The commercial fit-out exclusion under the Design and Building Practitioners Act

The requirements under the Design and Building Practitioners Act 2020 (NSW) (Act) to prepare and submit compliance declarations (including the requirement to hold prescribed registrations) apply to building work carried out to class 2 buildings, and class 2 containing buildings.

The compliance burden is high and at first blush, the coverage is broad. However, there are an array of exclusions found in the Design and Building Practitioners Regulation 2021 (Regulation). The exclusions indicate a level of engagement with the NSW building industry as to the sensible practical limits of the legislation in a mixed-use setting.

Regulation 13(1) of the Regulation provides an extensive list of works that are excluded from the definition of ‘building work’ for the purposes of sections 4(1) and 4(2)(b) of the Act.

Some of those are somewhat hard to contextualise in the context of the reforms to the sector. Others will give rise to difficult questions when scopes spill over from “maintaining a component” or “carried out in compliance with an order given by a council”.

Commercial fit-out exception

One significant exclusion is the commercial fit-out exception in clause 13(1)(k), which excludes:

“work that is the fit-out of part of a building, but only—

(i) if the part of the building is a class 5 or 6 building part or will be a class 5 or 6 building part as a result of a change of building use connected with the work, and

(ii) if the work is the subject of a development consent that primarily relates to the fit-out, and

(iii) to the extent the work does not relate to a structural component of the building.”

The exclusion goes some way to ease concerns of specialist designers and builders, for whom the burden of compliance may outweigh the benefit of commercial fit-out contracts in class 2 containing buildings.

However, it remains crucial for designers and builders to understand the scope of the exclusion in the context of the work proposed. A few issues are worthy of comment:

  • the requirements to engage the exclusion (four of, emphasis added above) are clearly cumulative, rather than alternative
  • the phrase “primarily relates to fit-out” is likely to restrict the operation of the exclusion to a consent for a premises fit-out, rather than a development-wide consent
  • work to structural components will remain subject to the Act.

The Act is still in its infancy and the courts have yet to provide guidance on the application of the exclusions provided in clause 13(1) of the Regulation. For now, it’s a case of asking questions, erring on the side of caution, and watching this space in terms of developments in the application of the exclusion.

Authors: Christine Jones, Nicholas Achurch & Daniel Fane

In the media

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Calls to build more one-bedroom apartments ... in Dubbo?

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Northern Beaches Council to consider extending Collaroy's controversial seawall

It's been labelled an "abomination", and the "ugliest edifice built on the coast". And, it might be about to get bigger. A group of beachfront home owners are pushing to extend the controversial Collaroy seawall on Sydney's northern beaches (18 September 2022). Read more here…

Constrained land supply sees knock-down rebuild market grow

“An unusually sharp rise in the price of residential land indicates the supply of land is not keeping up with new demand that has emerged during the pandemic,” said HIA Senior Economist, Nick Ward (16 September 2022). Read more here…

Tripartism set to transform Australia’s Building and Construction Industry

The Australian Government has today announced a tripartite National Construction Industry Forum to drive the transformation of Australia’s most male-dominated industry, construction. The group will comprise representatives from government, unions and business, including the Australian Constructors Association (1 September 2022). Read more here…

In practice and courts

Reforming building laws in NSW

The NSW Government is working to increase confidence in our building industry. The Government is aiming to create a new foundation for construction by looking at how they can improve laws, better protect consumers and support workers. Submissions are open until 25 November 2022. Read more here.

Published – articles, papers, reports

Total Value of Dwellings

The Australian Bureau of Statistics estimates of the total value of Australia's dwelling stock, and median prices and counts of residential property transfers. Read more here.

Cases

Li v Kerollos Property Pty Limited CAN 162 903 335 [2022] NSWCATAP 307 

APPEAL – Costs of discontinued appeal – whether special circumstances established pursuant to s 60(2) of the Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW); Strata Schemes Management Act 2015 (NSW)

Vujica v TNM Roofing Pty Ltd [2022] NSWCATAP 305

BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – Enforceability of contract – requirement for writing – whether non-compliance with s 7 requirements renders contact unenforceable by contractor

Australian Consumer Law (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Evidence Act 2005 (NSW); Fair Trading Act 1987 (NSW); Home Building Act 1989 (NSW); Home Building Regulation 2014 (NSW); Statute Law (Miscellaneous Provision) Act (No 2) 2001 (NSW)

Onslow v Cullen [2022] NSWSC 1257

BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – Statutory warranty – Proceedings for breach – where contract extracted statutory warranties – where proceedings for minor defect brought after two years – where magistrate found limitation periods in s 18E did not apply – where prefatory words “to the extent required by the Home Building Act” used – held to incorporate limitation period APPEALS – Procedural fairness – where party made concession in case summary prepared in accordance with practice note – where magistrate disregarded concession – held to constitute a denial of procedural fairness APPEALS – Procedural fairness –Failure to give reasons – where preliminary ruling made subject to any authorities being brought to magistrate’s attention — unorthodox approach – failure to address principal submissions of one party in reasons APPEALS – from Local Court to Supreme Court – where grounds involved statutory interpretation and denial of procedural fairness – where held to involve questions of law – leave not required

Civil Procedure Act 2005 (NSW); Home Building Act 1989 (NSW); Limitation Act 1969 (NSW); Local Court Act 2007 (NSW); Uniform Civil Procedure Rules 2005 (NSW)

The Owners- Strata Plan No 2341 v P&M Sachs Pty Ltd [2022] NSWCATAP 304

LAND LAW – Strata titles – Common Property – Maintenance and repair of common property – Claim by lot owner for compensation pursuant to s 106(5) Strata Schemes Management Act 2015 (NSW)

