Category: Building & Construction

On the last day of summer for 2019, the Victorian Civil and Administrative Tribunal (VCAT) delivered a burst of sunshine to apartment owners at the high-rise Lacrosse building in the Melbourne Docklands precinct. Lacrosse suffered a serious cladding fire on November 24 2014, started by a single cigarette on a balcony. Last Thursday, Judge Ted Woodward ordered the owners be immediately paid A$5.7 million in damages.

The judge also indicated that the owners would receive most of the balance of their A$12.7 million claim – including nearly A$6 million in calculated costs of compliance with building codes.

However, in our adversarial legal system, there are losers as well as winners. The losers in this case are the fire engineer, the certifier and the architects.

The builder, LU Simon, was ordered to pay more than A$5.7 million to apartment owners. However, the architect, fire engineer and building certifier who worked on the project would pay most of that to LU Simon after Judge Woodward found they had breached contractual obligations.

Fire engineer Thomas Nicholas was ordered to pay 39% of the damages, certifier Gardner Group 35% and architects Elenberg Fraser 25%. Incredibly, the builder, LU Simon, is a winner, assessed to pay only 3% of the damages.

So shocking is the VCAT decision to architects that the national president of the Australian Institute of Architects suggested in an email to members last Friday that they might need to seek counselling.

The decision reminds architects and other consultants that abiding by common practice is no defence if that practice is inadequate. Even though an architect may work for the builder and be employed on a limited commission during construction, they still bear primary responsibility for the safety of the building as the “lead consultant”. According to the decision, architects and consultants are required to exercise high standards of professional judgement and skill even if their commissioning arrangements and fees militate this.

So is this a win for all owners?

It looks like a cause for celebration by the owners. But is it?

Well, for a start, this decision has taken over four years to emerge. It may yet be the subject of an appeal. In the meantime, owners and residents have had to live in a building that is not safe, although work to replace the cladding should be complete by May.

Judge Woodward said the decision applies to the specific circumstances of Lacrosse only, so the owners of other buildings, including Neo200, which was evacuated on February 4 after a similar fire, might not also be in the winner’s circle.

Fourteen of the Neo200 apartments are so badly damaged that rectification works could take up to a year to complete. If Lacrosse is any indication, the Neo200 legal case might take until 2022 to conclude.

The Lacrosse case ran for 22 days, involved five QCs, five juniors and an army of instructing solicitors, paralegals and expert witnesses. There were 91 volumes of documents tendered as evidence. Legal costs almost certainly exceeded A$2 million, or more than 15% of the damages sought.

Around the country, based on state audits, I estimate around 1,000 buildings have combustible aluminium composite panels on their facades. If they all generate a court case half as complex as Lacrosse, the legal bills alone could total over A$1 billion.

Government must also answer for deregulation

Those who eased the regulatory framework in place in Australia since the late 1980s share culpability with the consultants for the fires at Lacrosse and Neo200. Until the early 1990s, Australian building codes prohibited the use of combustible elements on the facades of tall buildings. Throughout the 1990s, the then Building Code of Australia (now the National Construction Code or NCC) was relaxed to a “performance standard”, which allowed builders and consultants to believe aluminium composite panels and timber were permissible.

By 2000, despite plenty of evidence that these panels were combustible and therefore not suitable as facade material on tall buildings, the market for them continued to grow. The Australian Building Codes Board did nothing about this, encouraging a potentially fatal error.

So far, on the regulatory side, no one has actually owned up to a mistake. However, the Building Ministers’ Forum is considering the 24 recommendations of a report it commissioned from Peter Shergold and Bronwyn Weir. New South Wales’ minister for innovation and better regulation, Matt Kean, has promised to crack down on dodgy certifiers. In the light of the cladding panel fiasco, he probably should be reviewing his own remit, which is based on the premise that less regulation is better.

The NCC has a goal to encourage innovation in building by allowing alternative solutions to “deemed to satisfy” provisions. Unfortunately, in the case of the cladding panels and other “innovations”, the cost savings may be only a tiny proportion of the costs of rectifying the problems.

