By Scott Higgins, Partner and Lucy Hancock, Lawyer

In the wake of the tragic circumstances at Grenfell Tower in London, owners, builders and private certifiers of multi-story apartment buildings should take additional steps to ensure that the cladding materials being used are safe, sufficiently fire retardant, and at a minimum, satisfy Australian Standards and the Building Code of Australia.

The potential danger of certain types of cladding material has been of concern to many in the industry over the past few years. Whilst yet to be confirmed, there is widespread speculation that the tragic fire which engulfed a 24 story residential apartment building in London was likely exacerbated by fire-prone cladding, commonly used around the world and in Australia. It is now being reported that the façade of the building was made of non-compliant aluminium composite material also known as aluminium composite panel (ACP).

In 2014 the Lacrosse Building in the Melbourne Docklands took fewer than 15 minutes for its 13 storeys to go up in flames. The cladding used was Alucobest, an ACP, which is comprised of aluminium on the outside and polyethylene fibre on the inside. Polyethylene is thermoplastic and has a low melting point. It is used to varying degrees in ACP, which is commonly used in the façades of multi-storey buildings.

The City of Melbourne’s Municipal Building Surveyor investigated the incident at Lacrosse and ordered that the cladding be removed and replaced with compliant material. The Owners appealed to the Building Appeals Board, who upheld the decision and found that the alternative solution proposed (being the installation of water sprinklers instead of removal and replacement of the cladding) did not satisfy the relevant performance requirements in the Building Code of Australia (BCA).[1]

The BCA requires that a building must have elements that will avoid the spread of fire in a building and between buildings, in a manner appropriate for that building.[2] Compliance with the performance requirements in the BCA can only be achieved by satisfying the Deemed to Satisfy provisions; by formulating an alternative solution; or a combination of the two approaches.[3] The Australian Building Codes Board published an Advisory Note to assist with the interpretation of the National Construction Code in 2016.

Significantly, the decision by the Building Appeals Board regarding Lacrosse makes clear that the non-compliance of the Alucobest ACP panels did not arise as a result of a change in standards, but rather due to a misinterpretation of the standards by the relevant designers, suppliers, builders and installers.

Where builders and/or certifiers have utilised or certified panels based on a misinterpretation of standards they may have potential contractual and tortious liabilities. In the recent decision of Chan v Acres[4] the NSW Supreme Court held that a Principal Certifying Authority (PCA) owed a duty of care and was liable in negligence to a purchaser of home which was found to contain structural defects which the PCA had certified as compliant.

There has been ongoing criticism of the building regulation regime in NSW over recent years, with former Treasury Secretary Michael Lambert releasing a review of the Building Professionals Act last year. Mr Lambert recommended an overhaul of the certification system which would see Developer’s lose the ability to select their own certifier and the NSW Government confirmed that it would adopt many of recommendations made, including a rewrite of the Building Professionals Act. A draft of the new legislation is yet to be published, although in December last year, a draft regulation aimed at improving fire safety standards in NSW buildings was released.

If a NSW Department of Planning and Environment report from September 2015 is to be believed, between 1,500 – 2,500 buildings in NSW alone may have potentially non-complaint cladding and so this issue is likely to be widespread.

It is no secret in the industry that following on from the residential construction boom on the east coast, many are anticipating that defects disputes and issues with the use of non-compliant building products is set to remain on the agenda.

Please contact the authors if you would like to discuss any issues with respect to compliance and potential liabilities regarding defects, building materials or ACP cladding.

[1] Shireen Bangah & Ors v Municipal Building Surveyor, City of Melbourne [2017] Building Appeals Board Victoria, 16 January 2017

[2] The Australian Building Codes Board, Advisory Note: Fire Performance of External Walls and Cladding, 2016

[3] Performance Requirements CP2 of the National Construction Code

[4] [2015] NSWSC 1885