By Mr George Hayek and Mr Christian Marchant
On 28 February 2019, the Honourable Judge Woodward of the Victorian Civil and Administrative Tribunal (VCAT) issued a landmark determination in relation to the liability of Builders and Consultants regarding the installation of Aluminium Composite Panelling (ACP) on Australian Buildings in breach of the deemed to satisfy provisions of the Building Code of Australia (BCA).
The dangers of ACP are now well known in the building industry, due in part to the recent multiple high-profile fires such as Grenfell, London in June 2017, which resulted in 72 fatalities and the ironically named ‘Torch Tower’ in Dubai, which caught on fire on two separate occasions in February 2015 and August 2017.
Similarly, in November 2014 the Lacrosse Tower located in Melbourne’s Docklands area caught on fire after a resident, left a smouldering cigarette on a timber topped table. This act resulted in a fire which spread to the ACP clad façade of the Tower. In the time between the buildings fire system being activated at 2.23am and the first Melbourne Metropolitan Fire Brigade truck arriving at the Tower at 2.29am, the fire had spread from the 8th to the 21st floor of the building. The reason for the rapid spread of fire has subsequently been attributed to the internal materials of the ACP used on Lacrosse which contained a 100% polyethylene core. Polyethylene (PE) is a plastic substance more commonly found in the production of plastic shopping bags, cling film and partly in P.E.T. bottles. In 2017, the Senate Standing Committee conducted a widescale report on non-conforming building products in the Construction Industry and through studies with the CSIRO, found that PE had as much explosive energy per kilogram, as a litre of petroleum.
In the aftermath of the fire, the Owners Corporation and Individual Lot Owners of the Tower, commenced action against LU Simon (the Builder), Gardner Group (the Surveyor), Elenberg Fraser (the Architect), Tanah Merah Pty Ltd trading as Thomas Nicolas (the Fire Engineer), Mr. Gibuitta, Gyeyoung Kim (Owner of Apartment 805 of which Mr. Gibuitta was residing) and the Superintendent for the building Contract, being Property Development Solutions (Vic) Pty Ltd (PDS).
The main issue in question for Judge Woodward, was who was ultimately responsible (and therefore liable) for the installation of the ACP panels containing 100% PE coring?
In his decision, Judge Woodward determined that the Builder was liable to the Owners by failure to use suitable materials in the construction of the Tower; however, the builder had exercised reasonable care in its construction and that the decision to use the ACP panelling which was in breach of the BCA as the material contained 100% PE, was not one they were responsible for.
In that regard, liability was split between the following parties: The Surveyor (33%), The Architect (25%), the Fire Engineer (39%) and Mr. Guibtta (3%) (although no judgement was sought against Mr. Guibtta therefore LU Simon would account for his proportion).
His Honour determined the individual liability on the following grounds:
The Surveyor was in breach by issuing a building permit despite the Architect’s specification on ACP’s that did not comply with the BCA and further failing to notice the insufficient description of cladding systems in the fire engineering report;
The Architect was in breach as they failed as head design Consultant to ensure that the ACP sample complied with BCA specifications and failing to remedy that defect; and
The Fire Engineer was in breach as they failed to conduct a full engineering assessment and by failing to recognise that the ACP did not comply with the BCA.
Secondary to the question of liability, the tribunal also evaluated whether Gardner Group were exempt from professional liability under section 59 of the Wrongs Act (Vic) 1958 as they perceived that they had acted in a manner widely accepted by their peers in their specific field.
The Tribunal rejected this on the basis that Gardner Group had sufficient experience and requisite knowledge of the BCA, they were aware of the widespread use of ACPs in the Construction Industry and the fact that the combustibility of the materials was being discussed in the industry at the time, meant that even a basic enquiry with a fire engineer would have revealed concerns and therefore prompted discussion over the use of panelling with 100% PE core.
In that regard, the Tribunal was quick to point out that specific to this case was that damage had occurred due to the installation of prohibited materials.
There appears to be still an unanswered question surrounding liability where buildings are clad with ACP, but an incident or damage has not accrued.
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