowood under C1.10: at SR [131]–[132]. In doing so, the Senior Member referred to the “Lacrosse fire case”, noting that the Alucopanel in that case was found by VCAT to have satisfied AS1530.3 with a Spread of Flame Index of ‘0’ but proved to be dangerously inflammable when subject to a full scale façade test. Pausing here, Alucopanel is an aluminium composite panel that was used as cladding on the building that was the subject of a decision of the Victorian Civil and Administrative Tribunal (VCAT): Owners Corporation No.1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286 (Lacrosse fire case).

21. [54]

    At [133] and [135], the Senior Member stated:

22. [55]

    At SR [136]–[142], the Senior Member considered the topic of “Undue Risk”, and concluded that he was satisfied that Biowood constitutes an undue risk.

23. [56]

    The Senior Member addressed the expert evidence and flame spread at SR [136]. He noted that Mr Halstead conceded that the heat given off burning Biowood would not be sufficient to ignite adjacent Biowood of itself and that Mr Jordaan’s conclusions are based on assumptions made in the absence of test data that the Biowood would not support self-sustained fire spread. The Senior Member considered that a slow rate of fire spread did not preclude a finding that there was an undue risk even though there was no evidence of a large scale fire testing of Biowood.

24. [57]

    The Senior Member was satisfied that Mr Halstead, who he described as qualified and experienced to give an expert judgment, had established that there was a risk that the Biowood would support fire spread between levels of the building, “from compartment to compartment”, as it was “indisputably combustible”. He considered that any such risk was an undue risk, even if the material otherwise complies with the codes and standards, particularly as the Buildings, as high rise Type A buildings, were required to have non-combustible external walls and any risk had the potential to cause personal injury and physical damage. The Senior Member was satisfied that Mr Halstead had considered the measure of risk factor and safety measures, referring to his evidence that fire sprinklers, as the most significant fire safety measure, would have no relevance to external cladding. He considered that Mr Jordaan’s adoption of an “As Low As Reasonably Practicable” (ALARP) approach in reviewing fire safety and assessing risk, although uncriticised by Mr Halstead, did not eliminate risk or satisfy the assessment that there is no undue risk of fire spread between the compartments of the Buildings: at SR [137]–[141].

25. [58]

    The Senior Member dealt with “Spandrels” at SR [143]–[145]. He noted that the use of Biowood on spandrels needed to comply with C2.6 of the 2014 BCA, which mandates that spandrels be a “non-combustible material having an FRL of not less than 60/60/60”. The Senior Member concluded that the Biowood creates an undue risk of fire spread from compartment to compartment via the façade of the Buildings and that Biowood attached to the spandrels does not comply with cl 2.4 of Specification C1.1.

26. [59]

    The Senior Member considered the claim concerning the statutory warranties under s 18B(1) of the HB Act at SR [146]–[162].

27. [60]

    The Senior Member accepted the Owners Corporation’s submission that combustible Biowood is not fit for purpose and breached the statutory warranty in s 18B(1)(b) when used as an attachment to a non-combustible external wall as it presents an undue risk of fire spread and, as such, diminishes the fire resistance of the external walls. The Senior Member’s conclusion was informed by what he described as the ”common sense test” referred to in the Lacrosse fire case involving a consideration of the purpose and type of the Buildings. In his view, that 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. He concluded that there is a real risk of fire spread between the levels of the Buildings such that the Biowood is not fit for purpose.

28. [61]

    The Senior Member was satisfied that the warranties in subss 18B(1)(b), (c) and (f) were breached. He found that the use of Biowood does not comply with the BCA, which cl 98 of the EPA Regulation provided was a relevant law and which set the minimum standard for assessing fitness. He also concluded that the developer had made known the particular purpose of the building work and, on the balance of probabilities, had relied on the builder’s skill and judgment: at SR [158]–[161].

29. [62]

    Based on his findings, the Senior Member ordered the Appellants to rectify the breach of the statutory warranties by removing the Biowood attachments installed on the façade of the Building and replacing them with attachments to the external walls which comply with the codes, standards and statutory warranties, and to pay the Owners Corporations’ costs as agreed or assessed on an ordinary basis.

Summary of Appeal Panel’s decision

1. [63]

   Twelve grounds of appeal were included in the Appellants’ Amended Notice of Appeal of which eleven were recorded in the Appeal Panel’s reasons (AR) (at [30]) as being pressed before them as follows:

2. [64]

   At AR [30], the Appeal Panel also referred to another ground (13) on which the Appellants had sought leave to appeal. According to this ground, the Tribunal’s decision was against the weight of the evidence which indicated that there was no risk of fire spread from the Biowood and the decision was not one that a reasonable Tribunal could reach.

3. [65]

   The Appeal Panel noted that the effect of the Owners Corporation’s reply was a submission that there was no error made by the Senior Member nor any ground available justifying the grant of leave: at AR [32].

4. [66]

   The Appeal Panel summarised the submissions of the parties at AR [34]–[74]. Earlier in its reasons, the Appeal Panel had set out the background to the proceeding and the relevant BCA and HB Act provisions and summarised the Senior Member’s decision: at AR [3]–[29]

5. [67]

   The Appeal Panel noted that the appeal was brought as of right on a question of law or with the leave of the Appeal Panel on other grounds, as regulated by subss 80(2)(a) and (b) of the CAT Act, and that the primary question on the appeal was whether the Biowood material used as an attachment to external walls was used in conformity with the requirements of the BCA: at AR [76]–[77].

6. [68]

   The Appeal Panel resolved each of the grounds of appeal as follows.

7. [69]

   Grounds 1 and 2, which related to the issuance of the IOC, were rejected by the Appeal Panel. The Appeal Panel found that the issue of the did not create an irrebuttable presumption that the warranties under the HB Act had been complied with: at AR [79]–[81].

8. [70]

   The Appeal Panel dealt with grounds 3 and 4 together and also rejected them: at AR [82]–[104].

9. [71]

   The Appeal Panel commenced its consideration of grounds 3 and 4 by stating that it was necessary to construe the provisions of the BCA. Reference was made to the approach of Lindsay J in Owners – Strata Plan no 69312 v Rockdale City Council; Owners of SP 69312 v Allianz Aust Insurance [2012] NSWSC 1244. It was deduced from that decision that the task of the Tribunal was to construe the BCA as a formal document designed to provide standards for the promotion of public safety in the construction of buildings 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: at AR [83].

10. [72]

    The Appeal Panel referred to the objectives of Section C of the BCA, the requirements under the “Functional Statements” and CP2, and other provisions of the BCA, including C1.10, Specification C1.10, and cll 2.4 and 3.1(b) of Specification C1.1: at AR [84]–[87].

11. [73]

    The Appeal Panel rejected the Second Appellant’s submission that was critical of the Senior Member for not considering the effect of C1.10(c)(xiv) as the Appeal Panel did not consider that C1.10(c)(xiv) had any relevance to the interpretation of Specification C1.1 or cl 2.4(c)(iii) in particular. It noted that the BCA was a publication of the Australian Building Codes Board and referred to the observation of Simpson J (as her Honour then was) in Tumney (NSW Food Authority) v Nutricia Australia Pty Ltd (2008) 74 NSWLR 148; [2008] NSWSC 1382 at [71]–[74] that it may be appropriate to construe a code, apparently drafted by non-lawyers, on a more liberal and purposive approach giving considerable weight to the discernible intention of its authors and the purpose for which it and the individual provisions were drafted: at AR [88]–[89].

12. [74]

    The Appeal Panel also referred to a statement in the Lacrosse fire case at [35] in support of the proposition that the BCA is not to be construed as if it were a statute requiring the operation of different parts of the Code to be reconciled such that each part has a field of operation: at AR [90]–[91]. The Appeal Panel considered that there was no reason to restrict the meaning of cl 2.4(a)(iii) by reference to C1.10(c)(xiv) and, whereas C1.10 is concerned with fire hazard properties, cl 2.4(a)(iii) is concerned with whether a combustible material otherwise constitute an undue risk of fire spread via the façade. In its view, cl 2.4(a)(iii) involves:

13. [75]

    The Appeal Panel referred to the findings of the Senior Member as concerning the requirement contained in cl 2.4(a)(iii) of Specification C1.1 that the Biowood does not “otherwise constitute an undue risk of fire spread by the façade”. It summarised the relevant findings at AR [92] as follows:

14. [76]

    The Appeal Panel referred to Mr Halstead’s evidence noting, at AR [93], that his report identified that:

15. [77]

    The Appeal Panel rejected the Appellants’ submission that there was an insufficient basis to accept Mr Halstead’s evidence. It concluded that Mr Halstead’s report sufficiently exposed his reasons to justify acceptance of his opinion that fire spread via the external walls where the Biowood is located could enter the building through windows and balconies and occur across levels as the Biowood extends up the façade and joins each level: at AR [93]–[95].

16. [78]

    The Appeal Panel considered the meaning of “undue risk” and the construction of cl 2.4(a)(iii) at AR [96]. It took “undue risk” to mean “unwarranted or excessive” risk, adopting the ordinary meaning of “undue” as contained in the Macquarie Concise Dictionary, and that, in the context of cl 2.4(a)(iii), undue risk is intended to refer to a level of risk of fire spread via the façade of the building constituting non-compliance with the BCA because it “impairs fire resistance”. The Appeal Panel considered that subcll 2.4(a)(i) and (iii) should be construed such that an attachment may constitute an undue risk of fire spread via the façade even if it is exempted under C1.10 or complies with the fire hazards properties described in Specification C1.10 as it was logical to construe the BCA as requiring an assessment of undue risk of fire spread even if the material concerned complied with cl 2.4(a)(i). It referred to Mr Halstead’s evidence that an AS1530.3 test is in respect of fires inside a building and not relevant to external cladding. In the Appeal Panel’s opinion, a Spread of Flame Index of ‘0’ under the AS1530.3 test may still constitute an “undue risk of flame spread”. Later, at AR [100], it noted that an index of ‘0’ does not indicate that the material does not spread flame, but is a relative term indicating a slower rate of fire spread. Reference was also made to the CSIRO Guideline.

17. [79]

    The Appeal Panel held that the Senior Member’s findings contained in SR [135] and [136] were “open and display neither an error of law nor a ground for the grant of leave to appeal”: at AR [97].

