Articles

With more and more Victorians residing in apartment buildings, and the spotlight firmly on the compliance and fire safety of cladding products, apartment owners are having to learn more about rights and responsibilities they may once have presumed to be the domain of fire safety engineers.

What does it mean to owners when a building requires cladding rectification works?

There is a flavour of apartment owners, as the members of an Owners Corporation responsible for the cladding on an apartment building, finding themselves sandwiched between the demand for regulatory compliance on the one hand and the need to prioritise rectification funding on the other.

One could then see the apartment owners as the innocent inheritors of the problem when fire safety compliance is called into question.  The owners are subsequent purchasers of dwellings within the building after completion.  They did not design or build the property, they did not specify the building materials and nor did they issue the approvals for the design and construction.

How is a property determined eligible for financial support for the rectification of combustible cladding?

When Cladding Safety Victoria (“CSV”) was established several years ago, there was a sum of money allocated to its funding scheme while investigation continued into the most high-risk buildings with combustible cladding.  The was following an audit scheme where a Risk Assessment Tool or “RAT” analysis was employed to identify the highest priority buildings for rectification.

The criteria would look at such matters as the type of ACP product used, the extent of the cladding on the building, and its location.  For example, is the product near the main exit from the building, close to potential fire sources on neighbouring property or sensitive areas like fire hydrant cabinets, and is there is a risk of vertical fire spread up the building?

However, the pool of money for cladding replacement funding was always finite, meaning that a “triage” system of ranking the highest risk buildings for prioritisation was always going to be necessary.

Secondly, the Ministerial Prohibition Declaration, whereby the Minister of Planning declared that a range of ACP products would be prohibited for use on buildings in Victoria, came into effect on 1 February 2021.  This had the effect of removing for use not only the most combustible ACP products, but also any cladding product that did not have at least 93% inert material core.

This was a departure in that previously an ACP with less than 30% combustible polymer core was seen as lower risk and was assigned risk category “B” under the Insurance Council of Australia guideline.

Consequently, even cladding products such as Alpolic / FR, which has a fire-retardant core, is banned under the Ministerial Prohibition.  This is even though it has been used in Victoria on a hospital building and has a less than 30% combustible polymer core. 

While the “ban” by the Minister of Planning is not retrospective and applies to future projects after the date of coming into effect, the issue for Owners is that it can affect insurance for the building and potentially the value of apartments in the complex.

However, if one looks at a cladding material that has a fire-retardant core, such as Alpolic / FR, it is the very existence of the fire-retardant core that has been given as the reason by CSV to deny funding for cladding replacement.

There is another danger here, that Owners will become the “meat in the sandwich” between regulatory authorities seeking cladding replacement on the one hand, and on the other hand CSV that wishes to prioritise only the most high-risk buildings for replacement funding.

Just because, based on a triage system, CSV decides that a cladding product used on a specific building is not dangerous enough to warrant eligibility for replacement funding, does not necessarily mean that a Local Authority (ie a Council) will agree to cancel a Building Notice for the same cladding or building.

Potentially a denial of CSV funding can be a reason used to argue, amongst other matters, that certain cladding should be permitted to remain on the building.  After all, a lower combustibility of the product’s core must be one factor that a Local Authority should consider when deciding whether to cancel a Building Notice or Order.

Commonly, a Council will serve a Building Notice on an Owners Corporation alleging that the cladding as found on the structure is a danger to the life, health or safety of the owners and occupiers, anyone using the building or to the public, or could cause damage to property.  The Owners may be requested to “show cause” within a certain period why the cladding should not be replaced or a compliance assessment obtained from the Building Appeals Board to allow the cladding to remain.

If the Council won’t agree to cancel a Building Notice, even after a CSV approach for funding has been declined, then the Owners are faced with certain alternatives, for instance:

• Making written submissions with the use of fire engineering expert advice, to argue that the Building Notice should be cancelled, and if the authority refuses cancellation, appealing that decision to the Building Appeals Board;
• Applying to the Building Appeals Board for a section 160A compliance assessment, with the aim of having the Board confirm that the cladding as found on the building complies with performance requirements of the Building Code;
• Conducting extensive replacement of the cladding at the building with a non-combustible product and suing the relevant building practitioners for the associated costs.

