In the recent case of Owners SP 92450 v JKN Para 1 Pty Ltd [2023] NSWCA 114, the NSW Court of Appeal considered whether a building owner or builder bore the evidential burden of establishing that the reinstatement of non-compliant combustible cladding was reasonable or unreasonable.
The appellant was the Owners Corporation of a 28-storey building in Parramatta, which was constructed by the respondents. Aluminium composite panels were used to clad the exterior of the building. The Owners Corporation claimed that the cladding was combustible and failed to comply with Deemed to Supply provisions of the Building Code of Australia (‘BCA’), therefore constituting a breach of Section 18B of the Home Building Act 1989 (NSW). The issue on appeal was whether the primary judge erred in finding that no breach of Section 18B had been established, and thus in refusing to award reinstatement damages.
The Court of Appeal found that the cladding was non-compliant with the BCA, and no alternative solution was prepared by the respondents prior to the issue of a construction certificate. As such, the Court of Appeal overturned the first instance decision. The Court found that while the Owners Corporation bore the burden of proof to show the cladding was non-compliant, the respondents had the onus of establishing that the cost of reinstatement would be unreasonable, which they failed at.
This decision provides greater clarity regarding the requirements to establish a breach of the BCA in combustible cladding cases.