18. [80]

    The Appeal Panel rejected the First Appellant’s submission that the Tribunal found there was a need to establish the elimination of risk as “misconceived”. It considered that the Senior Member did not find there was no evidence of elimination of risk but found that Mr Jordaan’s evidence did not establish the elimination of “undue risk”, which was in addition to a finding that Mr Halstead’s evidence supported a finding of an undue risk of fire spread. The Appeal Panel also rejected the Appellants’ submission that the Senior Member relied on Mr Halstead’s interpretation of undue risk and that his finding of undue risk was an acceptance of the ipse dixit of Mr Halstead, concluding that the Senior Member relied upon Mr Halstead’s opinion that the use of Biowood would allow fire spread into the building: at AR [98]–[99].

19. [81]

    The Appeal Panel concluded that the Senior Member did not err in applying cl 2.4(a)(iii) of Specification C1.1 to find that the use of Biowood on the Buildings constitutes an undue risk of fire spread via the façade and that the provisions of cl 2.4(a) are cumulative: at AR [102].

20. [82]

    The Appeal Panel rejected the Second Appellant’s submission that the Senior Member had, in effect, reversed the onus of proof by requiring the Appellants to show that Biowood did not present an undue risk and accepted the Owners Corporation’s submission that the finding of undue risk was based on the evidence of Mr Halstead: at AR [103].

21. [83]

    The Appeal Panel also rejected the Second Appellant’s submission that the Senior Member did not give due weight to Mr Jordaan’s opinion. It referred to the Senior Member’s finding that Mr Jordaan’s conclusions on matters that may be relevant to a finding of undue risk were based on assumptions that Biowood would not support self-sustained fire spread in the absence of any test data other than the AS1530.3 test. The Appeal Panel concluded that the Senior Member did not err in relying on Mr Halstead’s evidence for the findings of undue risk, taking such an approach or making those findings: at AR [104].

22. [84]

    The Appeal Panel rejected ground 5, which concerned the submission that the Senior Member found that Biowood diminished the fire resistance of the external walls. The Appeal Panel held that, when SR [153] was taken as a whole, it was clear that the Senior Member did not make the finding contended for by the Appellants: at AR [105].

23. [85]

    The Appeal Panel rejected ground 7, which concerned the Appellants’ submission that the finding of undue risk of fire spread was not open on the evidence, on the basis that it did not involve an error of law but was properly characterised as an alleged error of fact, as a finding against the weight of the evidence. The Appeal Panel held that there was sufficient evidence to make it “fairly open” for the Senior Member to find there was an undue risk of fire spread. It referred to the combustible nature of the Biowood with a rate of fire spread (albeit slow), the Biowood extending up the façade in numerous locations, Mr Halstead’s evidence that fire spread via the external walls where the Biowood is located could enter the building from the façade through windows and balconies, and that adjacent Biowood could ignite through the original source of the fire: at AR [107]. While not stated expressly, the Appeal Panel’s reasons on this ground also deals with what they referred to as the additional ground 13.

24. [86]

    The Appeal Panel dealt with grounds 8 to 12, which concerned the findings of breach of the statutory warranties contained in subss 18B(1)(b), (c) and (f) of the HB Act, together and rejected them: at AR [109]–[114]. The Appeal Panel held that, as the Tribunal was correct in finding that the Biowood did not comply with the provisions of the BCA, there had been a breach of the warranties contained in subss 18(1)(b), (c) and (f). The submission that a builder who enters into a contract identified by its front page as a design and construct contract is not informed of the intended purpose of the contracted building work or the installation of the material was rejected as having an “air of unreality”.

25. [87]

    The Appeal Panel made orders that dismissed the appeal, affirmed the Senior Member’s decision and required for the parties to file submissions on costs. There is no evidence before this Court of what costs orders in relation to that appeal were ultimately made, if any.

Appeal to this Court

1. [88]

   Six grounds of appeal are raised by the Appellants’ summonses as follows:

2. [89]

   This appeal is brought pursuant to s 83 of the CAT Act, which relevantly provides:

3. [90]

   The parties referred to the recent decisions of Bronze Wing International Pty Ltd v SafeWork NSW [2017] NSWCA 41 (Bronze Wing) and Corcoran v Far [2019] NSWSC 1284 (Corcoran) for the applicable principles governing appeals to this Court, which were summarised as follows:

4. [91]

   The Appellants submit that the appeal raises issues of principle as the Appeal Panel’s decision has application to cladding cases generally and is of public importance for disputes in NCAT and this Court concerning cladding work undertaken up to 12 March 2018, being the date on which cl 2.4 of Specification C1.1 was removed from the 2016 Amendment 1 version of the BCA.

5. [92]

   The Appellants submit that the appeal raises questions of law as the grounds include whether the Appeal Panel identified the relevant legal test and applied the correct legal test, whether there is any evidence to support the Senior Member’s finding of a particular fact, and whether the facts found fall within the BCA as properly construed, relying on Federal Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd (2010) 186 FCR 410; [2010] FCAFC 94 and Amaca Pty Ltd v Frost (2006) 67 NSWLR 635; [2006] NSWCA 173 at [55]. They also submit that the appeal involves an injustice which is reasonably clear, in the sense of going beyond what is merely arguable.

6. [93]

   At the hearing, the Owners Corporation accepted that there is a public interest or importance about the issues raised by the appeal, which was a reason why leave to appeal could be granted (T57.47–T58.2). However, the Owners Corporation submits that leave to appeal should not be granted because it would not change the outcome of the Senior Member’s decision. It also submits that some of the grounds of appeal, such as grounds 2, 3 and 4, assert error and/or do not properly articulate a question of law.

7. [94]

   Before commenting on the grounds of appeal, I first consider the threshold issue raised by the Owners Corporation which is, in essence, a contention that leave to appeal should be refused as the appeal is futile or moot and would, if correct, lead me to conclude that leave to appeal should be refused: Gray v Minister for Energy, Environment & Climate Change [2020] VSCA 121 at [23]–[24] (Tate, Beach and Kaye JJA).

8. [95]

   The Owners Corporation’s contention that leave to appeal should be refused is based on the submission that the Senior Member’s decision is to the effect that the Biowood combustible cladding is not “another attachment” and does not satisfy cl 2.4(a)(i) of Specification C1.1 of the BCA. The Owners Corporation contends that, as a consequence, success by the Appellants in this appeal on grounds that only concern undue risk under cl 2.4(a)(iii) could not affect the Senior Member’s conclusion that the Biowood combustible cladding does not fall within cl 2.4 or satisfy the requirements of cl 2.4(a)(i) and, thus, fails to comply with the BCA.

9. [96]

   In support of that submission, the Owners Corporation contends that the Senior Member found that Biowood is not exempted under C1.10 or “another attachment” that complies with the fire hazard properties in Specification C1.10, at SR [133]. It submits that the effect of the Senior Member’s findings at SR [135] is that, even though the Biowood sample tested complied with the fire hazard properties in Specification C1.10 (being that referred to in cl 7), the Senior Member preferred Mr Halstead’s opinion adopting the views expressed in the CSIRO Guideline that the AS1530.3 test for cl 7 of Specification C1.10 is not relevant or applicable to external cladding.

10. [97]

    The Owners Corporation says that the Senior Member’s findings at [133] and [135] reflected and upheld its submissions to the effect that the AS1530.3 test is not relevant or applicable to external cladding and that compliance with that test does not necessarily exempt it as “another attachment” that complies with the fire hazard properties for “other materials” under cl 7 of Specification C1.10. It submits that the Senior Member’s findings at [133] and [135] were sufficient to determine the Owners Corporation’s claim in its favour and justify the order made. The Owners Corporation says that those findings were not the subject of the grounds of appeal to the Appeal Panel and are not (and could not be) the subject of appeal to this Court.

11. [98]

    The Appellants dispute the Owners Corporation’s characterisation of the Senior Members’ findings and what was, and was not, raised in the appeal to the Appeal Panel. They also submit that, if the Owners Corporation’s understanding of the Senior Member’s decision is correct, insofar as this appeal does not include a ground of appeal in relation to cl 2.4(a)(i), the Court should grant leave to the Appellants to appeal in relation to the findings on the basis that the Senior Member erroneously applied AS3837, rather than AS1530.3.

12. [99]

    In their written submissions in reply, the Appellants contend that the Owners Corporation’s submissions should be rejected because there was no finding by the Senior Member in relation to cl 2.4(a)(i), and thus none for the Appeal Panel to consider.

13. [100]

    They also submitted that the Owners Corporation called no evidence in relation to cl 2.4(a)(i) and the case both before the Senior Member and the Appeal Panel was one of undue risk under cl 2.4(a)(iii) and any attempt by the Owners Corporation to reframe the case otherwise should be rejected. I do not accept that submission. In my view, it is apparent from the Owners Corporation’s written submissions in the NCAT proceedings before the Senior Member that it advanced a case that Biowood was not an “other attachment” for the purposes of cl 2.4 of Specification C1.1 and did not satisfy cl 2.4(a)(i), in addition to a case that Biowood constituted an under risk under cl 2.4(a)(iii). The structure and content of the Senior Member’s reasons, which identified the parties’ submissions and made findings by reference to the separate headings of “Relevant codes and standards” and “Undue risk”, also reflect that distinction: at SR [39]–[52], [71]–[92], [128]–[142].

14. [101]

    Further, the appeal grounds advanced before the Appeal Panel did not raise a question of law or seek leave to appeal from any error in relation to the Senior Member’s findings in respect of cl 2.4(a)(i), although the Appellants’ oral and written submissions relating to cl 2.4(a)(iii) referred to errors regarding Specification C1.10 and cl 2.4(a)(i).

15. [102]

    That said, I do not agree with the Owners Corporation’s characterisation of the Senior Member’s reasons at SR [133] and [135] and have concluded that leave to appeal should not be refused based on the threshold issue raised.

16. [103]

    It is common ground that to comply with the BCA, the use of Biowood combustible cladding must fall within cl 2.4(a) of Specification C1.1 as an “other attachment” and satisfy each of the cumulative requirements of subcll 2.4(a)(i), (ii) and (iii). Clause 2.4(a)(i) is satisfied if Biowood is exempted under C1.10 (referred to by the Appellants as the “exemption limb”) or it complies with the fire hazard properties in Specification C1.10 (referred to by the Appellants as the “compliance limb”), and that the requirement in cl 2.4(a)(ii) is not applicable because the Biowood cladding is not located near or directly above an exit.

17. [104]

    There is no dispute that the Senior Member found that Biowood did not satisfy the exemption limb. That is made clear by the first line of SR [133] where he states that “Biowood is not “another attachment” that is exempted under C1.10”. That finding was adverse to the Appellants. It was also not the subject of an appeal ground to the Appeal Panel, although it was identified in the Appellants’ oral and written submissions as a finding that was not open to the Senior Member on the evidence and/or a failure to take into account C1.10(c)(xiv), and was adverted to in the Appeal Panel’s reason at AR [64(1)] and [102]. The Appellants’ grounds of appeal in these proceedings do not raise a question of law about the exemption limb finding.

