In the light of the current crisis around building cladding, the NSW Government is sending Notices of Intention to Issue an Order to buildings it suspects of having flammable wall cladding.
Please see the typical letter being sent to owners corporations by the NSW Government enclosing the Notices of Intention to Issue an Order.
The NSW State Government (in addition to local councils) has the power to issue such notices although typically it is local councils who issue Notices of Intention to Issue an Order.
Once a Notice of Intention to Issue an Order has been provided to an owners corporation, a Fire Safety Order can issue requiring an owners corporation to complete work at its own cost to rectify any non-compliances with the Building Code of Australia.
Notices of Intention to Issue an Order and Fire Safety Orders are issued as part of the ongoing responsibility of the NSW State Government and local councils to enforce the fire safety provisions of the Environmental Planning and Assessment legislation.
It is important for owners corporations to appeal an Order if one is received and the owners corporation does not wish to complete all the work required by the Order (because some or all of the work required by the Order may not be necessary). This is because not appealing greatly weakens the bargaining power of the owners corporation in any negotiations regarding compliance with the subject matter of the Order. That is, there is ultimately little an owners corporation can do to resist total compliance with an Order if no appeal is lodged and the NSW Government digs its heals in over compliance.
There are two types of appeal that can be made against an Order:
- a “class 1” merits appeal; and
- a “class 4” legal process appeal.
The relevant legislation governing this area of fire and life safety is the Environmental Planning and Assessment Act 1979 (the Act) (see especially Divisions 2A and 4 of Part 6 of the Act). Both appeals are made under the Act.
Class 1 Merits Appeal
In this appeal, the Land and Environment Court effectively looks at the Order and determines if the Order should be revoked, modified or given subject to no modifications.
Such an appeal must be made within 28 days after service of the Order.
It should be noted that this is a much stronger appeal as it can address a wider range of issues than a limited class 4 Legal Process Appeal.
Class 4 Legal Process Appeal
In this appeal, the Land and Environment Court looks at whether the legal process required has been followed prior to the issue of the Order.
It is a procedural appeal and there is no specified time period for taking such an appeal, although sooner is better than later. An example of a procedural appeal would be where an Order was given but no Notice of Intention to Issue an Order was given beforehand (assuming it is not an emergency fire safety order).
It is important to note that a procedural appeal, if successful, does not necessarily stop the NSW Government from re-issuing an order following the required legal process.
It should also be noted that under section 121ZN of the Act, making an appeal will not automatically stay an order (although a stay could be applied for once an appeal was commenced).
Consequences of Non-Compliance
There are a number of potential consequences of not complying with an Order including:
- pecuniary penalties;
- the work may be carried out by the NSW Government and then the cost of this recovered from the owners corporation;
- compliance costs;
- enforcement proceedings;
- summary criminal proceedings;
- personal liability of executive committee members (although executive committee members are insured for negligent acts or omissions); and
- possible inability to obtain an Annual Fire Safety Statement (with attendant penalties).
In addition, owners corporations should notify their insurer if a Notice of Intention to Issue an Order or an Order is received. Further, while an owners corporation may have an insurance policy, the liability of the owners corporation and executive committee members is unlimited (whereas any insurance coverage is limited).
Please see the Order Flow Chart (NSW) which sets out the process to be followed when an owners corporation receives a Notice of Intention to Issue an Order. It is important to act quickly as rights are lost if timely action is not taken.
In particular, there are two things which are recommended to be done:
- representations on the proposed order should be made by the required date to avoid an Order being issued; and
- an EGM be called to pass a resolution to commence court proceedings in the event an Order is issued by the NSW Government as there is usually not sufficient time to call an EGM to seek approval to commence appeal proceedings and then commence the appeal proceedings within the 28 day appeal period (if an order issues).
Please contact Christopher Kerin on (02) 8706 7060 if you have any questions.