Penitent governments should ensure flammable cladding is replaced now, not next year and certainly not in five or six years’ time when another round of court cases are finally decided after appeal. Unless governments act to fix this mistake, one that they are substantially responsible for, someone is going to be killed in a cladding fire in Australia.

As Judith Hackitt, who headed the inquiry into the Grenfell Tower disaster, said last week, a Grenfell-like event in Australia is “entirely foreseeable”.

Author: Geoff Hanmer Adjunct Lecturer in Architecture, UNSW

From The Conversation.

The fire at the Neo200 building on Spencer Street in the Melbourne CBD last week has eerie similarities to the Grenfell Tower disaster. Fortunately, instead of 72 people dead as at Grenfell, only one person was hospitalised for smoke inhalation.

Nevertheless, the building industry has responded straight from the Grenfell song sheet. Rydon, the main contractor for the Grenfell Tower cladding, said the work:

… met all required building regulations – as well as fire regulation and Health & Safety standards – and handover took place when the completion notice was issued by Royal Borough of Kensington and Chelsea building control.

Rydon chief executive Robert Bond said:

I will do all I can to assist in this investigation in order to establish what caused this tragedy.

The Neo 200 architect, Hayball, stated:

Neo 200 achieved certification and approval from the building certifier and relevant authorities at the time. We welcome the opportunity to support any investigation into the incident by authorities.

This appears to be the property sector’s version of “thoughts and prayers”. We’re very sorry, but there’s nothing we can do.

Sadly, this is far from the truth. We have known of the risk for years and the problem can be rectified.

Governments must act to ensure the cladding identified as a fire risk on hundreds of buildings is replaced. Further delay in fixing an identified threat to life is unacceptable.

Before the Grenfell and Neo200 fires, Melbourne had a cladding fire at the Lacrosse building in 2014. This led to an audit of external wall cladding on buildings by the Victorian Building Authority.

Following the Grenfell fire, states conducted further audits. In October 2018, an update by the Victorian Cladding Taskforce stated:

Our investigations found dangerous materials are widely used on buildings throughout Victoria, a finding that is consistent with inquiries carried out interstate and internationally.

We now know that hundreds of residential buildings are rated as either a moderate or high risk by the New South Wales and Victorian governments. Over 350 buildings in Melbourne alone are rated “high risk”. Neo200 was regarded as only a “moderate risk”.

Residential buildings are particularly vulnerable to the effects of a cladding fire because people can be asleep and windows are often left open. The amount of smoke generated by the recent Neo200 fire is frightening.

In the UK, the central government has given local authorities the power to replace risky cladding. We should do the same here.

Governments should take rectification out of the hands of dithering strata committees and, if necessary, carry out the necessary work directly and recover the costs from the responsible parties.

How did we get to this point?

Polyethylene-cored aluminium sandwich panels – often referred to as aluminium composite panels (ACP), PE or PU panels – were developed 50 years ago, patented in 1971 and marketed as Alucobond. When the patent expired in 1991 other manufacturers entered the market, including products marketed as Reynobond (originally Reynolds Aluminium) and Alpolic (Mitsubishi Chemicals). Now, it is estimated over 200 manufacturers around the world produce ACP panels.

By the 1990s, ACP was gaining a level of acceptance in the Australasian construction market. This was aided by the introduction of performance requirements to replace a previous blanket ban on combustible materials being used on tall building facades. The timing of the relaxation of the Building Code of Australia and the introduction of ACP panels to the Australian market by multinational companies could be a coincidence.

By the end of the 1990s, there was growing evidence that the performance-based approach to facade fire protection was not working. Combustible cored sandwich panels were implicated as contributors to serious injuries and death. A notable example was a 1993 fire in the Sun Valley food-processing factory in Hereford in which two firefighters died. In 1997, the Museum of New Zealand (Te Papa) experienced a cladding fire during construction.

