Crackdown on Combustible Cladding in VIC

Published:25/03/2019

Crackdown on Combustible Cladding in VIC

The first decision regarding non-compliant combustible cladding has been delivered by The Victorian Civil Administrative Tribunal (the Tribunal) following an inquest into the 2014 Lacrosse Building fire in Melbourne.

On 24 November 2014, a serious fire incident occurred at the Lacrosse building in Victoria, a twenty-three storey mixed use complex which includes fifteen levels of residential apartments. The fire which started on the balcony of resident Jean-Fracois Guibitta spread up the side of the external walls of the building, requiring all residents to be evacuated and leaving extensive damage to the building.

The Owners Corporation at the Lacrosse building took legal action against eight parties (Respondents) following the incident, including builder LU Simon, building surveyors, and architect and fire engineers.

At the time of the hearing, the builder was required to pay $5,748,233.28 in damages to the Applicants, which included the Owners Corporation and the owners of the apartments.

However, following extensive legal proceedings, the Tribunal found that all Respondents were partly liable for the incident and were therefore required to reimburse the builder in specified proportions. The decision was as follows:

  • The building surveyors failed to exercise due skill and care in issuing the building permit when the cladding did not comply with the building code and did not identify the incomplete description of the cladding on the engineering report. They are required to reimburse 33% of the total damages to the builder.
  • The architects failed to ensure the cladding sample they provided to the builder was compliant. They are required to reimburse 25% of the total damages to the builder.
  • The fire engineers failed to conduct a full engineering assessment and identify that the cladding did not comply with the building code. They are required to reimburse 39% of the total damages to the builder.

In total, the Respondents were required to pay $4,851,937.19 of the total $12,765,812.94 in damages claimed by the Applicants. There are still millions of dollars in claims remaining relating to property damages, compliance costs and costs associated with future repair work.


What does this mean for my building?

The outcomes from the legal proceedings associated with the Lacrosse building fire could set a precedent for other buildings not only in Victoria but across the country.

State Governments are not backing down when it comes to the safety risks associated with the non-compliant use of combustible cladding. Stronger laws continue to be introduced and will have implications for builders, surveyors, architects and fire engineers.

An internal audit lead by the Victorian Building Authority revealed more than 50% of the buildings investigated used non-compliant combustible cladding. With these numbers expected to rise, all builders, strata corporations and property owners are urged to ensure their property is up to code and satisfies their state requirements.

Australia's leading building product accreditation agency, CertMark, have also issued new warnings against the use of nine additional types of cladding which have likely been used or are currently being used in construction works across Australia. This could pose a problem for thousands more properties including single-storey residencies which may have not been affected previously by changes to building codes targeting external cladding materials.

For more information on the requirements for your state, click here.


How Coverforce can help

If you are a building owner or strata manager in QLD, NSW or VIC, new legislative changes could affect your building.

Coverforce have been considered a specialist provider of insurance and risk advice to the construction industry by some of the largest and most reputable builders and property developers across Australia.

Whether you require insurance for an upcoming project or a completed property, our brokers will provide you with insurance that meets your needs at highly competitive rates.

To find out more about how Coverforce could help you, contact your local office today.

The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.


References

  • https://www.sparke.com.au/insights/combustible-claddingis-it-viable/
  • https://www.melbourne.vic.gov.au/sitecollectiondocuments/mbs-report-lacrosse-fire.pdf
  • https://www.planning.vic.gov.au/__data/assets/pdf_file/0016/90412/Victorian-Cladding-Taskforce-Interim-Report-November-2017.pdf
  • https://www.abc.net.au/news/2019-02-21/cladding-crisis-spreads-to-suburbs-materials-banned/10832164

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