Flame On? Consider Engaging An Audit of Your Property In Light Of Concerning Aluminium Cladding Findings In Vic

In A Nutshell

  1. Following a significant fire in a 23 storey apartment building in Melbourne’s Docklands area on 25 November 2014 (the Lacross Apartments Fire), the rapid spread of which was attributable to a composite aluminium cladding on the building’s façade[1], the Victorian Building Authority has now completed an audit of some 170 high rise buildings in central Melbourne and surrounds with a finding that 51% of the audited buildings contained non-compliant cladding[2].
  1. While the Victorian authorities have taken a lead in compliance activities to ensure that accredited cladding materials are used in the building industry, it is unclear at this stage whether NSW will take the same pro-active steps as their Victorian counterparts.

 

Considerations

  1. Builders should be aware that owners corporations in apartment buildings and the owners of commercial high rise buildings where aluminium cladding has been used may give consideration to carrying out an audit and risk assessment to identify the type of any aluminium cladding used in the building and the fire risk.
  1. Following such an assessment owners may seek to bring a claim against their builder where any problematic aluminium cladding has been used.
  1. Where contracts have been executed after 15 January 2015, and aluminium cladding has been specified by the principal’s independent expert, builders should give consideration to whether they have a statutory defence to a defect claim under section 18F of the Home Building Act 1989see Article: Construction Update on Commencement Proclamation of the Home Building Amendment Act 2014.

 

Investigation by the Metropolitan Fire and Emergency Services Board (MFESB)

  1. The following emerged from the investigation of the Lacross Apartments Fire by the MFESB:
  1. There was an estimated property loss of $5,000,000 and fortunately no loss of life[3].
  1. Alcuobest, a Chinese manufactured, aluminium/polyethylene composite panel cladding product, that was used in the construction of the building was directly related to rapid spread of the fire[4].
  1. While there is an aluminium composite cladding product in Australia that has been accredited by the Australian Building Codes Board, named Alucobond Plus, a simple visual inspection cannot distinguish between Alcuobest and Alucobond Plus[5].

 

Audit by the Victorian Building Authority (VSB)

  1. The MFESB’s investigation sparked an audit by the VSB which delivered its findings on 17 February 2016, including the following:
  1. 51% of the 170 audited high rise residential and public buildings in central Melbourne and surrounds were found to contain non-compliant cladding[6].
  1. After applying a risk matrix which took into account external cladding and other building elements that could contribute to fire spread (e.g. balconies, sprinklers, window/door openings) only one of the audited buildings required an immediate emergency fire order from the Municipal Building Surveyor[7].
  1. The action items arising from the audit by the VSB included:
  1. Investigation of building industry practitioners that have been involved multiple times in the specification and use of non-compliant building materials[8].
  1. Preparation of a technical document to clearly explain the BCA and types of cladding permitted[9].
  1. An ongoing audit to ensure that building permits contain clear specifications on the cladding to be used and that documentation showing “as built” compliance with building permits contains sufficient detail[10].

 

Significance for NSW

  1. On 3 August 2015, in the wake of the Lacross Apartments Fire the NSW Department of Planning and Environment issued a Planning Circular[11] relating to:
  1. the use of aluminium composite cladding;
  1. the requirements of the BCA; and
  1. Stressing that certifiers, designers, builders and installers need to ensure that building components comply with the BCA.
  1. On 14 October 2015, the Minister representing the Minister for Innovation and Better Regulation in the NSW Legislative Council (the upper house of the NSW parliament) stated that the NSW Government is giving consideration to conducting an audit of high rise and apartment buildings built over the last decade to ensure any aluminium cladding used complied with the National Construction Code[12].
  1. In the past nine months, however, there has been no announcement from Fair Trading NSW that an audit is to be undertaken.
  1. Accordingly, builders should be aware that it is likely that owners corporations in buildings where aluminium cladding has been used, or the owners of high rise buildings that use such products may consider taking the following actions:
  1. An audit of any documentation to hand confirming the technical specifications and compliance of any relevant cladding product used; and
  1. An audit and risk assessment conducted by a qualified expert to identify the nature of the aluminium cladding used, its fire resistance properties and the fire risk associated with the cladding taking into account all fire control measures in the building.
  1. Following such an audit and risk assessment, builders should be aware that owners may be looking to claim for any necessary urgent “make safe” works and for any identified non-compliant material.

[1] Metropolitan Fire and Emergency Services Board, Post Incident Analysis Report, 25 November 2014, page 36

[2] Victorian Building Authority External Wall Cladding Audit Report, issued 17 February 2016, page 6

[3] Metropolitan Fire and Emergency Services Board, Post Incident Analysis Report, 25 November 2014, page 4

[4] Metropolitan Fire and Emergency Services Board, Post Incident Analysis Report, 25 November 2014, page 36

[5] Metropolitan Fire and Emergency Services Board, Post Incident Analysis Report, 25 November 2014, page 57

[6] Victorian Building Authority External Wall Cladding Audit Report, page 6

[7] Victorian Building Authority External Wall Cladding Audit Report, page 6

[8] Victorian Building Authority External Wall Cladding Audit Report, page 6

[9] Victorian Building Authority External Wall Cladding Audit Report, page 7

[10] Victorian Building Authority External Wall Cladding Audit Report, page 7

[11] Planning Circular BS15-001, Building Regulation Advisory Note, External Walls and Cladding, NSW Department of Planning and Environment

[12] Pages 673 – 674 Legislative Council Questions and Answers No. 28 – Wednesday 14 October 2015

 

***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.

 

Prepared by Bannermans Lawyers

25 July 2016

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For more information on this topic or any legal enquiries please contact your Construction Team.

 
 

 

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