Combustible Cladding: London to Sydney
The Lacrosse Apartment fire in Melbourne (2014) and the death of 72 people in the Grenfell Tower fire in London (2017) exposed the use of combustible cladding and the regulations in place. Five years after the Grenfell Tower fire, it is important to revisit the reformations in the field of cladding and determine if subsequent legislation and initiatives have improved the safety of buildings.
Cladding is used as the external skin for a variety of buildings including, residential and commercial buildings, food manufacturing facilities, schools, and hospitals. Metal composite panels (MCP) consist of two outer edged metal panels with an inner insulated cladding system. The MCPs can be made up of numerous metals including aluminium, copper and zinc with inner sections made of polyethylene. Due to the composition of certain panels some are deemed to be combustible. The associated risks of combustible cladding are exacerbated in apartment buildings where out of control fires can have a devastating impact, causing death.
2014 Lacrosse Apartment Fire
In November 2014, the Lacrosse Apartments in Melbourne caught fire rapidly, sparked by a cigarette butt. It was found that the fire was accelerated by non-compliant combustible cladding. Most concerning regarding the Lacrosse fire was the use of cladding layered between aluminium sheets, a practice that dated back to the 1970s in Australia and combustibility a known issue by the 1990s.
In 2017, the Grenfell Tower, located in London, was engulfed in flames. The fire resulted in the loss of 72 lives. The cause of the fire was an electrical spark in a fridge-freezer. The speed at which the fire spread was due to the aluminium composite panels with polyethylene centres installed on the outside of the building. As the fire spread from the apartment block to the outside, the polyethylene acted as a fire source, engulfing the entire building in flames.
NSW Policy Approach
Following the 2017 Grenfell Tower fire, the New South Wales Government implemented a ten-point plan aimed at the rectification of buildings that had combustible cladding, and the prevention of future building construction using combustible cladding.
The Building Products (Safety) Act 2017 was introduced with the aim of preventing the use of unsafe building materials and allowing for the rectification of buildings containing unsafe materials. In 2018, the NSW Fair Trade Commission banned the use of certain aluminium composite panels which were deemed to be combustible.
Additional regulations came in respect of the approval processes for cladding. Exemptions previously allowed under the following State Environmental Planning Policies (SEPP) were tightened:
- SEPP (Affordable Rental Housing) 2009;
- SEPP (Educational Establishments and Child Care Facilities) 2017;
- SEPP (Exempt and Complying Development Codes) 2008;
- SEPP (Infrastructure) 2007;
- SEPP (Kosciuszko National Park–Alpine Resorts) 2007;
- SEPP (Mining, Petroleum Production and Extractive Industries) 2007;
- SEPP (Three Ports) 2013; and
- SEPP (Western Sydney Parklands) 2009
The purpose of the amendments was to ensure that the approval processes were changed for installing cladding. Under the amended regulations, any building over two stories requires certification for the installation of external cladding by a private certifier or local council. If the building is less than two stories in height, then combustible cladding cannot be used. The policy changes are a correction to the previous self-regulation of the construction industry regarding cladding which sometimes resulted in inexpensive combustible cladding being used.
The second limb of the NSW Government’s approach centred on a retrospective look at buildings already constructed containing cladding. In 2018, the NSW Government passed legislation that placed the onus on owners to register their building as containing the combustible material under the:
- Environmental Planning and Assessment Amendment (Identification of Buildings with Combustible Cladding) Regulation 2018; and
- State Environmental Planning Policy Amendment (Exempt Development – Cladding and Decorative Work) 2018.
The buildings covered by the two regulations are wide ranging and include residential buildings, aged-care facilities, and public buildings. The classes of buildings outlined above pose the greatest risks with the use of combustible cladding.
Further subordinate regulation concerning cladding can be found in the National Construction Code Guidelines set to be implemented in September 2022. These further regulations relate to aspects of adhesive cladding panels and their installation, as well as further clarifications concerning ‘concessions for non-combustible requirements’.
The NSW Cladding Taskforce was established by the Department of Customer Service to help identify buildings that needed remediation depending on the extent of combustible cladding present. The program is overseen by the NSW Office of Project Remediate. The logistics and quality assurance of investigations, design and works is the responsibility of the appointed private sector Managing Contractor.
As part of the taskforce, over 185,000 buildings were checked, and over 4,182 buildings were inspected for combustible cladding. An estimated 391 buildings in NSW are in various stages of the remediation process for combustible cladding.
Owners Corporations are invited to be part of the program. If an OC joins the program, the Managing Contractor will organise investigation of the buildings and a design solution. The OC may take advantage of the financing scheme established through the Department which enables the OC to borrow the cost of remediation by way of an interest-free loan for ten years after which time the loan must have been repaid or will bear interest on ongoing terms. Financially impacted owners can apply for additional funds, though ultimately, the overall burden of costs lies with the owners. Other benefits of joining Project Remediate include:
- Certainty on the cost of remediation work through lump-sum pricing.
- Project management and quality assurance services.
- A safe, compliant and insurable solution to suit the building’s requirements, designed by an expert design team.
- Safe cladding products and systems endorsed by the Cladding Product Safety Panel.
- Oversight of building assurers by Fire and Rescue NSW.
Additionally, if owners decide not to opt into this process, and endeavour to undertake the remedies via alternate means, there is no Government support provided. Of course, if the OCs affected take no action, they may be required to do so through Orders issued by their local Council or Fire and Rescue for non-compliant buildings.