APPEAL – Procedural fairness – Treasurer of owners corporation refused leave to represent the owners corporation until he produced evidence of authority – Whether refusal of leave could have affected the outcome of the proceedings

Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Rules 2014 (NSW); Evidence Act 1995 (NSW); Strata Schemes Management Act 2015 (NSW)

The Owners – Strata Plan No. 61285 v Taylor (No. 2) [2022] NSWCATCD 117

LAND LAW – Strata title – Civil Penalty – contravention of Tribunal order – s 247A Strata Schemes Management Act 2015 – assessment of penalty – deterrence – relevant considerations – relevance of maximum penalty when assessing appropriate penalty – payment of penalty – whether penalty payable to applicant, the Crown or some other person – power of the Tribunal to direct to whom the penalty is to be paid

Design and Building Practitioners Act 2020 (NSW); Building Practitioners Regulation 2021 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Evidence Act 1995 (NSW); Fair Work Act 2009 (Cth); Home Building Act 1989 (NSW); Strata Schemes Management Act 1996 (NSW); Strata Schemes Management Act 2015 (NSW)

Tom v Commissioner for Fair Trading [2022] NSWCATAP 303

ADMINISTRATIVE LAW – Decision to cancel contractor licence and disqualify a licence holder pursuant to s 62 of the Home Building Act 1989 (NSW) – Whether the Tribunal in administrative review proceedings has power to order the builder’s experts access to the home builder’s property for inspection and investigation – Whether in such proceedings the home owner should be joined as a ‘proper’ party PRACTICE AND PROCEEDURE – In administrative review proceedings where a builder challenges suspension of his building licence by Commissioner of Fair Trading, whether the home owner, in respect of adverse findings made by the Commissioner, is a proper party to be joined to the proceedings - Whether the Tribunal in administrative review proceedings has power to order the builder’s experts access to the home builder’s property for inspection and investigation

Administrative Decisions Review Act 1997 (NSW); Administrative Decisions Tribunal Act 1997 (NSW), Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Bill 2013; Civil and Administrative Tribunal Rules 2014 (NSW); Evidence Act 1995 (NSW); Freedom of Information Act NSW; Home Building Act 1989 (NSW); Liquor Act 2007 (NSW); Uniform Civil Procedure Rules 2005 (NSW)

Keegan v Ballast Point Pty Ltd [2022] NSWCA 179

BUILDING AND CONSTRUCTION – residential building contract – where general conditions of contract provided for making by builder of monthly payment claims – where special conditions appointed architect to administer contract on owner’s behalf, including by assessing and certifying builder’s payment claims – whether owner’s obligation to pay and builder’s entitlement to payment only in respect of amounts certified as due and payable by architect

Wirth v Will [2022] NSWLEC 118

ENCROACHMENT – application pursuant to the Encroachment of Buildings Act 1922 (the Act) for order to remove encroaching structure – cross-claim seeking grant of easements to retain and use structure – whether there is a single structure or two separate structures built at different times – only evidence is photographic – examination of photographs reveals, on the balance of probabilities, two structures not one - finding necessitates rejection of cross-claim – consideration of whether encroachment satisfies definition of a “building” in the Act – encroachment satisfies the definition giving power to order its removal – removal ordered COSTS – costs follow the event – Respondents ordered to pay Applicant’s costs of the application and the cross-claim – earlier limited costs order in Respondents’ favour preserved

Civil Procedure Act 2005; Encroachment of Buildings Act 1922; Land and Environment Court Act 1979; Land and Environment Court Rules 2007; State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development; Uniform Procedure Rules 2005; Waverley Local Environmental Plan 2012

Manca v Tullipan Homes Pty Ltd [2022] NSWCATAP 296

APPEALS – Constructive failure to exercise jurisdiction – Failure to address a material issue and material evidence

APPEALS – Procedural fairness – Failure to address a material issue and material evidence

APPEALS – Procedural fairness – Failure to give reasons – Adequacy of reasons

Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Home Building Act 1989 (NSW).

Colourrender (Australia) Pty Ltd v Sarkis [2022] NSWCATAP 291

PRACTICE AND PROCEDURE – application for a stay – need for evidence to substantiate allegation appeal may be rendered nugatory due to liquidation of appellant company if judgment enforced – need for thorough and candid disclosure of financial position

Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW).

Legislation

Regulations and other miscellaneous instruments Environmental Planning and Assessment Amendment (Parramatta City Centre Development Levy) Regulation 2022 – published LW 9 September 2022 Environmental Planning and Assessment Amendment (Waratah Super Battery Project—Munmorah) Order 2022 – published LW 9 September 2022 Water Sharing Plan for the Macquarie-Bogan Unregulated Rivers Water Sources Amendment Order 2022 –published LW 9 September 2022

Environmental Planning Instruments Blacktown Local Environmental Plan 2015 (Amendment No 32) – LW 16 September 2022

Lake Macquarie Local Environmental Plan 2014 (Map Amendment No 5) – LW 16 September 2022

Wollondilly Local Environmental Plan 2011 (Amendment No 43) – LW 16 September 2022

Burwood Local Environmental Plan 2012 (Amendment No 23) – published LW 9 September 2022

Campbelltown Local Environmental Plan 2015 (Map Amendment No 8) – published LW 9 September 2022

Cessnock Local Environmental Plan 2011 (Map Amendment No 3) – published LW 9 September 2022

Maitland Local Environmental Plan 2011 (Map Amendment No 3) – published LW 9 September 2022

Mosman Local Environmental Plan 2012 (Amendment No 12) – published LW 9 September 2022

Parkes Local Environmental Plan 2012 (Amendment No 7) – published LW 9 September 2022

Shellharbour Local Environmental Plan 2013 (Amendment No 26) – published LW 9 September 2022