The general and technical press, including architectural magazines with wide circulation, reported cladding fires in various types of materials, including ACP.

What can be done to reduce the risk?

Clearly, a facade fire has serious consequences. The bedrock of all modern fire regulations is that a fire in a tall building must be confined to a single storey. A fire spreading from one floor to the next completely undermines all the elements of protection and control that make egress routes and firefighting viable.

As we saw at Grenfell, a fire that spreads up the facade and involves nearly every storey in the building can’t be brought under control.

By 2000, there was widespread concern among fire professionals and some regulators that ACP was a bomb waiting to go off. A paper by Dr Gordon Cooke clearly outlined the risks. It makes chilling reading in the light of the Grenfell disaster.

Luckily, most tall residential buildings in Australia with combustible ACP cladding have internal sprinkler systems – unlike Grenfell. We might also be able to buy some time by banning barbecues and smoking on balconies, but it is doubtful this will be 100% effective. Another possibility is to physically secure balcony doors shut, but many owners and tenants might strongly resist this draconian measure.

These measures still will not eliminate the risk of arson highlighted by the Victorian government.

As the Neo200 fire demonstrates, even a moderate risk is still quite risky. It is extraordinary that a fire allegedly lit by a single smouldering cigarette could spread so quickly across seven floors and generate so much potentially deadly smoke.

An urgent cladding replacement program certainly has its challenges. A campaign that involves working on several hundred buildings at once in Melbourne and Sydney might overload the industry.

Nevertheless, the situation has been created by a lack of action by governments. Only decisive government action can rectify it. No more “thoughts and prayers”, enquiries or investigations; just replace the cladding now.

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Author: Geoff Hanmer, Adjunct Lecturer in Architecture, UNSW

The Conversation discusses the lessons from the Opal Tower, and it goes way beyond building certification.

The reasons for the cracked concrete that triggered the evacuation – twice – of residents from Sydney’s Opal Tower over Christmas and the New Year are unknown and will take time to properly establish. Many commentators are jumping to the conclusion (yes that includes you, Senator Carr) that the problem is the result of the privatisation of building certification. Instead of being done by government or council inspectors, certification is now done by private contractors engaged by the developer.

It might well be a contributing factor, but what went wrong at Opal Tower is is much more complex than that. Making certification a government responsibility again won’t solve it.

Opal is unusual. Very few residential buildings in Australia have ever been evacuated due to construction defects, and fewer still because of structural cracking. The vast majority of construction defects in multi-unit residential buildings are waterproofing failures. Rather than creating short-term alarm, they create long-term misery. Because misery does not generate headlines, the problem of quality in multi-unit housing continues to be ignored by governments.

Most strata buildings are defective

Strata title allows each resident to own the space in which they live as well as a share of the common property including pipes and walls. It’s the way apartments are usually sold after they are developed.

We don’t have definitive, current data on the extent of defects in strata title buildings. Researchers from UNSW’s City Futures Research Centre have begun collecting the information for Sydney. But there are clear indications that defects are significant and widespread.

A 2012 study by City Futures surveyed 1,020 strata owners across NSW, and found 72% of all respondents (85% in buildings built since 2000) knew of at least one significant defect in their complex.

In 2017 a City of Sydney survey identified defects and maintenance as the top concern of owner occupiers of apartments, along with short-term letting through organisations such as Airbnb.

Unfortunately for those keen to leap to conclusions about certification, studies showed the same thing back in the early 1990s when certification was largely in the hands of local governments. In fact, studies have found the same thing ever since speculative housing became common in Australia, from the end of World War One.

In fact, ever since speculative housing development and investment has become common (after World War I in Australia), residential construction defects have been a concern both here and overseas.

The market for residential buildings is extremely competitive, and controlling the cost of construction is one of the key factors in making a profit. Sometimes, the urge to maximise profit dominates to the extent that both short and long-term construction failures are inevitable.

It’s the consequence of cost control

There are, of course, reputable developers and builders, but reputation usually finishes last, undercut by less-reputable players who produce buildings that are slightly cheaper.