18. [105]

    The threshold issue concerns whether the Senior Member found that Biowood was an “other attachment” and satisfies the compliance limb of cl 2.4(a)(i). This issue arises because, with all due respect, the Senior Member’s reasons are seemingly inconsistent and, as the Owners Corporation accepted before the Appeal Panel, “not entirely clear”: T51.1775, T52.1804, 24 February 2020.

19. [106]

    On the one hand, the Senior Member states, at SR [133], that there is “no evidence that [Biowood] complies with the fire hazard properties prescribed in C1.10". On the other hand, at SR [135], the Senior Member is satisfied that Biowood is combustible and “complies with the fire hazard properties prescribed by C1.10”. This apparent inconsistency is not assisted by the references to “C1.10” instead of “Specification C1.10” for the exemption and compliance limbs or by what appears to be a conflation of both limbs in SR [133] through linking, by use of the word “as”, the lack of exemption under C1.10 to the absence of evidence of compliance with the prescribed fire hazard properties. A lack of clarity also arises from the Senior Member’s references (at SR [128] and [131]) to cl 7 in relation to the fire hazard properties requirements and his findings (at SR [135]) that Biowood is assessed as a Group 3 material under AS3837 (being the relevant test under cl 4(a)), the test under AS3837 is “more relevant” than AS1530.3, and Biowood presents a risk of fire spread (which is relevant to the undue risk assessment under cl 2.4(a)(iii)).

20. [107]

    That said, and notwithstanding the terms of SR [133], in my view, the Senior Member’s reasons should be construed as having found that Biowood complies with the fire hazard properties prescribed by Specification C1.10. That finding is supported by the express terms of SR [135]. It is also supported by the Senior Member’s finding that Biowood achieved a Group 3 classification through the AS3837 test and his preference for the AS3837 test to the AS1530.3 test which he considered was not relevant for building attachments used as external wall finishes, lining or cladding: at SR [131] and [135].

21. [108]

    In other words, it seems that the Senior Member must have considered that Biowood was compliant with the fire hazard properties under cl 4 of Specification C1.10 as a material used as an “attachment to a wall”, reflecting his preference for Mr Halstead’s opinion that adopted the views expressed in the CSIRO Guideline to the effect that AS3837 was the more relevant test. That finding is, I note, also supported by Mr Jordaan’s 8 March report, which states that Biowood complies with the requirements of both cll 4 and 7 of Specification C1.10 (referred to at [44] above), although I accept Mr Jordaan’s oral evidence before the Senior Member was to the effect that Biowood should be assessed as “Other materials” under cl 7 and, thus, AS1530.3 was the appropriate test (T35.22–5, 30 July 2019), and the Owners Corporation also seemed to contend that Biowood was “Other materials” for the purposes of Specification C1.10 (T8.16–8, 30 July 2019).

22. [109]

    I would also observe that the Senior Member’s finding at SR [135] that Biowood complies with the fire hazard properties prescribed by Specification C1.10 could be based on Biowood being assessed as “Other materials” under cl 7 and tested as per AS1530.3, with a Spread of Flame Index of less than 9, with the other matters referred to being directed to his findings on the significance of the different tests and evidence of the experts for the purposes of assessing a risk of fire spread and Biowood’s suitability as an other attachment under cl 2.4(a)(iii).

23. [110]

    As to the Senior Member’s finding in SR [133], it is either inconsistent with the his reasons at [135] or could be read as relating to a lack of evidence regarding fire hazards for the purposes of the exemption under C1.10(c)(xiv), rather than compliance with the fire hazard properties under Specification C1.10. Whatever is the correct position in respect of SR [133], in my view, the Senior Member found at SR [135] that Biowood is an “other attachment” that complies with the fire hazard properties prescribed in Specification C1.10 and, thus, complies with the compliance limb in cl 2.4(a)(i) of the BCA. That was a finding adverse to the Owners Corporation and was not the subject of an appeal by it to the Appeal Panel.

24. [111]

    Having regard to my conclusion on the threshold issue, I am satisfied that the outcome of this appeal has the potential to change the decision of the Senior Member and is therefore not futile.

25. [112]

    The parties are agreed, and I accept, that the appeal raises issues of principle that may have some broader application to other cladding cases, notwithstanding that cl 2.4(a) of Specification C1.1 has been amended.

26. [113]

    I am also satisfied that the appeal grounds raise questions of law, although there are issues with the manner in which grounds 2 and 3 have been articulated and pressed, which I deal with below. Subject to that qualification, the grounds of appeal were not, in my view, unarguable,

27. [114]

    For those reasons, and subject to what follows, I consider that it is appropriate to grant leave to appeal in this case.

28. [115]

    The Appellants’ submissions address appeal grounds 2 and 3 together with other grounds of appeal. First, they make submissions on grounds 2 and 3 together with ground 5, which asserts error due to inadequate reasons. Second, they make submissions on grounds 2 and 3 together with ground 4, which asserts error from finding undue risk in the absence of evidence. The Appellants’ submissions in respect of grounds 2, 3 and 4 (grouped together) are expressed to be “in the alternative” to their submissions on grounds 2, 3 and 5.

29. [116]

    The Appellants’ approach to grouping the grounds of appeal makes it difficult to discern precisely what is alleged to be the errors of law in respect of each of grounds 2 and 3. This is not assisted by the formulation of grounds 2 and 3 which are in general terms and do not particularise the alleged errors. That said, I note the Amended Statement for Summons for Leave to Appeal alleges two errors of law which appear to be intended to relate to grounds 2 and 3 as follows: the Appeal Panel’s finding that testing under AS1530.3 did not apply even though the BCA expressly mandated that it did (at [3(b)]); and the application of the “test” as formulated by the Appeal Panel being comprised of nothing more than a statement that findings made by the Senior Member were “open”, with an implicit conclusion that those open findings satisfied the “test”, giving rise to error in the application of both the proper test and the BCA to the facts and an erroneous conclusion (at [3(c)]).

30. [117]

    The lack of clarity as to what is asserted to be the errors of law in respect of each ground of appeal in the groups referred to in the written submissions was raised with the Appellants’ Senior Counsel at the hearing. His explanation was that the “paucity of reasons” made it “very difficult to neatly compartmentalise them” (T42.25–7). He indicated that one of the grounds is that the Appeal Panel erred by not applying the relevant test at all; the other is that, if the Appeal Panel applied a test, then they made an ultimate finding (of undue risk) based on subsidiary findings that are not findings of fact at all and that were not open on the evidence (T42.29–35). The Appellants’ Senior Counsel also stated that there were a number of ways the “error” could be characterised and the grounds overlapped considerably, but this was all a consequence of a failure to provide adequate reasons (T43.3–5).

31. [118]

    In that context, I consider there to be force to the Owners Corporation’s submission that the way in which grounds 2 and 3 have been framed do not identify a question of law but, rather, merely assert that there has been error. The grounds as formulated do not adequately identify the legal rule, test or part of the BCA that should have been applied but was misconstrued or misapplied to the facts, or identify the questions of law that are the subject matter of these grounds: Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13] and the cases there cited.

32. [119]

    Further, most of the Appellants’ attack under these grounds were focussed on the fact finding, an asserted lack of evidence and the Appeal Panel’s acceptance of the Senior Member’s evaluative judgment of undue risk without proper reasoning, which are more relevant to appeal grounds 4 and 5, namely, that the finding of undue risk was made in the absence of evidence and the Appeal Panel failed to provide adequate reasons.

33. [120]

    Nevertheless, I consider it appropriate to grant leave to appeal on all the grounds raised. I have however not considered grounds 2 and 3 separately but have considered them and the submissions made under the grouping of the grounds advanced by the Appellants, noting that these reasons focus on the main issues identified by the Appellants in the hearing and raised by grounds 4 and 5 rather than grounds 2 and 3.

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

1. [121]

   The Appellants submit that the Appeal Panel’s error was the failure to formulate a test in deciding whether the use of Biowood cladding as an attachment to the Buildings was an “undue risk”.

2. [122]

   In support of this ground, reference was made to AR [96], where the Appeal Panel referred to the meaning of “undue risk” and stated:

3. [123]

   The Appellants submit that the Appeal Panel was wrong to link the meaning of “undue” to the concept of “impairs fire resistance” because the latter phrase is not used in the heading of cl 2.4. It is submitted that the Appeal Panel’s statement to that effect was predicated upon a misreading of that clause.

4. [124]

   The Appellants also submit that the Appeal Panel merely applied the synonyms “unwarranted or excessive” in substitution for “undue” without saying anything about how or why a risk is unwarranted or excessive. The Appellants argue that this approach offered no workable test, process or framework that can be applied in other instances to arrive at the ultimate finding of “undue risk” or through which the Tribunal or a Court can distinguish between an “unwarranted or excessive risk” and a risk that is “warranted” or not “excessive”.

5. [125]

   It is submitted that all the Appeal Panel did was identify the BCA standard without any interpretation or articulation of what is intrinsically a comparative and evaluative standard and, as a result, the Appeal Panel’s approach invited ipse dixit or arbitrary determinations and constituted an error of construction without regard to proper interpretation principles. Reference is made to two legal principles that are submitted to have direct application, namely the “well-recognised” danger of making a “fortress out of a dictionary” when interpreting a statute and the antipathy towards the use of slogans in the process of legal construction: Commissioner of Taxation v BHP Billiton Ltd (2011) 244 CLR 325; [2011] HCA 17 at [49]; Attorney-General (Cth) (Ex rel McKinlay) v The Commonwealth (1975) 135 CLR 1 at 17; [1975] HCA 53.

6. [126]

   The Appellants accept that they must show not just an error by the Appeal Panel in the formulation of a test for undue risk, but also what the correct test is and, when applied, that it would have generated a different outcome: Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 at [3].

7. [127]

   They submit that the formulation of the correct test for undue risk under cl 2.4(a)(iii) must assume that the material used is combustible, involves a risk of fire spread and is located on the façade of the building. The Appellants submit that, properly construed and having regard to its context, including CP2, the BCA mandates a test involving a comparative multi-factorial exercise which asks whether Biowood cladding presents an undue (or unwarranted or excessive) risk of fire spread having regard to at least the following factors:

8. [128]

   On the Appellants’ submission, the Owners Corporation was required to prove the following: that there was, in fact, a likelihood of flame spread within and between Biowood panels; the rate of flame spread was an element that caused Biowood to be an undue risk; there were other factors that ameliorated or exacerbated the risk of fire spread; and the fire spread would occur in a way that would contravene the overall aims of the BCA by endangering, for example, life and property. The Appellants contend that the Owners Corporation failed to establish or consider these matters by reference to the evidence, especially that of Mr Halstead. In particular, it is submitted that there was no basis to find an unwarranted or excessive risk of fire spread when the Flame Spread Index of Biowood is ‘0’ (being the lowest possible rating), the likely rate of fire spread is not known or explained, and “a low level of spread is permissible”. They submit that, as the Owners Corporation did not engage in a multifactorial approach, applying the proper test, it could not establish that Biowood constituted an undue risk and its claim would fail.

