February 28, 2018 saw the Victorian Civil and Administrative Tribunal (VCAT) decision of the Lacrosse Appeal case made by His Honour Judge Woodward. It is a decision that had major ramifications in the building industries. His Honour Judge Woodward determined that the Lacrosse builder’s negligence in installing unsuitable cladding was the result of breaches by the Building Surveyor, Architects and Fire Engineer; and that these consultants are liable for the $5.7million repair costs. This was the first major decision in Australia in relation to the respective liability of parties involved in the design and construction of a building that included combustible cladding (also known as aluminium composite panels (ACP).
The case surrounded the fire at the 21-storey Lacrosse apartment tower in La Trobe Street, Docklands, in Melbourne. Lacrosse suffered a serious cladding fire on November 24, 2014, started by a single cigarette on a balcony.
In its earlier ruling, VCAT agreed that the builder had breached the implied warranty of Victoria’s Domestic Building Contract Act, and part of the Building Act, by constructing a non-BCA compliant building, it found the builder not to be negligent under the Wrongs Act.
The implications of the decision was that the builder was not liable for the damages bill, which was predominantly allocated by VCAT to the Building Surveyors (Gardner Group), (33%), the Fire Engineer (Thomas Nicholas), (39%), and the Architect (Elenberg Fraser) (25%).
For more information on the Lacrosse Fire VCAT decision read our summary on the case here.
Since the VCAT decision in 2018, the Building Surveyor, Architect and the Fire Engineer all sought leave to appeal the decision. The three consultants appealed the tribunal’s decision, proposing 25 grounds for appeal and 11 issues that required resolution.
The Court concluded that none of the challenges to the Tribunal’s Reasons (raised by the 11 issues) had any real prospect of success.
Victoria’s Supreme Court of Appeal agreed with a lower court finding that builders LU Simon should not be held accountable for the in damages caused by combustible cladding that it installed on the Lacrosse building.
Issues on Appeal
The Court considered if LU Simon failed to take reasonable care in selecting the cladding product. All three consultants argued that the Tribunal erred in arriving at its conclusion that LU Simon had not failed to take reasonable care when, among other things, choosing to use Alucobest over Alucobond as the cladding for the Lacrosse building.
The Court noted that all of the relevant experts agreed that the selection of Alucobest over Alucobond did not contribute to the spread of the fire and found that “any conclusion about whether LU Simon failed to take reasonable care must be rejected.”
The only grounds allowed on appeal was argued by the Fire Engineer who argued that there was an inconsistency in relation to the findings presented. The Fire Engineering Report, drafted by Mr Nicolas, did not describe the cladding system on the Lacrosse building in terms which identified the use of ACPs. VCAT held that the Fire Engineer’s failure to query the incomplete description was negligent. However, the evidence of Mr Nicolas was that he had assumed that a compliant form of ACPs would be utilised. As such, this ground of appeal was given leave by the Court. The implication of this appeal is yet to be determined but could affect the apportionment of liability – possibly reducing that of the Fire Engineer.
The implication of this decision is that by engaging consultants with particular expertise, the builder was not found to have breached his duty of care owed to the owners. Further, its recovery options via apportionment of liability is still available against the consultants.
It is important to note that in this decision the Builder did not appeal the fact that it was found to be in breach of the warranties owed under the Domestic Building Contracts Act 1995. Therefore, domestic builders who do choose not to engage architects or other consultants as well as use a material that is not fit for purpose will still remain in breach of their warranties.
At Oldham Construction Lawyers, we have extensive experience acting for builders, engineers, architects, surveyors and a range of building professionals, particularly in complex matters to recover damages in Building and Property List for VCAT which includes cladding cases.
Building regulations and codes are constantly changing, and this case clearly demonstrates that there is a responsibility for all building professionals to be on top of these requirements. Allowing us to handle any matters arising within your construction projects, in a cost and time-efficient manner, could make all the difference.
Contact us today on (03) 9640 0002, or via firstname.lastname@example.org, to arrange an appointment with our Director, Daniel Oldham, and his team of dedicated lawyers.