In brief - Cheap external cladding materials from China
pose fire risk
Some types of cladding materials imported from China fail to
comply with Australian standards and lack the fire-retardant
qualities of compliant products. The China-Australia Free Trade
Agreement (ChAFTA) could exacerbate this problem.
Combustible external cladding allows Docklands fire to
In November 2014 the Lacrosse Residential Apartment Building in
Docklands, Melbourne caught fire, suffering extensive damage. The
fire was sparked by a cigarette on an eighth floor balcony. The
building's combustible external cladding enabled the fire to
race up to the 21st floor.
It was subsequently found that the cladding material was
imported from China and was not tested to Australian standards.
(See Simon King's article Fire-risk cladding a legal
minefield, apartment owners warned, The Australian (online), 5
Cheaper imported cladding materials fail to meet
The use of cladding materials in the last ten years has been
widespread due both to the demand for high-rise buildings and to
the product's multifaceted use for insulation, improved
rigidity and cosmetic purposes.
The Fire Protection
Association Australia has warned that builders across the
country are importing Chinese cladding material which has not been
tested to Australian standards. The cladding is comprised of a
plastic core compressed between aluminium panels and it is the
cheaper imported material that is less fire-retardant than
Insurers advised to request proof that building
materials are compliant
Strata insurers accept in good faith that buildings are being
constructed safely, but this may not always be the case. To manage
this risk, insurers may consider requesting certified documents to
show that the material being used is compliant.
Insurers may also turn their mind to conducting assessments of
existing and newly constructed strata buildings to determine the
extent of use of cladding or other materials which do not meet
As the defect in the materials is not readily apparent until,
for example, a fire ignites, there may be limited or no recourse to
the builders, developers and certifiers if they are long gone by
the time such an event occurs.
Victorian Building Authority auditing high-rise
buildings in inner Melbourne
Further, the Victorian
Building Authority (VBA) has recently taken action by
commencing an audit of some 170 high-rise buildings in inner
Melbourne to ascertain whether there has been non-compliant use of
cladding, as well as commencing an investigation into the conduct
of the builder and surveyor in relation to the Lacrosse building.
(See Lacrosse Docklands fire - VBA to investigate, VBA
media release, 27 April 2015.)
ChAFTA predicted to increase influx of falsely labelled
Housing Industry Association senior executive director, building
development and environment, Kristin Brookfield, recently said that
the new free trade agreement with China will result in an increase
in products entering the country and without an appropriate
checking framework, the current problems stemming from falsely
labelled building products will be exacerbated. (See Michael
Bleby's article Dodgy building products could increase under China FTA,
industry players warn, The Australian Financial Review
(online), 17 June 2015.)
Building professionals, owners, managers and their
insurers need to be aware of risks
Body corporates, strata managers and owner organisations could
engage technical experts to undertake inspections of their
buildings to determine whether the cladding and other materials
used are appropriate and conform to relevant standards.
Regulatory and compliance professionals including builders,
surveyors, technical assessors and building compliance officers
also need to be aware of these risks, as do their professional
The consequences of using defective materials are potentially
grave in terms of injury, fatality and rectification costs.
Underwriters should be aware of those potential hazards when
considering whether to accept a risk.
The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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