Client Update

Draft NSW commercial building and housing codes released for public comment

Summary

In May 2008, the NSW government released, as part of its planning and reforms package, draft codes for public comment including the Housing Code and the Commercial Building Code.

The draft codes were put together with the assistance of a complying development expert panel and are intended to apply statewide to NSW.

The objectives of the codes include harmonising the rules for exempt development, unclogging the planning system, speeding up approvals for small-scale, low-impact proposals, and to ensure that there is statewide consistency.

Background

At present, 90% of all development proposals are forced to proceed as full-scale Development Applications (DAs), which require processing times of up to 57 days (for renovations and extensions) and 78 days (for new homes).

For both housing and simple commercial and industrial developments, the draft codes aim to:

• clarify the requirements of exempt developments, and

• enable approval for complying developments to be obtained within 10 days.

The NSW Commercial Building Code

This code provides a simple approval process for identified forms of simple commercial and industrial developments. The advantages include:

• streamlined approval processes,

• reduced delays in receiving approval,

• standardised application for exempt and complying developments, and

• clearer processes for certification.

The NSW Housing Code

The housing code benefits from advantages similar to the Commercial Building Code. It additionally touches on “good housing design” principles including:

• streetscape,

• bulk and scale of dwellings,

• setbacks,

• building elements (eg: bay windows, balconies or verandahs),

• privacy and private open spaces, and

• environmentally sustainable design.

The Planning Minister, Frank Sartor, said that these codes “will make it easier for working families to undertake projects such as a small home extension, provided they comply with a strict set of rules”.

Conclusion

These codes were strongly supported in surveys conducted by The Australian Institute of Architects and the Planning Institute of NSW.

During the exhibition period, the Randwick, Penrith, Shoalhaven, Armidale-Dumaresq, Canada Bay, Pittwater, Orange, Tweed Heads and Sutherland councils participated in trials for the codes.

The NSW Department of Planning invited the public to comment on the codes and is committed to implementing the codes through an enabling State Environmental Planning Policy (“SEPP”) following public feedback.

According to Planning Minister, Frank Sartor, these measures “are about getting rid of red tape and confusing rules”.

Authors
Geoff Wood, Partner
Brandon Yap, Law Graduate

Building Code of Australia 2008 amendment

Background

On 13 May 2008, the NSW Department of Planning released a planning circular to “advise councils, accredited certifiers, relevant government agencies and industry practitioners of certain changes in the Building Code of Australia (BCA) with the 2008 amendment (BCA 2008) and other BCA matters”. Salient points highlighted in the planning circular are discussed below.

Summary

In NSW, the BCA is given legal effect through the Environmental Planning and Assessment Act 1979 (NSW) and the Environmental Planning and Assessment Regulation 2000. It is amended on an annual cycle, with the BCA 2008 coming into effect on 1 May 2008.

The BCA 2008 does not contain any major reform outcomes, but it nonetheless is an important amendment as it incorporates changes identified through the “Proposal for Change” process that was agreed to at the National Technical Summit 2007.

Purpose and scope of BCA 2008 changes

National Provisions

The purpose of the 2008 amendments to the national provisions in both BCA Volumes is to:

• update Australian Standards and other referenced documents,

• include minor technical amendments for clarity and consistency,

• include new national provisions for swimming pool water recirculation systems, and

• include lists of legislation from the Commonwealth, State and Territories which may potentially affect buildings.

In addition to the above, the purpose of the 2008 amendments specific to Volume 1 (Class 2 to 9 buildings) is to:

• expand the permitted use of other types of detectors where smoke detectors would be unsuitable in the atmosphere,

• clarify the provisions for service penetrations through building elements required to have a Fire Resistance Level (FRL), and

• amend particular BCA terms to align with current industry terminology and definitions.

The NSW Appendix Provisions

The purpose of the 2008 amendments to the NSW Appendix in both BCA Volumes is consonant with the purposes of the national provisions.

In addition to the above, the purpose of the 2008 amendments for the NSW Appendix specific to Volume 1 is to:

• update reference to legislation for places of public entertainment,

• clarify the application of specific requirements, and

• align certain NSW variations with amended national provisions.

Key Changes effected by the 2008 amendment (National Provisions)

Key changes to National Provisions (both Volumes) include:

• corrections and amendments to existing standards such as AS 1170, AS 1288, AS 3500 and AS 1289,

• substantive changes to AS 1170, AS 3700, and AS 1926, and

• deletion of references to AS 4428, CSIRO NBTC Bulletin 5 and SSL Register of Accredited Products.

