Class 1a Dwelling Units
Class 1a Dwelling units have a separating wall between each dwelling unit that extends continuously from the ground to the underside of the roof of the units.
Class 1 buildings cannot be built on top of each other, and each is totally independent of the adjoining class 1a except they share a separating wall.
Please note I did not use the term fire wall. Separating walls function as fire separation, however, they are not fire walls as defined in the BCA Volume 1.
Class 2 Dwelling Units
Class 2 dwelling units are not independent of each other like Class 1a buildings. They can share entries, hallways and roof space, or be built on top of each other.
In a Class 2 Dwelling, the space contained within the floor, walls and ceiling of the dwelling unit, is separated from the other common parts of the building or other Class 2 Dwellings. The separation is achieved by constructing the bounding floor, walls, and ceilings of the dwelling to comply with the required fire, sound, impact and insulation ratings.
Please note I did not use the term fire walls or separating walls. Class 2 buildings do not use fire walls or separating walls to separate dwelling units.
You can read the technical definitions of these classifications here.