9. [129]

   The Owners Corporation submits that this ground of appeal is misconceived because the thrust of the Appellants’ submissions on this ground is that Biowood did not constitute an undue risk, rather than identifying how or why the test applied by the Appeal Panel was wrong and involved an error of law. It contends that no error in terms of the test to be applied has been identified.

10. [130]

    As to the words “undue risk”, the Owners Corporation says they are more or less clear as they are used with their natural and ordinary meaning and not in any special or unusual sense that gives rise to a question of construction or law. It submits that the common understanding of the words is a question of fact, referring to the observations of Phillips JA in S v Crimes Compensation Tribunal [1998] 1 VR 83 at 88 where his Honour says:

11. [131]

    The Owners Corporation submits that the relevant test is that set out in cl 2.4(a)(iii), namely whether the use of Biowood constitutes an undue risk of fire spread via the façade of the Buildings. It submits that whether the use of Biowood involves a risk of fire spread and, if so, whether that risk is “undue”, involves a question of fact, accepting that the inquiry involves an evaluative decision taking into account matters such as the combustibility of the material, its location, the gravity of consequences in the event of fire spread, and issues of degree, possibility and likelihood.

12. [132]

    In reply, the Appellants contended that the Owners Corporation’s submissions assume that a test was applied by the Appeal Panel. They say that the Appeal Panel did not apply a test but applied a synonym for “undue” and made a concluded finding. They say that the Appeal Panel did not address how the characteristics of Biowood created a risk that was “undue”. The Appellants submit that the Owners Corporation ignores what the Appellants contend is the proper test (referred to at [127]). Further, they say that even if the Appeal Panel did apply a test, the test was misconstrued because there was no analysis of risk and it had no capacity to make allowance for Biowood in different locations. They point out that the very locations that Mr Halstead said Biowood was acceptable in would not be considered acceptable applying the Appeal Panel’s test.

13. [133]

    The Appellants also take issue with the submission that the meaning of “undue risk” involves a question of fact. They say this is wrong because, while the meaning of words is a question of fact, the effect of the words is a question of law, referring to Life Insurance Company of Australia Ltd v Phillips (1925) 36 CLR 60; [1925] HCA 18 and Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; [1993] FCA 456 (Pozzolanic). They submit that the words “undue risk” in the context of the BCA are special or unusual, do not have a conventional dictionary meaning (in contrast to the “cube” example given by Phillips JA in S v Crimes Compensation Tribunal [1998] 1 VR 83 at 88) and are not free from uncertainty.

14. [134]

    The Appellants also take issue with the Owners Corporation’s submission that the question of whether the circumstances of this case meet the test of undue risk is one of fact, contending that the question of whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law: Pozzolanic.

15. [135]

    At the outset, it is appropriate to record that I accept that ground 1 raises a question of law. The assertion of an error in the formulation of the applicable test under the BCA raises a question of the proper construction of cl 2.4(a)(iii). The effect or construction of a provision in the BCA, even if the meaning has been established, albeit by the ordinary meaning of words, may involve a question of law: Salter v Building Appeals Board [2013] VSC 279 at [34]–[35]; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 397; [1996] HCA 36.

16. [136]

    The first matter raised by the Appellants’ submission is an assertion of error by reason of Appeal Panel’s reference to “impairs fire resistance” in the fifth line of AR [96]. Contrary to what is said by the Appellants, the phrase “impair(s) fire-resistance” is used in the heading to cl 2.4, which heading states “Attachments not to impair fire-resistance” (emphasis added). It follows, in my view, that the Appeal Panel’s reasoning does not involve a misreading of the clause and the Appellants have not established any error of interpretation or construction of cl 2.4(a)(iii) in that regard.

17. [137]

    The primary thrust of the Appellants’ submission concerns what is alleged to be the Appeal Panel’s error in failing to articulate the proper test for determining undue risk under cl 2.4(a)(iii). The Appellants’ contention of error is premised on the submission that the Panel gave no content to what “unwarranted or excessive risk” entails, which constituted error because it was without regard to proper interpretation principles. As was put at the hearing, the Appeal Panel “stop[ped] there” at the identification of the meaning of “undue” (T40.41) and failed to identify what the Appellants described as the correct test, which is that unwarranted risk must mean the particular material in question makes the spread of fire both likely and likely to occur in a way that will contravene the overall aims as stated in the BCA (T41.1–7).

18. [138]

    I am not persuaded by that submission. In my view, the Appeal Panel’s reasons make clear that it approached the issue of the construction of cl 2.4(a)(iii) and the assessment of the Senior Member’s finding of undue risk in accordance with ordinary principles of construction. In particular, reference was made to the BCA being designed to provide standards for the promotion of public safety in the construction of buildings and to the objectives of Section C relating to Fire Resistance: at AR [83]–[84]. The Appeal Panel then went on to consider the context in which subcll 2.4(a)(i) and (iii) of Specification C1.1 appeared by reference to other clauses in the BCA, as referred to at [72]–[74] above. In other words, the Appeal Panel approached the task of construing what was required by cl 2.4(a)(iii) by reference to the context and purpose of the provision.

19. [139]

    Clause 2.4(a)(iii) of Specification C1.1 requires an assessment of whether the use of Biowood combustible cladding otherwise constitutes an undue risk of fire spread via the façade of the Buildings. The phrase “undue risk” is not defined by the BCA. In this context, risk refers, in my view, to the possibility of fire spread occurring via the external face of the Buildings, consistent with the ordinary meaning of the word. Thus, compliance with cl 2.4(a) requires that the possibility of fire spread occurring must not otherwise be “undue”. As the word “undue” qualifies the word “risk”, some meaning and work must be given to that word.

20. [140]

    The Appeal Panel found that the word “undue” in the context of cl 2.4(a)(iii) means, relevantly, “unwarranted or excessive”. Although the Appellants’ submissions suggested that undue risk connoted “deliberate and significant risk”, at the hearing they accepted that the words “unwarranted and excessive” are not inapposite to describe the nature of the risk as “undue” (T40.37–9). Thus, there is no real dispute that undue risk for the purposes of cl 2.4(a)(iii) means risk of fire spread via the façade of the Buildings that is unwarranted or excessive. The meaning given by the Appeal Panel to “undue” accords with the ordinary English meaning of the word and, in my view, correctly reflects that the word has no unusual or technical meaning, unlike some other terms used in the BCA, such as “Spread of Flame Index”. The Appeal Panel did not err by adopting that meaning.

21. [141]

    The BCA does not specify the particular matters or precise parameters for determining whether the use of combustible material as an attachment constitutes a risk of fire spread via a building façade that is unwarranted or excessive for the purposes of cl 2.4(a)(iii). In my view, the determination as to whether the risk is undue (or unwarranted or excessive) involves an evaluative task that requires consideration of the circumstances and context in which the Biowood combustible cladding is used as an attachment to the external walls of the Buildings. That includes consideration of the objective of Section C of the BCA of ensuring the safety of people from fire, the BCA requirement that external walls in Type A buildings are to be constructed using non-combustible material, the possibility of fire spread eventuating, and the gravity of the risk from such use. Factors such as the ignitability of the combustible material and the likely rate of fire spread, the location of the material, and relevant safety features of the Buildings would also be germane to consider.

22. [142]

    To that extent, I accept the Appellants’ submission that the “test” or approach to be applied in assessing whether risk is undue could be described as a multi-factorial one. It may be accepted that the Appeal Panel does not expressly articulate a test in those terms. However, I am not persuaded that the failure to do so involves an error of the type raised by this ground of appeal, or that the Appeal Panel simply applied a synonym for the word “undue”.

23. [143]

    In addition to identifying the meaning of undue risk as unwarranted or excessive, the Appeal Panel construed cl 2.4(a)(iii) as requiring an assessment to be made of undue risk of fire spread even if the combustible material complies with the fire hazard properties in accordance with cl 2.4(a)(i): at AR [96]. It identified that the undue risk assessment involves a consideration of factors such as the extent of use of the materials and the relationship of their use to other parts of the Buildings, such as windows and balconies: at AR [91]. The Appeal Panel also refers to the following matters: the combustibility, ignitability and rate of flame spread of the material used (at AR [92]–[96], [99]–[100]); the possibility of the material supporting fire spread via the façade (at AR [92]–[95]); the lack of evidence of elements which would avoid the spread of fire (at AR [101]); whether there was evidence of test data supporting assumptions made by an expert (at AR [104]); and the determination of whether Biowood otherwise constituted an undue risk of fire spread via the façade being made “in the circumstances of this building” (at AR [102]).

24. [144]

    Thus, the Appeal Panel’s approach clarifies that a material’s compliance with Specification C1.10, such as by AS1530.3 and a low Spread of Flame Index, is not determinative of whether use of that material otherwise constitutes a risk of fire spread that is unwarranted or excessive. It also identifies a range of factors that are relevant to and were considered in the evaluative exercise of assessing whether the use of Biowood otherwise constitutes an undue risk of fire spread under cl 2.4(a)(iii). I do not consider there to be any error of law in that approach.

25. [145]

    As the Owners Corporation submits, the Appellants’ submissions are not so much about whether the Appeal Panel erred in formulating a test under the BCA or in applying the wrong test, but about whether there were sufficient facts to warrant a finding of undue risk (T55.34–6). In my view, the Appellants have not identified an error of construction with respect to cl 2.4(a)(iii) or in the correctness of determining whether the use of Biowood constituted an undue risk of fire spread by reference to various factors as identified in the Appeal Panel’s reasons.

26. [146]

    I also do not accept the Appellants’ submission that the Appeal Panel erred because it did not address how the characteristics of Biowood creates a risk that was undue and, to the extent it applied a test, it was misconstrued because there was no capacity to make allowance for Biowood in different locations.