At present, the remediation work is estimated to take around 180 days (6 months) on average but variable having regard to the strata scheme and the level of remediation required. The work is coordinated by the managing contractor and the work must comply with the new Design and Building Practitioners Act. A defects liability of 6 months will apply once the remediation work is complete. Residents will be able to communicate with the managing contractor throughout the project and can report any issues that may arise. The managing contractor is expected to handle and swiftly rectify any issues that arise. The Design and Building Practitioners Act requires the cladding remediation work to comply with the following:
- Designer and engineer must be registered as design practitioner or engineer as appropriate.
- When the design is complete, the registered designer must make a declaration that the design complies with the Building Code of Australia and the works are to be uploaded to the NSW Planning Portal.
- The remediation contractor must be a registered building practitioner which means that they be licensed and insured.
- The remediation contractor is to carry out the works in accordance with the declared design and if a variation is required, it is to be declared with the varied designs.
- At the conclusion, the remediation contractor must declare the works to be in accordance with the declared design.
Questions regarding liability involving defective cladding are fraught with ambiguity. In the case of Taylor Construction Group Pty Ltd v Strata Plan 92888 t/as The Owners Strata Plan 92888, it was determined that Builder and Developer were responsible for the removal of the highly combustible ‘Biowood’ cladding.
In the case of Tanah Merah Vic Pty Ltd & Ors v Owners Corporation No 1 of PS613436T & Ors concerning the Lacrosse Fire, the question of apportionment of liability was raised. The court upheld the original decision by VCAT, which determined that the builder, LU Simon, was responsible for the construction of the building and as such potentially liable for 100% of the damages, although ultimate responsibility was subsequently apportioned as 39% fire engineer, 33% building surveyor and 25% architecture firm. The reason for this apportionment of liability lay in the incorrect advice provided to LU Simon and thus liability was handed over to those consultants that it hired. However, in some cases the builders and developers are now liquidated and therefore obtaining contribution against those entities often prove difficult and ultimately impossible.
Recent Case – Strata Plan 92450 v JKN Para 1 Pty Ltd & Anor  NSWSC 958
In this recent case, the Owner’s Corporation of a building in Parramatta commenced proceedings against a builder and Developer, alleging that the Vitrabond FR aluminium composite panels installed as external cladding on the building breached the statutory warranties under section 18B of the Home Building Act 1989 (NSW). The Owner’s Corporation alleged that the aluminium composite panels were combustible and therefore did not comply with the Building Code of Australia. The defendants, on the other hand, claimed that the aluminium composite panels complied with the Building Code of Australia at the time of installation. The main dispute was whether or not the aluminium composite panels installed on the building complied with the Deemed to Satisfy provisions of the Building Code of Australia and if not, whether an alternative solution was available to ensure that the building complied with the fire safety requirements of the Building Code of Australia.
Black J (at paragraph 46) held that there was insufficient evidence to suggest that testing of the aluminium combustible panels was carried out in accordance with AS 1530.1. The cladding, according to the Owner’s Corporation expert, was deemed likely to cause risk of life. The Owner’s Corporation Counsel referenced the similarities in the Grenfell Tower and the Lacrosse Tower fire events, citing that these were not isolated cases and the same disasters may eventuate here. The Court distinguished this case from the Grenfell Tower and Lacrosse Tower cases and found that the aluminium composite panels in those instances consisted of wholly polyethylene whereas by contrast, the aluminium composite panels in this case primarily comprised of flame retardant material.
Ultimately, the Court held that there was insufficient evidence to amount to a breach of the statutory warranties under the Home Building Act 1989 (NSW). Importantly, the Court noted that the aluminium composite panels may have not complied with the Building Code of Australia at the time of installation and that a breach of statutory warranties may arise, but these matters had not been established by the Plaintiff. The Court went on to say that those matters may have been established had the Owner’s Corporations undertaken a cone calorimeter combustibility test of the aluminium composite panels.
In summary, the Court clarified that simply establishing a possibility that there is a non-compliance or that a party may have breached the relevant law is inadequate, on the balance of probabilities.
United Kingdom’s Policy Approach
Following the tragic loss of lives in the Grenfell Tower, the spotlight was squarely put on the United Kingdom’s deregulation of the building industry. Through the formation of the Building Safety Programme, the UK Government consulted with several industry professionals both from the building industry and from the fire industry to ensure the future proofing of apartment buildings. The program’s initial aim was to focus on combustible cladding issues, particularly in buildings over 18 metres tall. The Building Amendment Regulations 2018 banned the use of combustible cladding in buildings that are over 18 metres tall and in populated spaces, including, hospitals. In Scotland, it was not until 2022 through the Building Amendment Regulations that a ban came into effect prohibiting flammable cladding on buildings over 11m. The UK maintains that the majority of buildings between 11-18m tall are safe.
Where to from here?
Combustible cladding and its flammability has had devasting effect around the world. Subsequently, there have been attempts by both the NSW and UK Governments to rectify this troublesome situation. Whilst global events have no doubt caused delays, five years after the Grenfell Tower fire, a great deal of work remains to be done. The NSW Government has made significant in-roads regarding policy changes concerning combustible cladding, however, lengthy periods and uncertainty for many regarding remediation does raise the issue of how many residents are unaware that, in some cases, they are potentially residing in tinderboxes. Regulations in the United Kingdom do not protect all buildings, furthermore, rectification of buildings with combustible cladding continues to be problematic. Whilst it is a major step forward in the UK with the shift to developers needing to pay for rectifications, there is a long way to go, and the jury is still out on whether this approach will ultimately succeed.
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If you would like to discuss this article , please contact our Property and Real Estate Projects Partner, Mike Ellis or Associate, Adwar Alkhamesi.
This publication is for general information purposes only and does not constitute legal advice. You should seek legal advice regarding your particular circumstances.