As you can see, there are not necessarily any easy or convenient options for the Owners Corporation faced with such a quandary.

With the Risk Assessment Tool, or RAT analysis, the grading for a building’s fire safety will result in a rating of Low, Moderate, High or Extreme.  It is understood that the RAT analysis was initially utilised to prioritise the most high-risk buildings for the Statewide cladding audit, that assesses the cladding alongside all active and passive fire safety systems.

While in the past there has been some “push back” on Owners Corporations using an RAT analysis to support submissions on compliance at the Building Appeals Board, there seems little reason why this analysis cannot be used in this capacity – at least as part of the argument for allowing cladding to fully or partially remain on a building.

Are there other considerations for compliance?

The cladding though should not be seen in isolation when assessing compliance with the performance requirements of the Building Code. There is the entire wall system to be factored, including the combustibility or otherwise of any insulation or sarking behind the panels.  In addition, there are the active and passive fire safety systems at the property.  These include such features as:

• Automatic Fire Sprinkler system in accordance with Australian Standards
• Building Occupant Warning system
• Nature and location of the cladding product itself
• Fireproof doors and smoke seals
• Location of fire hydrants and other Essential Safety Measures
• Paths of travel and egress for residents, taking into account the number, nature and likely mobility of residents
• Access for fire fighting personnel and proximity to a fire brigade station
• Design of the building, such as a stepped back layout for higher levels (or “wedding cake” design to lessen vertical fire spread)

In the Building Appeals Board case decision of In the matter of 14 Elliot Avenue, Carnegie [2020] VBAB 19, the Board determined that the prescriptive “deemed-to-satisfy” test for compliance of combustible cladding, such as Expanded Polystyrene (EPS) panels, would not necessarily be the relevant test:

• If the performance requirements in CP2 and CP4 of the Building Code were satisfied as an alternative path to compliance; and
• If the holistic or over-all fire safety situation at the property otherwise results in a satisfactory level of fire safety.

In this case, a building with four storeys above the basement carpark and 21 self-contained apartments, there was a mixture of EPS cladding on the top two levels and an eyebrow canopy on the top level consisting of Aluminium Composite Panelling (ACP). 

There was automatic sprinkler protection pursuant to AS2118.4 that covered the entire building including the basement carpark.  Also, each level containing apartments was supplied with an internal fire hydrant set in an enclosed fire isolated cupboard, and other fire safety features.

In accepting a performance-based solution for the property, the Board stated that the assessment of fire risk for a building is “an integrated assessment which is not automatically determined from a single variable.”   Consequently, the probability of ignition was just one factor relevant to determining the overall fire safety of the building, which was a holistic assessment considering active and passive fire safety features in addition to the combustibility of the cladding product.

Based on this holistic analysis, and because other factors are relevant over and above whether the cladding product itself is combustible under the deemed-to-satisfy tests in the Building Code, the question may be asked whether:

• the Ministerial Prohibition on cladding products is broader than it needs to be; or
• the Ministerial Prohibition fails to properly recognise the myriad of other factors that contribute to the fire safety matrix at a building.

This is a Lovegrove and Cotton publication, authored by Justin Cotton. Justin has more than 20 years of construction lawyering.

For related articles on cladding please see:

How to Respond to Cladding Rectification Notices and Orders in Victoria

Full Replacement of all EPS Cladding on Apartment Buildings may not be Ordered if Performance Based Solutions are Satisfied

Appealing cladding related building notices under the Building Act 1993 (Vic)

Disclaimer

This article is not legal advice and discusses it’s topic in only general terms. Should you be in need of legal advice, please contact a construction law firm. The experienced team at Lovegrove & Cotton can help property owners and building practitioners resolve any type of building dispute.

Lovegrove & Cotton Cladding Compliance and Regularisation Lawyers

For thirty years, Lovegrove & Cotton have provided advice and represented property owners, builders, and building practitioners in cladding regularisation matters. Please see the cladding section page for more information.

Please see our page for more information. If you wish to engage the firm, feel free to contact us via our website, by emailing enquiries@lclawyers.com.au, or via phone at (03) 9600 4077.