27. [147]

    As noted above, the Appeal Panel identified the location, extent and relationship of Biowood to other parts of the buildings as factors in an undue risk analysis. Those factors assist in the analysis of and provide the capacity to allow for differential risk assessment of fire spread from the different locations of Biowood. That analysis was also reflected in the finding of undue risk. It was the risk of fire spread via the façade “between levels”, from level to level into the buildings via windows as the Biowood extended up the façade of the Buildings in numerous locations, that was accepted by the Appeal Panel to be undue in this case, not simply the risk of fire spread via the façade of the Buildings. The Appeal Panel may not have referred to the precise locations of the Biowood that constituted an undue risk, such as by reference to the images in Annexure A to Annexure D. However, it is apparent from the Appeal Panel’s identification of the location factors and its references to (and acceptance) of Mr Halstead’s evidence that its acceptance of the Senior Member’s finding of undue risk did not extend to the use of Biowood as shutters or on the ground floor as the Biowood in those areas did not extend between levels.

28. [148]

    In any event, the Owners Corporation does not press any claim in relation to the use of Biowood as shutters or on the ground floor (T58.40–9). I should also record that the Appellants accept Mr Jordaan’s evidence that the use of the Biowood cladding in the spandrel zones is not compliant with the BCA and they take no issue with that conclusion (T13.29–40).

29. [149]

    The question is whether the Appellants have demonstrated that the Appeal Panel erred in law in its expression of the undue risk test mandated by the BCA, such as by misconstruing the scope and operation of the phrase “undue risk” or in its formulation of the matters to which regard may be had. For the above reasons, I am not persuaded that any such error has been established.

30. [150]

    On the conclusion I have reached, the questions of whether the Appellants are correct in their formulation of the test to be applied to determine undue risk and whether they have demonstrated that the application of that test would generate a different outcome do not arise. As they were the subject of submissions, I make the following observations about those matters.

31. [151]

    As the Appellants submit, what matters under cl 2.4(a)(iii) is whether the risk of fire spread via the façade is “undue”. As noted above, in my view, a determination of that matter involves an evaluative exercise that takes into account the context and circumstances in which the combustible material is used, the possibility of fire spread eventuating, the gravity of that risk and a range of other factors. As between the parties, there seems to be little dispute about the need for an evaluative assessment.

32. [152]

    The difficulty with the Appellants’ correct test as postulated is that it seems to proceed on the basis that some risk of fire spread via the façade of the Buildings is always acceptable and to also require that certain matters be proven or given weight over others, such as the requirement to prove that the rate of flame spread is an element that causes undue risk, and that fire spread will occur or be likely to occur. The Appellants’ test and approach also suggests that the relevant comparator is between whether the likelihood of fire spread is de minimis and small, or whether it is large and excessive and, thus, undue. I do not consider that approach to be correct.

33. [153]

    The determination of whether a risk of fire spread is undue is not, in my view, limited to a comparator of risk based on a quantitative assessment of whether there is a high likelihood of fire spread or a low one. The determination also takes into account a qualitative assessment of whether the risk is warranted, in the sense of being acceptable or not, in the circumstances. The evaluative exercise in assessing undue risk inevitably requires the balancing of factors and judgment. The likelihood of fire spread might be identified as low or not fully known based on the quality of the material but the risk assessed as undue because of the gravity of the consequences having regard to the location of the material and nature of the building.

34. [154]

    As to the Appellants’ written submissions at [58], it does not seem to me to assist the analysis by illustrating an unwarranted or excessive risk of fire spread by reference to a counterfactual scenario that assumes Biowood is highly combustible and has quick rate of fire spread based on large scale testing and insufficient safety measures in the building exacerbating the risk of the fire spread. Identifying a scenario at one end of the risk spectrum does not identify an error of law in the approach of the Appeal Panel or the finding that the use of combustible material in this case constituted an undue risk, even accepting that the evidence and circumstances indicate that the risk of fire spread was at the lower end of the risk spectrum. The words undue risk do not only mean that which is an excessive, great or high risk, but includes the concept of unwarranted, in the sense that a risk may be inappropriate or unjustified in the circumstances even if low.

35. [155]

    I am also not persuaded that CP2 of the BCA is a critical context for the interpretation of cl 2.4(a)(iii) as the Appellants submit. I accept that the factors identified in CP2 may be relevant to assessing undue risk. However, to the extent the Appellants’ submission suggests that compliance with CP2 is a strong textual indicator that the use of combustible material does not constitute an undue risk for the purposes of cl 2.3(a)(iii), I reject that submission. If the controls in CP2 were sufficient to address whether the use of combustible materials gives rise to an undue risk of fire spread via the façade, either by themselves or together with the exemption and compliance limbs of cl 2.4(a)(i), there would be no need for the undue risk test in cl 2.4(a)(iii). As the Appeal Panel clarified, that clause requires an assessment of whether the use of the combustible material otherwise constitutes a risk of fire spread that is unwarranted or excessive, notwithstanding the other matters.

36. [156]

    For completeness, for the reasons set out in relation to ground 4, I do not accept the Appellants’ submissions at [57] which seem to me to be premised on the assertion that there is no evidence to support the findings of undue risk in this case.

37. [157]

    It follows that I am not satisfied that the Appellants have established that the Appeal Panel erred in its formulation of the test in determining undue risk and dismiss ground 1.

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

1. [158]

   The Appellants’ submissions on these grounds focus on the Appeal Panel’s reference to the Senior Member’s findings at AR [92] (set out at [75] above), which the Appeal Panel identified as the findings relevant to the requirement in cl 2.4(a)(iii) of Specification C1.1 that Biowood does not otherwise constitute an undue risk of fire spread by the façade. The Appellants submit that the absence of the application of the proper test was exposed when the Appeal Panel took those four “facts” as found and held, without exposing any reasoning, that the facts made Biowood an undue risk.

2. [159]

   The Appellants submit that the Appeal Panel failed to undertake any risk evaluation or ask itself whether the relevant findings at AR [92] gave rise to an unwarranted or excessive risk of fire spread. They submit that, to the extent the Panel articulated a test (such as that the risk had to be excessive), it failed to apply that test, and jumped from the so-called “facts” to a conclusion of undue risk that was an ipse dixit. The Appellants contend that the extent of the Appeal Panel’s reasons comprised a finding that the facts set out at AR [92] were “open and display neither an error of law nor a ground for the grant of leave to appeal” (at AR [97]) and no steps were taken to identify whether the facts were “facts” at all, whether they informed the question of risk and, if so, why. They submit that the Appeal Panel’s failure to expose why the four “facts” made the use of Biowood an undue risk was an error of law because it failed to undertake an evaluation to assess whether Biowood was a risk or an undue risk and no adequate reasons were given for that conclusion.

3. [160]

   The Appellants say that nothing in AR [98]–[104] considers why the Senior Member’s findings gave rise to an unwarranted or excessive risk of fire spread, nor was there any exposition as to how the conclusion of undue risk co-existed with, or was available in light of, his findings of a risk of fire spread (AR[92(2)]), that Biowood would not ignite adjacent Biowood (at AR [92(2)]), or a slow rate of fire spread (at AR [92(3)]).

4. [161]

   The Appellants submit that paragraphs AR [92] and AR [98]–[104] lack sufficient detail to enable the Court to ascertain whether the Appeal Panel’s reasons for finding that Biowood creates an undue risk are sound as they draw no connection between the findings at AR [92], the matters discussed at AR [98]–[104], and the conclusion that there was an unwarranted or excessive risk of fire spread. They say that this means the Court cannot determine whether the Appeal Panel did err in law in reaching its decision, which is in itself is an error of law, referring to Amaca Pty Ltd (under NSW administered winding up) v Raines; Seltsam Pty Ltd v Raines [2018] NSWCA 216 at [19] and Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [55].

5. [162]

   In response to ground 5, the Owners Corporation submits that an analysis of the Appellants’ submissions indicates not that the Appeal Panel failed to provide adequate reasons, but that it did not advert to findings regarding the capacity of Biowood to ignite adjacent Biowood or the slow rate of fire spread.

6. [163]

   The Owners Corporation’s submissions responsive to grounds 2 and 3 address some of the findings at AR [92(2)] and [92(3)]. In summary, it contends the following: there is no dispute on the evidence that there is a risk of fire spread from the use of Biowood combustible cladding; that the finding that Biowood would not ignite adjacent Biowood does not mean that Biowood would not support self-sustained fire spread, referring to the Mr Halstead’s evidence in cross-examination (T81.11–29, 30 July 2019); and that the rate of fire spread is not a material consideration.

7. [164]

   On this last point, the Owners Corporation raised five matters as to why the rate of flame spread is not necessarily material. First, cl 2.4(a)(iii) makes no reference to the rate of fire spread. Second, there was no meaningful evidence that residents of the Buildings would be substantially safer if, for example, it took 10 minutes for the fire to spread between floor levels rather than two minutes. Third, the test upon which the Appellants rely, namely AS1530.3, is not a measure of the actual rate of fire spread but a test that determines the relative rate of fire spread. A Spread of Flame Index of ‘0’ does not mean that it will not spread but that it may be taken to spread more slowly. In support of these propositions, reference was made to SR [42] where the Senior Member referred to the NSW Timber Advisory Council Technical Report and to Mr Jordaan’s evidence in cross-examination before him at T56.4–T57.42, 30 July 2019. Fourth, the Appeal Panel’s reasons (at AR [100]) was to the effect that the Spread of Flame Index of ‘0’ does not indicate that the material does not spread flame but is a relative term indicating a slower rate of fire spread. Those reasons note the statement in the CSIRO Guidelines referred to in the Senior Member’s reasons. Fifth, cl 2.4(a)(iii) is expressly concerned with signs, sunscreens, blinds and awnings which may, if ignited, have a high or low rate of fire spread but, depending on their location, may be unlikely to support fire spread between levels.

8. [165]

   The Owners Corporation also submits that other factors, such as whether the elements were limited to isolated sections of cladding which did not span between windows or if there were external sprinklers, might be material if they would impede the spread of fire between floor levels. It contended that no such factors were identified in the proceedings.

9. [166]

   In reply, the Appellants took issue with the Owners Corporation’s contention that the Senior Member’s findings that Biowood will not ignite adjacent Biowood and that it had a slow rate of fire spread were not material considerations. They submit that these submissions are contrary to the findings of the Appeal Panel, which explicitly catalogued the matters referred to at AR [92] as relevant findings. They are also said to be contrary to the Senior Member’s findings that, according to the contested evidence of both experts, the measure of “risk” is a function of at least three factors including the rate of fire spread, and that factor is also an aspect of the multifactorial analysis of “undue risk”: at SR [88].

10. [167]

    The Appellants also submit that the Owners Corporation’s contention that other factors are only material if they mean that fire would not spread between floors proceeds on the erroneous assumption that flame spread is the only relevant criteria. This is said to be contrary to Mr Halstead’s evidence to the effect that various factors must be considered and Mr Jordaan’s evidence and ALARP analysis, both of which support a multifactorial analysis to determine undue risk. It is submitted that such analysis was not undertaken by the Senior Member or the Appeal Panel.