Key changes to National Provisions (Volume 1) include changes to:

• C1.3: Determining type of construction when the top floor of a building contains a Class 4 part,

• C3.15: Openings for service installations,

• D1.3: Fire-isolated stairways and ramps,

• D2.23: Signs on doors,

• E1.8: Fire Control Centres,

• Specification G3.8: Fire Safety terminology,

• Table E2.2b - class 6 buildings: Smoke Hazard Management in shopping centres,

• F2.8: Waste management in Class 9c Buildings, and

• Section J: Energy Efficiency.

Key changes to National Provisions (Volume 2) include changes to:

• 3.1.2.4: Subsoil drains,

• Part 3.7 - various clauses: Fire separation, and

• Figure 3.10.1.4: Wind region map.

Key Changes effected by the 2008 amendment (NSW Appendix Provisions)

Key changes to the NSW Appendices (both Volumes) include changes to:

• NSW Part G1 and NSW 1: Swimming Pool Water recirculation, and

• Footnotes which include a new footnote listing other legislation that could potentially affect the design and construction of buildings.

Key changes to the NSW Appendices (Volume 1) include changes to:

• NSW D2.21: Operation of latch,

• NSW Table E2.2b: Stages and backstages, and

• NSW H101.1: Places of public entertainment legislation.

List of Amendments

A complete list of amendments is available on the website of the Australian Building Codes Board or at the links below.

BCA 2008 (Volume 1)

BCA 2008 (Volume 2)

Who does this affect?

The 2008 amendment affects all stakeholders of the building and construction industry including developers, architects, engineers, designers, specifiers, suppliers and any person involved in building and construction related activities.

Conclusion

The 2008 amendment provides the opportunity to focus on issues of clarification and better understand the application of the BCA and benefits all stakeholders and end users of the BCA.

The BCA 2008 has been in operation since 1 May 2008.

Authors
Geoff Wood, Partner
Brandon Yap, Law Graduate

Update of SOP Decisions - Denial of Natural Justice - 2 cases reviewed

Trysams Pty Limited v Club Constructions (NSW) Pty Ltd [2008] NSWSC 399

Facts

Trysams (Plaintiff) contracted with Club (First Defendant) for renovations and additions to a hotel in Gymea. On 23 November 2007, Club issued a payment claim to Trysams which, although not in the form of a final payment claim, was one in substance. This claim, totalling $690,822.22, included the release of the retention fund ($355,025.00). Trysams provided the Club with its payment schedule which showed that Club owed Trysams an amount of $374,188.55 after setting off defective and incomplete work and liquidated damages and crediting an amount for unexpended provisional sums. The Adjudicator (Second Defendant) determined that Club should receive 75% of its claim amount, including all the retention fund. Subsequently Trysams sought to have the determination declared void based on denial of natural justice.

Issues

The main issues considered by McDougall J in the Supreme Court of NSW were:

• Was there a denial of natural justice in relation to the fact that the Adjudicator found that certain provisions of the Contract upon which Trysams relied to answer the claim for the retention fund were avoided by section 34 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act)? [It is important to note that this issue had not been canvassed in the adjudication application or response or in the payment claim or schedule, and the Adjudicator had not given either party an opportunity to put submissions on this issue].

• Did the Adjudicator deny Trysams natural justice by failing to consider on its merits Trysams’ case based on those contractual provisions?

Held

McDougall J held that there was no denial of natural justice and that Trysams’ challenge to the Adjudicator’s determination failed.

His Honour noted that the SOP Act applies to progress claims and final claims, and that Adjudicators deciding such claims are not to be bound by the decision (or absence of one) of a superintendent to issue or not issue a final or special certificate (as the case may be).

Turning to the allegation of denial of natural justice, McDougall J noted that “where an adjudicator was minded to decide a dispute on a basis for which neither party had contended, then natural justice required the adjudicator to notify the parties of that intention, so that they could put submissions on it.” However, this does not require an adjudicator to give the parties an opportunity to put submissions on matters that were not germane to his or her decision. His Honour was also of the view that the concept of materiality is inextricably interlinked with the concept of natural justice. As part of considering materiality issues, Courts should consider:

• the importance or otherwise of the relevant subject matter,

• in particular, its significance to the actual determination, and

• whether or not there were submissions that could properly have been put that, as a matter of reality and not mere speculation, might have affected the determination.

McDougall J reached the conclusion that the Adjudicator’s view in this case on the operation of section 34 (namely, the Adjudicator’s reasoning that the contractual provisions which Trysams relied on sought to limit the operation of the SOP Act and thus fell foul of section 34(2)(a)) were not essential to his conclusion. Accordingly, there was no substantial denial of natural justice as the materiality threshold had not been met.

