The incorporation of combustible cladding in Victorian buildings has been a scourge on building owners and the Victorian construction industry since coming to the attention of building owners after the Grenfell (UK) and Lacrosse (VIC) buildings fires and the resulting litigation.
Cladding Safety Victoria’s (CSV) analysis, Compliance in Building Design, considers the causes of the incorporation of combustible cladding into Victorian buildings.
It is critical of design professionals and suggests legal changes to the sector intended to impose a greater burden on them along with new burdens on others connected to a building project.
Introduction
Cladding Safety Victoria (CSV) was established under the Cladding Safety Victoria Act (2020) to facilitate funding of the rectification of buildings with combustible cladding.
The organisation has been actively engaged in managing and funding the removal of combustible cladding in hundreds of buildings in Victoria. Combustible cladding includes aluminium composite panels (ACPs) expanded polystyrene and styrene expanded foam (EPSs).
CSV issued a report following its analysis of the causes of the installation of combustible cladding on buildings and who was responsible. Its investigations had access to the documents submitted for the design process and building permit applications, all part of the building approval process.
The review considered 804 buildings constructed with combustible cladding between 1998 and 2019. It identified the key building professionals responsible for a building project as the architect, draftsperson, fire safety engineer and building surveyors, and to a lesser extent, the builders.
Each of these relevant participants in the industry had a role in the approvals process to ensure a building was constructed to be fit for purpose, safe and compliant with the BCA.
It says in most cases, those were the parties responsible for decisions that resulted in the incorporation of combustible cladding in buildings.
The report concludes that the incorporation of combustible cladding was primally caused by a lack of understanding of the regulatory process, the application of the Building Code of Australia (BCA), or a failure to appreciate that the cladding was combustible.
Prevalence of the problem
CSV's analysis argues that each of the architect, draftspersons, fire safety engineer and building surveyor played a critical and ultimately causative role in the design process leading to combustible cladding being installed.
It observes that the Victorian regulatory requirements impose duties on building professionals with “overlapping” responsibilities.
The architect or draftsperson specified combustible cladding in the design or failed to specify in detail the cladding to be used, leading to combustible cladding being adopted.
The fire safety engineer failed to critically consider the cladding’s compliance with the BCA or follow necessary review and approval processes in order to determine whether the cladding could satisfy the standards of performance required to fit an acceptable solution pathway.
The building surveyor issued building permits for designs that included combustible cladding without determining if a performance solution had been engaged. (If there is BCA non-compliance in a building design or the absence of an appropriate approval pathway, the building surveyor must not approve a building permit.)
Given these failings were identified across all building professionals and projects and not confined to a limited pool of professionals, the review contended that such failings were likely to be widespread amongst professionals overall.
Failure to follow appropriate processes
The CSV report suggests the design and approval process was an early and causative factor leading to the installation of combustible cladding.
Principally, building professionals specified cladding that they ought to have known was combustible. CSV says 72% of the buildings it considered did not have a documented performance solution to justify the use of combustible cladding.
The report is critical of the frequency with which combustible cladding varieties were specified for and installed on buildings as a result of ignorance of the BCA requirements and without proper application and documentation for the approval process.
This is particularly so where a designer had adopted a performance solution to approve the use of combustible cladding, but the performance solution had not been properly carried out or documented.
The report does not consider in detail that the possible widespread misinterpretation of the BCA by buildings professions arose from an inherent ambiguity in its provisions.
Many building professionals defended their conduct by referencing these alleged ambiguities. Evidence for this argument includes clarifications or alerts issued after the 2014 Lacrosse fire by both the Victorian Building Authority and the Australian Building Codes Board regarding the widespread interpretation of the BCA which led to combustible cladding being installed on buildings.
The BCA was also amended in 2016 and 2019 to clarify its application in regard to external cladding and the use of combustible material. Nevertheless, it is correct that the Lacrosse decision [1] in VCAT found that an interpretation of the BCA relied upon by building professionals to justify a compliance pathway to permit combustible cladding was not established or reasonable.
Suggested remedies
The report suggests that fundamentally, there should be better education for building professionals so that they may understand their roles and responsibilities on a building project, and the application of the BCA.
Legislative changes are also suggested to clarify the duty of each relevant building professional for safety and quality, and that all architects, draftspersons and fire safety engineers should be required to certify compliance with the BCA for apartment buildings.
It is suggested a chain of responsibility should be introduced so that all relevant persons involved in the building process, including developers and product manufacturers and distributors, are aware of their role and responsibilities regarding the safety and compliance of projects with the BCA.
Such changes are likely to override the traditional responsibilities and liabilities of participants in a building project.
The report suggests the relevant building professionals should be required to specify the proposed compliance pathway for key building elements and any reform should place a duty on builders to seek guidance from the relevant professionals for design input.
Observation
The report identified hundreds of buildings constructed in Victoria that required the removal of combustible cladding for fire safety reasons at great cost to building owners.
The issue of combustible cladding has created considerable litigation in Victoria brought by property owners seeking to recover rectification costs.
Commonly the builder architect, draftsperson, fire engineer and building surveyor will be defendants to that litigation. Our courts and VCAT have been kept very busy dealing with the demands of such claims and backlogs have occurred in dealing with them.
We expect these claims to take many years to work through the courts and tribunal system. Clyde & Co have acted in many of these claims including in the landmark Lacrosse decisions [2].
CSV is charged with funding the rectification of many of those buildings requiring the cladding removal and has a statutory right to commence recovery proceedings against builders and their principals, to recover rectification costs.
As a result, we are seeing many CSV recovery actions commence and some challenges to the legislation in the courts.
The CSV report suggests a need for further regulation of the sector. This may include an enhanced legal regime.
The idea that new legislation will impose responsibility (and legal liability) on others such as building developers, product manufacturers and distributors beyond their usual contractual arrangements, could ensure a greater degree of supervision of building projects for BCA compliance.
It also may assist builder owners to recover their losses and to reduce the liability of other building professionals responsible for a building's design.
[1] Owners Corporation No 1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286.
[2] Owners Corporation No 1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286, Tanah Merah Pty Ltd v Owners Corporation No 1 of PS613436T [2021] VSCA 72.
This article first appeared on the Clyde & Co Website and is reproduced here with permission.
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