11. [168]

    The principles relevant to an appellate review where the adequacy of a Tribunal’s reasons is raised were recently considered by Bell P in NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (NSW Land v Orr) at [66]–[77].

12. [169]

    His Honour recognised that adequate reasoning on the part of a Tribunal, such as the Appeal Panel in this case, is informed by s 62(3) of the CAT Act which requires there to be set out in reasons, when requested by a party (at [71]):

13. [170]

    His Honour identified that the notion of adequacy is informed by a recognition for the need for practical as well as principled restraint in the context of decisions made by a Tribunal that is not under any express statutory obligation to provide reasons unless a party makes a request, the volume of applications that tribunals deal with each year, and statements from well-known administrative law decisions relating to the limits of judicial review in that context: NSW Land v Orr at [70], [76]. See also Collins v Urban [2014] NSWCATAP 17 at [57]; Pozzolanic at 287.

14. [171]

    His Honour also referred (at [75]) to the statement of Basten JA in Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWCA 112 at [46], which is also of relevance in this case, as follows:

15. [172]

    His Honour summarised the relevant principles at [77], which I gratefully adopt (citations omitted):

16. [173]

    Also of relevance is that the function of this Court is not to determine the optimal level of detail required in reasons for a decision but, rather, the minimum acceptable standard. As the present case involves a right of appeal given only in respect of a question of law, reasons for a finding of fact "can be treated less elaborately than [those on] an issue involving a question of law or mixed fact and law": Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Basten JA, Beazley JA agreeing), [83] (Macfarlan JA), citing Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281.

17. [174]

    Applying these principles to this case, I am not persuaded that the Appellants have established that the Appeal Panel’s reasons are inadequate. Nor do I accept the submission that the Appeal Panel’s reasoning should be characterised as comprising an ipse dixit because it jumped from the Senior Member’s findings contained at SR [135] and [136] (as summarised at AR [92]) to a conclusion that those findings were “open and display neither an error of law nor a ground for the grant of leave to appeal” (at AR [97]) without any analysis or reasoning.

18. [175]

    In my view, when read as a whole and applying a “beneficial construction”, the Appeal Panel’s reasoning process for concluding that it was open to the Senior Member to make the findings he did and upholding that the use of the Biowood constitutes an undue risk of fire spread via the façade can be discerned: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271–2; [1996] HCA 6. In particular, the Appeal Panel’s statement at AR [97] must be read with the balance of the Appeal Panel’s reasons, not just in conjunction with the paragraphs that follow sequentially at AR [98]–[104], as the Appellants’ submissions seem to suggest.

19. [176]

    In dealing with ground 1, I have already referred to aspects of the Appeal Panel’s reason that identify its approach to assessing undue risk. The Appeal Panel was cognisant of and referred to the objectives of the BCA and the context in which the “undue risk” assessment was to be made, and articulated that undue risk is more than just “a risk” but a level of risk that is unwarranted or excessive.

20. [177]

    AR [96] and the matters referred to at AR [100] explain the Appeal Panel’s reasons why a combustible material may constitute an undue risk of fire spread even though it complies with the fire hazard properties in Specification C1.10 and has a slow rate of fire spread (as evidenced by a Spread of Flame Index of ‘0’). The Appeal Panel explains this by reference to Mr Halstead’s opinion that the AS1530.3 test is in respect of fires inside a building and is not relevant to external cladding, the submissions made (which were not objected to) and parts of the evidence before the Senior Member (referred to in his reasons). That evidence is to the effect that a Spread of Flame Index of ‘0’ indicates a slower rate of spread but not that the material does not spread flame, and that a “Group 3 material can achieve a Spread of Flame Index of ‘0’ in the AS/NZS1530.3 and is highly likely to have flame spread the full extent of a vertical element, once ignited”.

21. [178]

    Significant to the Appeal Panel’s reasoning process and the conclusions at AR [97] are its rejection of the Appellants’ submission that Mr Halstead’s evidence should not be accepted and its findings regarding Mr Halstead’s evidence at AR [93]–[95], [98]–[99] and [107]. Relevantly, those parts of the reasons identify that Mr Halstead’s evidence was to the effect that the Biowood cladding is combustible, has fire properties allowing ignition and spread of flame, is located in areas extending up the façade of the external walls, and, if ignited, gives rise to the possibility of fire spread into the Buildings via the windows and balconies between levels notwithstanding that it would not give off sufficient heat to ignite adjacent Biowood. Relevantly, the Appeal Panel noted that the Senior Member rejected Mr Jordaan’s method of assessing risk (by which I understand the Panel to be referring to the ALARP approach) in favour of Mr Halstead’s evidence.

22. [179]

    In other words, the Appeal Panel dealt with the substance of the factual and other findings that are summarised at AR [92(1)]–[92(3)], namely, that Biowood would support fire spread between floor levels along the façade, the relevance of the AS1530.3 test and the slow rate of fire spread. I accept that the Appeal Panel’s reasons do not expressly or sequentially connect each of the findings referred to at AR [92] with the matters referred to at [138], [140], [143], [147] and [176]–[178] above. Nor do the reasons distinguish between what are the factual and other findings made by the Senior Member at SR [135]–[136]. But, in my view, the matters to which I have referred identify the critical steps in the Appeal Panel’s reasoning process and expose the primary bases for its conclusion that it was open for the Senior Member to make the findings that he did at AR [92].

23. [180]

    The lack of an express exposition of why the Appeal Panel considered that any risk that Biowood would support fire spread between levels of the Buildings presents an undue risk is not, to my mind, significant. Its reasoning is, in part, apparent from the ultimate finding itself, namely that a risk of fire spread “between levels” of the Buildings is an undue risk. As stated above, it is not simply a risk of fire spread via the façade that the Appeal Panel accepted was an unwarranted one. It is the possibility that the Biowood, if ignited, would allow fire spread into the Buildings via windows from level to level. In that regard, and while not at all determinative, there is some force to the Owners Corporation’s submission that, as the Biowood combustible cladding formed a bridge above what was required by the BCA to be a non-combustible external wall, a finding that the use of the Biowood combustible cladding spanning multiple levels next to windows in a residential multi-story buildings constitutes an undue risk of fire spread between levels via the façade of the Building is “obvious”.

24. [181]

    Accordingly, I do not accept that the Appeal Panel’s reasons fail to inform on the question of undue risk or provide analysis concerning the relevant findings, or that the Appeal Panel’s conclusion that upheld the Senior Member’s finding on undue risk involved an ipse dixit. To my mind, it is sufficiently clear from the Appeal Panel’s decision the path of reasoning that led it to uphold the Senior Member’s findings set out at AR [92] and why it accepted that the use of Biowood cladding gave rise to an unwarranted or excessive risk for the purposes of cl 2.4(a)(iii). The Appeal Panel’s acceptance of the Senior Member’s findings was made having had regard to the applicable codes and standards, key findings, the evidence in support, other matters relevant to the evaluative exercise of assessing whether the risk was undue (such as location, extent and relationship of the material to the buildings, the ignitability and speed of flame spread), the Appellants’ submissions as to why the Senior Member had erred, and the Appeal Panel’s responses to those submissions.

25. [182]

    As to the Appellants’ submission that there was evidence that “pointed the other way”, namely, that the risk of fire spread was low and there was no test data to substantiate findings relevant to the rate of flame spread other than AS1530.3, those matters seem to me to raise a question as to the weight to be placed on the evidence. The Appeal Panel dealt with the absence of test data other than the results of the AS1530.3 test and observed that the Senior Member found that Mr Jordaan’s conclusions were based on assumptions that Biowood will not support self-sustained fire spread in the absence of any test data: at AR [104]. That there was evidence of the nature referred to by the Appellants does not establish the Appeal Panel erred by providing inadequate reasons or erred in law its application of the proper test or the BCA to the facts, giving rise to an erroneous conclusion.

26. [183]

    Similarly, in my view, the parties’ submissions referred to at [163]–[167] above go more to the weight of the evidence and views expressed by the parties’ competing experts, rather than any error of law under grounds 2, 3 or 5.

27. [184]

    It follows that I have concluded that ground 5 fails and the Appellants have not made out grounds 2 and 3 based on the submissions advanced in support of those grounds with ground 5.

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

1. [185]

   The Appellants’ submissions on grounds 4, 2 and 3 were expressed to be “in the alternative” if the Court found that the Appeal Panel did disclose its reasoning. In support of these grounds, the Appellants submit that the “relevant findings”, being those referred to by the Appeal Panel at AR [92] (referred to at [75] above), could not support a conclusion that there was an “unwarranted or excessive risk”.

2. [186]

   The Appellants’ submissions refer to aspects of the relevant findings and contend, in summary, the following: there was no evidence to support the findings; there was no analysis of some of the findings; the finding in relation to AS1530.3 was, in addition to not being based on evidence, an error in misconstruing the BCA; and the findings involved an ipse dixit and non-findings.

3. [187]

   In relation to appeal ground 4, the Owners Corporation contends that the issue is not whether the Appeal Panel found the existence of “undue risk” in the absence of evidence, but whether the Appeal Panel erred in law in determining the appeal from the Senior Member’s decision. It submits that there was no “no evidence ground” of appeal before the Appeal Panel and, absent such a ground, the jurisdiction of this Court to determine a question of the Appeal panel is not enlivened.

4. [188]

   The Owners Corporation also submits that, in any event, there was evidence to support the decision of the Appeal Panel and the finding that there was a certainty of risk of fire spread between levels by reference to Mr Jordaan’s 8 March report.

5. [189]

   The Owners Corporation also submits that there was evidence from which a Tribunal could find that there was an undue risk of fire spread via the façade of the Buildings. Seven evidentiary matters were identified as follows: first, that Biowood cladding is combustible; second, the risk is that the fire will spread beyond the floor of origin because the material will support fire spread between levels; third, there was positive evidence from a suitably qualified and experienced fire safety engineer that there is an undue risk; fourth, the evidence of Mr Jordaan rested entirely on AS1530.3, an inapplicable test which did not demonstrate that the Biowood combustible cladding would not support fire spread between levels; fifth, there was nothing to support the implicit contention that a slower rate of fire spread does not present an undue risk in comparison with a comparatively higher rate of spread; sixth, the evidence of Mr Halstead was that the aluminium cladding the subject of the Lacrosse fire also satisfied the requirements of the 1530.3 test but, when subjected to a full-scale façade test, readily facilitated the spread of fire between levels, so that the assumption that a Spread of Flame Index of ‘0’ meant that there was no risk was misplaced; and seventh, the fact that combustible cladding was a Group 3 material again points to the conclusion that it would enable the spread of fire between levels in the Buildings.