Defects in single-storey speculative houses with pitched roofs are probably just as common as defects in multi-unit dwellings with flat roofs, but they are much easier to fix because the houses are close to the ground and no strata committee is involved.

They are also much easier to find; a competent building inspection initiated by a purchaser is normally enough to protect the buyer. On the other hand, a building inspection of a single unit in a multi-unit development is highly unlikely to find defects which are located elsewhere in the common property of a building.

There are 653 apartments in the Meriton-developed Regis Towers, for example, which was the subject of a long-running legal action for defects.

Intervening at certification is too late

The only practical way to make multi-unit dwellings a good investment for the residents and a decent place to live is for government to take a pro-active role in driving quality throughout the design and construction process, not just at the end when the building is certified for occupation, or at the beginning when it gets a development approval.

It is a simple reality that no other actor in the construction process has the capacity to take this role. It is also simpler and cheaper to build in quality than to rectify defects.

Often, a $1 detail realised for fifty cents will cause endless grief and cost thousands of dollars to fix.

Reducing the amount of rectification required will improve sustainability outcomes by containing the amount of embodied carbon incorporated in the building.

If the building performs well, it will have a longer life and that will reduce the need to eventually replace it with a new building; again saving materials and improving the outcome for embodied carbon. It is worth remembering that 20 million tonnes of construction and demolition waste are produced in Australia each year.

Governments have been reluctant to intervene early

Governments have as good as ignored the problem of defects in multi-unit residential construction even though they have been aware of it for years.

This is particularly concerning because the state governments in NSW and Victoria have been busy spruiking this type of accommodation as the solution to the pressures of rising populations in Sydney and Melbourne. Given this, the protections for apartment owners under existing legislation are ludicrously slight.

Unfortunately, compliance with the National Construction Code (NCC) in its current form is no guarantee. There are so many ambiguities and grey areas in the NCC and in the way that it is applied that it is a guarantee of almost nothing, particularly when it comes to waterproofing.

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A simple example is the construction of balconies with flat slabs, which is perfectly acceptable under the NCC. The floor slab is constructed as a single plane from the interior to the exterior of the building with the waterproof barrier at the balcony being provided by a masonry wall or a concrete ridge on top of the slab.

This design almost always leaks within a few years. The reliable solution is to cast the slab with a step, but this is more expensive and as a consequence is rare. Cut-price membranes under tiled terraces are also common, causing leaks, mould and misery, despite arguably complying with the provisions of the NCC.

Fortunately, there is plenty that government could do to improve quality of multi-unit construction without affecting prices much.

Five stars. Information could drive standards

One clear way forward is to make the construction quality of a building more transparent to buyers.

This could be achieved by introducing a similar sort of quality assurance scheme to the one government runs to improve safety in cars; a five-star rating.

People are free to buy a two-star car, but for obvious reasons, not many do, even if they are cheap. Similarly, it is unlikely that many people would buy a two-star unit.

It would be perfectly possible to star rate multi-unit housing for construction quality using an independent assessment body against a transparent set of criteria.

It’s been tried before

Such a quality assurance scheme was introduced by the now defunct Building and Construction Council (BACC) in NSW during the 1990s, but unfortunately foundered due to a lack of funding and will from Bob Carr’s government. This was a pity, as the scheme was designed to drive quality through the whole of the building process, from design to completion.

It still provides a perfectly valid model for a policy that would actually do something to improve multi-unit construction quality at a cost which is minimal in relation to the value of the benefits produced. If a building is built correctly in the first place, then owners will not need to rely on shonky fly-by-night builders and developers for rectification works nor need to claim against complex insurance policies.

If the NSW and Victorian governments are serious about having a greater proportion of people live in multi-unit developments, they have a responsibility to do something about their quality before we are left with a overhang of misery, leaks and failures. Just ask the residents and owners of Opal Tower.

Author Geoff Hanmer: Adjunct Lecturer in Architecture, Univeristy of NSW, UNSW