Australia: Cladding design in high rise buildings: rethinking the approach

The catastrophic consequences of the Grenfell Tower fire in London and the Lacrosse fire in Melbourne have shown how poor approaches to design and investment analysis of property development can lead to unsafe materials being used in high rise buildings.

With growing technological advancements in materials used in cladding design, there needs to be an informed understanding of the use of the various types of composite panel claddings and the risk that each material type pose. This is particularly the case when the core material (such as polyethylene) is flammable. The overall integration of the building design (including the cladding) with the fire safety systems (such as the fire sprinklers and fire escapes) are critical in ensuring safer use of high rise buildings.

As the Australian Senate Inquiry into Cladding Materials received its first interim report on 6 September 2017 on aluminium composite cladding, it is a quick reminder to developers, building professionals (whether they be architects, engineers or building certifiers), contractors and planning authorities of their duties at law. The final inquiry report is due on 30 April 2018.1

The NSW Government's Fire Safety and External Wall Cladding Taskforce carried out a desktop audit of 178,000 building across NSW and identified that 1011 buildings had external wall claddings that will need to be inspected for non-compliance.2

There are also a wider set of duties and responsibilities that are important for the various participants to consider:

  • Workhealth and safety legislative requirements: Duties that are imposed on the 'person conducting a business or undertaking' (PCBU) who has primary duties for safety. A PCBU has a duty to ensure, so far as is reasonably practicable, the health and safety of workers engaged, or caused to be engaged by the person, workers whose activities in carrying out work are influenced or directed by the person, while the workers are at work in the business or undertaking; and other persons who may be at risk from work carried out as part of the conduct of the business or undertaking. The WHS legislation also requires people who design plant, substances and structures to ensure, so far as is reasonably practicable, that they are without risks to health and safety.3
  • Environmental and planning legislative requirements: There will be greater scrutiny for building certification in NSW with the introduction of Environmental Planning and Assessment Amendment (Fire Safety and Building Certification) Regulation 2017. It will commence on 1 October 2017 with new requirements such as a new construction inspection authority for FRNSW, and the requirement for fire safety statement assessments to be carried out by a competent fire safety practitioner.4
  • Supply chain responsibility: The Queensland government has introduced a bill to make building supply chain participants responsible for ensuring that non-conforming building products are not used on building sites and improving safety on construction sites through expanded notification requirements. The NSW government has similarly made an announcement to introduce similar legislation.5
  • More stringent regulation of building certifiers: Proposed replacement of the Building Professionals Act 2005 in NSW with a new Building and Development Certifiers Act – a draft exposure Bill is expected to be out late this year. 6
  • Compliance with the National Code of Construction: All building work needs to comply with the NCC. Compliance rests with all parties in their respective roles in the design, manufacturing and construction process. Builders will need to ensure that they install compliant products. The design professionals (whether architects or engineers) must ensure that any products, materials or systems specified or approved for use in their designs are appropriately approved, fit for purpose and meet the performance requirements of the building elements in which they are used. Similarly, building certifiers have obligations (when inspecting and approving) to ensure that the technical specifications and construction comply with the NCC and law.
  • New testing standards: A set of standards AS5113-2016 (Fire propagation testing and classification of external walls of buildings) has been introduced by Australian Standards. It is anticipated that this will be incorporated into the Building Approval and Certification (BCA) in the next round of changes to the BCA in 2019. When incorporated in the BCA, the cladding for new buildings will need to undergo a full-scale façade test to assess the fire safety as applied to a building's external cladding.7
  • Duty of care and statutory warranties: Builders and design professionals have various duties including to act with reasonable skill and care and duties not to cause personal injury to those to whom they could reasonably foresee that might be injured as a result of their negligence, or physical damage to property.8 They also have duties to ensure that the design is reasonably fit for the purposes. In relation to residential buildings, the owners also have the benefit of statutory warranties under the relevant legislation.9

At a practical commercial level, it is more important for the decision makers when making development choices about materials impacting on cost and design that they do not simply pass the duty to the consultants and builders as very often, their liabilities under their agreements are subject to a monetary limitation of liability and limits of their insurance cover. Appropriate risk management needs to be put in place to best ensure that the most appropriate decision including any cost benefit analysis is made to ensure that a safe environment for the occupiers of those high rise buildings.

NON-COMPLIANT BUILDINGS: WHERE TO FROM HERE?

Building owners and body corporates are concerned about the level of non-compliances in their buildings and the duties that they owe to the occupiers of those buildings (and in the case of high rise residential towers, breach of statutory warranties under the relevant home building legislation)10. Most are undertaking inspections by experts and deciding on solutions to address the non-compliant claddings. These are costly exercises and recovery of those costs and associated losses from builders and consultants are not too far from their minds.11 For developers, builders and design professionals, it will be timely to seek advice as to their duties and responsibilities. They should also consider their insurance policies to respond to potential actions, claims and rectification costs that may be coming their way. Importantly, what are the options for projects that are underway or are about to commence?

Footnotes

1 Non-conforming building products, last accessed 1 September 2017. The Committee has proposed a ban on the use of PE core ACPs.

2 NSW Government Fair Trading - Fire safety and external wall cladding, last accessed 1 September 2017. Other States have also conducted various audits and inspections:

3Workplace Health and Safety Act 2011 (NSW); Workplace Health and Safety Act 2011 (ACT); Work Health and Safety Act 2011 (Qld); Work Health and Safety Act 2012 (SA); Work Health and Safety Act 2012 (Tas); Work Health and Safety (National Uniform Legislation) Act 2011 (NT); and Work Health and Safety Act 2011 (Cth).

4 The new requirements will not apply to developments already approved or pending on 1 October. Environmental Planning and Assessment Amendment (Fire Safety and Building Certification) Regulation 2017, last accessed 1 September 2017.

5 The Building and Construction Legislation (Non-conforming Building Products – Chain of Responsibility and Other Matters) Amendment Bill 2017. NSW Government Fact Sheet - Fire Safety and External Wall Cladding. Related Article: The Buck Stops Here: Chain of Responsibility for Non-Conforming Building Products in Queensland, last accessed 1 September 2017.

6 NSW Government Planning & Environment Building Regulation and Certification Reform, last accessed 1 September 2017.

7 The current fire testing standard in Australia AS1530 is 23 years old and the prescribed tests do not adequately prescribed a testing regime for modern materials.

8 Murphy v Brentwood District Council [1964] 1 QB 533; Robinson v PE Jones (Contractors) Ltd [2011] EWCA Civ 9; Bevan Investments Ltd v Blackhall & Struthers (No 2) [1973]2NZLR 45; Bigby v Kondra [2017] QSC 037; Chan v Acres [2015] NSWSC 1885; Tzaneros Investments Pty Ltd v Walker Group Constructions Pty Ltd [2016] NSWSC 50

9Home Building Act 1989 (NSW); Domestic Building Contract Act 1995 (Vic); Queensland Building and Construction Commission Act 1991 (Qld); Owners - Units Plan No 1917 v Koundouris (2016) 307 FLR 372

10 Home Building Act 1989 (NSW); Domestic Building Contract Act 1995 (Vic); Queensland Building and Construction Commission Act 1991 (Qld)

11 Recent cases would make hard for owners/subsequent purchasers to recover economic loss - Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288(2014) 313 ALR 408; [2014] HCA 3; Chan v Acres [2015] NSWSC 1885; Tzaneros Investments Pty Ltd v Walker Group Constructions Pty Ltd [2016] NSWSC 50

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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