6. [190]

   Reliance was placed on Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 at 557 (Williams v Bill Williams) :

7. [191]

   Reference was also made to Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12 at [77] where Kirby J said:

8. [192]

   In reply, the Appellants contend that ground 4 is not concerned with an analysis of the view of the facts taken by the Senior Member, but whether there was “no evidence to support the conclusion” of undue risk.

9. [193]

   The Appellants take issue with each of the reasons advanced by the Owners Corporation for why there was evidence to support the finding of undue risk. In summary, they submit that:

10. [194]

    The first issue raised by the submissions is whether the “no evidence ground” is open to be raised on this appeal. In my view, it is. Although not expressed as a “no evidence ground”, the Appeal Panel accepted that ground 7 (the Senior Member erred in finding that the Biowood attachment presented an undue fire risk) concerned the question of whether the finding of undue risk of fire spread was not open on the evidence, and dealt with it on that basis: at AR [106]–[108]. While the appeal to this Court could have been expressed as whether the Appeal Panel erred in upholding the Senior Member’s decision in the absence of evidence, I am satisfied that a question of law in respect of the Appeal Panel’s decision is enlivened by ground 4, that this Court has jurisdiction to determine it and that leave to appeal should be granted.

11. [195]

    It is an error of law to make a finding for which there is no evidence: Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91]; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (Australian Broadcasting Tribunal v Bond) at 355–6 (Mason CJ, Brennan J agreeing); [1990] HCA 33. The question whether a particular inference could be drawn from facts found or agreed is a question of law and the drawing of inferences in the absence of evidence is also an error of law: Australian Broadcasting Tribunal v Bond at 355 (Mason CJ, Brennan J agreeing).

12. [196]

    A finding of fact cannot be disturbed if the facts upon which the finding is based are capable of supporting that finding and there is evidence to prove those facts. Conversely, a finding of fact can be disturbed if there is no evidence to support the facts on which the finding is based or if the facts as found, even those supported by the evidence, are incapable of justifying the finding of fact: The Australian Gaslight Company v Valuer-General (1940) 40 SR (NSW) 126 at 138 (Jordan CJ).

13. [197]

    Turning to the findings as referred to by the Appellants, they contend that there was no evidence to support the findings (at AR [92(1)] and [92(2)]) that there is a risk that burning Biowood supports fire spread and that Biowood would support fire spread between floor levels along the façade of the Buildings. I disagree. In addition to the fact that Biowood is a combustible material, in my view, there is evidence from both experts that supports those findings.

14. [198]

    The Appellants did not take issue with the finding that there is a risk that burning Biowood supports fire spread but say that Mr Halstead’s evidence does not support the unqualified statement (at AR [92(1)]) that Biowood will support fire spread between floors because his evidence, and that of Mr Jordaan, was to the effect that Biowood would only do so “where the original source of the fire persists”.

15. [199]

    Mr Halstead’s evidence was that the risk of fire spread arises from both the Biowood being heated by the burning of adjacent Biowood and the original source of the fire. He did not accept the proposition that adjacent Biowood would not burn provided the heat given off the burning Biowood is less than the critical heat required to burn itself, stating it was “not fair to say at all because it depends on how the fire started in the first place” and that a large fire impinging out of a unit onto the external wall, and going on to the façade, “adds to the fire spread” (T81.10–9, 30 July 2019). Mr Halstead did not say that Biowood would only support fire spread where the original source persists.

16. [200]

    I have already referred to relevant parts of Mr Halstead’s evidence, including those identified in the Appeal Panel’s reasons, at [43], [75], [76], [77] and [178] above. Mr Halstead also gave evidence before the Senior Member as follows (T52.36–43, 30 July 2019):

17. [201]

    Mr Jordaan’s 8 March report and his evidence before the Senior Member also acknowledged there was a risk of fire spread via the Biowood cladding. The effect of Mr Jordaan’s evidence is that it was expected that a “low level of fire spread could occur”, although he considered that Biowood was unlikely to support “rapid fire spread”, it “may be self-extinguishing” and the current evidence did not support “significant fire spread”. In cross-examination, Mr Jordaan accepted that a Group 3 material (which Biowood is) was potentially more likely to support fire spread between levels than a Group 1 and 2 material, that his evidence that there was no undue risk of fire spread was based on his interpretation of the AS1530.3 test results, that the Spread of Flame Index in the CSIRO test (based on AS1530.3) is not a direct measure of the spread of flame but based on the relationship between radiant energy released and time taken for flame to spread, and that an Index of ‘0’ does not mean there will not be fire spread but that it may be taken to spread more slowly (T51.10–23, T56.41–T57.4, T57.39–44, T66.3–12, 30 July 2019).

18. [202]

    While there was a difference in opinion between Mr Halstead and Mr Jordaan about the extent of the risk of fire spread, in view of the above, I do not accept that there was no evidence to support the findings expressed at AR [92(1)] and [92(2)] or there was any error of law in the Appeal Panel making those findings.

19. [203]

    As to the finding at AR [92(1)] that “The test recorded in AS1530.3 is not relevant because that test is concerned with fires inside a building”, that statement records Mr Halstead’s opinion to that effect and is also supported by his evidence. To the extent that this finding affirmed an error on the part of the Senior Member in misconstruing the BCA, such an error relates to the proper construction of the applicable test under Specification C1.10 for the purposes of the compliance limb of cl 2.4(a)(i), rather than an error in the assessment of undue risk under cl 2.4(a)(iii).

20. [204]

    This last point is highlighted by the Appellants’ submission that the Senior Member’s finding that at SR [135] that Biowood should be assessed as a timber Group 3 material and his preference for the “alternative test” of AS3837 to the AS1530.3 test was not open because, as a matter of construction, the BCA admits of no test other than AS1530.3, and was based on an opinion expressed by CSIRO employees whose qualifications and reasoning remains untested. It is submitted that the Appeal Panel erred as a matter of law in affirming the correctness of the finding by the Senior Member, referring to the statements of Beach J in Salter v Building Appeals Board [2013] VSC 279 at [29] and [31], where his Honour said:

21. [205]

    The Appellants submit that the BCA says nothing about the AS3837 test in relation to flame spread and there was no evidence to support that “alternative test”. They say that the only evidence concerning AS3837 was that of Mr Jordaan in cross-examination to the effect that the AS3837 test is unsuitable and less relevant for external cladding as the material’s ability to sustain a fire itself is not determined from that test.

22. [206]

    As to the submission regarding the evidence, I accept that Mr Jordaan expressed the views referred to (at [205] above) in cross-examination. However, when asked about cl 7 and the CSIRO Guideline, he also agreed that the “whole section, C1.10, is not really relevant to external parts of a building” but “mainly intended for internal linings” (T38.35–40, 30 July 2019), and the matters referred to at [201]. As noted at [108] above, Mr Jordaan also referred to AS3837 as an applicable test under cl 4 of Specification C1.10 for Biowood as “wall linings”, in addition to the AS1530.3 test under cl 7.

23. [207]

    There is also Mr Halstead’s evidence. In cross-examination, Mr Halstead gave evidence to the effect that he did not consider AS1530.3 to be suitable as a test for external use or a façade and he understood the CSIRO Guideline as saying that “clause 7 of C1.10” and a “test under” AS1530.3 “is not relevant or applicable to attachments used as external wall … cladding” (T40.37–40, T43.46–7, T44.6–16, 30 July 2019). He gave evidence that the panels the subject of the Lacrosse fire had an “ignitability index of zero, a spread of flame index of zero, a heat evolved index of zero and a smoke developed of one”, and agreed the conclusion to be drawn from this is that a Spread of Flame Index of ‘0’ from AS1530.3 testing does not mean that flames will not spread but may refer to the speed of spread, noting that AS1530.3 is a small scale test carried out internally, not on a façade (T46.13–28). He also accepted that AS1530.3 is one of a number of industry standard approaches for testing for compliance with the BCA, he had used AS1530.3 to assess the fire properties of Biowood and whether it is an undue fire risk, he had reproduced and relied on the results in his report, and that cl 7 of Specification C1.10 calls AS1530.3 up as one of the contributing elements to be analysed when assessing an attachment to a façade (T44.3–5, T76.30–T77.35, 30 July 2019).

24. [208]

    The evidence referred to above acknowledges the limitations with AS1530.3 testing, that the test is not ‘really’ relevant for external uses, and the contents of the CSIRO Guideline. In that context, I do not accept the Appellants’ submission that there is no evidence that supports the Appeal Panel’s findings at AR [92(2)].

25. [209]

    As to the Appellants’ submissions on the error on construction of the BCA, I do not consider that the Appeal Panel (and the Senior Member) held that “testing under AS1530.3 did not apply” under the BCA, as referred to in the Amended Statement for Summons for Leave to Appeal. The Appeal Panel accepted it was open for the Senior Member to find the following: that on the evidence that Biowood is a combustible material, Biowood complies with the fire hazard properties prescribed by Specification C1.10 and is assessed as a timber Group 3 material achieved through AS3837 testing; there is a risk that Biowood will support fire spread between floor levels along the façade of the Buildings; and Mr Halstead’s evidence (who agreed with the opinions expressed in the CSIRO Guidelines) is preferred to that of Mr Jordaan as to the relevance of the AS1530.3 test: at AR [97] and SR [135]. Insofar as the Senior Member erred as a matter of construction of the BCA in preferring AS3837 to the alternative test of AS1530.3, it appears he did so as part of the assessment of compliance with the fire hazard properties prescribed by Specification C1.10 (as noted above at [108]), which assessment is relevant to the compliance limb of cl 2.4(a)(i).

26. [210]

    The effect of the Appeal Panel’s reasons at AR [96] is that, even if the Biowood cladding complies with the fire hazard properties in Specification C1.10 (and has a Spread of Flame Index of ‘0’ under the AS1530.3 test), cl 2.4(a)(iii) of Specification C1.1 requires that an assessment as to the risk of fire spread be made and whether that risk is undue. In other words, the assessment of undue risk is undertaken in circumstances where the combustible material complies with the relevant tests under cl 2.4(a)(i). The BCA does not mandate a particular test for the undue risk assessment, rather, it mandates tests for assessing whether the material meets the requirements of the compliance limb under cl 2.4(a)(i).

