Building Product Performance – Recent case law and International Guidelines for Good Practice Regulation

A decision of the Federal Court of Australia late last year highlights how some manufacturers apply the evidence of suitability requirements in the NCC. It also shows the lengths to which some will go to call out alleged misrepresentations by competitors.?This decision offers a case study to inform the debate on how we regulate building product performance in Australia and what needs to change. These issues have recently been informed by the release of Good Practice Guidelines for regulating Building Product Performance issued by the International Building Quality Centre, a paper which I was involved in preparing.

Federal Court Case

The Federal Court case concerned a dispute between competitors Pirmax Pty Ltd (Pirmax) and Kingspan Insulation Pty Ltd (Kingspan) over claims made about Pirmax’s thermal insulation boards. The case was heard over 6 days resulting in a 160 page decision. Given the complexity, for those that want to read more detail I have prepared a longer case note which you can access here. https://weirlegalconsulting.com/wp-content/uploads/2023/05/pirmax-v-kingspan-case-note-bronwyn-weir-frances-hall-weir-legal-and-consulting-full.pdf

For the purposes of this covering article, I summarise the case briefly as follows.

The court was asked to determine whether Pirmax had engaged in false and misleading information in relation to 2 of its thermal board products, namely its ‘HR Panel’ and its ‘ISO3 Panel’.

Technical datasheets for the HR Panel said various things including that the product achieves a group 1 classification when assessed under AS 5637.1. They also said the applications included walls, slabs, ceilings and roofs. AS 56737.1 is the standard used that is to be used to determine group numbers NCC since 1 May 2016. In fact, the HR Panel had only been tested under AS ISO 9705-2003, the test which applied before 1 May 2016. The test report was dated after 1 May 2016 and did not specify a group number for the product because the assembly tested only used the product on the ceiling.?In making the claims in the datasheets Pirmax relied on ‘desktop’ reports also dated after 1 May 2016 which reviewed the test report and said the product could be taken to achieve a group number of 1.

The ISO3 Panel came in silver, white and black versions all of which were said to have achieved a group number 3. However, only the product with the silver finish had been tested and determined to be a group number 3.

Kingspan disputed Pirmax’s claims and embarked on a 3 year campaign to discredit the Pirmax products whilst simultaneously putting forward its own product as a more reliable alternative. Pirmax commenced the legal case against Kingspan alleging Kingspan’s claims about the HR Panel and ISO3 Panel were false and that its conduct was malicious causing reputational and economic losses to Pirmax.

The court found in favour of Kingspan, it said the claims by Pirmax were false because it had relied on a test and various other desktop reports which did not establish a group number for the HR Product before 1 May 2016, when the relevant standard had changed. The Court also said that based on testing of the HR Panel product done by Kingspan, it only achieved a group number 4. This led the court to conclude that Kingspan’s claims that the HR Panel was not ‘fit for purpose’?and ‘dangerous’ were not improperly made.

In relation to the ISO3 Panel, the court also found Pirmax’s conduct was false and misleading. The court had regard to testing of the ‘white’ version of the ISO3 Panel by Kingspan which it said achieved a group number 4. The court concluded that each coloured variant of the ISO3 product was required to be tested and assessed under AS5637.1 in order to determine the group number.?Testing only the silver variant did not provide a sufficient basis to represent that the ISO3 product in all finishes achieved a Group 3 classification.?

In relation to the allegation that Kingspan behaved maliciously, the court held that given the claims made by Kingspan about the HR Panel and the ISO3 Panel were not false, it had not acted maliciously in its 3 year campaign against Pirmax.

IBQC Guidelines for Regulation of Building Product Performance.

In March 2023 the International Building Quality Centre published Good Practice Guidelines for regulating Building Product Performance. The Guidelines contain a framework of 31 elements that the IBQC says governments around the world should use as a checklist to assess their own frameworks to see where they may have gaps that could be undermining the proper regulation of building product performance.

So how does Australia fair on that gap analysis? In short, poorly. Some key reasons why include:

• The NCC provides that products specified for use and installed in buildings must be able to demonstrate ‘evidence of suitability’ through one of six possible pathways set out in Part A2.2 of the NCC. These pathways range from obtaining a certificate of conformity under our voluntary CodeMark conformity assessment scheme to having a report prepared by a professional engineer, recognised expert or other appropriately qualified person. However, a Product Technical Statement prepared by a manufacture can also be relied on. The rigour behind each of the six possible pathways differs significantly.

Under the IBQC Guidelines, it is recommended that there be just 2 pathways for evidence of suitability. For Australia, my view is that the two pathways should be:

1. Where there is one or more normative standards applicable for a product, the product must be tested to those standards and be subject to conformity assessment by a conformity assessment body that operates under international standards. In Australia a CodeMark certificate would meet this requirement.
2. Where no such normative standard exists for a product, the product must be subject to an assessment by an Independent Technical Group (ITG) to determine whether it should be subject to testing and if so the criteria for testing. If such testing is required, the product must undergo such testing and be subject to conformity assessment by a conformity assessment body that operates under international standards. If testing is not required, other suitable forms of evidence of suitability determined by the ITG may be used.

• There are currently no legislative standards on what product technical information must be supplied with products to confirm how they achieve evidence of suitability and how they can be used in a way that conforms with the requirements of the NCC and other legislative requirements. The IBQC says not only that such standards are required but that there needs to be a national product register where the required product technical information, including test results, ?is publicly available for specified types of products. The IBQC also says that where a product has a conformity assessment, the conformity assessment body should be responsible for reviewing and approving the manufacturers product technical information to ensure it is consistent with the conformity assessment and not misleading.

Conclusion

The above are just some of the 31 elements recommended in the IBQC Guidelines. If these Guidelines were in place, Pirmax would not have been allowed to use desktop reviews by ‘experts’ as evidence of suitability and any information in its product datasheets would have had to be approved by an independent conformity assessment body. ?

It is reasonable to infer from the findings of the court that the Pirmax products involved in this case did not meet minimum standards. So the question arises, what is being done about those products that have been installed? Product recall powers do not exist in most states and territories and regulators have no easy way of determining the buildings in which these products have been installed. Almost 9 years on from Lacrosse and we are yet to take meaningful steps in Australia to effectively regulate building product safety and performance. What are we waiting for?

Bronwyn Weir, Director, Weir Legal & Consulting

May 2023