Richard Shorten and Anor v David Hurst Constructions Pty Limited and Anor; David Hurst Constructions v Richard William Shorten and Anor [2008] NSWSC 546

Facts

Mr and Mrs Shorten (Plaintiffs) had contracted with a builder, David Hurst Constructions Pty Limited (First Defendant, DHC) to construct 10 apartments in Wagga Wagga, NSW. DHC issued two payment claims in late 2007. Both claims were ultimately adjudicated under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act), with the Adjudicator (Second Defendant) finding for DHC in the amounts of $424,681.90 and $246,277.11 respectively.

Mr and Mrs Shorten sought to have the first adjudication declared void (and the judgment which was entered in the District Court of NSW and later transferred to the Supreme Court of NSW in relation to this adjudication set aside). In relation to the second adjudication, Mr and Mrs Shorten were successful in obtaining an interlocutory injunction preventing it being entered as judgment on the basis that if the first one was held void, any subsequent adjudication purported to be founded on the first, as mandated by section 22(4) of the SOP Act, would also be void.

Issue

The main issues in this case were:

• Was there was a denial of natural justice (as discussed in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421) which invalidated the adjudications?

• If the answer to the above is yes, whether such denial could not have possibly made a difference to the outcome of the adjudication?

Held

Einstein J ultimately held that Mr and Mrs Shorten were entitled to relief setting aside the adjudication determinations. His Honour noted the main principles relating to natural justice as follows:

• From Brodyn – “a denial of natural justice, to the extent that natural justice is to be afforded as contemplated by the procedure established by the [SOP Act], invalidates an adjudication”.

• A legislative intent can be inferred that natural justice is “essential to validity [of an adjudication], so that if there is a failure by the adjudicator to receive and consider submissions, occasioned by breach of these provisions, the determination will be a nullity”.

• “A denial of natural justice will invalidate an adjudication, but only if the procedure falls short of that measure of natural justice to which a party is entitled under the scheme of the [SOP Act]”.

Although a party may be entitled to relief in the absence of natural justice, this relief is discretionary. That is, relief can be declined if the denial of natural justice could not possibly have made a difference to the outcome. However, where a plaintiff can show that it was deprived of the possibility of a better outcome, relief may still be granted.

Einstein J also noted that the concept of materiality is inextricably interlinked with the concept of natural justice and is a factor which must be considered by the Court. In other words, an adjudicator is not required to give the parties an opportunity to put submissions on matters that were not germane to his or her decision.

In this case, DHC had not provided a full adjudication application to Mr and Mrs Shorten (with a breakdown in copying procedures resulting in numerous documents missing from the application). His Honour held that Mr and Mrs Shorten were entitled to a full copy of the adjudication application and did not receive it, thus, a denial of natural justice had occurred. Accordingly, DHC could not profit by its own wrongdoing in not providing the full application.

Authors
Geoff Wood, Partner
Benjamin Urry, Solicitor

OHS update - federal codes replaced by National OHS Code 2008

On 2 June 2008 the Federal Government approved the new Occupational Health and Safety Code of Practice 2008 (the Code) which revoked all 27 existing codes under the Occupational Health and Safety Act 1991 and introduced 5 new codes. The Government implemented the recommendations identified in Comcare’s 2005/2006 evaluation. Guidance material addressing some of the replaced codes will subsequently be released.

The Code does not impose mandatory legal obligations. Rather, it constitutes a flexible framework in which duty holders may introduce relevant new developments provided that certain health and safety standards on specific issues are respected. This means that duty holders may lawfully choose to act in a manner not outlined in the Code provided that their actions still satisfy or better the safety standards in the Code.

The Code is divided into 25 parts as follows: Risk Management; First Aid; Noise; Manual Tasks; Vibration; Human Immunodeficiency Virus and Hepatitis B&C; Confined Spaces; Indoor Air Quality; Safety in Laboratories; Asbestos in Situ; Storage and Handling of Dangerous Goods; Hazardous Substances; Synthetic Mineral Fibres; Vinyl Chloride; Carcinogenic Substances; Timber Preservatives; Inorganic Lead; Ethylene Oxide; Ultraviolet Radiation in Sunlight; Occupational Diving; Spray Painting; Abrasive Blasting; Construction Induction Training; Falls in Construction; and Cash in Transit.

Please click on the following link to go to the Code: Occupational Health and Safety Code of Practice 2008

Authors
Andrew Chew, Special Counsel
Franco Aversa, Solicitor