27. [211]

    The questions of law raised by this appeal are whether the Appeal Panel erred by finding the existence of undue risk in the absence of evidence or erred in its application of the BCA to the facts such as to give rise to an erroneous conclusion, relevantly advanced as the erroneous conclusion of undue risk under cl 2.4(a)(iii). The error of construction that is raised by the Appellants’ submission relates to the proper construction of cl 2.4(a)(i) of Specification C1.1, namely whether Biowood is to be assessed as complying with the fire hazard properties in Specification C1.10 under cl 7 as “Other materials” and assessed by reference to AS1530.3, or under cl 4 as a material used as an attachment to a wall and assessed by reference to AS3837. Irrespective of what clause and test applies under Specification C1.10, the Senior Member found that Biowood complies with the fire hazard properties prescribed by Specification C1.10 under cl 2.4(a)(i). There is also evidence that Biowood complied with the fire hazard properties under both tests.

28. [212]

    It follows, in my view, that even if the Appeal Panel erred in affirming the Senior Member’s error in misconstruing the BCA by preferring AS3837 in place of AS1530.3 for the purposes of Specification C1.10 and cl 2.4(a)(i), that error would not be material to the outcome of this appeal as to whether the Appeal Panel erred in relation to the finding of undue risk. This is particularly as the Appeal Panel (and the Senior Member) had regard to the results of the AS1530.3 test and the rate of flame spread as part its consideration of undue risk. The Appeal Panel recognised that the test gave rise to a Spread of Flame Index of ‘0’, identified that ‘0’ is a relative term to indicate a slower rate of fire spread and not that the material does not spread flame, and noted the extract from the CSIRO Guideline referred to by the Senior Member (referred to at [41] above) about what might be taken from an Index of ‘0’ under the AS1530.3 test and a Group 3 material. Thus, notwithstanding the finding that AS1530.3 is not a relevant test because it is concerned with fires inside a building and that Biowood is assessed as a Group 3 material under AS3837, the measure and rate of flame spread as predicted by AS1530.3 testing were considered by the Appeal Panel (and the Senior Member) in the assessment of risk of fire spread and whether that risk was undue for the purposes of cl 2.4(a)(iii).

29. [213]

    Accordingly, I am not persuaded that the Appellants have demonstrated an error by the Appeal Panel in its construction of the BCA or its application of the proper test to the facts giving rise to an erroneous conclusion of undue risk, based on the finding concerning AS1530.3, or an absence of evidence in support of that finding.

30. [214]

    The Appellants take issue with the finding that “a slow rate of fire spread does not preclude a finding that there is undue risk” (AR [92(3)], contending that it is a “non-finding” and that it is not a finding of or in support of undue risk. Taken by itself, I agree. But that finding must be read together with the other findings referred to by the Appeal Panel and its reasoning process that identifies why a slow rate of fire spread may not preclude such a finding: see, for example, at AR [95]–[96], and [100]. No error of law has been shown in relation to that finding.

31. [215]

    The Appellants also submit that the Appeal Panel was wrong to find that the Senior Member did not accept the ipse dixit of Mr Halstead on the issue of undue risk. I accept that the determination of whether the use of Biowood constitutes an undue risk was for the Senior Member to determine and not for Mr Halstead, or Mr Jordaan. However, the Appellants have not identified any error of law in the Appeal Panel’s conclusion that the Senior Member did not rely on Mr Halstead’s interpretation of the meaning of undue risk but relied on his evidence and opinion that Biowood would allow fire spread into the buildings, as explained at AR [99], [103] and [104].

32. [216]

    As to the Appellants’ contention that there was no evidence that fire will spread via the façade, the evidence does not need to establish that this will occur with certainty, only that the use of Biowood gives rise to a risk of fire spread occurring via the façade and that the risk is an unwarranted or excessive one. In my view, there is no error in the Appeal Panel holding that Mr Halstead’s evidence supported a finding of undue risk of fire spread based on the evidence referred to at [200] and [207], and his evidence that sprinklers, as a relevant fire safety measure, would have no relevance to external fire spread and were no not present in the units (T86.45–T87.3, T87.30–9, 30 July 2019).

33. [217]

    The Appellants also submit that the finding that “any risk that Biowood would support fire spread between levels of the building presents an undue risk” at AR [92(4)] is an ipse dixit and has the effect of extinguishing the adjectival influence of “undue”. I do not accept that submission. It fails to take into account the balance of the Appeal Panel’s reasons, which I have referred to in dealing with grounds 1 and 5 above, and the significance of the risk of fire spread being “between levels”. Contrary to the Appellants’ submissions, Mr Halstead does not “equate any risk [of fire spread via the façade] as undue”. This is apparent from his report which does not raise concerns with the use of Biowood as shutters or on the ground floor which, in theory, could give rise to a possibility of fire spread via the façade, albeit in a very limited area, and his evidence referred to at [200] above. As already noted, it is not simply a risk of fire spread via the façade that the Appeal Panel accepted as undue, but the possibility that the Biowood, if ignited, would allow fire spread into the Building via windows and balconies from level to level in the circumstances of a multi-storey residential building and a BCA that required external walls to be non-combustible.

34. [218]

    The Court has no authority to decide whether any particular finding is correct but only whether there is any material upon which the Tribunal could reasonably make that finding: Federal Commissioner of Taxation v Broken Hill South Ltd (1941) 65 CLR 150 at 155 (Starke J); [1941] HCA 33. While accepting that reasonable minds could and may well differ on the finding of undue risk in this case, based on the evidence to which I have referred, particularly that of Mr Halstead, I am satisfied that there was some material on which the Senior Member could make the finding of undue risk and the Appeal Panel did not err in upholding the finding to that effect.

35. [219]

    Accordingly, ground 4 fails, as do grounds 2 and 3 based on the submissions advanced in support of those grounds together with ground 4.

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

1. [220]

   At the hearing, the Appellants accepted that ground 4A is linked to the finding of undue risk and non-compliance with the BCA and that if I am against them on “undue risk” as raised by grounds 1 to 4, they cannot succeed on ground 4A (T69.21–9).

2. [221]

   In other words, the Appellants accept there was no error on the part of the Appeal Panel in upholding the Senior Member’s decision that each of the statutory warranties in subs 18B(1)(b), (c), and (f) of the HB Act were breached having concluded that the use of Biowood did not comply with the BCA as the material presented an undue risk of fire spread (noting they take issue with the finding of undue risk). Accordingly, based on my conclusions on the other appeal grounds, appeal ground 4A also fails and will be dismissed.

3. [222]

   As it was the subject of submissions, I should record that there was debate about the findings on breach of the fitness for purpose warranties. The Appellants submitted that the Appeal Panel’s findings of breach were based on reasoning of non-compliance with the BCA and undue risk, an acceptance that the BCA sets the minimum standard against which fitness for purpose was to be assessed, and its correct rejection of the Owners Corporation’s submission before the Senior Member that s 18B(1)(f) is breached by the use of Biowood even if the BCA requirements are met.

4. [223]

   The Owners Corporation submits that the Senior Member’s finding that Biowood combustible cladding was not fit for purpose was not contingent upon there being a failure to comply with the BCA (T59.11–30). It also submits that, in addition to the evidence, there are two additional factors justifying the conclusion that Biowood cladding is not fit for purpose even if it complies with the BCA. Those matters are, first, the subversion of the fundamental fire safety requirement that external walls be non-combustible by cladding them with combustible attachments and, second, the recognition of this illogicality by the changes introduced to cl 2.4 of Specification C1.1 in response to “recent fires”.

5. [224]

   In my view, the Appeal Panel’s findings that the Senior Member was correct in concluding that the use of Biowood breached the statutory warranties in subss 18B(1)(b), (c) and (f) were predicated on the finding that the use of Biowood constitutes an undue risk of fire spread and, thus, is not compliant with the BCA. The Appeal Panel accepted the correctness of the Senior Member’s decision that Biowood breached s 18B(1)(b) by reasoning that material installed in a multi-storey residential building which “does not comply with the BCA is … material that is not suitable for the purposes for which it is used…”: at AR [111].

6. [225]

   I also consider that the Senior Member’s findings that Biowood is not fit for purpose and in breach of subss 18B(1)(b) and (f) were premised on his finding of undue risk and, thus, non-compliance with the BCA. The connection between those findings is apparent from the Senior Member’s finding that “It follows that Biowood is not fit for purpose when used as an attachment” (at SR [154]) after he had referred to his finding that “combustible Biowood used as an attachment to a non-combustible external wall presents an undue risk of fire spread” (at SR [153]), the Owners Corporation’s evidence that Biowood has the risk of permitting fire spread from compartment to compartment via the exterior of the building (at SR [153]), and the BCA setting the “minimum standard by which fitness for purpose is to be measured” (at SR [152]).

7. [226]

   Accordingly, I accept the Appellants’ contention that there was no finding by the Senior Member that the HB Act had been breached that was independent of the finding of undue risk and reject the Owners Corporation’s submission that the finding of breach of the warranties under the HB Act in this case was not contingent on the finding of a failure to comply with the BCA.

8. [227]

   Thus, if I had found that the Appeal Panel erred in upholding the Senior Member’s finding that the use of Biowood constituted an undue risk of fire spread and was not compliant with cl 2.4(a) of Specification C1.1 of the BCA, I would have concluded that the Appeal Panel’s findings concerning breach of the statutory warranties in subs 18B(1)(b), (c), and (f) of the HB Act should be set aside as the determination of breach was not on any basis other than non-compliance with the BCA. The submissions advanced by the Owners Corporation that there are factors and evidence that support the conclusion that the Biowood combustible cladding is not fit for purpose even if it complies with the BCA raises questions of fact do not arise in this appeal.

Conclusion, costs and orders

1. [228]

   In conclusion, I do not accept that the Appellants have established any of their grounds of appeal against the Appeal Panel’s decision that upheld the Senior Member’s decision. The appeal to this Court pursuant to s 83 of the CAT Act will be dismissed.

2. [229]

   I see no reason why the usual order that costs follow the event should not apply and propose to make an order for the Appellants to pay the Owners Corporation’s costs of these proceedings. As the parties did not address the issue of costs, I have deferred entry of the proposed costs order for 14 days to enable a party to make an application if they consider a different order should be made. In that event, that party should confer with the other parties and, before the order takes effect, notify my Associate by email that a different costs order is sought together with their written submissions on that issue (of no more than three pages) and an agreed date for submissions in response, with a view to the issue being determined on the papers.

3. [230]

   For these reasons, I make the following orders:

   1. (1)

      Grant leave to appeal.

   2. (2)

      Dismiss the amended summons filed by the First Plaintiff and the cross-summons filed by the Second Plaintiff.

   3. (3)

      Unless any party makes an application for a different costs order within 14 days, the Defendant’s costs of these proceedings be paid by the First and Second Plaintiffs on an ordinary basis as agreed or assessed.